Analysis: McKinsey's enterprise web 2.0 survey

McKinsey & Company recently released the results of a survey called "Building the Web 2.0 Enterprise" (free with registration).  Here's what I found interesting for those responsible for making social technologies work.

1) Social technologies are bigger than just marketing and PR campaigns.  They're helping to reinvent the organization.  Companies satisfied with their experience with Web 2.0 technologies are applying them within change management practices and organizational structures.  Companies are using new tools to reconnect with customers for co-creation and collaboration.  "Reconnecting," you ask?  Yes, the way businesses started and survived long before advertising as we hate it existed.

2) It's what's on the inside that counts.  94% of respondents report internal use of web 2.0 technologies vs. 87% for customer interfaces and 75% for channel relationships.  In fact, internal use increased from 2007 while customer and channel uses declined.  Using web 2.0 applications internally are like picking low-hanging fruit.  Technology operates on standards, communities are pre-formed, and processes have low variation.

3) Success starts at the top.  Web 2.0 may be all about power to the people, but in an enterprise setting it needs a senior stamp of approval.  On average, only 1 in 4 employees use web 2.0 tools; in companies with higher usage, one key is "getting senior managers to act as role models for adoption." Conversely, among companies with low levels of satisfaction with web 2.0, a major barrier to success is seen as "my company's leadership team doesn't encourage the use of web 2.0 technologies."

4) IT needs to get aligned with the business.  How do businesses dissatisfied with web 2.0 experiences start using these things in the first place?  Most often, IT selects the technology and brings it to the business.  That's like having a builder decide how big your house is going to be, what appliances and fixtures you'll get, while you can decide what color to paint the walls.  Businesses that are satisfied with web 2.0 determine a business need, then find a solution to help.

Takeaways to consider:

- Organizations are changing and may look the same externally but will operate very differently on the inside once social technology adoption reaches critical mass (i.e. a majority of employees using these tools for  work purposes)

- In the near term, this may be a case where the irresistible force (i.e. web 2.0) meets the immovable object (i.e. senior management).  Adoption of social computing correlates higher with younger generations...and Gen Xers aren't yet running Fortune 500 enterprises.

- Marketing, IT, HR, and Finance all need to get along...but any department's role as an order taker will be justified unless it can tie itself to business goals and objectives.

(Note: If you found this post useful, let me know and I'll start making it a habit to publish analyses like this regularly.  Of course, I'll need your help in hearing about what data is out there and also what perspectives are most interesting to you.)

Comments

[justin hunt]

I like the point about web 2.0 adoption coming up against management who are not Generation X-ers. This can be frustrating. I was in a meeting with a large organisation last week, pitching an idea of web 2.0 tools.We had waited ages to get the meeting with this senior communications executive. He started off by telling us how he had banned his son from using Facebook. And also said how little time he had to read blogs etc so how could anyone else be expected to? I reckon if he spent more time reading blogs in his subject/market area, his job would become easier. But it is definitely a challenge trying to convince senior management of the importance of web 2.0. For some reason they don't seem to think it matters.

[hackneed]

Always enjoy your two cents. Keep the analysis. Your frequency isn't overwhelming and it acts as a good filter.

[Pete]

Hi Justin - and in my experience, this generation gap issue isn't with social technology; it's with technology in general and is on view daily at brands, agencies, and consultancies.

If I were more of an anthropologist I'd have more references for this, but I believe that the generation gap used to occur around benign topics like dress code and hair styles. Maybe that focus had practical implications for the industrial age, e.g. wear a tie to protect your clothes from getting soiled, then be careful your tie doesn't get caught in the paper shredder. Today, the gap revolves around an issue critical to getting work done in the information age - technology - and we've got to be up to speed.

It's tough to win a battle armed with swords when the competition is using rifles.

[Mike Spataro]

Very helpful Peter. It validates what we've been experiencing too. Legal, IT and HR are often involved in the data collection and intelligence and interested in how social technologies can impact operations.

[Arne-Per]

Absolutely keep the analysis going. You have great insights!

[Craig Alberino]

Great summary Peter.

I've been working in the business to enterprise web 2.0 space for the last year. Justin hit it on the head with Gen X to Boomer conversation. I've had some similar challenges with needing to educate and "sell in" the technology more than I would have to if I was dealing with another Xer or Yer.

I am also finding that Boomers are coming to Gen Xers in their organizations to bridge the gap with Gen Yers who are the true digital natives. Senior management recognizes that in order to attract and retain talent, they need to listen and learn.

There are some very big brands with large budgets that want to do this the right way. And surprisingly, senior management is starting to listen. (And it only took 2 years.)

[Adam Daniel Mezei]

Hi Peter,

I'll chime in with the European perspective here -- and coming from someone who can bridge both divides, given that my "internal C: drive" is Canadian...ergo, I can understand it from this (local Czech) way and that...it might have more credence coming from someone like me who uses the (primarily) US-based Web2.0 tools, but who also understands features of the local marketplace and business ethics.

My read of this post is that you're referring to likely one of several millions of similar businesses/organizations, all nibbling from the fruit of the same social media tree.

But what if social media usage in corporations had very distinct cultural dimensions/vectors?

I keep thinking in this case of Japan or other "parochial"-type business cultures...where employees marched in lockstep with dictates from on-high.

Has anyone considered what might happen at certain social networking sites (in the English language, of course) which might be deemed "mandatory usage" on the part of bosses in other countries outside of the US?

We might not encounter such resistance from other corporate departments (egs. HR, Finance, Legal). And all this due to how these corporations function at a specific cultural level...

And if all rockets at a given company are firing and all employees/stakeholders at the same firm are reading from the same hymn book, imagine how this might impact the rolling out of social networking in ways we haven't seen (until now) in the US context?

Just an idea...

--ADM

[Pete]

Craig - that's awesome to hear about your success. Two years is long in internet time, but very short on many corporate scales!

ADM - the McKinsey data contained two data cuts based on region. Asia-Pacific respondents had the highest level of satisfaction with web 2.0 tools. North America had the highest percentage of respondents reporting dissatisfaction. One hypothesis would be that social networking tools help free the organization from cultural rigidity and usage is similar in US workplaces with strict IT policies, where workers access the sites they want via smartphone or web proxy instead.

[Pavan]

Yes - Definitely find this useful. Please keep publishing more of the same :-)

[Kim]

I live this daily too, trying to drive web strategy at an insurance company.

I won't blast any names here, but we have some consultants around (afterall, corporate senior leaders aren't going to listen to GenX'rs unless McKinsey or BCG confirm what we're saying, right?)

Anyway... we were supposed to be receiving a pitch on innovation, given by a Big5 web 2.0 expert. Deck was standard fare - basic examples of blogs, wikis, etc. and the "web 2.0 guru from the silicon valley" doesn't even have a twitter, friendfeed, blog or any type of account besides Facebook. "No, only Facebook for me."

Yet he was confident in telling our leaders that web 2.0 is going to revolutionize our industry.

Come onnnnn.....

A lot more sizzle than steak, IMO.

[Peter Kim]

Hi Kim - good point. Let me push it even further. When people investigating the social media space started, they started using the tools for personal reasons, then professional.

Josh Hallett (aka Hyku) in particular has called for an evolution in credibility - we need people who have done the work, not just used tools personally. See this post in particular: http://hyku.com/blog/archives/001936.html

Naturally, for a Gen Y professional with no work experience, the personal is all they've got. Personal use does equal credibility for the "digital born" consumer (using a term from Josh Spear/Undercurrent). Gen X toes the line here.

So you probably already know this, but your consultant is not just one, but two steps behind. You're right in asking "where's the beef?"