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June/July 2012


Embrace It or Not, Social Media Is Impacting Your Organization

Last month, this column focused on innovation as I pondered the growing importance of the topic to U.S. competitiveness and how to heighten attention to the topic in the 2013–2014 Criteria for Performance Excellence. This month, I am focusing on a second topic of growing importance to business and therefore the Baldrige Criteria: social media. I last wrote about this topic in January 2011, and the landscape has continued to evolve since then—from questioning if and how your organization is adopting social media to how well and rapidly your organization is adopting social media. Let me start by sharing some recent data.

According to a report from InSite Consulting released in June of this year, 80% of American companies use Facebook, 45% have Twitter accounts, and 48% are present on LinkedIn. Six out of ten companies listen to customer conversations on social media, and eight out of ten answer customer questions and complaints via social media. However, the study also found little integration of social media into businesses’ overall strategy.

A recent study from the Nielsen Consulting Group had several key takeaways. Americans now spend 7.6% of their time on e-mail and 23% of their time on social networks. More than 70% of social network users shop online. In addition, 53% of adults follow specific brands online. Nielsen found that 60% of social network users are writing reviews and sharing them with friends—a “cris-atunity” in Homer Simpson terms. Mobile use of social networking is up 62%, and twice as many users over 55 visited social media sites on their phones in 2011 compared to 2010.

A 2011 McKinsey study of 4,200 global executives reported that more than 50% of respondents used social networking and more than 40% used blogs.

Every two years for the last decade, IBM has conducted personal interviews of CEOs and public-sector leaders to get their perspectives on emerging trends and issues. Its latest report, based on more than 1,700 interviews, was issued in May 2012. It indicated that CEO focus is shifting to the power and potential of social media. Collaboration is the number-one trait that CEOs are seeking in their employees, with 75% calling it critical and social media providing a key opportunity. In another of its three key findings, IBM states that CEOs expect a step-change in the use of social media for engaging with customers as individuals.

The “social media” challenge in updating the Baldrige Criteria is related to the Criteria goal of  always reflect the “leading edge of validated management practice,” a phrase coined by a chair of our Panel of Judges, Arnie Weimerskirch, in the 1990s. I am not sure that I would call the current experimentation with and use of social media a validated practice. However, if we wait two more years to incorporate the concept more fully, I believe we will be well behind validated management practice given the pace of change in this arena. As a matter of fact, one can envision social media impacting virtually every category of the Baldrige Criteria.

I believe there are four basic organizational uses of social media:

  • Reaching customers – This includes using Facebook, Twitter, Web-based product and sales information, blogs, and other mass outreach activities, as well as communicating with individual customers about their complaints, product insights, and product ideas.

  • Connecting employees – This includes connecting employees with each other and with the organization’s senior leaders. Social media allows collaboration among geographically dispersed employees and cross-functional groups. This can have the effect of making the biggest companies small again through employee connectivity across the globe. Internal wikis allow knowledge sharing and knowledge building. Internal CEO blogging allows two-way communication that breaks down organizational hierarchy and eliminates distance and time zone pressures.

  • Coordinating with suppliers and partners – This allows better supply chain integration, starting with product and process design and running through responses to customer input and issues. It permits more efficient total value chain operation and knowledge sharing.

  • Gathering data and research – This includes gathering comparative performance and benchmark data through publicly available resources—previously a real challenge for smaller businesses and organizations. Social media and the Web provide a potential gold mine of data and information about customer perceptions, desires, and evaluations of your products and services. Using the Web for environmental scanning during strategic planning also provides immense benefits. It is just a matter of asking the right questions and evaluating the information available (admittedly, not always easy tasks).

There are also risks with engaging more heavily in the use of social media, particularly without the knowledge base to set specific use guidelines in a rapidly evolving landscape. In social media, the risks are amplified by the fact that any mistakes made are made in front of the whole world. Thus, one must take intelligent risks, guided by a supportive environment (see last month’s column). The best control mechanism organizations have is one of the three major recommendations from the 2012 IBM CEO study: empowering employees through values. Decisions on social media content, as with other decentralized organizational decisions, should be guided by an organization’s shared beliefs, common purpose, and values.

I commented earlier that social media have the potential for impacting virtually every category of the Baldrige Criteria. Let me illustrate with a few examples. In the Organizational Profile, social media can play a significant role in communicating with suppliers and in assessing your competitive environment. The latter topic relates directly to strategy considerations in Category 2, Strategic Planning. In Category 1, Leadership, social media provide a powerful vehicle for senior leader communication with the workforce, particularly in a multi-site or multi-country operation. In the Customer Focus and Workforce Focus categories, social media are critical to listening to the voice of the customer (external and internal) and provide a significant mechanism for engaging them and building stronger relationships.  I could give additional details for these and the other Criteria categories; as you can see, the implications are pervasive. The question is how to rise to the challenge!

This column comes at the start of summer, when we all deserve a little time off, so I will be back with my next column in August. In the interim, I hope I have led you to think about your organization’s use of social media. And if you have thoughts about how the topic should be enhanced in the new Baldrige Criteria, please let me know at harry.hertz@nist.gov. Have a good summer!



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Dr. Harry Hertz, Director
Baldrige Performance Excellence Program

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