What is the Big Idea?
Social media has been inspiring change in the way business leaders interact with their customer base. And for good reasons. Companies that adopt social technologies can see a 50 percent increase in customer satisfaction, 48 percent increase in business leads, and 24 percent increase in revenue, according to McKinsey.
"From the Arab Spring to the global Occupy movement, citizens of all nations are more empowered than ever before," writes Marc Benioff, Chief Executive of Salesforce.com, in BBC Business. "Connected individuals have rallied crowds, created vast audiences and toppled political establishments by communicating their message through social networks. We've also seen the impact of the social revolution on business."
What is the Significance?
When Netflix announced it was changing its pricing structure, customers protested with 82,000 negative comments. Within months, the company lost 800,000 customers and two thirds of its market value.
"That's the speed of social," said Benioff. "Everything happens faster than ever before."
Sir Andrew Likierman, Dean of the London Business School says that social media has completely disrupted the way businesses assess their performance.
"When I started my working life, it was quite easy to be mediocre and nobody really noticed," said Likierman.
These days, businesses can reach beyond traditional geographical boundaries with social media, which means they are more exposed to disruptors and competition who want to gain market share, he says.
Listen to Andrew Likierman's take on how social media is changing the way we do business:
Rather than shy from this trend, Benioff says leaders must use it to connect and engage with customers. But it takes more than a few bodies with a password to the company's Facebook page.
"To be transformative, social can't be an add-on. Social must be a strategy that is integrated into business processes across the organization," he said. "New graduates entering the workforce are frequently appalled by the technology their employers use to run their companies."
"They are frustrated by antiquated software systems that were built long before Mark Zuckerberg was even born. They want to collaborate with the best people across their organisation and to have real-time access to information, just like they have in their personal lives."
Updates that show up on the social feed should serve as a "knowledge funnel" of information and it should be a collaborative effort.
"Work itself is fundamentally social, so why can't our business apps be social, as collaborative as Facebook, as transparent as Twitter, and as engaging as Zynga's social games?"
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