The Social Economy

While the vast majority of organizations (72%) use social technologies in some way, very few are realizing their full potential benefit, the McKinsey Global Institute (MGI) claims. The MGI considers that by using the full power of social tools to improve knowledge sharing, collaboration and communication inside and outside the enterprise, companies will be able to boost the productivity of interaction workers (high-skill knowledge workers) by 20-25%.

In its report "The social economy: Unlocking value and productivity through social technologies", MGI estimates the use of social technologies will contribute $900 billion to $1.3 trillion in annual value through higher productivity across four sectors: consumer packaged goods, retail financial services, advanced manufacturing and professional services.

Two-thirds of this potential value will come from enhancing collaboration and communications within and across the organization. Currently, the average interaction worker spends 28% of the working week on reading and answering emails and 19% on seeking internal information or colleagues who can lend a hand on specific tasks. But when social media is used internally, the time for searching and tracking data can be reduced by 35%, according to the report.

The value that social technologies create varies between individual companies, depending largely on their industry. Productivity enhancements are biggest at companies with a high proportion of interaction workers, because internal communication and collaboration are faster and smoother. At the same time, companies that are more heavily dependent on influencing customers can achieve better interaction with users and gain richer insights for fewer dollars through the use of social technologies than through traditional research methods.

Essentially, to utilize the full potential of social technologies, companies must change their processes and cultures to embrace trust, collaboration and networking and move away from the hierarchical structure.