The $1.3 Trillion Price Of Not Tweeting At Work

On June 6, Larry Ellison—CEO of Oracle, one of the largest and most advanced computer technology corporations in the world—tweeted for the very first time. In doing so, he joined a club that remains surprisingly elite. Among CEOs of the world’s Fortune 500 companies, a mere 20 have Twitter accounts. Ellison, by the way, hasn’t tweeted since.

As social media spreads around the globe, one enclave has proven stubbornly resistant: the boardroom. Within the C-suite, perceptions remain that social media is at best a soft PR tool and at worst a time sink for already distracted employees. Without a push from the top, many of the biggest companies have been slow to take the social media plunge.

A new report from McKinsey Global Institute, however, makes the business case for social media a little easier to sell. According to an analysis of 4,200 companies by the business consulting giant, social technologies stand to unlock from $900 billion to $1.3 trillion in value. At the high end, that approaches Australia’s annual GDP. How’s that for a bottom line?

Savings comes from some unexpected places. Two-thirds of the value unlocked by social media rests in “improved communications and collaboration within and across enterprises,” according to the report. Far from a distraction, in other words, social media proves a surprising boon to productivity.

Companies are embracing social tools—including internal networks, wikis, and real-time chat—for functions that go way beyond marketing and community building. R&D teams brainstorm products, HR vets applicants, sales fosters leads, and operations and distribution forecasts and monitors supply chains.

Behind this laundry list is a more hefty benefit. Social technologies have the potential to free up expertise trapped in departmental silos. High-skill workers can now be tapped company-wide. Managers can find out “which employees have the deepest knowledge in certain subjects, or who last contributed to a project and how to get in touch with them quickly,” says New York Times tech reporter Quentin Hardy. Just cutting email out of the picture in favor of social sharing translates to a productivity windfall as “more enterprise information becomes accessible and searchable, rather than locked up as ‘dark matter’ in inboxes.”

Among the most promising (and heretofore least hyped) new social technologies are tools like Yammer (recently snapped up by Microsoft for $1.2 billion), which bring Facebook-like functionality into the office. Social-savvy employees post queries and comments to internal conversation threads and coworkers offer feedback, crowdsourcing solutions. Content can be shared and searched, so the same issues don’t resurface. Meanwhile, virtual groups offer a more interactive alternative than email or phones.

Interestingly, the report suggest that tools like Yammer are the tip of the iceberg. Right now, only five percent of all communications and content use in the U.S. happens on social networks, mainly in the form of content sharing and online socializing. But McKinsey analysts point out that almost any human interaction in the workplace can be "socialized"—endowed with the speed, scale, and disruptive economics of the Internet.

It seems noteworthy that the report’s conclusions have been echoed of late from the most authoritative of places: Wall Street. In the last year, the world’s largest enterprise software companies—Google, Microsoft, Salesforce, Adobe, and even Ellison’s own Oracle—have spent upward of $2.5 billion snatching up social media tools to add to their enterprise suites. Even Twitter-phobic CEOs may have a hard time ignoring that business case.

—Author Ryan Holmes is the CEO of HootSuite, a social media management system with 4 million users, including 79 of the Fortune 100 companies.

[Image: Flickr user Vincent van der Pas]

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156 Comments

  • rnakagawa

    The C-Suite does not want social clout like Justin...and definitely not anarchy.

    Running a successful business is not about democracy and definitely not fuelled on anarchy. It is about focus on market winning vision, strategy and execution.

    Talk to the C-Suite about maximizing contribution on key initiatives, transcending geography and time zones via collaboration tools. Imagine your best minds around the globe working on your top priority de jour. Through facilitated discussions they create a key strategies or business requirements or design document. They dramatically improve the your ability to work on the most challenging parts of a project.... strategic alignment, proposal, definition and analysis. All this and you did not spend a dime on a plane ticket. Perhaps they did not even meet or send an email.

    Want team members to be more social then server Perrier at the water cooler, buy a Tassimo with free t-disks and put lounge chairs in the smoking area.

    Want leading edge tools in your company? Connected them to making a difference on a winning business strategy...good fashion ROI.

  • blahhh666

    They got it ass backwards, social media are on track to destroy $900 billion to $1.3 trillion in lost work hours :)

  • Mortalsense

    Quote of old about the new
    For if a true survey be taken of counselors and statesmen, there may be found (though rarely)those which can make a small state great, and yet cannot fiddle; as on theother side, there will be found a great many, that can fiddle very cunningly,but yet are so far from being able to make a small state great, as their giftlieth the other way; to bring a great and flourishing estate, to ruin anddecay. And certainly whose degenerate arts and shifts, whereby many counsellorsand governors gain both favor with their masters, and estimation with thevulgar, deserve no better name than fiddling; being things rather pleasing forthe time, and graceful to themselves only, than tending to the weal andadvancement of the state which they serve

  • Lindsay Wright

    I would have to agree that twitter is a majorly important marketing tool for every company. If businesses are trying to connect with the YAYA market, twitter becomes especially important. This is the platform where YAYAs are reading the news and connecting with brands on a different level. I'm interested to see how 18-24 year olds would react if they were able to see a different side to the CEOs of these brands through twitter!

    Lindsay Wright
    Graphic Designer
    www.mojo-ad.com

  • SocialMediaWastedMyTime

    WOW!!! I just spent (wasted) over an hour reading this article and then the ongoing, neverending debate that followed.  I find extreme irony in the fact that this article promoting the potential profitability of social media just cost my company money by enticing me to read it and its comments.

    Now, before any of you decide to start bashing me and explain how it wasn't social media and/or this article which cost my company, but rather my own stupidity and understanding of the proper use of social media which did, let me explain how I got here...

    I don't like Twitter, but my company insists that I use it.  They want me to both post on my own Twitter account and follow as many industry related people as I can.  I reluctantly do so, and today when making my usual Twitter rounds I came across a tweet about this article.  It was tweeted by someone who is a recruiting/marketing consultant for our company who usually has a pretty good head on her shoulder when it comes to tweeting.  So basically, I was doing exactly what my company has asked me to do (instead of the professional job they actually pay me to do), went to Twitter, found a tweet from someone that I usually can trust, clicked a link that seemed like it could be interesting, and spent over an hour accomplishing nothing, but reading about a debate that is essentially unwinnable.

    If my company had not insisted that I become involved with Twitter then I would have spent the last hour or two creating something profitable for them.  I am paid a comfortable six figure salary.  Someone please tell me how Twitter helped my company get a piece of $1.3 trillion today.

  • Philippe Dosne

     
    Your comments are complete rubbish. I and I am certain many like me would love to hear from the CEOs of the companies I am invested in, whether it is by Tweet or Facebook updates. The CEOs are the decisions makers and ultimately the business drivers. There is a bit more to a company than bug fixing a product. Don't be such an ignorant consumer.

  • Sideliner

    8 Days, 145
    comments, Yes', Nos, and Maybes - Ping-Pong.

    "The meek
    shall inherit the Earth"..... the 6% that Tweet or Twits?

    140 characters

  • StefanGeorge

    Such a lame article & waste of time. Can someone hack into this site and replace the main article with Kevin's? :-) That should add value instead of wasting value!

  • TaylorM

    Anyone viewing Twitter or any other social media channel as a way to advertise or push has completely missed the point about social media. It's relationship driven - I ignore all FB ads and promoted Tweets, but I do follow my favorite brands in both and I engage with them online. The companies that do well in social media channels have interesting, engaging content and I often take an action because of information or a recommendation from a Tweet or an FB post. The nano-second that a company becomes heavy-handed...they lose me. Social media is pure relationship and if your only focus is a one-to-one conversion of posts and tweets to widgets sold, you'll never be successful, and you'll always be a bit jealous of the ones who are...

  • Cleggg

    If you only read two comments in this thread, read TaylorM (Milsal?) and KevinLenard. 

  • JohnHenry

    It is interesting how articles come your way at a specific time. I was just at an IBM office today talking to some of the people within their federal group about the use of social business tools within the public sector. I find it interesting that in this article the #1 vendor of social tools for business, IBM, is not listed. (I am not an IBM employee)

    I agree with some of the comments that the consumer focused offerings, that are advertizing based are not well suited for business or gov. use. However the value of making it easier and faster to find, connect and collaborate with experts and others in your community of interest, that is at the heart of social products and services is undeniable. Social tools, when used in business just need to include things like security and reporting to make them compliant with the requirements of the professional (business and Gov.) world.

    There is no mistaking that this is the next transformational technologies for professional use.

  • Maybe it's just me

    I find Mr. Holmes article to be self serving fluff.  I know it is hard to believe that humans still conduct business on the telephone, by email and perish the thought.....IN PERSON!!!!  Yes, Mr. Holmes, sometimes people actually talk to each other in person.  I've even done that where all of us were looking at a piece of paper, God forbid. Twitter is a communication tool for short messages.  Great, beautiful, wonderful tool.  Doesn't solve every communication problem in the business world.  Not a panacea as long as humans are involved. We can still screw it up in  140 characters or less.

  • Tim

    You're citing McKinsey as your source?  The same McKinsey who's "business expertise" led Enron to the world's largest bankruptcy filing, it's officers to prision, and who's late CEO Rajat Gupta has been convicted of securities fraud?  Really?  Why would anyone believe anything coming out of this organization?  It's reassuing that Larry Ellison and I share the same values regarding Twitter and similar social media.  It is NOT a "productivity tool" if you do real work.

  • Boogie Sheftell

    "Facebook

    is a voyeuristic, crowdsourced paranoia funded by large corporate
    interests looking to create a highly targeted advertising engine
    designed for those who
    want to believe they are better-looking and/or wealthier than the
    people they despised in high school. As a public bulletin board slickly branded as a "social media tool," it is a
    microcosm of America itself -- a fake empire fully engaged in
    delusional,
    juvenile, anti-social activity. When a terrible act of bullying or suicide occurs, or when a
    rape, shooting, stabbing, strangulation, or other violent act takes place, the
    first location the police scour for evidence is... Facebook."

  • Boogie Sheftell

    Within the C-suite, perceptions remain that social media is at best a
    soft PR tool and at worst a time sink for already distracted employees...

  • R. Toupin

    Which proves Mark Zuckerberg's point in his letter that accompanied the IPO.  The social aspects of the internet have tremendous value that should be understood by the business world but really are not!

  • Sri

    No real data, other than some dodgy stuff from McKinsey. It is bit silly to ban social media at work. Then you can have an argument to ban personal mobiles at work too.
    But these kind of fantastic projection of how if everyone starts tweeting at work, things will become magically interconnected & some value will pop out from this fuzzy cloud.. is well fuzzy.
    I use social media, the company I work doesn't ban it and has a extensive & active social media presence both internal & external.

    If anyone remembers Sun Systems CEO was a frequent blogger. He lost his job & Oracle acquired Sun & didn't pan out very well as per analyst reports. Did blogging help Sun? Would tweeting by CEO made any difference? You decide!

  • Don Williams

    I tried twitter for several months. I followed a few news feeds, a few high profile op-ed writers, and even a few random people. And a lot of people followed me. My verdict after 90 days:

    It's stupid. Most of what you read, even by otherwise gifted writers, is just dumb. And the gems are so few and far between it is simply not worth the time. I've not tweeted in 6 months, though I still get twitter requests to tweet. Very little information of value can be shared in so short a space, regardless of the companies claims of "higher quality info.

    Meh.