How does one distinguish between a fad and a social or business transformation? When it comes to social media and its impact on business, I’m convinced of just two things.
The first is social media is much more than a fad (which you have probably read about, as well.) It’s not just that Twitter has been at the heart of the Arab Spring and other social and political developments of recent years. Nor that Facebook has acquired so many millions of users all over the world. It’s the fact that people use these new media in such a variety of ways it becomes impossible to distinguish business from pleasure. Wikipedia, for instance, has shown that people not only long to discover, they want to share. The psychological effect on business and public life has been immense; in fact I would say that there is a new business climate of openness.
But not all the ancient verities of business have disappeared, which brings me to my second firm conviction – simply that we shouldn’t get carried away. Congressman Anthony Wiener was not the first public figure to be undone by the ill-advised use of Twitter, and he won’t be the last. These things need to be handled with care.
It was with great interest, therefore, that I read the annual social media survey commissioned by Regus. This year, Regus polled more than 17,000 senior managers and business owners in 80 countries on how social media has impacted their businesses worldwide. Interestingly, what was uncovered is that while most global businesses see social networking as an important business tool and an essential part of success, there is an enormous discrepancy between countries.
China and India topped the list of those who use social networks to find new customers, at 65% and 61% respectively, both figures much higher than the results from the survey commissioned a year ago. But while the global average hovered around 47%, up from 40% in 2010, the Japanese were far more sceptical of the idea of using social networks to find new customers, with only 23% of respondents noting that they do so. In fact, that number is down 7% from a year ago.
In the U.S., the survey revealed that 43% of U.S. businesses use social media to win new business – up eight percentage points from last year’s survey. 55% of firms also encourage their employees to join social networks like LinkedIn and Xing to build relationships, with 38% of firms dedicating up to 20% of their marketing budget to social networking activity.
Another note of caution: 61% of respondents globally said companies would not succeed if they used social networking and online campaigns to the exclusion of other marketing methods. And, although 35% of companies planned to devote more budget to social networking, this is by no means a majority of businesses. In fact, 34% of global companies states that that devote no budget to social media at all.
The survey confirms what I suspect—social media, for all its popularity and benefits is by no means a panacea.
One of the problems for businesses is social media it’s as uncontrollable as it is unpredictable. China is the exception, where the government still applies a high degree of censorship to its social media. Nonetheless China now has Renren, its own highly successful equivalent of Facebook, hugely popular among students and now trading on the New York Stock Exchange, as well as Kaixin, a version aimed at white-collar workers.
Censorship is not a serious option for global business. So what should we do? Must we all have a Facebook presence? Must we all tweet? Should we insist that all our managers and executives join LinkedIn or some equivalent network? Is collaboration the only way to do business nowadays?
The founding principal of all social networks is participation is voluntary. Social media is about making connections, and the more connections you make, the greater openness you have to new ideas, the stronger your company’s ability to see trouble coming.