Networked organizations - The key to industrial success?

Enterprise 2.0 and social collaboration are currently on everyone's lips when talking about how to improve enterprise productivity. But to state that the right tools will you and your employees make collaborate is a myth. Today we want to share a study from the McKinsey Global Institute revealing what companies do make use of Web 2.0 tools and how do they profit from it.


Internal, external or all way round networking

The study (covering 3.249 executives) identified that companies are already making use of Web 2.0 tools and technologies in general. 9 out of 10 even receive even some kind of benefit out of it. But most of the inteviewed companies (79%) report only a small improvement across business metrics like information flow or information sharing. This means, there is still room to grow.

Beside this group of "learning enterprises", there are three types of companies when it comes down to beneficial social collaboration: first internally networked, second externally netoworked and third are fully networked enterprises.

Internal networking provides a greater process flexibility for 13% of the Web 2.0 using enterprises. This results in a less hierarchical information sharing and an easier processing across organizational silos as well as a more project-based accomplishment of tasks. 

External networks are used to interact more directly with customers or other partners beyond company borders. The result is in a more tighter relationship as a kind of a competitive advantage. But as the study points out, a successful networking with customers does not necessarily mean that internal collaboration works as fluid. The third group, represented by 3% of enterprices already using Web 2.0 technologies, quote to apply these both internally as well as externally. The biggest advantage here lies in the break down of different organizational barriers, causing a greater level of collaboration and a liquid flow of information.     


When asked about measurable benefits, foreseable findings came out. An increase in market share is mostly common to enterprises which are fully or externally networked.  That means talking directly to customers, partners and other peers and creating a relationship pays out in gaining your competitors shares.

 Higher profits, the use of Web 2.0 tools is reflected in the the ability of making decision on a lower and more local level. But building up work groups within the company as well as with individuals from outside the organization do indirectly impact your profits too. And last but not least, the survey revealed that a solid internal networking is more relavant than collaboration with external partners, when talking about market leadership

Overall 27% of the interviewed executives reported an increase in market share and higher profits. All metrics are self-reported.  More details can be viewed in the graphic.

(source: McKinsey Quaterly. Number 22, Spring 2011)


It's all in the workflow ... 

So what's now the right way if you now want to make to most of social collaboration within your company? Firstly, a tight integration of Web 2.0 technologies into the daily workflow of each employee. Because what gets used often and properly that leads also to improvements ... and profits. Secondly, do not forget to drive the adoption of all collaboration processes, so internal barriers disappear and your employees gain a greater flexibility in dealing with problems. And third, make your information flow be an interaction between your employees themselves as well as all your customers and business partners at the same time. 


The original report: McKinsey Quaterly. Rise of the networked enterprise.


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