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Mid-sized Businesses Suffer a Social Media Gap

Why owners are less likely to stick to a social strategy as their businesses grow--and how it hurts them.

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Lots of companies talk about social networking and strategy, but, like the weather, relatively few do anything about it, and this is nowhere more true than at midsized companies, according to a couple of recent studies. The irony is that their CEOs increasingly are interested in integrating social into their strategies.

They Know It's Important

IBM's latest global CEO survey found that companies in general have a growing interest in ideas that have natural connections to social networks and computing. About three-quarters of CEOs at organizations of all sizes say collaboration is a top trait they seek in employees. Take companies with between 100 and 1,000 employees, and the numbers get strikingly different. For example, 45% of CEOs in organizations of that size thought that they needed a more open environment and greater use of Facebook, Twitter, and other social platforms. That number is about double what it was last year.

But right now, only about 15% actually are present on social networks. Interestingly, this generally reflects a joint study by MIT Sloan Management Review and Deloitte. In general, 52% of the 3,478 survey responses indicated that "social business is important or somewhat important to their business today." Interestingly, look at the next tier of companies--those with more than 1,000 employees and fewer than 100,000--and the respondents perceived less value from social networks than the smallest or largest.

Less Social as They Scale

Somehow, as companies get progressive larger, they seem more disconnected from social computing and networking. The Sloan/Deloitte study quoted Boston College assistant professor Gerald Kane, who studies strategic use of information by businesses, with the following explanation:

I think smaller firms like social business because they don't have the buying power or the resources to conduct traditional media campaigns. They can use social media to increase their voice and connect with customers to really make themselves seem bigger than they are.

Massively large organizations, in contrast, have lots of resources, can afford to experiment, and like to seem like a "collection of people who really care about their products and customers," rather than a monolith.

The Side Effects

There are a couple of dangers for companies as they grow. One is that they lose focus on an important tool for marketing, customer relations, strategic information gathering, and competitive advantage. There are enough resources for "real" communications, and so the drive to use social weakens. Companies no longer feel that it is a replacement.

The other danger is the lack of control. As the IBM study points out, it's unlikely that only 15% at mid-sized firms are using social networks. What is more likely is that employees start initiatives as skunkworks projects that pass under the notice of people at the top. The problem is that the initiatives may not correctly support the company's overall strategy or other activities.

Now is the time to get things under control, as, according to both studies, social will only get more important. IBM says that within a few years, half of companies will have an official social presence, while the joint Sloan/Deloitte study expects 63% of companies within three years will find social strategies important to their organizations.

The various data suggest that entrepreneurs have a window of opportunity of about three years to get ahead of their rivals of all sizes and establish strong social corporate presences.

Last updated: Jun 19, 2012

ERIK SHERMAN | Columnist

Erik Sherman's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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