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Unlocking value with social technologies

Noel Forster, Untitled, Flowers Gallery

Social technologies are a modern phenomenon. They have found favour with consumers at a faster rate than any previous technologies.

Writing for McKinsey Quarterly, Jacques Bughin, Michael Chui and James Manyika point out that it took 13 years for commercial television to reach 50 million households, while internet service providers signed their 50 millionth subscriber in just three years. What’s more, Facebook gained 50 million users in just one year, while Twitter needed only nine months to accrue the same total.

The authors observe that this accelerated pace of adoption by the world’s consumers has been accompanied by sweeping cultural, economic and social changes. They add that companies have also adopted the technologies but have only generated a small fraction of their potential value.

Bughin, Chui and Manyika studied hundreds of cases around the globe where organisations used social technologies. They estimate that improving collaboration and communication within and across companies using social technologies could raise productivity among interaction workers by between 20% and 25%.

Aside from email, the authors believe companies can also improve efficiency for the 20% of the day for which knowledge workers search for and gather information. They insist that by using a searchable store of social messages, employees could repurpose 30% to 35% of their information search time.

However, the potential of social technologies goes beyond productivity – Bughin, Chui and Manyika add that additional areas can benefit, such as consumer marketing and customer service.

The authors examined four major sectors: consumer packaged goods (CPG), advanced manufacturing, professional services, and consumer-facing financial services. For each sector they assessed the value potential in five areas: R&D, operations and distribution, marketing and sales, customer service, and business support.


Consumer social media was adopted early on by many CPG companies as a way of engaging customers and discovering insights. However, the authors’ research suggests “substantial gains” could be made with additional applications, especially in marketing and sales. They have found that productivity of advertising expenditures can be increased by 30% to 60% with interactive product campaigns deploying social technologies.

New, collaborative forms of engagement with customers can improve both the speed and understanding of product development. Kraft has benefited from such an approach, enlisting communities of nutrition experts and potential consumers, allowing them to obtain key insights and significantly reduce the time needed to market 48 new South Beach Diet products.


Highly educated knowledge workers often become “siloed” in specific units of advanced manufacturing operations. However, their effectiveness can be increased by collaboration through social technologies across organisational boundaries.

Companies in the automotive industry can also use social technologies for marketing purposes and to gain customer insights. For example, Kia Motors increased space and comfort in one of its models after social forums revealed that consumers found the cabin cramped and uncomfortable.


In professional service industries such as advertising, accounting, engineering, consulting and design, value is created through interactions with colleagues and clients. Bughin, Chui and Manyika insist that productivity gains can be achieved with social technologies by managing internal work flows and providing “meaningful real-time” interactions with customers.

The authors report that global design firm Choosa enables clients to use a company social platform to post requests for proposals, allowing contractors to submit competing design plans.


Social technologies can help improve delivery of service, lower costs and enhance customer experience in industries such as retail banking, insurance and property.

TD bank, for example, deployed a social platform for 85,000 employees to improve communication and collaboration. This resulted in a reduction in the number of meetings, phone calls and unwanted emails.

Movenbank, meanwhile, has set up a Facebook-based, branchless institution targeting 50,000 customers which uses CRED, an intelligent system advising on financial matters and analysing customer information for credit decisions.


Because of the fast pace of development, Bughin, Chui and Manyika warn that “a universal set of prescriptions for business leaders to follow in exploiting these opportunities has yet to emerge”.

Also, certain risks need to be managed, such as “concerns about productivity-dampening distractions, privacy, the potential loss of proprietary information, and reputational issues”.

However, the authors recommend focusing on “next practices” rather than best practices in the early stages of social technology adoption. They describe the broad principles of these:

  • A “critical mass of participation” should be created, and bottom-up use of technologies is crucial.
  • Experimentation is essential, and an array of practices and technologies should be tested since what works for one organisation might not work for another.


Capturing Business Value With Social Technologies
Jacques Bughin, Michael Chui and James Manyika
McKinsey Quarterly