Re-cutting and restructuring budgets - Don't forget Social Media

Now is the time for learning professionals to embrace social media as an emerging and engaging way to enhance an organisation’s strategy. A confluence of issues, both mitigated and unmitigated, has arisen over the past several quarters. Budget cuts, staff reductions, travel embargos, and facility consolidation have left many chief learning officers, chief marketing officers, and chief operations officers clamouring for the emergency brake. Add to this the rising inferno of social media, informal learning, and anything to do with a 2.0 moniker—and a full-blown learning crisis is existing for improving learning for employees, marketing with intent for customers, and expending the right energy on retention and acquisition of customers whilst providing your core operation.

Given this pending calamity, it’s time for business leaders to rethink their strategy to make enterprise 2.0 an important piece of the corporate spectrum if you want to stay ahead of the game. Leaders should be embracing it, but it does require new approaches in leadership and budget planning to successfully execute, rather than simply tightening the purse strings on conventional marketing, learning, operations. This spend should be transitioned to enterprise 2.0 spend.

More with less

Despite recent and modest gains in the economy, the latest US credit downgrade, Europe sovereign debt crisis and general contraction globally, training budgets are going to plummet. It always does in firms when budgetary pressures rear their ugly head. During these times executives preach to senior managers and senior managers preach to middle managers to do “more with less” is. No matter the study, training, traditional marketing, service budgets have been and continue to reduce or run flat. Whilst social media marketing budgets might be increasing, organisations are showing a tendency to transition traditional forms of marketing professionals into this field. The problem with this is the professionals have distinctively different skill sets.

In a 2009 IDC report, training budgets decreased on average by 19.5 percent. ASTD research also suggests that corporate learning investment, as a percentage of company payroll, has decreased from 2.24 percent in 2008 to 1.96 percent in 2010. Clearly, a fiscal pattern is emerging and corporate learning budgets are running flat or, worse, dramatically shrinking.

Furthermore in the downturn from 2008 to 2010, service budgets have been slashed, with talent being let go, downsizing conducted with broad brushes. Refocusing service efforts into the social media channel would likely offset any need to downsize.

Enter Enterprise 2.0

Given the meteoric rise of social media in the consumer space, it was only a matter of time before various 2.0 technologies surfaced within the organisation. Not only is it crucial that organisations embrace social media to understand consumers, companies need to restructure for social media, particularly within marketing, customer analytics, and business intelligence groups. It is a whole of business paradigm shift, not just required to lazily go where the interest is. Furthermore it should not be viewed as a time wasting tool.

This is where the concept social learning comes into play. Social learning can be thought of as the use of Enterprise 2.0 opportunities and technologies to help facilitate the learning experience of employees. Blogs, wikis, micro-blogging, YouTube-like video sharing, tagging, ranking, virtual worlds, discussion forums, and generally any other form of user-generated content (for learning, communication, and marketing) are both practical and engaging ways to complement the learning strategy of any organisation. Enterprise 2.0 opportunities are no longer just to socially connect with friends. It mines real-time information, sources real-time preferences and drives understanding of new trends to reshape an organisation’s capability around to drive financial and organisational performance.

Social media and enterprise 2.0 within organisations is essential to capability building and transforming talent from point A to B, finding the next best product, building a consumer-fellowship, distributing product and services via new channels. Gartner predicts that by 2014, social learning-like services will actually replace email as the primary communications vehicle for at least 20 percent of the workforce. Clearly, change is upon us all. Therefore, if planned correctly, social media and appropriate mobilisation of capability can not only help with the points of practicality and engagement, it can also assist those aforementioned budget problems.

Restructure for Enterprise 2.0 – starting at the top

Prior to solving the budget issue, organisations need to structure and build an organisation that can leverage social media for it’s multitude of purposes: learning, marketing, product development analytics, and customer understanding. Organisations need to develop an organisation within the organisation focused on enterprise 2.0. Regardless what industry the organisation plays within, social media implications exists. For fast-moving consumer goods companies – customers want the latest deal, and want to know where, via a social media means. Conversely, the company wants to know consumer preferences to develop new products and augment existing ones. What better way to understand this through the enterprise 2.0 social media ‘like’ functionality permeating the online world now. Share of wallet has never been so crucial for banks, and customer churn is the death spiral – financial services firms need to leverage social media to look at methods to cross-sell, bundle products, to the savvy social customer. Energy companies need to educate about environmental footprints, customer awareness on energy usage, help their communities with demand management – channelling this through to the mass market via social media is a must to have a hard-hitting impact.

Nevermore has the matrix structure been more pertinent in building a social media organisation within the construct of an existing organisation. Social media and enterprise 2.0 capabilities need to permeate almost every function of the organisation. Hence the social media operation needs to be virtual. A word that is synonymous with this capability. These professionals with dedicated functional expertise be it marketing, customer analytics, business intelligence, ICT, or sales and operations, need to work across the traditional forms of the organisation yet act as a remote community to bring the organisation on the Enterprise 2.0 transformation. This is what the construct could look like:

Example Enterprise 2.0 Organisation Blueprint - Investment is required for all industries today

But where is the ROI?

There are plenty of individuals within the Enterprise 2.0 space who are not yet on the train. Before hopping on, as is customary to the social vertical itself, leaders need to prove its worth. Babson Education, in the report Social Software in Business, estimate that 84 percent of organisations do not measure return-on-investment when it comes to the use or implementation of social technologies such as wikis, blogs, user-generated content and videos, discussion boards, microblogs, ratings, chat, and others. Quite simply, those organisations already subconsciously investing in social media aren’t yet interested in return-on-investment; although C-level executives and senior management paradoxically highlight they are interested in connecting employees, improving engagement, and allowing the learning and knowledge sharing to naturally occur in more effective and efficient ways.

Did the sales team wait for an ROI calculation before trying to get a leg up on the competition by offering a differentiated product or service? No, it just made sense. Social media, in this case, is analogous to investing in something new and it must start strategically and organisationally. It’s time to evade those budget cuts and begin investing in an area that will only show growth for years to come.