Why do SMB social networking projects fail in the first 6 months?

Now, it is companies without an established presence on public social media that are the exception, and more and more businesses are exploring the benefits of social networking inside the company firewall.

This change of heart is undoubtedly driven by compelling statistics proving the benefits of employee social networks. A recent report from McKinsey Global Institute (MGI) estimates that social networking could potentially contribute between ?541bn and ?780m in annual value in just four industry sectors. Whereas most business use of social networking so far has been external-facing, the MGI report finds that two thirds of the potential value lies inside the company. It estimates that the use of social tools to enhance communications, knowledge sharing and collaboration can enhance the productivity of high-skill knowledge workers by 20-25 per cent.

Yet, the harsh reality is that many internal-facing enterprise social networking projects fail in their first six months. It’s tempting to blame these failures on the tools used, but with some companies suffering repeated failures on different technology platforms, it’s clear that blaming the tools is often just a convenient excuse for wider organisation failures.

One of the most common reasons for failure of an employee social networking project is a lack of clear purpose for the network created. There was, for a time, a school of thought that said the best social projects were ones driven from the ground up ? groups of employees choosing to use a tool, with use then expanding virally throughout the company. 

This approach is largely discredited now, because while it is sometimes very effective at getting a social network started, these networks often have no established business objective and usage fizzles out. Charlene Li of Altimeter Group describes in her report “Making the case for enterprise social networks” how ?the reality of everyday work? catches up with employees and they are drawn away from the social network back to their ?day jobs?, where they fall back in established working and communication patterns. Or, alternatively, without clear business objectives, the network degenerates into a chat room for gossip and trivialities ? everything senior management feared would happen.

These days, it is increasingly accepted that, for a social network inside a company to succeed, it needs clearly defined business objectives and approval from senior management. It needs to be a place where real work gets done, with the social environment providing richer communication and collaboration capabilities for business processes that you would have been working on anyway.

But this highlights another common cause of failure. For a social network to add real value to the processes it is hosting, employees need to take advantage of the opportunities that the social environment presents. They need to change from the traditional knowledge-is-power, need-to-know mentality to a need-to-share attitude where they embrace the opportunity the social network presents to share their knowledge.

For many organisations, this sort of cultural change is a far greater challenge than choosing the right tools and gaining management approval. It requires genuine leadership, with senior managers setting an example to their departments about how it is no longer acceptable to hoard knowledge. This is a change that many managers struggle to make, but if they don?t do it themselves, they are unlikely to convince their departments to.

Richard Hughes is the director of product strategy at BroadVision.

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