McKinsey report shows that using Web 2.0 creates competitive advantage – part ii

by Justin Souter on January 19, 2011


Second post in a series of 3 – hopefully the title gives it away! If the series gizmo is working properly, you should have a box at the top right of this post which links to all the posts live in this series…

This post contains McKinsey’s key assertions regarding the difference Web 2.0 makes, and also their suggested 4 steps going forward.

Statistical analysis

ita_bewe09[1] The Authors did some number-crunching and the following quotes summarise their findings:

“We performed a series of statistical analyses to better understand the relationship between our categories of networked organizations and three core self-reported performance metrics: market share gains, operating profits, and market leadership. […]

This, we believe, is statistically significant evidence that technology-enabled collaboration with external stakeholders helps organizations gain market share from the competition. They do this, in our experience, by forging closer marketing relationships with customers and by involving them in customer support and product-development efforts. […]

“These findings suggest that Web technologies can underwrite a more agile organization where frontline staff members make local decisions and companies are better at leveraging outside resources to raise productivity and to create more valuable products and services. The result, the survey suggests, is higher profits. […]

“A more likely explanation for the data is that market leaders use Web 2.0 to strengthen internal collaboration, seeking to enhance the organizational resiliency required to maintain their leadership positions. Market challengers, by contrast, may be more focused on external uses of Web 2.0 to win customers from industry leaders.”

These effects could be assumed to be for larger organisations, but arguably SMEs can ‘punch above their weight’ using social media. In the words of one of the comments:

You talk about Web 2.0—I see the fully networked organisation as being the role model of the ‘social business.’ I think this report will go some way to helping answer the question from the CEO “What is the financial return on an investment in social media?”

Going forward

The following is a truncated form of McK’s recommendations:

“The imperative for business leaders is clear: falling behind in creating internal and external networks could be a critical mistake. Executives need to push their organizations toward becoming fully networked enterprises. Our research suggests some specific steps:

  • Integrate the use of Web 2.0 into employees’ day-to-day work activities.
  • Continue to drive adoption and usage.
  • Break down the barriers to organizational change.
  • Apply Web 2.0 technologies to interactions with customers, business partners, and employees.”

More detail on the McKinsey website.

Other posts

The posts in the series:

  1. Introduction and discussion of the ‘networked organisation’ (ok, McKinsey spell it organi*z*ation) but I’m British… ;-)
  2. This one
  3. Detailed survey information, in the form of two graphs
  4. Supplementary information
Series NavigationMcKinsey report shows that using Web 2.0 creates competitive advantage – part iMcKinsey report shows that using Web 2.0 creates competitive advantage – part iii

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