At the end of last month McKinsey published the results of their fifth annual survey on the ways organizations use social technologies.
For the most part, the results are a snooze: The adoption of
social media tools, from Twitter to Quora, is steadily rising; measurable
benefits are steadily if slowly increasing; and the sophistication in the way
organizations use social media has seen significant gains. All good, although
hardly ground-breaking news.
But wait. The McKinsey people aren’t anything if not
thorough, so they also tried to show a correlation between adoption of social
media and self-reported organizational performance (that is, market share
gains, operating margin compared to competition, and being first in industry
market share). To my surprise, on the latter measure – showing a link between market
share leadership and adopting social tools – the correlations are mostly negative. This suggests that the
adoption of social media is adversely
associated with being a market leader, a counter-intuitive and strange
result. If it were so, then the good people at McKinsey should be telling the
titans of industry to flee Facebook, ban blogging, and terminate Twitter
But wait. The researchers’ explanation of this is that “while
market leaders may use social media technologies within the organization, they
might be less inclined than market challengers to push for a full range of
benefits [and use social media externally].” So, according to McKinsey, they
suspect that market leaders as a group are actually under-utilizing social media.
This sounds plausible. Indeed, very detailed
research by UMASS Dartmouth shows that for blogs, about 23 percent of the
Fortune 500 (large, market-share leaders) have corporate blogs, compared to
well over 50% if the Inc. 500, a list of the fastest-growing companies compiled
by Inc. magazine. There are similar results for corporate adoption of Facebook
and Twitter – the Fortune 500 lag the rest of industry, especially the
Put these two pieces of research together and we have strong
data suggesting that large, market-share leaders – think companies like WalMart, Exxon-Mobil,
Proctor and Gamble, Hewlett Packard, Boeing and Dow Chemical – are collectively failing to
extract value from the social media revolution. These findings play into the
stereotype of the lumbering, bureaucratic multinational that often enjoy a
market-share lead but fail to take first-mover advantage of new innovations.
And the research clearly shows that the price of late
adoption of social media is very high indeed.