How does a real estate investor in Milwaukee predict true housing market demand and fine-tune better forecasts of potential homeowners and or renters in New York City, 880 miles away? The answer lies in monitoring social interactions – location-specific tweets, pokes, and “likes” – where participants reveal individual and collective location preferences and willingness to pay.
In the age of social technologies, the world has been flattening much faster since Twitter hit the corporate bloodstream with its 140-character limit, and Facebook began the long expedition to make the world “more open and connected.”
Most business leaders want to change how work is done — increase productivity, enhance employee engagement, build sustainable businesses and inspire innovation. Moreover, innovations such as shifting from one-to-one communication channels to social channels (one-to-many), creating accessible and searchable information, and enhancing creative forces among employees have been marketed as key drivers and benefits of social technologies.
But vital questions remain: How can organizations capture the value of social technologies, encourage collaboration across functional silos, and improve productivity? How can organizational practices be transformed to fully benefit from social networks on a large-scale basis? And how can social media facilitate or change the way businesses approach sustainability?
Against the backdrop of these perplexing questions, a recent McKinsey Global Institute report, The social economy: Unlocking value and productivity through social technologies, found that application of social technologies to key sectors such as financial services, manufacturing, energy and transportation remains largely untapped. According to the report, “The speed and scale of adoption of social technologies by consumers has exceeded that of previous technologies. Yet, consumers and companies are far from capturing the full potential impact of these technologies.”
Here are a few answers to help us understand this situation.
What is sustainable business?
A sustainable business is an enterprise built on organizational structures, processes, practices and culture that creates as little waste as possible while depending on as few resources as possible. Simply put these are a set of benchmarks that enable an organization to increase its operating efficiency and reduce its environmental impacts. To understand this practice, it includes practices that encourage remanufacture or repurpose of the end product, even after the product comes to the end of its useful life. Reuse is therefore a primary characteristic of a sustainable business. As businesses move from the traditional “end-of-pipe” approach to a preventive approach where decoupling and innovation in manufacturing processes are emphasized, then environmental sustainability can increase, not reduce, a firm’s profits and strengthen the balance sheet.
How does social technology help build sustainable business?
Social technology can help promote sustainable practices through value creation. For example, social media can add value in organizational functions by solving product development problems though co-creation, help improve distribution efficiency in product demand variations, gather insights about products and perceptions of market segments, and help identify cost-effective procurement leads through enhanced external engagement. However, organizations need a well-structured marketing funnel that clearly identifies their products and target markets. This strategy should explain the key sustainability strategies and decoupling processes. Decoupling is about doing more with less: more goods and services with fewer resource inputs and fewer emissions. At its core is improving efficiency. And since efficiency is a key factor in business sustainability practices, decoupling has a familiar logic and a clear appeal as a solution to achieving inclusive growth and long-term sustainability.
Does sustainability vary by country and environment?
Location and environment determine the issues and factors that shape sustainability practices. For instance, in California an initiative built on the concept of “one business’s trash is another business’s treasure,”—the California Materials Exchange (CalMAX) helps businesses and organizations find alternative use and disposal avenues to their waste products. In so doing, it deepens sustainability-business connection by conserving energy and fostering re-use of resources, which would otherwise end up in landfills. Related to the idea of location is capital cost. Investing in sustainable processes may result in financial benefits and huge pay off, but this may not happen at the level of profit desired. As a result, if the organization is small and capital scarce, investing in sustainable operations may not be a smart business decision. Conversely, if capital is plentiful, then long-term investment in sustainability becomes competitive to attract capital.
How is social technology changing how organizations manage sustainability?
Sustainability and value creation across industries through application of social technologies has tangible, and even intangible benefits. For instance, PepsiCo (through Pepsi Refresh Project) and Ford (through People’s Fleet) have both applied innovative social-business models to advance sustainability and corporate social responsibility: built homes for deserving community members, created jobs and invested in sustainable education initiatives targeting local communities. As the Mckinsey report shows, social technologies will continue to create value to organizations as their application across industries grows.
Which industries use social media most to promote sustainability?
There is no doubt that sustainability field is growing and the link between people, profits and planet is gaining acceptance. Automotive, transportation, financial services and energy companies are the most active users of social media in promoting sustainability and employee engagement. The trend that I see is that this will ultimately become a routine rather than as special case of industry-specific or business capital requirements. It will simply become a part of capital set aside for business modernization.