The current focus on social media has many leaders wondering about its impact, specifically, for their businesses.
Is this a structural change, or just a fad?
Does it impact the whole economy or just particular industries; does it apply across a business or just to sales; is it the right time to invest in platforms; and how, if at all, social media contributes to productivity and the bottom line?
Let me paint the picture in numbers.
Right now, there are more devices connected to the web than people on earth. Eight new users come online every second – 91% of whom are using social media regularly.
Not only that, 70% of these adults are shopping online and buying from brands they follow.
Currently consumers are spending almost US$300,000 a minute, or US$391,680,000 a day, online and the figure growing fast.
According to Goldman Sachs, online will contribute almost $1 trillion to the global economy by 2013.
But these awe-inspiring numbers are just the beginning of what is projected to be a steep trajectory.
Boston Consulting Group says that by 2016, online sales will contribute $4.2 trillion to the GDP of G20 nations, making it the equivalent of the 5th biggest economy worldwide.
It’s a pretty compelling reason to sit down and suss out the world of social media, don’t you think?
Online sales in mature markets are expected to grow annually at 8% but the runaway story is in developing markets, where growth is conservatively projected to be twice as fast.
But social media is not just about products and marketing; it’s much broader than that.
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Social media influences everything from the way we meet each other to how we learn, shop, vote and work.
At work, McKinsey Global Institute believes social technologies could improve professional productivity by up to 25% by enhancing communications, knowledge-sharing and collaboration.
For example, when companies use social media internally, the messages employees create become a searchable record of content that can reduce time spent looking for information by 35%.
The cross-disciplinary nature of conversations can also help to add value as employees share information across the business rather than within silos and avoid duplication as well as leverage off existing ideas.
Despite this, many leaders block access to social media at work. A study by accounting firm, KPMG, found only around half of Australian companies are using social media as an integrated part of marketing strategy, let alone a business model. They see them as distractions, despite the potential productivity gains and the views of young workers, who value access to social media higher than a salary rise.
An even more remarkable finding is that that only 32% of companies view social as an executive priority.
A 2012 report on Fortune 500 CEOs’ use of social media shows that the greatest disconnect is at the top, with only 16% of CEOs having some presence in social and up to 70% of CEOs have no social media presence at all.
In fact, CEOs are the laggards here. They are behind the general population and existing and potential customers, stakeholders, suppliers and employees. That is not leadership.
There are some exceptions. Leaders such as Rupert Murdoch (News Corp), Jack Slazwedel (American Family Insurance) and Meg Whitman (Hewlett Packard) understand the link between a connected leader, social visibility and what LeadingCompany’s branding expert, Trevor Young, calls “the connected brand”.
But the social CEO is not limited to celebrity; the ubiquity of social media means that non-social leaders will risk their competitiveness.
As chief custodians of their businesses and brands, executives have a responsibility to shareholders for managing a presence online.
The business imperative for social is clear.
With online offering unfettered growth opportunities, social literacy is a must-have future capability and social leadership an imperative.
Dionne Lew is managing director of Bespoke Communications and an advisor to C-suite executives on leadership, strategy and innovation, in particular social leadership for executives in the emerging social era. She is a member of the Australian Institute of Company Directors. www.dionnekasianlew.com