I often hear from business leaders that while they see some value in using Facebook for business-to-customer interactions, they see little value in using it internally. They argue that the use of Facebook to engage in social chit-chat will distract employees from their work and make them unproductive. I believe that these business leaders are not seeing the value of the social interaction that is facilitated by a tool such as Facebook. Research tells us that social interaction is very useful for facilitating knowledge transfer and innovation in organizations. It is, therefore, not surprising that some companies are reporting significant benefits from the internal use of Facebook or a similar tool.

The value of social interactions

W. Tsai and his colleagues have published findings that demonstrate the value of social interaction within a company. In one of their studies, the authors found that social interaction across business units led to the exchange and combination of resources (e.g., knowledge, service, products) by individuals within those business units. This effect occurred both directly and via the facilitation of trust among individuals. The exchange and combination of resources, in turn, was related to product innovation in the organization. In another study, Tsai and his colleagues found that when members of different business units interacted socially, they also transferred more knowledge. Additionally, this effect of social interaction on knowledge transfer became stronger the more the business units competed with each other for market share. The logic behind this effect is similar to that behind the adage ‘keep your friends close, and your enemies closer.’ Essentially, when your unit is competing with another, there is greater incentive to learn what those units are up to so that you can benchmark yourself and compete more effectively. Since the competing unit shares the same resource constraints and market situation as your unit, there are also greater opportunities for synergistic activities.

Research from Gallup provides additional support for why social interactions might be useful. Using data from its employee engagement questionnaire, Gallup has found that people with best friends at work are also more engaged in their work. Greater employee engagement, in turn, has been found to lead to greater profitability, customer engagement, and employee retention. Where do social interactions figure in here? Gallup’s research did not focus on social interactions but I think it is reasonable to think that social interactions at workplace are an important precursor to having a best friend at work.

Companies using social networking tools internally

Perhaps it is due to the potential of social interaction to lead to favorable business outcomes that some companies have adopted Facebook or tools like it for internal use. Serena Software, a company of about 800 employees with average age close to 50, adopted Facebook to improve the quality of workplace interaction (see related article). According to the company, the Facebook initiative has yielded tactical and strategic benefits. With over 95% penetration of Facebook within the company, the company’s culture has changed. The social networking tool has led to relationships that would not have existed otherwise.

A Canadian manufacturer of construction goods, Canam Group, decided to use Facebook for various aspects of its 2008 leadership conference (see related article). About 200 attendees, who were 50 years old on average, were offered the use of Facebook to create and share their profiles, register for the conference, and take part in the opening ceremony, elections, quizzes, and photo contests. The use of Facebook was a huge success, with a 99% participation rate. After the conference, Canam Group decided to set up a Facebook group that is available to its employees and retirees to create a more collaborative culture within the company.

IBM has set up a Facebook-like social networking tool, called Beehive, to facilitate personal and professional connections within the company. Like Facebook, Beehive provides an employee who is joining the network a profile page. On this page, employees can use the status message field and the ‘About Me’ section to update others about where they are, what they are doing, and what they are thinking. Users can also post photos, create lists to share their thoughts, and organize events. Beehive has been reported to facilitate connections at a social or human level between people working remotely. It has also led to opportunities for collaboration that would not have arisen in the absence of information about who else share’s one’s interest and expertise.

Summary

The use of social networking tools internally can add value by facilitating social interactions. Social networking tools can facilitate cultural change and friendships within your organization. They can help your employees discover who shares their interests and expertise and open up opportunities for knowledge sharing and collaboration. Distributed workers who have been assigned to a common project can use such tools to learn more about each other and break the ice. If you are not comfortable using Facebook internally because of its public nature, alternatives that can be deployed within your firewall (e.g., Lotus Connection, Socialtext) are available. A new tool, called as Convofy, will also be available as an alternative in the near future.