The State of Social Business in Australia 2012 Whitepaper

WHITEPAPERThe State of Social Businessin Australia for 2012Who is Achieving Strategic Results by DesignMay 2012by Dion Hinchcliffe and James DellowRipple Effect Group Pty Ltd (ABN: 28 135 533 514)P.O. Box 1227, Woollahra, N.S.W. 1350Suite 1, 50 Stanley Street, Darlinghurst, N.S.W. 2010© 2012 Ripple Effect Group www.rippleffectgroup.com © 2012 Ripple Effect Group Pty Ltd 1

IntroductionDespite being nearly last in the developed world in adopting social business (aka enterprisesocial media), a wide cross-section of Australian companies are now seeing the benefits,both inside (workforce and business partner collaboration) and out (customer participation).Encouragingly, the latest data shows that enterprise social media is set to grow by over 25%between 2013 and 2015, the largest uptake yet. In fact, by some accounts, Australia is the5th largest user of grassroots enterprise social networks in the world, highlighting the pent updemand that local companies are likely not yet actively taking advantage of.Yet the proof of success with social business ultimately lies in the real-world, bottom-lineresults. Business leaders and workers are challenging social business evangelists todemonstrate what Australian organisations are actually achieving and what benefits they areseeing. Can applying social media to their various business challenges provide the extra edgeand differentiation to not only keep up but also innovate and help Australian companies to bemore globally competitive?Key FindingsBased on recent data from 2011 and 2012, the following trends and results were uncovered: • Australia is a leader in consumer social media, yet a laggard in social business. • There is strong demand by workers for better tools to collaborate and engage. • Australian firms that strategically commit to social business see the largest results. • While early days, some large enterprises in Australia are implementing social business at scale. • Results of social business implementations in the enterprise in Australia so far include: ‣ Better and more meaningful connection to customers and workers. ‣ Improved market engagement that scales quickly. ‣ More direct handling of media crises with lower negative impact. ‣ Relatively low cost, compared to traditional approaches of similar types of business activity. ‣ Seamless access to content or influence over the products people care about are primary drivers of mass participation. ‣ Adoption of internal enterprise social media can be achieved relatively quickly. www.rippleffectgroup.com © 2012 Ripple Effect Group Pty Ltd 2

Social Business in Australia: The 2012 Data PointsOne of the key insights of the latest data about social media in Australia is how entrenchedand widely adopted it is in people’s personal lives. The most current data available showsthat, in terms of regular engagement, there are: • over 10 million Facebook users, • 4 million Blogspot users, • 2.1 million users of LinkedIn, • 1.8 million users of Twitter, and • the list goes on.When new globally popular social networks appear, such as Instagram and Pinterest, theyalso quickly climb towards the top of the Australian charts. The data are clear: Social mediain Australia is strong, vibrant, and users are deeply engaged. Everyday, millions of Australiansconnect with each other, share information, make plans, and live otherwise more enrichedand community-based lives in social media.However, the story of the business world in Australia is considerably different than theconsumer world today, although it is starting to change. Only Japan, at 27.5 percent, has alower level of business adoption of enterprise social media, with Australia coming in at 41.6percent according to recent data from KPMG1.By comparison, China comes in at 87 percent and the United States at 71.5 percent. Eventhis misses a critically nuanced story, that many organisations claiming adoption of socialmedia often consists of as little as having a corporate Twitter account.The reality is that only a small number of businesses in Australia are using social mediabeyond the early adopter areas of marketing and corporate communications. Those that doare ﬁnding a more potent way of engaging with customers and employees where there is anincreasingly strong story of correlated business results such as higher sales and customersatisfaction2.In a broader business productivity context, it is worth considering that research published bythe University of New South Wales in 2011 showed that the characteristics of high performingAustralian organisations include high levels of employee participation, better use oftechnology and talent management - all factors closely related to being a social business 3.Interestingly, the number of industries engaging in social business today is varied and wide.These include travel, law, government, consumer electronics, retail, and food and beverage.All of these industries in Australia had strong enterprise social media stories with eithersigniﬁcant adoption numbers or concrete outcomes worth noting. While external customerengagement is the most well documented and measured, a number of notable internalstories have emerged recently as well. www.rippleffectgroup.com © 2012 Ripple Effect Group Pty Ltd 3

Real-World Vignettes: Using Social Business toImprove OutcomesCompanies rarely document what they do in a way that can be shared easily in a publicationlike the Harvard Business Review or the Australian Financial Review, to make it clear to therest of their peers about what they have accomplished. This is true of social business asmuch as with any other new strategic business innovation.Sometimes this is due to competitive secrecy (and in our experience, many early adopters inAustralia see social business as a significant source of competitive advantage), often theysimply find it hard to measure the affect of IT when applying technology to business. Yet thebroad outline of social business, here defined as situating social media adapted specifically toenterprise, needs to improve the way organisations operate on both the inside and outside, isemerging at last to the Australia business community.Case study: Canon Australia - customer engagementOne particularly stand-out story is of Canon Australia, whose popular line of digital camerasgenerates particularly strong brand affinity. Their research showed that consumers, whorespected and adored the company’s products, wanted “an enduring relationship with thebrand.4 ” But building an engaging relationship that is both genuine and useful requires atwo-way medium, one in which physical presence or traditional media cannot do.Canon Australia eventually designed a multi-channel social media strategy that was based ona central hub community of enthusiast customers, dubbed the “World of EOS.” Connectedto Facebook, YouTube, and Twitter, as well as being a destination in its own right, thestrategy netted over 75,000 members with over 100,000 photos uploaded. Canon createdengaging events and content such as competitions, live exhibitions, custom designedFacebook applications, tips and tricks posts, and more.The real question of course is whether building relationship-based connections withcustomers creates real business results. Canon reports that in the most recent period inwhich World of EOS was integrated into their marketing efforts that they attained a 50% valueshare across all interchangeable lens cameras, more than all other competitors combined.Unit sales grew by 23% in 2011 over the previous year and brand awareness in the generalAustralian population grew from 26% to 31%.Case study: Tourism Australia and Jetstar - external engagementIn late 2011, Tourism Australia and Jetstar entered into an agreement for a $10 million effortto boost visitor arrivals to the country using primarily social media 5. Already a social mediagiant with over 2 million followers on Facebook, Travel Australia realised that the emergingmiddle class in Asia was already profoundly tech savvy and an ideal group to be engaged insocial media. The plan was to entice tourists by using the channels they frequent most.A series of social media campaigns ensued and just six months later, despite a highAustralian dollar and regional economic weakness, flights have increased and visits aresubstantially up, including a 10.7% increase from China 6. www.rippleffectgroup.com © 2012 Ripple Effect Group Pty Ltd 4

Case study: NSW Department of Education and Communities - employee engagementThe move to social business has not been limited to the private sector. Recently, the NSWDepartment of Education & Communities (previously the Department of Education & Training)provided a 12 point social media policy to its staff. The intent, to lay the groundwork for theirstaff to be become more engaged and collaborative with each other using social media tools.Employees with clearly defined rules can better participate in the freeform and dynamicconversation inherent with social media. They can also be educated on how best to use themto produce useful results for the organisation.While still nascent, the early results have been encouraging and the rollout of enterprise socialnetworking tools inside the department (initially piloted with Yammer, then a full scaleimplementation of Socialtext) has netted over 13,000 active users which have formedspecialist communities of interest around educational topics such as maths and science7.Students themselves can reach out for help on the social network and find teachers or otherswilling to assist them, making it a self-help resource of considerable potential.Case study: Minter Ellison - internal communication and collaborationThe Australian legal sector is undergoing a period of significant change and Minter Ellison’sCIO, Peter Westerveld, wanted to make communication and collaboration better and moreseamless in his company. The challenge: A far-flung workforce with 2,500 total staff, 290partners and over 1,000 lawyers working in Australia, China, New Zealand and the UnitedKingdom. The firm selected a new unified communication service from Cisco, known asQuad, which combines video, audio, virtual meetings, as well as an enterprise social network,which has been rolled out to all employees8. Users can employ the best communicationmethod for a given situation.The desired outcome: Reduced e-mail volume in a very intensive e-mail workplace and betterknowledge retention in a knowledge heavy environment.Case study: Telstra - social customer serviceSocial media has also begun making it’s way into the way Australian telecommunicationsindustry’s work. Telstra has recently had considerable success in using the medium forcustomer care. In August, 2011, they announced they had moved to 24 hours a day, 365days a year social media-based customer support via Twitter and Facebook9. Since then,their followers have exploded from 11,000 to over 37,000. But perhaps what is mostsignificant is that have worked to create a customer community, using Lithium Technologies’social CRM solution, who can are willing to help other customers, reducing the workload onTelstra staff while cutting costs and increasing customer satisfaction.By making major investments in social business for a critical business function, Telstra arepreparing for the future of social customer service.Case study: Domino’s Australia - social product co-designFinally, Domino’s Australia recently used its hundreds of thousands of engaged Facebookfans to design a new product, a pizza. In March 2012, Domino’s asked its social media fansto vote on a wide range of features such as the type of crust used, the sauces to add, the www.rippleffectgroup.com © 2012 Ripple Effect Group Pty Ltd 5

toppings and even the name. Fans of the company quickly joined in en masse. The mostpopular choices were added onto the new pizza, the winner of the process which has sincebeen added to the Domino’s menu, dubbed Fan Favourite.Using the social connection to customers to co-design the exact products that they want isan important new aspect of social business and this is a leading Australian example.Conclusion: Social Business Getting Traction inAustralia in 2012The good news is that despite the Australian industry’s low benchmark position globally foradopting social business, demand exists on the ground from both consumers and workersfor better business use of social media.Customers are willing to interact at scale with businesses, workers are adopting grass rootssocial media until their workplaces offer them. The major roadblocks are easily understood aswell. Despite the transformative nature of social media to improve business outcomes,organisations remain concerned about both security and relevance to their business.However, as shown in the vignettes here, a new crop of leading companies in Australia arefinding their way forward in engaging via social media to improve business outcomes inmarketing, sales, customer care, and product design.The limits that exist in what organisations can achieve by tapping into their customers andemployees are largely self-imposed. We often find that managers need to look beyond theirindividual experiences and attitudes towards social media so they can identify the beneficialpatterns of innovation, productivity and performance that better collaboration and collectiveintelligence provides.Business leaders need only look beyond the shores of Australia for hundreds of additionalhigh-impact examples that can be learned from and applied to their organisation. Socialbusiness, while still in the early days of adoption in Australia during 2012, is showing enoughmaturity around the rest of the world in process and tooling to be taken seriously on themanagement agenda. It is now poised to deliver major benefits in higher performance andbottom-line results for the companies willing and able to make the necessary improvement tothe way they work.Looking ahead, Australian companies should focus on understanding how becoming a socialbusiness can: • Act as a force multiplier that allows them to punch well above their weight in a globalised economy; • Help them to engage better with staff, so that they can attract and retain employees and empower them to be more productive; and • Enable them to deliver innovative co-produced products and more personalised levels of customer service through social media. www.rippleffectgroup.com © 2012 Ripple Effect Group Pty Ltd 6

About the Authors Dion Hinchcliffe - Executive Vice President of Strategy, Dachis Group Dion is Executive Vice President of Strategy of Dachis Group. A well-known enterprise architect, author, blogger, and business strategist, he currently works with the leadership teams of Fortune 500 and Global 2000 ﬁrms to devise strategies to help them adapt their organisations to the challenges and opportunities of the 21stcentury. Dion has been featured or quoted in CIO Magazine, Computerworld, Forbes, Wired,and BusinessWeek, and is a frequent keynote speaker at industry-leading conferences suchas Web 2.0 Expo, Enterprise 2.0, CeBIT, and the Agile Executive Forum.Dion still works hands-on in the trenches where he develops new ground in the areas ofdigital strategy, next-generation IT, enterprise social media, open supply chains, businessagility, and emergent Web architectures in large engagements for enterprise clients. He is alsoco-author of Social Business By Design with Peter Kim (John Wiley and Sons, 2012.) Dionwrites about next-generation business at http://dionhinchcliffe.com and on Twitter at@dhinchcliffe.James Dellow - Senior Business & Technology ConsultantMaster of Business & Technology (MBT) As General Manager, Social Business Consulting, James is responsible for managing the technical and organisational aspects of all social software implementations. This encompasses helping organisations maximise the value of social software to meet business objectives, providing expertise on social computing strategies and integrating social software tools with current IT systems. James brings more than a decade of experience working ininformation and knowledge management roles and as a consultant with a wide range ofgovernment, professional and blue chip companies including AMP, the Australian Red CrossBlood Service, the Australian Securities & Investments Commission, the Australian TaxationOfﬁce, BHP Biliton, Blue Scope Steel, CSC, Department of Immigration and Citizenship, theGovernment 2.0 Taskforce, Ernst & Young, the Childrens Hospital at Westmead, INGAustralia and Rio Tinto. With a thorough understanding of emerging web 2.0 technologiesand user-centred information workplaces, James is a well regarded business and technologyexpert in the social media landscape.James’ viewpoint has been sought in a range of media channels including the AustralianFinancial Review, Sky News Australia and the Sydney Morning Herald. He has also writtenarticles for publications such as CMS Wire, Image & Data Manager magazine and theInternational Association for Human Resource Information Management.James writes at http://chieftech.com.au and on Twitter at @chieftech. www.rippleffectgroup.com © 2012 Ripple Effect Group Pty Ltd 7

Additional ResourcesOrganisations wishing to adopt social business approaches in order to achieve the beneﬁtsoutlined in this white paper may wish to consult the following resources:Social Business By Design: A Strategic Roadmap and PlaybookSocial Business By Design is the deﬁnitive management book onhow to rethink the modern organisation in the social media era.Based on their research and work through the Dachis Group,industry thought leaders Dion Hinchcliffe and Peter Kim deftlyexplore how the social, cultural, and technological trendsprovoked by the social media explosion are transforming thebusiness environment.Designed as both a strategic overview and a hands-onresource, Social Business By Design clearly shows how tochoose and implement a social business strategy and maximizeits impact.Links:http://socialbusinessbydesign.comhttp://dachisgroup.comhttp://www.amazon.com/dp/1118273214/ www.rippleffectgroup.com © 2012 Ripple Effect Group Pty Ltd 8

References1“Local business yet to capitalise on Australians love of social media.” KPMG Press Release. August 2nd,2011.http://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/Press-Releases/Pages/Press-Release-Local-Business-Yet-02-Aug-2011.aspx2“Leadership, Culture and Management Practices of High Performing Workplaces in Australia: The HighPerforming Workplaces Index”, University of New South Wales. October 2011.http://www.deewr.gov.au/Skills/Programs/WorkDevelop/Documents/SKEHPW.pdf3“Local business yet to capitalise on Australians love of social media.” KPMG Press Release. August 2nd,2011.http://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/Press-Releases/Pages/Press-Release-Local-Business-Yet-02-Aug-2011.aspx4“Social Media’s Role in the Marketing Mix.” Switched-On Media. February, 2011.http://www.theprreport.com/wp-content/uploads/2011/02/Canon-Switched-On-Media.pdf5“Tourism Australia, Jetstar Tap Social Media to Bring Back Japanese Tourists.” International BusinessTimes. October 24th, 2011. Vittorio Hernandez.http://au.ibtimes.com/articles/236279/20111024/tourism-australia-jetstar-tap-social-media-to-bring-back-japanese-tourists.htm6“China, Japan arrivals boost Australia tourism.” AFP. May 9th, 2012.http://www.google.com/hostednews/afp/article/ALeqM5g8gEDKHEI8H-tHVDn6Q97Iw9eLiw?docId=CNG.b8753a623ca4cf7edb396e16ede50159.2a17“Making social media happen in government: case study of NSW Department of Education.”RossDawson.com. December 12th, 2011.http://rossdawsonblog.com/weblog/archives/2011/12/making-social-media-happen-in-government-case-study-of-nsw-department-of-education.html8“Cisco Quad Makes Law Firms World Smaller.” InformationWeek. August 2, 2011. David F. Carr.http://www.informationweek.com/thebrainyard/news/workgrouping_team_collaboration_workspaces/2313000189“Telstra opens next chapter of social media customer service.” Telstra Press Release. August 16th, 2011.By Gerd Schenkel. http://exchange.telstra.com.au/?p=14431 www.rippleffectgroup.com © 2012 Ripple Effect Group Pty Ltd 9

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