Introduction

SUPERVALU is the third largest grocery chain in the U.S., with a network of 4,300 stores. When SUPERVALU CEO Craig Herkert joined the company in 2009, he realized that in order to be an effective leader, he would need to increase collaboration among store managers and enhance his and his management team’s ability to see what was happening across SUPERVALU’s many brands and locations. At the time, store managers met only once a year at an annual conference and did not talk regularly with one another. Herkert found a solution to both problems in a single internal collaboration tool that a few store managers were using to share leading practices, an application from Yammer, the enterprise social networking company. Herkert supported the use of Yammer across the organization.

Subsequently, more store managers began using the tool to exchange ideas and to post photos or videos of successful merchandise displays and specials. An experiment run during a holiday period demonstrated that stores participating on the Yammer platform had 13% more sales revenue than nonparticipating stores.2 Through the many videos, posts and profiles on Yammer, Herkert and his executive team gained visibility into what was happening in their stores without any filters. Herkert was also able to better see the opportunities and challenges related to consolidating SUPERVALU’s brand identity.

Social Business:

In our survey, we defined social business as activities that use social media, social software and social networks3 to enable more efficient, effective and mutually useful connections between people, information and assets.4 These connections can drive business decisions, actions and outcomes across the enterprise.

SUPERVALU’S experience highlights several important themes that cut across this report. First, social business is more than a way to get closer to customers: it is influencing a wide range of activities within the enterprise, from marketing to operations to innovation to leadership. (See sidebar for definition of social business.) Second, social business is more than a phenomenon best suited to technology and consumer goods companies: it is gaining traction in many organizations across all industries.

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References

1. As used in this document, “Deloitte” means Deloitte Consulting LLP and Deloitte Services LP, which are separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

2. Source: MIT Sloan Management Review interview with David Sacks, CEO of Yammer, February 24, 2012.

3. Social media is how people get together virtually to accomplish outcomes. Social software is the set of tools that gives people in a social network the means for automation, virtualization, scale and abstraction. Social networks are formal descriptions of groups of people who congregate in a social medium.

4. Not all social business activities will produce mutually useful connections between individuals. In some cases, it may be beneficial to diminish certain connections between staff or with some customers. Further, the use of emergent communication and collaboration tools like Yammer may one day become part of the baseline. When that happens, using these tools may cease to qualify as a social business activity as we’re defining it, not because they are any less social but because they no longer “amplify” connections.

5. D.M. Smith et al., “Predicts 2010: Social Software Is an Enterprise Reality,” Gartner, December 3, 2009.

6. A. McAfee, “What Sells CEOs on Social Networking,” MIT Sloan Management Review, Spring, 2012, http://tablet.mitsmr.com/feature/what-sells-ceos-on-social-networking.

7. Other uses of “social business” might refer to organizations or to economic systems that promote some notion of social welfare. For an example of the latter, see M. Yunus, “Building Social Business: The New Kind of Capitalism That Serves Humanity’s Most Pressing Needs” (New York: Public Affairs, 2010).

8. See F. Gossieaux and E. Moran, “The Hyper-Social Organization: Eclipse Your Competition by Leveraging Social Media” (New York: McGraw Hill, 2010); and A.J. Bradley and M. McDonald, “The Social Organization: How to Use Social Media to Tap the Collective Genius of Your Customers and Employees” (Cambridge: Harvard Business Review Press, 2011).

9. E. Deci and R. Ryan, “Intrinsic Motivation and Self-Determination in Human Behavior” (New York: Plenum, 1985).

10. This example comes from an interview with Fergus Griffin, senior vice president for solutions marketing at Salesforce.com. Additional detail was sourced from: http://www.youtube.com/watch?v=kTOL6gUgoJQ.

11. G. Tay, “Ask Five Questions to Determine Whether to Deploy Social Software Bottom-Up or Top-Down,” Gartner Research, January 20, 2011, http://www.gartner.com.

12. P.F. Drucker, “The Practice of Management” (New York: Harper & Brothers, 1954), 37.

13. Of course, social business activities can be valuable in many ways. It is our belief that social business activities in these four areas have the potential to generate substantial value.

14. E. von Hippel, S. Ogawa and J.P.J. de Jong, “The Age of the Consumer-Innovator,” MIT Sloan Management Review 53, no. 1 (fall 2011): 27-35.

15. S. Nambisan and P. Nambisan, “How to Profit from a Better ‘Virtual Customer Environment’,” MIT Sloan Management Review (spring 2008): 53-59. For an analysis of Threadless and social media, see D. Hinchcliffe and P. Kim, “Social Business by Design: Transformative Social Media Strategies” (San Francisco: John Wiley and Sons, 2012).

16. This example is based on Y.M. Antorini, A.M. Muñiz, Jr. and T. Askildsen, “Collaborating With Customer Communities: Lessons From the Lego Group,” MIT Sloan Management Review 53, no. 3 (spring 2012): 73-79.

17. J. Hagel, “Pull Platforms for Performance,” February 20, 2012, http://edgeperspectives.typepad.com.

18. T. Levitt, “Marketing Myopia,” Harvard Business Review, September/October 1975.

19. Providing clear guidance about communications external to a business can be tricky, especially in regulated industries like health care and financial services. Too much guidance can put a damper on social business activities. “If I ask an organization for their social media policy, and I get back a 50-page document,” says MIT’s Andrew McAfee, “that might as well just say, we’d prefer it if you don’t use social media.” Even in unregulated industries, too much oversight can cast a shadow on innocent interactions. Babson College’s Keri Pearlson describes a recent meeting with a colleague and two representatives from a large technology firm. Her colleague tweeted that she and Pearlson were at a lunch meeting, naming the firm but not the individuals. When the representatives returned to work, the office was buzzing about who was speaking without authorization about the company. Staff had been monitoring information flows from Twitter about the company and had seen the tweet from Pearlson’s colleague.

20. M. Miller, A. Marks and M. DeCoulode, “Social Software for Business Performance: The Missing Link in Social Software — Measurable Business Performance Improvements,” Deloitte Center for the Edge, 2011.

21. M. White and B. Briggs, “Tech Trends 2012: Elevate IT for Digital Business,” Deloitte, 2012: 5.