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Turning an organization into a social business — one that knows how to use new forms of collaboration and communication via social media — is a challenge for any operation, but it’s especially challenging for multinational, highly regulated companies.
Boston-based financial services company State Street deals with this double whammy every day. A company founded in 1792 — yes, you read that right — and traded on the New York Stock Exchange, State Street has approximately 29,000 employees and offices in 29 countries — so it is subject to 29 different sets of regulations, not to mention international law. Which makes managing its online activities… interesting.
Today, it has become an industry model for how to use social business to make the business more innovative. Information Week named the institution social business leader of the year in 2013, noting that a 72-hour online “innovation rally” held by the company in 2012 saw “employees from around the world participating in eight online forums on ways for State Street to improve its business.” The brainstorming session attracted 12,000 postings, which the coordinators filtered down to about 400 for further investigation and then down to 16 ideas “with a reasonable expectation of return on investment.”
In a conversation with David Kiron, executive editor for MIT Sloan Management Review’s Big Idea Initiative, Hannah Grove, executive vice president and chief marketing officer, explains how the bank piloted its first forays with social tools, and what it’s doing today.
Is there a driving vision behind State Street’s approach to social business tools?
A very important catalyst to State Street’s approach to social business is our focus, which is reflected in our marketing strategy, on adding value for our clients.
We think about the client being in the center of our universe and constantly ask ourselves how we can create a surround-sound effect that gives them the power to gather more insights, more information, and help overcome the challenges they face. Our clients are institutional investors, and we divide that group into five distinct segments: asset owners; asset managers; alternatives; insurance; and official institutions.
Back in 2010, we observed that most of our competitors were largely talking about themselves to clients — and to a degree we were guilty of that too. We would talk about our products, our services, and, to be slightly tongue-in-cheek, how we’re better than anybody else. Now we’re focused on changing the dialogue. It’s more about saying, “We understand the challenges that you’re facing, whether it’s the regulatory environment, whether it’s increased competition, whether it’s facing increased complexity.”
That’s the core of our marketing strategy, and social business is a big part of that. Rather than being a strategy unto itself, it gives us tools to connect effectively with our clients and have a rich, meaningful dialogue.
How is State Street using social tools for its internal operations?
That’s definitely the other side of the coin: how we enable employees to come together to generate the best ideas, the best insights, and to share information that delivers a better outcome for our clients. And candidly, that creates a more engaged workforce.
I talk a lot about the paradigm shift I’ve seen in communications personally and how we’ve evolved from a cathedral model, where all you do is push top-down messages, to much more of a marketplace model, where sometimes the best ideas and innovations are sourced from within. In this model, you’re more likely to be influenced by a conversation with peer or a colleague than you are by overt, explicit messaging. Understanding that, and then figuring out how it fits into our overall marketing strategy, has been a major focus for us.
Going back to your external use of social: how big a deal is social in creating or maintaining this customer-centric focus?
It is a very big deal, because people’s attention spans are limited these days and we have a finite capacity for information. Using social as a way to deliver content in unique and interesting ways was something that we really leaped on to help drive awareness.
For instance, we were the first B2B company to produce a Vine on Twitter as a way to illustrate a rather complex pension process and to break it down into a really easy to understand infographic.
Also, let’s face it, our industry hasn’t met an acronym or a piece of jargon that it hasn’t wanted to embrace. If anything, our industry was guilty of making itself even more complex and difficult to navigate. Particularly in the aftermath to the financial crisis, people want plain, simple language with context that they can understand.
We’ve tried very hard to not use hyperbole or really complex terminology and open up our world to a much broader universe. Social has been a big part of that.
Do you think you would have been able to achieve your current level of customer-centric focus without a social business approach?
I don’t believe social is a channel or strategy unto itself, but it is a very important lever. What we do isn’t entirely dependent on it, because a lot of client-centricity is built around developing relationships, and those relationships are often one-on-one. That can’t be replaced by a purely social strategy, but when placed within the right context and used in the right forms, it can help open up a different dialogue.
One of the things that we’ve done is a lot of in-depth research with partners like The Economist, to look at the issues facing alternative investors in the post-crisis environment. That research gleaned a myriad of insights and we used social media to broadcast those insights in “snackable” content. So we might just release a headline, where people can click to know more. We use campaigns on LinkedIn or SlideShare as a way again of getting the story out, but packaging the story in a way that if you only had five minutes, you can at least get the top-line headlines. That’s where social can really be an extraordinary value-add.
Do you have any specific examples of how social has helped simplify things, or has provided some business value, in your efforts to enhance your customer focus?
Yes, absolutely. As you know, one of the great beauties of social is that it’s trackable, and you know who’s following you and you know who’s accessing what piece of information. We’ve had examples where we’ve been able to observe an interest from client X in a particular solution, and we’ve been able to follow up with our relationship managers and encourage a broader discussion, or perhaps ensure that we can better target content toward that individual or firm. In a case like that, today’s social tools definitely give us a significant leg up.
We’re currently adopting some new technology, Radian VI, which enables us to listen to the discussions that our clients and competitors are having online today and have a heat map of where the issues and opportunities are. And the more informed you are, the better solutions you’ll be able provide.
How do you equip your employees with the skills to use these tools?
That leads us rather elegantly to Collaborate, which is what we call our efforts to engage employees on social tools. When we started with the premise of a more client-centric organization and built our marketing strategy around that, social became a big opportunity for us to engage in a different way, whether it be lead generation or relationship development or listening. But we needed to first educate ourselves about social technologies and develop governance controls and policies.
So, we took a cautious approach and wanted to prove that a concept works before pushing it out. So we asked ourselves: if we tweet, will anybody follow us? We’d seen examples of our peers that entered the social space, set up a Facebook page and then didn’t have any friends. We wanted to be very thoughtful about how we build our presence and how to remain very consistent throughout that process.
We started off with corporate citizenship being the main driver of our content, and content, as you can imagine, still remains key and king. You can’t just put content out for the sake of it. If you take that approach I think you lose a lot of credibility.
We started to build up our presence and our followers, and then also started to look at how to duplicate that internally. We had an intranet that was very much the cathedral model that I described earlier. And yet, if you look at the demographic of our employees at State Street, more than 50% are under 35. In their personal lives, they’re interacting and communicating in a wholly different way, and we knew that in order to engage and in order to be able to get the best ideas and the innovation which ultimately benefits our clients, we had to create a better platform that more easily mirrored how our employees communicated in their personal lives.
That was to a great extent the genesis of Collaborate, and thinking about how people want to communicate. It’s much more of a two-way dialogue. We started that with a pilot and then, having had that proof of concept, we launched fully to all employees last month, which is very exciting.
What metrics helped you believe you had a proof of concept?
We were able to measure traction with our corporate intranet and do some comparisons. For example, if we would put a video on the old platform, the maximum number of hits it would get would be in the low hundreds. Whereas, within the context of the pilot late last year, we developed a video around gold that went on the Collaborate platform, and it has had more than 5,000 hits globally. So pretty quickly we could see that it would increase traction.
The other thing that was very interesting and important culturally, is that as much as there was very strong development of communities built around business — either divisions, departments, or business solutions — there were the same number of communities being built around affinities and employee interests.
That was really interesting, because we’d see employees in Poland, Scotland, Canada and the U.S. all engaging around corporate citizenship, or, for instance, a health and wellness community.
Before, the intranet was largely confined to corporate news. With Collaborate, we have something more organic that is directed by employees and yields more meaningful engagement.
What do you say to the skeptics who say, “if people are talking about their diets or whatever, that’s a time-sink and it’s unproductive”?
First, at the risk of sounding glib, numerous studies have demonstrated that an engaged workforce begets much higher productivity, which gets better results for clients and shareholders.
Number two is that in the traditional model, way before the advances in social business, many employee affinity groups bubbled up. That’s a well-known norm within the corporate world. So the social platforms just enabled them to get scale on that much quicker, and much more globally.
And then, we found that people are enormously self-governing. People adhere to the standard of conduct.
So we see healthy engagement in what we would call the more network-based communities. Personally, I’m a member of quite a few. I’m the executive sponsor of our State Street Pride, which is our LGBTQ network at State Street, and I’m very proud to be active in that community. I think it’s great.
What kind of coordination did all this take? What’s the status of this effort within the organization?
For the rollout of Collaborate, we had an executive steering group that made this a high profile effort across the organization. We had great support and traction from our most senior leadership echelon, which is called the management committee, led by our chairman, CEO and president, Jay Hooley.
Was that important in terms of financing the effort or clearing any cultural obstacles?
I think that it was probably less financial and more on the cultural side, and leading from the front. On a very practical front, when we flicked the switch and moved from the old static intranet to the social intranet, it was both a bottom-up and a top-down presence.
We had to ensure that leadership were fully engaged and up and running on the platform. We had Collaboration station workshops set up in more than 12 locations globally to help acquaint employees with the social intranet. More than 150 Collaborate Ambassadors volunteered to staff the sites and show employees how they could use the social intranet in their day-to-day work life. At the more senior levels, they might not necessarily be active on Facebook or LinkedIn or all the other platforms, so getting people familiar with it was critical. But we’ve had tremendous engagement from our senior leadership.
To what extent are social tools being used to help stitch together your regionally distributed businesses into a single global entity?
The social intranet has a tremendous power to bring together disparate geographies. It helps people find the information relevant to them, but more importantly, it helps employees recognize we have a very distinct culture, shared values, and a shared vision for the future. And all of that becomes magnified by the power of the social intranet.
I think the affinity groups and the communities based on common interests are very tangible examples of employees, irrespective of geography, rallying around a common cause. The best examples of those are in corporate citizenship. For instance, environmental sustainability is something that we know is incredibly important to our employees. When I log on in the morning, I can see that whether it’s a plastic bag drive in Boston or another initiative in Edinburgh or Tokyo, we don’t have discrete geographic pockets anymore — instead, we have an ethos dedicated to a community that is built as one.
I think that the more you can do to focus on what brings us together, instead of what makes us different, is incredibly powerful. To me, social is magnifying those unifying points.