For an actual study, McKinsey asked nearly 1,700 executives from around the world, across a range of industries and functional areas how they are benefiting from Web 2.0 technologies and how their organization is using these technologies. The executives were asked about the value they have realized from their Web 2.0 deployments in three main areas: Employees, customers as well as partners, suppliers and external experts.

Today I want to summarize the key findings of this survey for you.

The Benefits of Web 2.0 Technologies

According to the survey, the three major benefits of Web 2.0 technologies are better knowledge access, reduced costs and increased stakeholder satisfaction. Let’s have a short look at the TOP 5 benefits for the single stakeholder groups:

TOP 5 Benefits for Employees:

1. Increasing Speed of access to knowledge
2. Reducing communication costs
3. Increasing Speed of access to internal experts
4. Decreasing travel costs
5. Increasing employee satisfaction

TOP 5 Benefits for Customers:

1. Increasing effectiveness of marketing
2. Increasing customer satisfaction
3. Reducing marketing costs
4. Reducing support costs
5. Reducing travel costs

TOP 5 Benefits for Partners/Suppliers/Experts:

1. Increasing Speed of access to knowledge
2. Reducing communication costs
3. Increasing Speed of access to external experts
4. Reducing travel costs
5. Increasing satisfaction of suppliers, partners and external experts

The Usage of Web 2.0 Technologies

The survey shows that the most popular Web 2.0 technologies among enterprises are blogs, wikis, social networks and (video-)podcasts: Not very surprisingly the same tools that are popular among consumers. Here are the TOP 5 Web 2.0 technologies for the single stakeholder groups.

TOP 5 Technologies for Employees:

1. Video sharing
2. Blogs
3. Social Networking
4. RSS
5. Wikis

TOP 5 Technologies for Customers:

1. Blogs
2. Social Networking
3. Video Sharing
4. RSS
5. Wikis

TOP 5 Technologies for Partners/Suppliers/Experts:

1. Blogs
2. Video Sharing
3. Social Networking
4. RSS
5. Wikis

Who is gaining the Web 2.0 benefits?

• High-Tech companies benefit most from Web 2.0 technologies, followed by business-, legal- and professional services.
• Manufacturing and Financial industries gain 25% to 50% less benefits from Web 2.0 technologies than the High-Tech and Service Industries (depending on the stakeholder group).
• Companies with a revenue > $1 billion benefit more than smaller companies.
• Most benefits result from the internal usage of Web 2.0 technologies. Fewest benefits result from the interaction with suppliers/partners and experts.
• By function: information technology, business development and sales report more benefits than finance or purchasing.
• IT managers mostly focus on internal improvements. Business development and sales functions want to deliver better insights into markets or to interact with customers.
• The benefits in India and North America are higher than the benefits in Europe.

What are the critical success factors of Web 2.0 adoption?

The survey results confirm that the tool integration into the daily workflow is the most important success factor. To encourage the continuous use, traditional approaches such as financial or performance measurements are inappropriate. In the Web community, status and reputation is often the No. 1 driver for making meaningful contributions. These findings confirm the Web 2.0 success factors I’ve posted earlier in this blog.

For more information, please find the entire survey on mckinseyquarterly.com. I also want to recommend an interactive presentation, which visualizes the key findings of the survey in a very pleasant way.

Last week I wrote about the Web 2.0 adoption process in traditional organizations. Today I want to discuss six critical factors that determine the outcome of efforts to implement these technologies.

1. Support bottom-up initiatives from the top

Technology adoption will not work without management intervention. This point seems to be very clear for companywide initiatives, for instance an ERP rollout. By contrast, the usage of Web 2.0 technologies often starts small, sporadic and is driven by enthusiastic employees. To get these single-pointed initiatives applied to the organization, the senior management should become a role model and lead through the Web 2.0 channels.

Many employees already have a profile on professional social networking-sites like XING or LinkedIn. As our company’s consultants are spread all over Germany, the management board founded an own group within a social network, exclusively for the organization’s employees, to provide an opportunity to keep in touch easily.

2. Measure the soft side of business value

In the past, applications focused on improving the effectiveness and efficiency of a business process. The prioritization of IT-projects was easy: The project with the greatest business value was served first. But how is business value measured? How can you measure the value of lower reaction times? How can you measure the value of building your brand? How can you measure the value of staying in your customers minds? All these questions need to be answered when talking about Web 2.0 technologies.

If you can’t show the value of a tool, the management won’t support your initiative. In this case the management probably chooses the wrong Web 2.0 tool and the organization is not switching to applications that might be successful.

3. To be or not to be (in the workflow)

Until today new applications mostly replace old ones. Therefore, the new application is immediately integrated into the workflow.  As Web 2.0 initiatives are relatively new, they are often not integrated into the daily workflows. Thus, they are seen just as another “to do”, not as a tool to make the work more effective.

Get the Web 2.0 technologies into your workflows. For example, use social networks for recruiting employees or build up a wiki as platform for the internal information and knowledge exchange.

4. Motivation is about building the ego – not about money

You might ask how to get your employees to use all the fancy Web 2.0 tools. Maybe you can install a bonus system: Each employee can get an extra fee for using the Web 2.0 tools. I suggest five Euros per blog entry, how about that? Seriously: I think it’s obvious that money can’t be the motivation. Web 2.0 technologies fulfill the desire for recognition such as higher reputation of participants in web communities or acknowledging the quality and usefulness of contributions.

To successfully apply Web 2.0 technologies in your organization, you need to establish a system of intrinsic, never of extrinsic motivation.

5. The right solution comes from the right participants

Another success factor is to create a critical mass for participation. Let’s take the ERP rollout example again. You just identify the number of installations you need for functions such as purchasing or finance and accounting – and that’s it. When adopting Web 2.0 technologies you need to select users who will drive a self-sustaining effort.

If you introduce wikis and blogs to foster collaboration among workgroups, choose technology-savvy and respected opinion leaders within your organization. Some of these people should be ranked high in the hierarchy, while others should be influential scientists or employees to whom other colleagues would turn for advice or other assistance.

6. Reduce the fear with the help of clear policies

Web 2.0 projects can fail, if participants feel uncomfortable with the tool. Employees may be scared of a legal vacuum, for instance caused by anonymous posts and comments. Therefore, managers should establish reasonable policies for the usage of Web 2.0 tools. The social norms enforced by identifiable users in the participating communities can be very effective for the regulation of the communication. Furthermore, Web 2.0 technologies should provide an opportunity to audit the communication. All blog entries, comments etc. should be tracked.

What do you think about these success factors? Please, tell me about your experiences with the adoption of Web 2.0 technologies in your company!

The Web 2.0 technologies created a new type of online customers. Web users consume and create content and share experiences and opinions directly with each other. So, what does this mean for your organization? Your company needs a strategy to thrive in the online world’s environment of constant change.

The article “Managing beyond Web 2.0” proposes a strategy called LEAD (listen, experiment, apply, develop) that will help companies to manage the external image.

Listen: The organization needs to monitor and analyze what the customers are saying about the company. Use this information as an early-warning system. Probably customers are already talking about you on Facebook or Twitter? Sounds a bit like paranoia, but don’t underestimate the rapidness of change. If your organization says or does something right now, it may be discussed in the web community a couple of hours later. Instead of pushing your message to the customers, you should listen to them engage with them actively.

Experiment: There are a lot of fancy Web 2.0 tools out there – play with them. Create a company profile on social-networking sites, a blog or a daily tweet. There is no proper ROI metric available yet for measuring the effect of the Web 2.0 technology usage, but for sure it will pay off in greater customer awareness and brand engagement.

Apply: After your experiments you should apply the technologies in your company. Stay in touch with your customers; make it simple for them to communicate with you. Optimize your social-networking sites for search engines. Be visible for your target audience. To measure your success in this process step you can use web tools and quantitative analysis to track the results of your experiments. For example, every bigger blog hosting site offers tools to analyze the traffic on your blog.

Develop: The Internet is a social medium and therefore a very important part of any company’s marketing mix. But don’t see just another marketing channel to put all your messages in. Get rid of the mass-media broadcast mentality and make interactive Web 2.0 elements part of your marketing program.

I found this four-step-strategy very logical. It’s easy to understand and simplifies the Web 2.0 adoption process. What’s missing is the organizational impact. Who is choosing the Web 2.0 channels? Is the Web 2.0 communication centralized or decentralized? Who is creating the content – the marketing experts or the experts in the functional teams?

What do you think about the LEAD-strategy? Did you already implement a strategy for adopting Web 2.0 technologies? What are your experiences with Web 2.0 technologies so far? How did you organize the adoption process?