It is a manager's problem that Henry Ford and even a young Bill Gates never had to deal with - how to maintain productivity when workers are using valuable company time to update their Facebook status or check their Twitter feeds.
A new generation of startup companies say the answer is simple: Make social media a part of employees' daily work routines with "business social media."
Unable to beat Facebook and Twitter, they decided to join them.
The movement came into sharp relief last month when Mr. Gates' Microsoft Corp. announced the $1.2 billion purchase of Yammer Inc., one of the pioneering companies of social networking for corporate use. The 4-year-old California-based company has built up a base of some 200,000 corporate customers, including Ford Motor Co., Orbitz Worldwide Inc. and 7-Eleven Inc., linking them to customers via social media.
As social media sites boom, many businesses are looking to computing clouds, "enterprise social networks" and collaborative software services to connect with customers - and speed up the tempo of activity at the office.
Long gone are the days when employees sent emails or made phone calls to check on the status of their projects, and forget about walking down the hall to thank Joe from accounting for his brilliant idea in the latest staff meeting.
New services offered by companies with names such as Basecamp, Jive Software Inc. and Box Inc. have taken concepts honed in social media - accessibility, regular status updates and seamless reply functions - and morphed them to fit the business needs of the 21st century.
Basecamp was founded in 2004 and serves 150,000 businesses while managing 8 million individual projects. Box Inc. can claim Procter & Gamble Co., Six Flags Entertainment Corp. and Pandora Media Inc. as part of its 100,000-plus clientele.
Industry leader Jive, which represents T-Mobile USA Inc., Hewlett-Packard Co. and the World Bank, was one of the first in the fledgling sector to go public in December. Opening at $12 a share, Jive jumped 15 percent on its first day of trading and now trades on the Nasdaq at about $20 a share.
Beyond the buzz
The fact that many Fortune 500 companies have bought into the business social media idea has refocused scrutiny on what the industry buzz is all about.
Anthony Rotolo, assistant professor at the Syracuse University School of Information Studies, credits the ability of companies "to replicate or simulate traditional social media giants like Facebook and TwitterInc. in a closed environment."
What is posted on Facebook is owned by Facebook Inc., he noted. Such collaborative software gives businesses the control and accountability that are lacking in more traditional social media outlets.
Adam Mertz, product marketing director at Jive, said traditional office communication channels are broken, citing spam emails, ever-mounting numbers of files, and the lack of timely access to needed information. Mr. Mertz said business social media use a "people system," something dramatically different from the "document-and-record systems" that define the status quo.
Natalie Petouhoff, instructor of UCLA's extension social media business course for executives, said, "I don't think regular office communication ever really worked. It's full of politics, brown-nosing and cherry-picking talent."
She noted that "with the ability of employees to talk to one another, across time zones, in an ongoing way, better information can be shared with the right people and, if used well, collaboration tools can cut through politics."
Adapting to the market
Companies such as Basecamp, Jive and Box Inc. are adapting to various markets by offering services to fit the needs of individuals, small businesses and corporations. There are no thick contracts or mandatory time commitments, only monthly payments based on standard fees and the number of users who have access to the software.
Projects can be managed, edited and uploaded on any electronic device that is connected to the Internet. Individuals can work on projects stationed in New York while the project manager is in Hong Kong. Computers and servers are unnecessary because all information is saved on cloud technology. Projects can develop entirely through electronic means as individuals post feedback, commentary and suggestions just as they would on a Facebook page.
With easy-to-read "to-do lists," employees know what needs to be done even when the boss is not around. In addition, projects are all safely and securely posted so that no idea, file or conversation is lost in a stack of paperwork. Control functions allow project managers to decide who has access to sensitive material and who can edit project developments, giving the software accountability that businesses desire.
Business social media companies say they try to tailor their software and templates to the formats of the social media sites to which workers are already accustomed. It is difficult for an employee to determine whether they are using Twitter or editing their latest multimillion-dollar project.
Finding a niche
While even industry leaders such as Facebook face market skepticism over the best ways to "monetize" their giant customer bases, business social media companies appear to have carved out a money-making niche.
Jive is estimated to be worth $1.29 billion, and total revenue for the industry is expected to well exceed $21 billion by 2015.
Jive's Mr. Mertz describes the market demand as a breaking dam. "It is no longer about experimenting with our services," he said. "Companies are finally seeing the value, and it's becoming a critical part of the way they do business."
Mr. Rotolo said success or failure of an idea often depends on how a company implements a concept. Just because employees engage in social media at home, in their free time, he said, does not mean they will engage with similar technologies at work.
"Whenever you adopt something new, you are asking employees to create a new behavior," he said.
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