A View From INSEAD

Social Media in Business: How to Build Emotional Capital in your Workforce

Social media in business

“Social media in business” sounds like a contradiction in terms. But some companies are harnessing not only the functionality but also the emotional power of social media. INSEAD professors Quy Huy and Andrew Shipilov have been researching this new phenomenon…

The first finding from the INSEAD research project was that relatively few companies are using social media and even fewer are making a success of it. A survey of 1,060 global executives revealed that only 30% were working for companies that used social media tools and technology internally. More importantly, the researchers looked at what made social media in business successful… or not.

One organisation that they studied was a large technology company. Its attempt at social media in business involved an expensive project to recreate the functionality of Facebook and Twitter internally, as well as a complex platform for the creation of internal wiki pages. However, take-up by employees was less than enthusiastic and return on the substantial investment was low. “When asked about the most important factors that accounted for success of social media communities, the executives told us only about technological aspects,” says Professor Shipilov.

Contrast the approach of Tupperware’s European Nordic operation. The US-headquartered kitchenware company is famous throughout the world for its direct sales through “parties” in homes, workplaces, schools and community groups. Perhaps it is unsurprising that the Tupperware Nordic approach to internal social media is largely about fun. It also cost relatively little, as the company used existing platforms such as Facebook.

Putting the fun back into business

Stein Ove Fenne, managing director at Tupperware Nordic, set up several mechanisms to connect with the independent sales consultants. For example, he frequently organises webcasts from his own office in the format of a talk show. Consultants do not simply watch; they interact by posting comments and talking about their own sales results – which Fenne thanks them for personally. They are also encouraged to post videos of innovations, such as effective product demonstration techniques. “Funny elements in these videos attract viewers’ attention,” says Professor Shipilov. “They also show that deviance from ‘corporate’ ways of getting things done not only is tolerated, but encouraged.”

Equally important, is the way that Fenne authenticates his “virtual” persona by making real-life visits to his workforce. The overall result is improved information flows, better collaboration, higher motivation and lower turnover of consultants.

Emotional capital is the key

The key to Tupperware Nordic’s success at applying social media in business is a concept that Professor Huy is all too familiar with from his long standing research: “collective emotional capital”. This can be defined as the aggregate internal feelings of goodwill towards a company and the way it operates. The four pillars of emotional capital are: authenticity, pride, attachment and fun – all of which are actively elicited in Tupperware Nordic’s social media strategy.

As Professor Huy puts it, “Executives who use social media to build emotional capital in the communities of their employees reap real benefits.” Or to put it another way, it has always been desirable for your workforce to be emotionally invested in your organisation. Social media just made it a whole lot easier – and cheaper – to achieve.

Learning more at INSEAD

To find out more, read Professor Huy and Shipilov’s article on their research in MIT Sloan Management Review. Alternatively, consider enrolling on the Executive Education programmes directed by Professor Huy and Shipilov respectively: Strategy Execution Programme and INSEAD Blue Ocean Strategy.

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