Use Social Media to Build Emotional Capital

Many organizations have started using social media tools internally to interact with their employees. However, in our survey of 1,060 global executives, only 30% of executives work for companies that benefited from the internal use of social media.

To understand why the rate is so low it's instructive to compare the social media experiences of two companies we studied.

The first (whose name is disguised to spare blushes) is TEKCO, a technology company. TEKCO followed a traditional approach to an IT implementation. Executives mobilized experts to develop internal applications that mirrored the functionality of Facebook and Twitter, and built a platform that allowed for the creation of internal wiki pages. The company hired many open source technology developers to build new collaboration tools.

For all this effort, the company had very little to show. When interviewed, TEKCO executives had difficulty identifying examples of tangible benefits their company obtained from social media. Contrary to initial expectations, social media adoption improved neither the ease of internal information sharing nor employee morale. Even operational efficiency was unaffected.

The second company (which we will name) is the Northern European subsidiary of Tupperware, the famous food container company. Tupperware took a very different approach, investing less than $50,000 in social media initiatives, but it obtained much more impressive results. Between 2008 and 2011, the turnover rate of Tupperware's predominately part-time sales people (consultants, as the company calls them) fell by 15%. Both the ease at which best practices diffused throughout the company and the company's revenues increased.

What made the difference between these two experiences was that the project's leader, Stein Ove Fenne, managing director at Tupperware Nordic A/S, focused on building emotional capital in driving the initiative. He realized that the prime goal of the social media initiative should be to reinforce employees' positive feelings about the company, their colleagues, and their jobs. Tupperware's SM initiative — like those of other successful SM implementers — did this by focusing on four components of emotional capital:

• Authenticity. What you communicate through social media has to be aligned with how you interact with people in the real world. Employees at TEKCO greeted with cynicism the senior executives' blog posts and podcasts about the importance of community spirit, because the same executives had previously engaged in a massive restructuring that involved layoffs. By contrast, Fenne's messages to sales consultants delivered through social media are consistent with his other actions. He has established personal relationships with many of them by visiting all major centers of activity. He invites key consultants to Tupperware's headquarters on a regular basis and literally rolls out a long red carpet in front of them as a symbol of appreciation. These behaviors are very consistent with his messaging in podcasts, e-mails and blogs about how much the company values its sales consultants' contributions. 

• Pride. Pride is a better motivator than money and relying on financial or promotion incentives to elicit employee engagement in social media initiatives can backfire. When TEKCO executives made employees' contributions to internal wikis for knowledge sharing a part of their performance appraisal, many employees interpreted this as a coercive measure and posted entries of questionable quality only to satisfy the directive perfunctorily. By contrast, Fenne recognized that social media could provide Tupperware with an inexpensive platform for producing "moments of pride" for sales consultants. One of these is the "Tupperware radio show" in which Fenne plays the role of talk show host. Consultants' teams from all over Northern Europe connect through WebTV and post their live comments on a Facebook-type "wall" seen by all participants. Fenne calls on every sales team, asks them to report their results and thanks them for their achievements. 

• Community. Social media users often do not consider time spent on non-work related discussions within social communities as wasted from a professional standpoint. When employees identify common non-work related interests among each other and forge informal bonds, they will eventually start discussing work-related matters even outside of formal work hours. TEKCO stayed away from Facebook in order to avoid unauthorized information leakage; unfortunately, by doing so it eschewed the Facebook-type community platform that would have allowed employees to share information about their personal values and interests that were not always work-related. As a result, the platform never took off. By contrast, Tupperware is happy to encourage communication that is not work-related. Fenne even records short podcasts containing advice on how to lead effective sales force or how to achieve success in their private life. These podcasts are sent as "thank you" gifts to top performers and convey that senior leadership cares about consultants' personal development. 

• Fun. Enjoyment is well known to be a strong motivator of innovation. Yet not one TEKCO executive we interviewed told us that they wanted employees to use internal social networking platforms to have fun. At Tupperware, in contrast, consultants produce best-practice videos that are amusingly self-mocking. One group of Danish consultants portrayed a bunch of Danish men having a cooking competition (using Tupperware products) that was eventually shared through social networking sites and was widely viewed by colleagues and friends. The company for its part releases amateur movies under the umbrella "Tupper Films," some of which contain highlights of Tupperware parties, while the others contain useful tips for product demonstration. This increases the speed with which innovations spread across various countries and regions.

For social media to be widely adopted inside organizations and ultimately produce business benefits, executives first need to change their mindset about using these technologies. They have to realize that internal social media success isn't really about the software but about the emotional connection it creates.

But that doesn't mean you can let your social media platform grow by itself. Although self-organization is a touted attraction of social media, our study shows that the most successful employee communities tend to be actively managed by executives such as Fenne.

Companies that lack active community builders tend to create cold communities without heart and spirit, underutilizing technological infrastructure, generating employee cynicism and destroying what little emotional capital was present.

Finally, remember that context and culture play a role; executives should use locally appropriate means to develop the four pillars of emotional capital. But however the actions to build emotional capital have to be adapted locally, they still need to be done.

Quy N. Huy and Andrew V. Shipilov are both professors of Strategic Management at INSEAD, an international business school with campuses in France, Singapore and Abu Dhabi.

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