Tuesday, June 26, 2012

Yammer: Corporate Social Networking and Strategy Execution

In the article, The Secrets to Successful Strategy Execution, the authors highlight two elements that prevail in companies with strong strategy execution: decision rights and information. Today, companies have started exploring a new avenue in the sharing of information and improving strategy execution; corporate social networking.

One such provider of social networks is Yammer, which began offering its services in 2008 and cites that it was “among the fastest growing enterprise software companies in history, exceeding over four million users in just three years.” When reading their description, it almost seems as if they read the HBR article and decided to start a company to address those needs;

Yammer empowers employees to be more productive and successful by enabling them to collaborate easily, make smarter decisions faster, and self-organize into teams to take on any business challenge. It is a new way of working that naturally drives business alignment and agility, reduces cycle times, engages employees and improves relationships with customers and partners.”

Today, it states that it is “used by more than 200,000+ companies worldwide”, many of whom cite the improvements in information sharing and decision making through an online network. Vodacom claims that a social network helped employees engage in and successfully execute a major rebranding strategy. ModCloth’s employees used the network to retain a sense of connection and collaboration at a time of rapid expansion. LG used it in the development of an employee training guide and because it was able to gain real-time input and feedback from subsidiaries around the world, it completed the project eight weeks earlier than planned.

According to an article in The Economist, the success of Yammer has caught the attention of Microsoft, which may or may not have offered a bid of $1.2 billion for the company. If Microsoft truly is interested in Yammer, it would appear that the company is looking to strengthen its software division services. As noted in the article, IBM at 100, Microsoft should be concerned that 

it still gets over 80% of its operating profit from the franchising of PC software. So its interest in Yammer is understandable. Such an acquisition would make Microsoft more competitive while offering businesses around the world a product that will strengthen their strategy execution.

The Economist: http://www.economist.com/node/21557341
The NY Times:

Yammer: https://www.yammer.com/customers/case-studies/vodacom/

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