American Century Investments surveyed 303 advisors, brokers, and RIAs online at the end of 2010, then compared results to a similar survey a year earlier. This year’s study found that 86% of the respondents have a business or personal social media profile, up 13 percentage points from 73% in Q1 2010.

The lessening concerns about compliance concerns seem to lead the way in the dramatic increase in social media adoption, and more and more firms are successfully deploying solutions to deal with these issues throughout the business. What’s even more interesting? While firms’ concerns decrease, regulatory scrutiny is going up — FINRA put social media on the examination priority list for 2011, the SEC sent out a Sweeps letter and IIROC recently released their social media guidelines. All these trends indicate that social media is obviously a hot topic and beneficial to business – and that IR departments not yet using social media risk being left behind.

Promotions not main goals for social…

Almost 60% of the advisors currently using social media for business mainly monitor industry or market news, research clients or prospects, or reading expert commentary. Next on the list of priorities is sharing news with clients.

…but benefits continue to emerge.

Advisors are generally bullish on social media, with approximately 45% of respondents feeling generally positive about the overall value of social media as a potential tool to grow their business. And while few study participants said they believe social media has “high business value,” those who ranked it highly increased this year over last: 13% in 2011 versus just 8% in 2010.

Also, more financial professionals feel that social media is an “emerging trend with significant future potential” — 56% of respondents agreed with this assessment this year, versus 44% last year.

This survey, which we also covered last year, continues to indicate the importance and growth of social media among financial professionals. Firms that remain on the fence about social media are definitely being left behind.

Large companies are more likely to use LinkedIn in the United States, and they have done a great job breaking down the distribution of LinkedIn use by industry.

The most surprising area of growth is in Finance, shown to have the second highest concentration of industry usage on LinkedIn. Further analysis shows that most of this takes place in North America.

This is no doubt the result of the popularity of social networks as a whole, the credibility of LinkedIn among business users, and the increasing openness of financial firms to use social networks to connect with clients, prospects, and recruits.

Looking at the distribution of LinkedIn usage by job function, there are three interesting points here. First, the main use of LinkedIn is sales, which is relevant to the financial industry, as LinkedIn helps producers connect with centers of influence, find paths to warm referrals and serves as a fact-finding gold mine. Many banks and credit unions use social networks like LinkedIn to improve customer service and send general notices to clients, which touches on the administrative and operational uses of LinkedIn. Finally, 5.3% of those directly involved in finance use LinkedIn, showing that there are specific needs being met for this audience.

You can see all the data and a great infographic here. So tell us, how are you using LinkedIn to drive your business?

Here’s a summary of they key findings:

1. Financial advisors using social media have higher growth rates in revenues, 19%, AUM, 19%, and in client base, 21%, than ones that don’t. The non-users in the survey report revenue growth of 6%, AUM growth of 6% and client growth of 7%.
2. One in five advisors say they increased revenues and fees from clients through social media efforts. Advisors say they use social media to: reach new prospects, 42%, increase awareness of their practices, 31%, differentiate form other practices, 27%, and increase revenues, 21%. “Advisors using social media (especially LinkedIn) are gaining a competitive advantage over other advisors that are not,” said Michael Byrnes, president of Byrnes Consulting LLC of Boston. “Those competitors that are late adopters are missing out on expanding their reach, brand awareness and opportunities for increased new business.”
3. Firms with the largest assets are not necessarily the biggest users of social media, mainly due to large firms’ reticence to put in compliance guidelines. Advisors who don’t use social media cite the following reasons: compliance, 71%, regulatory concerns, 55%, and negative publicity, 22%. Of those who have social media policies, 81% say that policies inhibit them in their social media use.

Of course, I always point out – and this article by Ron Shevlin agrees – that social media is just one way to market your firm. Effective use of all marketing – including social – helps grow practices. Social media, however, is unique because it allows for two-way conversations with prospects and clients.

The Pershing survey included 144 financial advisors; 33% were employed with firms with $1 billion of AUM or more and 37% with less than $100 million. The rest fell at firms with between $100 million and $999 million AUM. Of the participating advisors, 55% of them are hybrids and 45% are fee-only advisors.

Ask for referrals. All firms preach this, but the survey of wealthy investors found that 75% of them haven’t been asked to refer their colleagues to their advisor. In the era of LinkedIn and Facebook this is the low hanging fruit that everyone should be reaching for. Consider too that nearly 60% of LinkedIn users have high personal incomes and hold executive-level or consultant positions. If you aren’t building your networks online and leveraging those relationships you are leaving money on the table.

Actively keep in touch. Only 38% of investors say their advisors proactively reach out to them when market changes could impact their portfolios – and it’s hurting client retention. One third of investors have changed advisors since 2008, and 25% of the rest of wealthy advisors are dissatisfied with or neutral towards their current advisor. Again social networks can help. Look at the advisors on AdvisorTweets.com. Over 400 advisors are tweeting to clients and prospects about the market. If you aren’t tweeting, who are your clients following? Or even worse who WILL THEY be following?

Stop shouting, start engaging. We used to think about marketing as a chest-thumping activity that ensured we were always top of mind with prospects. Guess what. The old way doesn’t work anymore. Marketing today is about active engagement. Social networks are a key part of this change, allowing you to come out from behind the megaphone.

Think your clients aren’t using social networks? Think again. Another recent post revealed research showing those who use social networks are very interested in hearing from advisors: 63% of Twitter users would pay attention to investment tweets; 46% of YouTube users and 41% of Facebook users would seek investment information from these communities.

The question you should ask yourself right now is this: If you’re not engaging with your clients and prospects, who is?

The “Social Media and the Investor” study showed that…

63% of Twitter users would pay attention to investment tweets. They’re listening, and want to hear from investment and financial professionals.

46% of YouTube users and 41% of Facebook users would seek investment information from these forums. While there may be charlatans and get-rich-quick schemers afoot, these consumers are also looking for real-time reliable information.

Social media networks are also popular sources for developing new investment strategies and seeking buy/sell advice. The average Facebook user has more than 200 friends, and they’re not afraid to ask for advice and input. As peoples’ networks grow much larger through social networks, it’s a huge opportunity for all types of experts to reach out to consumers in new ways – with authentic, two-way conversations.

“For advisors and financial services providers, this means that a social media presence and the use of social media tools for communications have become a virtual necessity,” concluded George H. Walper, Jr., president of Spectrem.

It’s a fact: the financial industry is built on networking, yet many people don’t find their insurance agents through traditional networking anymore. Facebook and Twitter, among others, constitute the world’s greatest invention for massive – yet still personal and authentic – networking.

Progressive firms are jumping on the recent guidance from FINRA to make the most of this new opportunity. Whereas in the past advisors built their business on 1-to-1 conversations and individual referrals today you can reach hundreds of connections with a single, 140-character post. Doesn’t it make sense to understand how to best use these networks – now – to maximize your networking reach and extend your personal brand?

If you are looking to learn more about how advisors can use social networking to drive real results join us for a free webinar on June 2: Social Media, Can Advisors Afford to Miss It?

Whether you are a social media ninja or novice I hope the list below helps you see better results.

1. Be provocative, interesting and “catchy”
There are over 400 million Facebook users, 100 million on Twitter and over 60 million on LinkedIn. If you are going to rise above the noise you have a split second to capture your reader’s attention. Done well they will reward you and amplify the message across the social web.

One way to do this is write a provocative headline. Something that is thought provoking, controversial or completely goes against what we believe is true. I find this is usually the hardest part of writing, but in the age of blogs and Twitter it is even more important. In fact, there is a book out that helps you write specifically for Twitter.

Need a few examples?

• How to Live on $0 a Day
• State DOTs are paving more than roads
• 5 steps to ensure you lose customers

Keep an eye out for great tweets or headlines and start working those elements into your writing.

2. Track and measure everything
Tracking results with social media can be tricky. Instead of explaining all the reasons why, I will move on to things you should do to make it easier.

• Install Google Analytics on your blog and website. This is free and super simple.
• Open a bit.ly account or other URL shortening service. These services will take a long URL and trim it down so you can include it in your social media posts
• Install the Firefox plugin Snip-N-Tag. This will allow you to create shortened URLs with embedded tracking codes so Google Analytics can accurately credit the source of the traffic.

With these steps complete the last item is to make sure you shorten and tag every link you post out to a social media site that directs traffic back to your site. Don’t worry about tagging 3^rd party links as these will just show up in that site’s analytics.

3. Skate to where the puck is going to be
Wayne Gretzky said it best “I skate to where the puck is going to be, not where it has been.” The same is true of social media. Many people assume that Facebook and Twitter is only made up of 20 or 30 something’s. While this isn’t entirely true, it is important. This group represents a large number of your future clients so make sure you are ready when the puck is passed.

Also realize these sites are rapidly becoming commonplace for boomers as well. Here are a few stats to consider around Facebook’s growth:

• The overall number of users between 18 and 24 years of age has grown only 4.8% between the fourth of January and the fourth of July of 2009.
• In comparison, the number of users aged 25 – 34 has grown 60.8%
• The number of users aged 35 to 54 has grown 190.2%
• The number of users older than 55 years has grown a tremendous 513.7% (I can personally attest to this as my in-laws and now my grandmother are all getting Facebook accounts!)

4. It must be archived
FINRA recently clarified the guidelines around social media use and they made one thing very clear. If you are using social media sites (Facebook, LinkedIn or Twitter) for business purposes you are required to archive everything. It doesn’t stop there. In addition to having the data archived you need an easy way to search through your posts and export the data when needed. The same is true in the government sector. The Freedom of Information Act, State Archive requirements and more require government agencies to capture, archive and produce this information on request.

I’ve heard stories of people taking screenshots of Facebook, tracking tweets in Excel or in some cases doing nothing at all. These approaches are time-consuming, error-prone and risky. If you are looking for an automated solution check out Socialware Sync (there is a free trial).

5. Repetition, repetition, repetition
Social media is a lot like giving a presentation. You want to tell the audience what you are going to tell them, tell them and then tell them what you told them. The problem you have to overcome is again all the noise out there. There is a good chance that you first message will slip through the cracks.

By repurposing and retelling your audience the same thing in a different way you are helping ensure your message gets heard. Of course, if you have a nice provocative headline you may not need to repeat yourself as your connections will it do it for you!

6. It doesn’t take as long as you think
One of the biggest excuses I hear about not engaging in social media is that people don’t have the time. If you don’t have time for social media you are saying you don’t have time to find new referrals, to build your brand and to close more business. This isn’t a fad, it is a powerful marketing channel. By becoming an expert now you will set yourself up for tremendous success in the future.

That being said I understand we are all busy. Here are a few tips on how to add some efficiency to your social media activities:

• Use Google Alerts to setup saved searches so you can quickly find interesting topics that you can highlight or comment on.
• Repurpose old content in creative ways
  • Do a blog post on your top tweets of the week or month
  • Say the same thing in another way
  • Do a blog post on the interesting articles you discovered (whether you have commentary on them or not)
• Don’t forget to add some personality, people don’t care about you stopping by Starbucks but a little insight into your personal side will help your followers connect to you (no pun intended).

7. Contribute to the discussion, not the noise
I’ve found the most valuable way to build a presence online is to add value to existing discussions. You can do this in a lot of ways. You can comment on blogs. When you do this be authentic and add value. In exchange you should absolutely put a link back to your site. This will increase direct traffic and also your SEO ranking.

Also take advantage of things like LinkedIn Groups and LinkedIn Answers. These are forums where people are actively seeking information. Take your expertise on the road and in the process start building your brand.

The last recommendation is to amplify the points of others. It is not the same as a discussion but you are helping your connections find valuable and relevant content. It adds to your social karma too. The more your share from others the more they will share from you.

8. Use the right tool for the job
There are a lot of great tools out there to help you be more efficient in your social media activity. I’ve created a list of my favorites right here. I will continue to add to this toolkit as I find valuable products. If you have a recommendation please let me know. My Twitter handle is @bockius.

9. Always add value
When you start sharing information with your network remember to add value first. When you make it about yourself you are selling – when you add value first you are helping build your reputation, increasing your network and eventually increasing your revenue. It also buys you the right to mention your own products and services along side the value you are sharing. It is a balance. And when in doubt always error on the side of creating value for your readers. It will pay off in the long run.

10. Connect the dots
Now that you have a blog, Twitter account, LinkedIn profile and Facebook Fan Page you will want to link all of your activity together. Doing so maximizes your reach and the benefit you will get from these sites. Here are a few simple things to remember:

• Promote blog posts on Facebook, Twitter and LinkedIn. Do this every single time and be on the lookout for blog plugins that can post to these outlets automatically.
• Link your Twitter and LinkedIn accounts. You can do this on the LinkedIn settings page.
• Do a summary blog post on your latest and greatest tweets
• Start conversions on LinkedIn and drive people back using a tweet, status update or blog comments.

I hope you were able to get at least one valuable tip from the list above. If you are looking for more please connect with me on Twitter, subscribe to our blog and follow us on Facebook.

Kristin C. Harad or VitaVie Financial Planning was kind enough to spend some time answering the questions below. So let’s get started.

Tell me a little about yourself and your business
“After an accomplished career in financial services marketing, I founded VitaVie Financial Planning, a fee-only financial planning firm focused on the needs of expectant parents and growing families in the San Francisco Bay Area.  By coupling personal financial planning with coaching, I help eliminate clients’ anxiety around money and proactively addresses the issues that arise with the increased financial responsibility that accompanies parenthood.

I have nearly fifteen years of client management experience, working for major financial players including Charles Schwab, Visa, and Chase Bank (JP Morgan Chase). As such, I’ve developed extensive knowledge in retirement planning, credit cards (leveraging what is helpful and getting rid of what is not!), home equity products, and utilizing brokerage services in additional to more general financial planning.

Most of all, I enjoy working with people to help them achieve their goals. I am a CERTIFIED FINANCIAL PLANNER™ professional, completed my Personal Financial Planning coursework at UC Berkeley and earned her Bachelors of Science in Economics from The Wharton School at the University of Pennsylvania. I also trained in personal coaching at The Coaches Training Institute and incorporate coaching into my practice to better help my clients identify and achieve their goals.”

You can also see a video profile of Kristin here and don’t forget to follow her on Twitter @vitavie.

What social media outlets do you currently use?
“We’re on Twitter on a daily basis.  We’ll post quick tips or insights, links to interesting articles, and of course links to any content that we’ve put out.

I really like some of the financial social news sites, as it’s a great way to learn what other people are thinking about and promote our own content as well.  We’re very active on Tip’d and have built up a nice network of relationships with some other top users there, many of whom are also financial advisors.

We recently started getting very intrigued by video and are working to figure out how to leverage YouTube and some other sites.  Video is an incredibly powerful way to stand out and communicate exactly the message that you want to convey.  Plus, the search engines absolutely love it — we’ve had some of our videos jump to the top of the search engine results in just two days!

I’m a moderate personal user of Facebook and we’ve brought in a few prospects via Facebook ads, but we haven’t yet figured out what our strategy there will be.  Same with LinkedIn.”

How long have you been using social media?
“I’ve been involved for about a year, and more so in 2010.  My husband, who helps me with our online marketing, is much more involved and helps with a lot of the execution.

Right now we are spending about 15 minutes a day physically on the social media sites.  Writing the content piece takes a little more time as well as doing videos.  This part takes about an hour a day for us. Overall social media represents 25% of strategy and marketing efforts.”

How would you describe your use of social media?
“I view social media as a communications channel.  It’s a really good way to build awareness and an initial relationship with potential clients and it gives us a way stay top-of-mind and deliver useful information to clients.  So far, our efforts are meeting those goals.  Do I expect a 140 word tweet to result in a new client relationship? Absolutely not.  But it helps give prospects a sense of who we are and what we offer, and it’s a very easy way to provide a gentle reminder that we’re here when they are ready to take action.

We have been fortunate to garner positive media coverage and I also contribute to some large financial blogs like Fat Wallet and Bargaineering.  We use sites like Twitter, Tip’d, Digg and StumbleUpon to not only get these pieces in front of our social media friends and followers, but to help build a broader audience for them as well.  Bloggers and media outlets absolutely love it if you can not only help them with a story but help deliver big traffic numbers to it as well; it really helps to expand those relationships.

VitaVie focuses on young and growing families, so I’m not afraid to make the occasional update about fun things I’m doing with my kids, too.”

What results have you seen?
“I know we will see a positive ROI from our efforts. It does take time to develop. Social media is not an overnight vehicle. We believe it will help with retention, brand building and overall connections. In addition it is an invaluable research channel for us. Really it is all part of building stronger connections with people, something that is core to this entire business.

We are finding that video is a much more effective medium to help people get a sense of who we are and why they may want to work with us.  So far, we’ve produced brief interviews with each of our planners and the results are really intriguing.  It’s surprising how many views they are picking up, and many of the prospects I’ve met with recently rave about how much they enjoyed watching them because it gave them such a detailed sense of what it’s like to work with me.  It is also surprising how easy it is to get these videos to rank well and quickly for our best search terms.

As we climb up the video learning curve, we’re going to start doing short videos on broader topics, like our thoughts on budgeting or interviews with some of our favorite service providers.  I think our clients and prospects will both find these types of videos to be helpful and it’s an easy way for us to create some value-added content for them.”

What was your single best learning around social media?
“That you really can form or grow relationships via social media.  I’ve found some other financial professionals who I’ve never met in person that help us out (and vice versa) with communicating our message and providing feedback on things we’re working on a very regular basis.  I’ve also formed stronger relationships with people I do know by engaging with them via social media as well.  Yes, sometimes it’s even fun!”

What is one pitfall other advisors should avoid?
“Viewing social media as an aggressive sales channel.  Just because someone posts that they are looking for a financial planner doesn’t mean that you should contact them out of the blue to say, “Hey, I’m a financial planner.  Hire me!”  It doesn’t work in the offline world and it’s not going to be effective with social media either.  You’ve got to view this as a part of your communications and relationship building strategy.”

What would you recommend to someone just starting out with social media?
“Be patient and be focused.  Pick just one venue, like Facebook and Twitter, and spend your time there.  Don’t spread yourself too thin.  Commit to posting regularly — you only need to spend ten minutes per day, but do it every day.  Remember that success will take time.  You don’t walk into a party and suddenly have 200 conversations going, so don’t expect that to happen with social media either.  Over time, though, you’ll start seeing results and will develop some quality relationships.  (Don’t obsess over friend/follower counts either!)”

What issues are you still overcoming with social media?
“We’re doing a nice job of leveraging social media to bring people to our Web site, but I want to start focusing on using our Web site to start social media relationships with our visitors.  Our Web site brings in a consistent number of visitors, so I want to figure out how to engage them with our social media presences so that we can build a relationship beyond a one-time web site visit.”

How do you plan to expand what you are doing with social?
“Video is definitely our focus now.  It is very intimidating to get started, but now that we’ve made a few videos, we’re finding that it is much easier to do interesting and quality video than we thought. We’ve invested all of $300 in a camera, microphone and tripod and our setup seems to work well now.  It’s pretty fun to climb up the learning curve, too.  I’d like to get to the point where we’re producing brief videos on a weekly basis where we can help people think about different issues they’re struggling with (like understanding the different types of life insurance or how to reduce their financial clutter.)  We can quickly build a nice library that our prospects and clients will not only find really helpful, but will help them connect to us.  I really like the response we’re getting to video so far and I’m eager to start doing more of it.”

How are you archiving your content to ensure FINRA compliance?
“Today we are doing it manually by copying all of our content into a local file. It is time consuming but it is helpful to have all the information readily available and to ensure compliance”

Side note: Kristin hadn’t heard about Socialware Sync, an all in one solution to automatically archive content and make it searchable across all social accounts.

What is one thing you want to leave our readers with?
“You have to know why you are using social media and what result you are seeking. I don’t believe it is for direct sales; it is to build a relationships. People that are successful at planning do so because they want to have relationships with people. Those planners that start with this attitude with intuitively understand how to use these tools to help your business.”

I want to thank Kristin again for participating in this spotlight. It is great to see this kind of success and I’m sure other advisors will love the tips and examples.

If you’re an advisor successfully using social media we want to here from you. Drop us a line and we will slot you for our next spotlight.

We’ve already shared some stats around companies that choose to  block access to these sites. For example, Robert Half Technology found that 54% of CIOs said their firms do not allow employees to visit social networking sites for any reason while at work.

The naysayers will point out that giving employees access will hurt productivity,  expose sensitive information,  hurt the brand’s reputation or  cause compliance issues. The reality is that these are all just excuses. There are always risks with any decision and in this case businesses have to make their own assessment and then take steps to mitigate that risk.

My request is that you keep an open mind before jumping to a conclusion. To help you along let’s review reasons you WOULD want to open access to social networking sites:

1. They offer a great channel to recruit new talent
2. It is a unique way to build your brand in the eyes of customers and prospects
3. Go where customers are – let them communicate with you on their terms
4. Drive new sales and upgrades
5. Find new prospects
6. Drive traffic to your site
7. Reduce your customer service costs
8. Improve productivity (yes you read this right – look for proof below)
9. Collaborate with partners, customers and employees
10. Increase your reach by tapping the collective networks of your employees. In other words grow your enterprise social graph

But don’t take my word for it. Let’s look at some other research that points to the benefits of opening access.

• According to Dr Brent Coker from the Department of Management and Marketing at University of Melbourne in Australia, workers who engage in “Workplace Internet Leisure Browsing” are 9% more productive than those who don’t.
• An Accenture survey of Millennial preferences found that they prefer to communicate via instant messaging, text messaging, Facebook and RSS feeds. One Millennial MBA, points out that, “I need to access my Facebook in order to do my job.”
• The Cerner Corporation has found tremendous benefits from opening access to social networks. Here is how one Cerner associate puts it “Cerner supports the notion that “work time” and “personal time” have blurred in the uber-connected world. We used Twitter to gather real-time feedback during our corporate town hall in October. It was amazing to see a meeting of 5,000 associates be steered by the crowd, channeled via social media.”

Is there a social media silver bullet? No. But are you missing out on a great opportunity if you don’t engage and don’t enable your employees? Absolutely.

As many companies start to embrace social networking a common first step is to create a Facebook “Fan page” (54% percent of the companies studied have at least one Facebook Fan page according to the Burson-Marsteller study) or a LinkedIn company profile, or even a Twitter handle where the company will post news about the company, special promotions, and so forth. This is a fantastic start! But it is only a start.

Leading computer manufacturer, Dell is a perfect example of fully embracing this initial phase of social network marketing. Dell has several Facebook and Twitter pages, each with a specific goal.  For example, the @DellOutlet Twitter account sends Followers updates around the latest “deals” for Dell Outlet products. Dell has similar Facebook Fan Pages.

In June 2009, Dell reported it had driven $2 Million in sales directly from the aforementioned Twitter account, @DellOutlet. A great achievement for sure, but now think about the reach and impact of activating all of Dell’s employees. They have more connections, reach a wider set of the population and all have unique interests but at least one shared interest – they want Dell to succeed.

Companies that activate their employees will experience a big competitive advantage in the market.  Keep in mind activating is not just about turning on access. It is also about defining a strategy, a policy, educating your employees and then giving them the tools they need to be successful.

Here are a few examples of companies taking steps to activate their employees to drive their business:

• Online retailer Zappos has an employee leaderboard that shows who’s on Twitter and how many followers they have.
• PETCO, the pet retailing chain, used its already passionate and engaged employees use of social networking to build an in-house strategy.
• Telstra, the Australian telecom giant has mandatory Social Media training for all of its employees (Telstra has 40,000 employees!). In the training they stress “responsibility, respect and representation”.
• Best Buy’s Twelpforce is a collective force of Best Buy blue shirts offering technology advice whenever and wherever you need it.
  

Yes, companies are driving revenue through their Fan Pages and Twitter accounts but it is a mere sliver compared to the total impact activated employees are driving on social networks.

Companies in highly regulated industries (such as those regulated by FINRA, SEC, FDA, and so forth) that have blocked access to social networking due to compliance concerns are missing out on a tremendous opportunity.

There are 400 million people on Facebook alone, and that number is rising. Social networking is a channel that must be embraced to maintain a competitive advantage. Whether you are concerned about brand protection or regulatory concerns, implementing a solution to “unlock” social networking for your employees will pay off immensely.

If you were looking for more we’d encourage you to take our Social Networking Risk and Opportunity Assessment. After answering the questions we will provide a detailed analysis for you, generate a specific set of actions and help you prioritize your next steps in engaging with social networks.

Image courtesy of Jason Griffey

Technology has been evolving at lighting speed in recent years and sites like Facebook, LinkedIn and Twitter have changed the way we connect forever. Everyone has experienced the benefit in their personal lives and now businesses are recognizing the opportunity as well.

In the next decade the companies that have the largest employee networks, or said another way that have the highest connection coefficient will be the ones that win. Metcalfe’s Law applies for enterprises just as it applies for technology, “the usefulness, or utility, of a network equals the square of the number of users.” In other words the more connected employees are (to other employees, partners, customers, prospects, etc) the more value the employees and therefore the enterprise will experience.

Here is an example to illustrate the point. Say you have 10,000 employees. You can influence employee connectivity in one of two ways. First you need to encourage all of your employees to participate in these social networks. This is critical because this number is not going to change significantly in the short term. Second you need to help employees grow their number of connections – this is the connection coefficient. The higher the coefficient, the greater the reach. While you won’t double the number of employees you have in a year you can double the connection coefficient and if you do the results will be tremendous.

In the networked economy knowledge grows as it is shared. Most importantly companies get stronger through their connections and those connections have to be driven by your employees. Check out my last post to see an example how these connections can be used to help drive recruiting.

Stay tuned for future posts on how these connections change the game in sales, marketing and customer service.