Companies warm up to social networks

At Serena Software, water-cooler talk has been replaced by Facebook chatter. Nearly everyone in the company, headquartered in Redwood City, Calif., uses the social-network site to hang out with fellow workers, access internal communications, or even challenge the Sydney branch to a movie quiz.

That includes the CEO. In a bid to create a sense of community within a worldwide company of 850 employees – many of them physically dispersed and acquired through a series of mergers – Serena's management created a "Facebook Friday" last November. An afternoon training session by Facebook experts – namely teenage sons and daughters – sparked ubiquitous social-network interaction inside the corporation. So much so, that Serena uses Facebook as its de-facto Intranet. The company also uses social networks to recruit new hires and market its Web 2.0 tools. Employees can even peer into the CEO's home life as a race-car driver.

It's a radical policy for a firm that, just a year ago, had banned the use of Instant Messenger.

"For a company that has a history of locking things down, it took a cultural shift for us to say, 'What if we open everything up?' " says Serena spokesman Kyle Arteaga. "We needed to find a way to build a community."

For many companies, social networks are deemed portals to lost productivity or, worse, gateways for security breaches by hackers. But some firms are taking a counterintuitive approach. A few are using existing social networks on the Web while others are building their own custom networks to maximize internal information flow and forge stronger links between individuals and departments. It's conceivable, some workplace analysts suggest, that every company will someday have its own social-network hub.

"Authentic relationships are at the heart of both personal and business or professional life," says John Challenger, CEO of Challenger, Gray & Christmas, an outplacement firm. "Some companies are using [social networks] as great networks of current employees to enhance intra-company communication. It's a way of building stronger alumni networks with your employees who have left but are still in some ways part of the culture. And it's certainly a great way to reach out to potential customers."

As Mr. Challenger puts it, social networks are like a Rolodex squared. Businesses interact with customers on Facebook groups. Millions of businesspeople also make connections through professional social networks such as LinkedIn, Plaxo, and Ryze. One of LinkedIn's most popular features is its information booth, where users can pose business questions and share knowledge with others. "We're seeing a lot of small-business owners getting advice on how to build their businesses," says Krista Canfield, public relations manager for the Mountain View, Calif.-based company.

Moreover, recruiters are increasingly plugging into LinkedIn's pool of 25 million résumés to find new hires.

But before your office joins the rah-rah social-network parade, beware: Popular sites should be monitored for corporate security.

Sites such as Facebook are not immune to harmful Malware widgets, observes Graham Cluley, senior technology consultant at Sophos, a firm that creates antivirus software for businesses. "If you click on the link, you infect your computer. So this is a way for malicious code to enter your organization."

Mr. Cluley worries, too, about employees leaking proprietary information to others. One solution may be migration to "gated networks" such as Thomson Reuters' tightly guarded social network for the financial community, where rigorous identity verification procedures screen out unwanted visitors. It's also likely that offices will start creating their own fortressed hubs. For instance, Accenture, a management consulting, technology services, and outsourcing group with 180,000 employees, recently created its own matrix. The Facebook-like network includes the sorts of features one would find on YouTube (a video-sharing site), Wikipedia (an Accenture encyclopedia), De.licio.us (a social-bookmarking site for URLs), Ning (the ability to form subgroups to share information on a topic), and even a Twittr-like presence indicator that specifies whether you're interruptible. As Accenture Chief Information Officer Frank Modruson explains, "It has your bio. It has your picture, if you choose to share it. It has contact information. It has where you work in the organization, who you report to, skills, things of that nature. And the best part is you can free-text search it. So, you start being able to find skills and information that is hard to structurally design."

Case in point: An Accenture employee in London recently needed to find someone with digital-asset management experience, so he sent e-mails to colleagues, asking who to contact within the firm. But when he typed that search term into People Search, he found the right person within minutes. Two days later, he received replies to his e-mails recommending the same person.

The goal of the site, according to Mr. Modruson, is to break down barriers within the organization.

Accenture's system certainly puts the "work" back into social network, but how about the "social"?

Modruson's profile indicates that his interests include fly fishing, wine tasting, and volunteer firefighting, and he's been able to make connections with Accenture workers who share those pursuits. Common interests can forge new bonds in the workplace. But the biggest impact on internal communication – something that's also been observed at Serena Software – is the ability to use Web profiles to see what people on the other end of a phone line look like. It adds a personal element to professional interaction, according to users.

Smaller companies don't have their own social networks – yet. But Modruson and Challenger predict that social networks will become as integral to business as e-mail. And, if information truly is power, then expect social networks to topple established business hierarchies.

"You look at an org chart within a company and you see the distribution of power that should be," says Eran Barak, global head of marketing strategies at Thomson Reuters. "You look at the dynamics in the social networks [to] see the distribution of power that is. It reflects where information is flowing. Who is really driving things."