How Social Networking has changed business?

Consider a world where one is friends with everyone else, where one pokes and likes everyone, where a movie about a website becomes a mega hit. The world has become similar to this since the emergence of social networking. The influence is equivalent to the discovery of electricity, changing the way we see the world. Off course the way one does business has also changed. In this article we will look at some of the areas where social networking has changed the way businesses work.

Social networking is one of the most significant business developments of 2010, topping the resurgence of the U.S. automobile industry. During the year, social networking morphed from a personal communications tool for young people into a new vehicle that business leaders are using to transform communications with their employees and customers, as it shifts from one-way transmission of information to two-way interaction. Leaders like IBM's Sam Palmisano, PepsiCo's Indra Nooyi, Apple's Steve Jobs, Microsoft's Steve Ballmer, Carlson's Marilyn Nelson, and Harvard Business School Dean Nitin Nohria are all active social network users. The reason being that these social networks are a unique way of broadly communicating real-time messages to the audiences they want to reach. This can be seen as a help in mergers and acquisitions which are few among the numerous problems a leader has to face in communicating with the employees and the stakeholders. The biggest threat presented by social networks is to middle managers, who may become obsolete when they are no longer needed to convey messages up and down the organization. The key to success in the social networking era is to empower people who do the actual work — designing products, manufacturing them, creating marketing innovations, or selling services— to step up and lead without a hierarchy. Social networking is also flattening organizations by distributing access to information. Everyone is equal on the social network. No hierarchies need get involved.

Apart from organizational hierarchies these sites have changed the way corporate are interacting with their customers and other stake holders. Consumer marketing companies are lining up to use these networks to reach their tailored demographics with highly personalized messages. Already they are revolutionizing marketing by shifting dollars from purchased media advertisements to building their own outlets and content. Kraft Foods, for example, is now one of the largest publishers of food-related materials. IBM is launching thought leadership communities. PepsiCo uses social networks to reach millions of social entrepreneurs in lieu of advertising at the Super Bowl.

From a leadership perspective, social networking is making authentic leadership a reality and a necessity for the 21st century leaders. Even more important, this new phenomenon is enabling business leaders to regain the trust and credibility they have lost over the last 10 years. That's why social networking is the most important business development of the year.