Social Media Marketing Case

The story. EMC, a leader in the computer storage industry, needed to cut its costs during the
financial crisis of 2008 and 2009. Although it traditionally had a hierarchical culture, it was
beginning to look to its employees for ideas. Could the companys recently-adopted social media
platform an online discussion tool called EMC|One be used to identify cost reduction
opportunities?
The challenge. EMC had risen to the top of the storage market, and had successfully acquired a
number of companies to augment its offerings. But it was becoming clear in mid-2008 that the IT
market was beginning to suffer. A global recession was under way, and customers were not
buying EMCs products at the rate they had been. Could EMC avoid massive layoffs and plant
closures by engaging its employees in the process of identifying and implementing cost
reductions? EMC|One did not seem to be a likely vehicle for helping out, as it was used largely
for discussing employee hobbies.
The strategy. EMC, given its long heritage of senior management decision-making, was initially
focused on a top-down approach to cost reduction. Executives established a cost transformation
programme. Several company-wide task forces, led by programme managers from the
companys finance, IT, and other business divisions, examined people costs, indirect costs and
product costs.
One of the first steps was a change to EMCs holiday policy. It specified that employees with
leftover leave time in one year had to use it by March of the following year.
The employee response. Discussions on EMC|One quickly shifted from hobbies to the fairness
of the new holiday policy. Some complained that they would have to cancel long-planned
holidays. Others had particular work-related situations that would make it difficult to use the
leave days. The tone of the hundreds of online comments was largely negative, and there were
more than 10,000 views of the discussion thread. Some posts raised fears of massive layoffs.
Several employees tried to make more constructive comments, including Michelle Lavoie, a
training manager in EMCs services business. She posted a contribution on EMC|One under the
heading of Constructive Ideas to Save Money. It suggested several possibilities, including
incentives for early retirement, unpaid holiday week shutdowns, pay freezes and four-day weeks.
She asked others to contribute ideas, and that discussion took off. It lasted almost two years, and
generated 364 ideas, with more than 26,000 page views. Senior executives joined the discussion,
and members of the cost transformation task force also participated.
Did it work? In April 2008, EMC announced a 5 per cent pay cut for all employees, along with
the addition of five days of paid holiday for the year. The responses on EMC|One were almost
uniformly positive. Ms Lavoie noted, A lot of people understood that they made a difference,
and that the discussions were being heard.
EMC saved millions of dollars through the ideas. David Goulden, the companys chief financial
officer, said: Ultimately we distilled about 200 different ideas coming from employees on EMC|
One. There was nothing huge that hadnt been discussed in the cost transformation project teams.
But its clear that the feeling of participation and morale issues were the most important
contribution from EMC|One. People had a sense of being part of the process, as opposed to
receiving memos about it.
Key lessons. EMC no longer has a culture in which a solitary CEO can make pronouncements
from on high without comment or involvement from 49,000 employees.
The EMC experience shows that a previously top-down and buttoned-up culture can begin to
accommodate new voices and influences in its organisational judgment.
Author: Thomas H. Davenport is a professor at Babson College. Source:
http://www.ft.com/cms/s/0/5cc5991a-8224-11e1-b06d-00144feab49a.html#axzz3s1AMKKIV