7/25/2019 EMC the Story

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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 loo to its employees for ideas. Could the company!s recently"adopted social mediaplatform # an online discussion tool called EMC$%ne # be used to identify cost reduction

opportunities&

The challenge.EMC had risen to the top of the storage maret, and had successfully ac'uired anumber of companies to augment its offerings. (ut it was becoming clear in mid"2008 that the )*

maret was beginning to suffer. A global recession was under way, and customers were not

buying EMC!s products at the rate they had been. Could EMC a+oid massi+e layoffs and plantclosures by engaging its employees in the process of identifying and implementing cost

reductions& EMC$%ne did not seem to be a liely +ehicle for helping out, as it was used largely

for discussing employee hobbies.

The strategy.EMC, gi+en its long heritage of senior management decision"maing, was initially

focused on a top"down approach to cost reduction. Eecuti+es established a cost transformation

programme. -e+eral company"wide tas forces, led by programme managers from the

company!s finance, )*, and other business di+isions, eamined people costs, indirect costs andproduct costs.

%ne of the first steps was a change to EMC!s holiday policy. )t specified that employees withlefto+er lea+e time in one year had to use it by March of the following year.

The employee response.iscussions on EMC$%ne 'uicly shifted from hobbies to the fairness

of the new holiday policy. -ome complained that they would ha+e to cancel long"plannedholidays. %thers had particular wor"related situations that would mae it difficult to use the

lea+e days. *he tone of the hundreds of online comments was largely negati+e, and there were

more than /0,000 +iews of the discussion thread. -ome posts raised fears of massi+e layoffs.

-e+eral employees tried to mae more constructi+e comments, including Michelle a+oie, atraining manager in EMC!s ser+ices business. -he posted a contribution on EMC$%ne under the

heading of 1Constructi+e )deas to -a+e Money. )t suggested se+eral possibilities, includingincenti+es for early retirement, unpaid holiday wee shutdowns, pay free3es and four"day wees.-he ased others to contribute ideas, and that discussion too off. )t lasted almost two years, and

generated 456 ideas, with more than 25,000 page +iews. -enior eecuti+es 7oined the discussion,

and members of the cost transformation tas force also participated.

Did it work?)n April 2008, EMC announced a per cent pay cut for all employees, along with

the addition of fi+e days of paid holiday for the year. *he responses on EMC$%ne were almost

uniformly positi+e. Ms a+oie noted, 1A lot of people understood that they made a difference,

and that the discussions were being heard.EMC sa+ed millions of dollars through the ideas. a+id oulden, the company!s chief financial

officer, said: 1;ltimately we distilled about 200 different ideas coming from employees on EMC$

%ne. *here was nothing huge that hadn!t been discussed in the cost transformation pro7ect teams.(ut it!s clear that the feeling of participation and morale issues were the most important

contribution from EMC$%ne.