From the June 2013 issue of Entrepreneur

Q: What's the advantage of a closed social network?

A: All businesses depend on information flow. When employees have the information they need, they make better decisions, save time, feel connected and are more productive. A closed social network--think Facebook or Twitter, but for use by your employees only--encourages a more open work environment by allowing information to move freely within the business.

With the transparency such networks provide, executives enjoy a direct line of sight into operations, managers can better direct their team's efforts and employees can collaborate with colleagues in offices around the world. This is important when you consider that nearly 71 percent of employees report that they don't feel fully connected or engaged with their jobs, according to a recent study by Dale Carnegie Training.

Unlike traditional communication tools like shared files and e-mails, private social networks allow employees to easily organize into groups to tackle specific projects or objectives. We asked Brian Murray, director of enterprise strategy for Yammer, a San Francisco-based provider of enterprise social-networking software, for details on how it all works.

How do I go about creating a closed social network for my business?
The best way to get started is to take a service for a free test-drive to see what it has to offer. Once you find one you like, make sure your executive team supports it, the training is simple and thorough and your employees are empowered in its use.

How do the networks handle privacy issues?
While closed social networks encourage employees to work more openly, they also support the need for privacy. Private messages can be sent to a specific audience, and private groups can be created for sensitive, ongoing conversations. The key differentiator between closed social networks and more traditional communication tools (e-mail or chat) is that the default mode of a social network is open, with the option to have a private conversation as needed.

Employees need to interact with people outside the business. How can a closed social network support that?
Many of the closed social networking services offer "external network" capabilities that allow employees to include outside partners, advisors, consultants, vendors, suppliers and others. This creates a B2B group that doesn't involve setting up separate company networks for each outside party. It's about linking them together and increasing connectivity like never before.

Why would a startup need a closed social network?
In a small company employees often wear multiple hats and support each other, even if it's not part of their job description. A closed social-networking platform can facilitate this crowdsourcing of ideas, help find experts and support and allow everyone to get their job done more cohesively. Social networking is about moving information through your business more efficiently, and that works for businesses of any size.