Where Companies Go Wrong with Social Media
For all the talk of the game-changing nature of social media, most companies do a poor job of embracing its opportunities and managing its risks, according to Vincent Schiavone, co-founder and chief executive of ListenLogic, which provides social media monitoring services.
Abundant support for a jaded view of corporate use of social media comes in a book just published by Mr. Schiavone and his collaborators, “Avoiding #Fail,” which includes 100 examples of the inept handling of social media issues.
In an interview, Mr. Schiavone outlined his view that many companies don’t understand social media or who uses it. He also detailed how companies should go about starting to monitor the risks surfaced in social media.
“Most large corporations haven’t evolved their understanding of social media, the amount of damage it can cause and how quickly that can happen,” he said.
The examples in the book range from lack of awareness, such as ExxonMobil Corp. not realizing a fake Twitter account had been created in its name, to chief executives throwing caution to the wind, such as Netflix Inc. CEO Reed Hastings drawing scrutiny from the Securities and Exchange Commission for his disclosures on Twitter. The agency later decided not to pursue any action against Mr. Hastings.
“Companies haven’t taken their complex risk maps and applied them to social media,” Mr. Schiavone said. A part of the reason is that social media is often being kept in the silo of the marketing department, he said, when it’s another risk factor that should be considered by multiple corporate functions including finance, human resources and legal.
Companies fail to understand that social media is the “canary in the coal-mine” for risk, providing early warning of brewing problems of all kinds, whether product quality, supply chain or customer service, Mr. Schiavone said. That mistake, in turn, stems from an erroneous view that social media is distinct from other forms of media when it’s really just another form with more immediacy, a “24/7 theater” in Mr. Schiavone’s words. Many companies also mistakenly believe that only individuals and customers make use of social media, neglecting rivals, shareholder activists, employees and other parties that influence their business, he said.
At a time when many companies are pushing their CEOs to Tweet, Mr. Schiavone takes a much more cautious view that it’s risky to let executives loose on social media. “There should be the same vetting process regardless of the medium,” he said.
Board members should also be monitoring social media for risk at a higher level, Mr, Schiavone said, including looking at rival companies and strategic issues.
When it comes to setting up social media monitoring, Mr. Schiavone said this should start with an assessment of where risks are likely to arise and how to monitor them. The risks then discovered fall into three buckets, he said: Immediate risks such as a negative blog post; Emerging trends that will affect the business; and “tipping points” where social media provides warning of a marked change that’s been in the offing for some time.
In Mr. Schiavone’s view, “the risk of not properly understanding and monitoring (social media) is increasing every day.”
(Source: The Wall Street Journal, 09/05/13)
