Don’t shy away from social media, advises Fred Stone
Q: My CEO is hostile to social media. Does that matter?
A: The short answer is ‘yes’. One of the CEO’s many jobs is to build the company’s story as an investment proposition; another is to protect and develop its reputation. Doing the right thing and
communicating that to stakeholders is fundamental to growth, so the arrival of a communications tool that advances the speed at which news travels demands attention, particularly when it encourages
its audience to share its views in real time, globally.
The growth of social media has also given us tools to form online communities for sharing views. It’s now a way of life and anyone can get involved at any time of the day or night. Customers, shareholders, suppliers and employees are using social media to seek out other people’s opinions of products and services, both negative and positive – that’s why corporate reputation can be at stake.
It’s also why CEOs who ignore social media risk learning the hard way that it can be used to track and harness the power of online crowds, which can organize themselves quickly through Twitter, YouTube and Facebook when they feel companies are not doing the right thing. The problem for many CEOs is that this freedom to talk and influence is terribly new to them; it may be hard to take seriously something that’s used by kids to plan their next party.
The good news is that CEOs don’t need to know the technologies of social media; they just need to understand their power. Some chief executives are experimenting, blogging about everything from corporate strategy to the wider global environment. In the US, Brian Dunn, CEO of Best Buy, embraces social media with streamed Twitter comment on the Voices section of his company’s website. Other enlightened senior management teams are using social media to transform their businesses.
IBM’s use of social networks to maximize internal knowledge is a good example. WSP’s new intranet links Twitter and blogs together in one seamless experience. The CEO of Scandinavian Airways uses social media to talk to customers and gather feedback, and the CFO of Telecom Italia holds frequent Twitter sessions with shareholders.
It’s the speed, scale and reach of social media CEOs need to understand, as well as the fact that stakeholder behavior can change under the influence of social networks. Kasper Rorsted, chief executive of Henkel, provided a powerful example of this when addressing German IR association DIRK’s conference in May: a member of his family had called to ask whether he was alright after seeing a fire at a Henkel factory on YouTube. Social media brought news of this development to him before his company’s own communications team reached him.
The experience converted Rorsted to the need to understand social media. Hopefully, it won’t take similar experiences for other CEOs to look closely at the medium and assess how best to use it to the benefit of their companies and stakeholders.
Fred Stone is international head of business development at King Worldwide.
This article appeared in the October print edition of IR magazine.
