Google the term ‘social media’ and you’ll get close to four billion hits. So clearly something pretty big is happening out there.
Do companies need to engage with this thing called social media?
Yes.
Should companies be proactive about engaging with it?
Maybe.
Can companies choose to ignore social media?
No.
These were the general conclusions reached by directors participating in the KPMG Series 1, 2013 Directors’ Roundtables. Participants were conscious of social media and its potential power, but few claimed to fully understand it, or to be truly comfortable with it.
Of course, most people (even company directors) think they know what social media is. But to make sure we’re all on the same wavelength, let’s define it as ‘the digital space in which people create and share information and ideas in virtual communities and networks’.
It includes internet forums and chat rooms, social networks, blogs and platforms such as Facebook, You Tube, Twitter and Tumblr. It’s fast moving and unpredictable. It blends technology and social interaction to create value. It empowers consumers, providing them with platforms to agitate, organize, enquire and amplify their concerns but also to provide useful feedback and even compliment staff on an outstanding transaction.
Some significant challenges with social media are the speed and ferocity with which issues are raised, the ability of these issues to escalate and gain momentum very quickly, and the fact that comments are often uninformed, unmonitored and often blown out of proportion.
It’s unsurprising that some company boards and their audit committees can be reluctant to even think about social media. But we think that’s a mistake…
Participants of the KPMG Roundtable generally agreed that social media represents a serious potential threat to any organization, irrespective of its nature and size. Audit committees, in particular, need to recognize the magnitude of the threats posed by social media and what will be required to manage them. Often this is a dedicated social media strategist or team.
Of course, social media can also be an excellent way for many kinds of business to engage with customers, prospects, employees, the supply chain and other stakeholders. Successful business models have been built entirely on social media engagement. Companies have employed social media to increase sales and profits, undertake market research, resolve customer complaints faster and cheaper, cross sell products and services and humanize the external face of the organization. And unlike many other forms of marketing and communication, social media typically doesn’t involve huge expenditures.
Yet to put matters in perspective, social media can offer little or nothing of value to many companies. Still that doesn’t mean these companies can afford to ignore it.
The first step in any social media strategy is to listen to what is being said about your organization. Listening gives intelligence which then allows you to prepare without any inherent obligation to respond through social media.
However, as several directors admitted, companies are often forced to interact with social media when consumers or employees or anyone else uses it to criticise or attack them for real or imagined sins. Most such criticisms will be lost in the general social media static, but some end up getting noticed, and can quickly morph into a digital avalanche of bile and spite.
Directors and executives who couldn’t distinguish a tweet from a toboggan find themselves being assailed from all sides of the social mediaverse, putting the reputation and credibility of the organization at serious risk. It doesn’t matter that the allegations might be completely false, even malicious, perhaps planted by a competitor or propagated by a disgruntled employee or aggrieved customer.
Remember that while it might be possible to have comments and allegations taken down from a particular social media site or network, once something is published on the internet it can never be fully withdrawn. Even if the ‘someone’ concerned can be identified, attempts to obtain legal redress from the individual or group responsible for trashing a business’s reputation can easily backfire.
Roundtable participants decided that audit committees need to assure themselves that the business has plans in place to deal with a social media crisis and that it has ready access to good advice for dealing with any such problem.
