Risk vs. Rewards in Social Media

Here we are in the 21st century.  We monitor our trading, we monitor our friends, we get real time information (or as real time as we can), yet big brother is still trying to hold us back.  Why is it that so many of corporate america can’t seem to catch up to the trends?  Are they going to miss out on the best and brightest because of their hesitation?  Seems to me that every time a new technology starts to take roots the people who should be embracing it tend to dismiss or defend against why we shouldn’t have or use the new technology.  I know information directors that don’t have computers at home and believe it or not there are still executives that have all their email correspondence printed for them and they dictate or write the responses for their administrative assistance (I know, seems like a cliché from 9 to 5 with Dolly Parton).  Ok so lets get down to brass knuckles, why is it that adaptation comes so easy to some and so hard to others?  It’s a risk perception whether it be personally or professionally.  People innately evaluate the cost benefit to themselves and or their company.

Personal Risks of Social Media Use

On a personal level the risks are minimal to the population.  If I were to get hacked my identity might get stolen and I would be in a world of hurt, and may even face some public retribution, but overall the impact would be isolated. Even so, some people choose not to assume this risk and choose not to participate in social media which is an individual preference.  Now let’s talk about corporate risk.  Many people would argue that the number one risk associated to social media is reputation.  The thought is that if you allow your employees to access these sites, it could pose a reputational risk that you are unable to address.  Funny, when I write reviews about a company or service I receive it isn’t as though I work for that company, rather I received their service.  I would say that the inability to receive or view that feedback could lead to more negative connotations vs. the ability to receive that information and prepare an appropriate response.   Another difficulty to companies limiting their employees is the lack of control of those employees when away from the office.

This is why I argue that the number one risk associated to social media is ignoring it.  The lack of accepting social media as a successful form of communication could really hurt your company through lack of your participation in the conversation. And believe me, the conversation is already going.

Freedom of Information

Another interesting standpoint to social media is the freedom of the information.  When people post public information, it is very difficult to remove it from every source possible on the internet.  This allows people and companies to view their information without any risk of invasion of privacy because most the sites with the exception of Facebook are open communities.  There are all sorts of tools that you can use to monitor traffic as it pertains to your company, brand, and even industry.  If you haven’t already started, just set up some google alerts to see what is being circulated about your company.

Liability Risk of Social Media

Other risks associated to social media are the liability risks and enterprise security risk which each have their own subcategories such as personal information, financial information, legal liabilities, network risk etc.  These are the risks that any company has regardless of their stated participation level or acceptance of social media.  Someone somewhere in your employee population is participating, therefore your company is as well.  Guilty by association.  The best way to address these risks is to address the population with training and policy.  Note that training was first on my list because of the trust factor that seems to be embedded with all users of the internet, people need to understand the risks associated — how many times have you clicked a link that you didn’t really know where it was going to send you?  Most employees don’t understand that clicking that link is risky business.

How To Address Social Media Risks

Ok so now you know that every company is guilty by association when it comes to social media. You have accepted that your company is exposed to some sort of risk. So now, what do you do to start addressing that risk? There are a lot of boiler plate policies and procedures out there, but every company is it’s own customized entity. To begin, you need to determine to what extent your company is participating in social media, both internally and externally and your key risk factors. Some thoughts on typical key risk factors are reputation, financial, liability etc. External participation is probably the easiest to see and evaluate and may give you the biggest bang for your buck so to say because your external information is hopefully comprised of both employee correspondence and external evaluations such as financial analysts, newspapers, and customers. I say hopefully, because if you are not finding employee correspondence, then either you aren’t looking hard enough or your employee demographics may not be prone to communications via social media and this could be a problem in itself.

Here are some easy steps to see what your external participation in social media is:

  1. Google your Company
  2. Google your industry
  3. Set up key word searches on Google on all sorts of media
  4. Set up key word searches in TwitterGo to sites like Yahoo Finance and read through the blog posts

Log as much information as you can over a period of time. A good time do this if you are publicly traded might be a quarter or year end, or a recent release of new products as well as time that there is a minimal amount of activity happening.

Categorize the information you are seeing into employee correspondence (financial, personal, liability, reputation) external evaluations using the same categories you used for your internal. Each of your categories need to be evaluated on a risk basis of likelihood and impact. Likelihood is to be defined as the probability that the event will occur and impact is the amount it would impact your risks financially, professionally, and the speed of onset. As these increase so does your risk.

Ok, now that your eyes have glazed over with confusion, I will let you consider what I have written to absorb it all. We’ll talk about internal social media analysis strategy soon, but I think we are off to a great start!

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