Social media isn’t really its own risk, but it sure can amplify underlying ones
The buzz for the last few years now is that social media represents a unique risk that companies must manage, lest they leave their corporate reputations hanging out there for others to tweet all over them.
We’ve all heard the cases: the viral video of the pizza-chain employee adding an ingredient that, ahem, isn’t listed in the formal recipe book; the tweets about the recorded call of the cable company service rep insulting customers and refusing to let them cancel their service; the nonprofit that gets hammered on Facebook and other social media outlets after a senior executive makes an unpopular and seemingly politically-motivated decision, alienating its core constituency.
With these blunders in mind, companies are hiring scores of white-hat twitteratti to saturate the wired-waves with edgy, yet positive, corporate messaging. How do you stop a bad guy with a Twitter account? By sending out a good-guy with a corporate Twitter account. The plan is to manage social media risks with hired hands, responding to and neutralizing the bad stuff.
It’s a wrong-headed strategy. Social media sites aren't risks all their own any more than 60 Minutes, the Wall Street Journal, or a billboard overhanging I-95 are. Social media may be more likely than traditional mediums to out your latest fiasco or ethical breakdown, and can do it much faster, but they are just that—outlets. The real risks to be managed lie underneath.
The YouTube video of the rogue employee being a jackass says more about a company’s culture than it does about its social media strategy. The Facebook page devoted to a customer service representative with a salty vocabulary says more about its training program than its social media risks. The hateful tweets don’t need to be managed as much as the executive decision-making process and communication among organizational leaders do.
Less Hashtagging, More Listening
Don’t get me wrong, reputational risk is surely near the top of the risk list, and corporate reputations can be trashed on social media in the blink of a Snapchat. True too, the expected time for companies to respond to social media concerns has condensed dramatically, down from days to hours and minutes. But working to neutralize “social media risk” could do more harm than good. If the focus is to disarm and discredit social media commentators, rather than to listen to them and ensure their concerns are communicated through the right channels, companies could actually miss the underlying problems.
In a report on how board members view various risks, accounting firm EisnerAmper argued that, “Because social media is intrinsically linked to a company’s reputation and image, organizations and boards should consider social media as one of the most important risks to manage and monitor (as well as a tool to use to combat the same.) It said, “Shockingly, only 6 percent of boards feel they are well-versed in social media risks, and 67 percent of organizations are not engaging external consultants to monitor social media.”
I’m not arguing that boards should ignore social media, but, given the graying of America’s boardrooms, I’m hardly shocked that they generally don’t consider themselves social media experts. I’m not convinced they need to be. Board members not only have a firm grasp on reputational risk, it scares the hell out of them. Understanding that social media is an outlet for other risks to materialize, rather than a risk all its own, could free board members to focus on the wider crisis management and reputational risk issues, of which social media should play a part, and that boards are generally good at.
I'd also suggest that outsourcing social media monitoring to external consultants is a bad idea. They are more likely to see it as a problem area to control, rather than a conduit to the unvarnished views of customers and the public. Those consultants are also more likely to sanitize or ignore what social media commentators are saying, rather than admit they can't control the conversation.
EisnerAmper’s chief risk officer, Peter Bible, put it well when he said, “When evaluating risks, remember the three Ds: diversity of thought, distribution of capital, and disruption of your business. Social Media has served as an agent to consolidate all risk into one category.”
That’s exactly it—it's an agent. Listen to what it is saying, but also understand that it’s not something, necessarily, to be controlled. Reputational risk doesn’t exist in a vacuum; it’s tied closely to all the things that can go wrong in an organization, such as customer service, culture, fraud, and lack of communication, leadership, and ethics. Putting social media management ahead of managing those other things may be a good way to find your company’s reputation trashed on social media—and elsewhere.