The Business Value of Social Media

One of the four recommendations of The Authentic Enterprise white paper is to encourage corporations to responsibly and strategically embrace "new media" - what we know as "social media" today. In making this recommendation we recognized that eventually corporations would have to confront - and overcome - policy, risk and management issues, ranging from privacy and disclosure to misrepresentation and intellectual property leakage. This would, in turn, compel the CCO to collaborate with other C-suite officers, including the General Counsel and CFO.

A few weeks ago, in New York City, IBM hosted a Social Media Business Summit. In partnership with my IBM peers - our CFO, CIO, General Counsel and head of HR -- we brought together 100 senior executives from 70 leading companies to explore the business value of social media, how to mitigate its potential risks and the management systems that organizations should employ to achieve its greatest benefits. Several Page members attended the meeting.

The genesis of this event was two-fold. First, we've been examining these issues as part of the current Authentic Enterprise Task Force's New Media workstream, which I'm co-leading with Alan Marks, SVP Corporate Communications of eBay. Second, social media has become an increasingly hot topic across the C-suite at IBM. This has, as expected, required a cross-functional, multi-disciplinary approach. As I've worked my fellow IBM senior leaders we've found that our counterparts at various companies and institutions were having similar conversations. We decided now was the time to initiate a dialogue across the C-suite. We invited peers from leading companies and institutions representing a cross section of industries, including regulated industries like financial services and pharma, as well as the public sector. To no one's surprise, the largest turnout was from the CCO/CMO community, but we also had a strong showing from legal, HR, CIO and finance.

Prior to the event, we asked attendees to complete a survey to help frame our discussion. Interestingly, 75 percent said that the opportunities of social media outweigh the risks. However, 89 percent said that they're being held back from seizing those opportunities by inadequate management of the risks. So, we spent much of the event exploring and defining what could enable companies to manage risk appropriately in order to pursue and achieve the benefits.

Additionally, survey participants provided insight into which areas they believe social media holds the most value for their organizations. Fifty-one percent mentioned the value of social media for co-creation; almost 70 percent believe that the value of social media is to enable customers; 61 percent believe there is opportunity for understanding customers; and 86 percent believe it can improve workforce management.

We also presented an analysis of social media policies and guidelines from more than 60 organizations. In comparing the picture of business value in these guidelines to the results of our pre-conference survey, we see an opportunity to strengthen guidelines in order to aim employees at the value creation side of social media. Most guidelines focus on sharing and collaboration as prime value creators, but don't discuss key areas such as co-creation with customers, customer relationship management, gaining customer insights, workforce management or building loyalty and advocacy.

We were surprised to find that only 43 percent of the guidelines made reference to an organization's code of conduct. This presents an opportunity -- given that many of the fears companies have about social media are already covered by existing company policies. Employees can be pointed to already existing codes of conduct. Further, one third of the guidelines didn't cite any particular risks, and the ones that do are incomplete. This indicates that we need to deepen employee education around risk, above and beyond what is already included in codes of conduct.

Overall, the Summit provided a great opportunity to start many of these important conversations. We'll draw upon the learning from this dialogue as we continue our work on the New Media workstream. I'd welcome comments from those Page members who attended, and anyone else with ideas or advice on how to address the emerging questions we're facing as a profession.

Jon Iwata
SVP, Marketing and Communications
IBM Corporation