The measure of effectiveness of a CEO and its executive board has always been the degree to which the business is achieving its purpose. Whether in Canada, the U.S., Europe or Asia, an executive board’s purpose should be to increase shareholder value, a purpose that is best accomplished by serving the needs of various stakeholders. Somewhere in the pyramid of stakeholders is the consumer or client, whose likes, favorites, and preferences must be met with quality personalized products and services that deliver high competitive value. In an interconnected global knowledge economy, this has meant listening to what consumers are saying online through social media platforms like Facebook and Twitter, and engaging in two-way conversations to respond in real-time to consumer demands.
The value of engaging in social media listening to increase shareholder value is evidenced by the surge in the use of social media by Fortune 500 companies in 2012. Consider the following statistics: 28% of the primary Fortune 500 corporations have an external corporate blog; 54% of the corporate blogs come from companies ranked in the top 200 on the list; 73% (365) of Fortune 500 primary companies have corporate Twitter accounts; 66% (332) of the 2012 Fortune 500 primary companies have a corporate Facebook page; 62% (309) of the 2012 Fortune 500 primary companies are using YouTube. All of these companies have engaged in social media listening to better determine what their consumers want. A simple example of one company that has successfully converted the power of social media listening into actionable value is Starbucks through its website Mystarbucksidea.com, which offers the opportunity to its customers to engage in a two-way conversation by sharing, voting, discussing, and seeing the best collective ideas implemented into Starbucks’ business model.
Harnessing the power of the outside social media-driven revolution means evolving into a social business on the inside, a top-down driven process which exposes executives to new risks. Consider the use of a corporate Twitter account. Questions immediately arise. In light of the potentially high economic value of an individual Twitter account and its followers, who between an employer and employee owns a list of Twitter followers? Do corporate guidelines properly address the personal versus professional uses of social media in and outside the organization? Does the corporation have clear policies and guidelines that address disclosures and non-disclosures of personal or confidential information, trade secrets? How, or with what technologies is the online reputation of the corporation monitored? Does the organization have a plan that addresses a crisis-scenario where one critical tweet degenerates into thousands of negative comments? Is a public apology on Youtube by the CEO an appropriate response? What web listening technologies are employed in and outside the corporation? The questions and variables to becoming a competitive social business are countless.
As businesses continue to push and shove to gain competitive advantage by becoming more social in how they do business, consumers are rapidly catching on to the value of their data. One website, for instance, now allows Facebook users to calculate the economic value of their Facebook profile. More recently, in an article “demand your data from Google and Facebook” Tim Berners-Lee, father of the internet, raised the interesting point of why web giants like Google are not sharing their data with the individuals to whom it relates. Other websites are trying to create value by allowing individuals to profit and benefit from their own personal information and collective knowledge.
With a growing awareness of the value of data and privacy comes a growing consciousness and sensitivity to how data is being gathered, analyzed, collected, and shared, and what remedial rights and remedies exist for data privacy and security violations. While a multiplicity ofweb threats and technologies continue to undermine the security and fidelity of corporate data silos, a complex web of divergent national privacy law standards have sprung up in jurisdictions across the globe, burdening cross-border data flows for businesses wishing to expand across borders. For less fortunate organizations, increasing enforceability of data privacy standards across the globe has meant that any value gained from data has been undermined by plaintiffs seeking relief for, among other things: loss from identity theft; negative publicity; court awarded damages for alleged emotional distress; physical harm; monitoring and prevention costs; reputational harm; class actions; and regulatory fines. In short, individual pieces of data are increasingly become economically quantifiable.
The business environment is becoming increasingly complex. From a governance perspective, executive boards seeking to compete in the global knowledge economy and increase corporate shareholder value, and who are willing to undergo the growing pains necessary to transform into a social business, need to reinvent their corporate culture and governance model into one which is adapted to the realities and contingencies of the outside social media environment. A logical first step would be to ensure the implementation of a robust social media policy centered on meaningful control, transparency, security, notification, adaptability and respect for context. Needless to say, an organization’s ability to navigate the online world and maintain the trust of its consumers will extract more value out of every bit of personally linkable data by acting within the bounds of data privacy laws. In this highly dynamic world, technologies are mediating how we govern our businesses. As Obama rightly pointed out in a recent White House privacy report, citizens who feel protected from misuse of personal information feel free to engage in commerce.
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