“I’ve found that when you want to know the truth about someone that someone is probably the last person you should ask.” (Dr. Gregory House – HOUSE, Fox Network)
About four years ago there was ample talk about the uses of social media and its role in enterprise. I remember how, during a marathon working lunch, David, the owner of a mid-sized telephony company, said, “Social media in enterprise is a great thing as long as it is not used by its employees. Social media is like releasing the genie out of the bottle. You can’t control it. Just imagine the mess!”
Indeed, the general attitude at that time was that it would be better to wait and see, and perhaps let others experiment with social media. So, big corporate players like IBM, Dell and Proctor & Gamble didn’t shy away from using social media in order to get in touch with the valuable knowledge and creative resources that were underutilized in their organizations. Yet the progressive companies whose corporate cultures weren’t afraid to try new things were still seen as exceptions. For the rest, the general attitude seemed to be, “Let them be the trailblazers and we’d learn from their mistakes.” Miraculously though, in just a couple of years, the mentality of naysayers seemed to have radically metamorphosed, as if the Social Media Borg’s message finally triumphed, “Resistance is futile. You will be assimilated…”
So what happened?
This simple question cannot be answered ‘simply’. And although it is not polite to answer a question with another question let’s try to make some sense out of what took place in the last several years by asking a few questions:
- Were personal computers created only to be used as faster calculators of data?
- Was the Internet supposed to remain a basic tool for exchanging massages among the US military?
- Was E-mail just a killer application fad of the Internet?
- Was Tim Berners-Lee creating the hypertext 1989 with the purpose of providing regular access to the Web for 1.1 billion people?
- Was the Netscape Navigator ultimately a failed web browser which basically gave birth to the World Wide Web?
- Was the term mobile web ever used by anyone in 2006?
- Were virtual communities (Facebook, Twitter, etc.) created with the intention of having hundreds of million users?
- Was the creation of Wikipedia in 2001 the most ‘doomed’ manifestation of open source?
- Was it conceivable in 2008 that Goldman Sachs would in 2011 be showing to its clients the worth of investing billions in Facebook, which is currently valuated at $50 billion?
Oh, I have quite a few more questions to ask, but let’s get to the point. We create technology and technology re-creates us. In fact we are at a technological stage where artificial intelligence is capable of astonishing feats. If before, we used to say, “Humans have the advantage of intuition over the most intelligent ‘machines’…”, now we could say. “Come again, could you provide a precise diagnostic in a medical case based on a ‘hunch’?” HOUSE, the highly successful TV series is fictional drama. It is meant to inspire and entertain us, but in real life there are computing systems that are unbelievably more accurate than any Dr. Gregory House. When you practically have the entire world’s accumulated medical knowledge in a database, you, as a doctor, have to type in the symptoms and then in less than a minute you have a digital diagnostic. All you are left with is making the choice of implementing the required procedures based on that diagnostic.
I have intentionally underlined the word ‘choice’ because ultimately this article is about making the right choices in the enterprise environment. I believe that as intelligent beings we must make the right choices. And in our times, in order to make the right choices, we have to suitably inform ourselves by using the optimal means of communications. The decision-making process in any reputable enterprise cannot rely on some esoteric sixth sense. Even a good ‘hunch’ has to be supported by suitable data. The times of the public company which is run by a mercurial chairman and his ‘yes people’ are long gone. These days, the new blood that runs through the veins of any successful corporation is…digital. Sorry, Dr. House!
In the above list I tried to express how astonishingly fast technology is changing our everyday life. So when we refuse to embrace it, although we are not quite luddites, we are leaving ourselves behind. Web 2.0 is not a fad and it hasn’t been a fad for…five years! In the fast-paced technological world five years is indeed a very long period of time.
Here’s an apparent paradox. The everyday reality of Enterprise 2.0 tells us that technology use cannot or shouldn’t be controlled. In fact it is impossible to control it. It is like navigating a ship through a huge storm. Instead of controlling the storm it’s better to make the best manoeuvrings decisions and move the ship to the best possible position for its proper course, even if it means turning back for a while. Human beings are conditioned to make the best possible choices and not exercising this natural gift which is the result of millions of years of natural selection (or perhaps some divine intervention) is the utter sacrilege. But we are nearing a stage in the development of humankind where physically technology (implanted or permanently attached) is about to become part of the human body. From there on, without continually accessing the necessary information we could not function properly, as an individual or as an organization.
In any successful enterprise, governance has to put in place policies of crucial importance for ensuring the best and/or optimum performance of the company. Investors place their confidence and their money in a social entity that is created to produce exceptional results. Nowadays, that is not possible without technology. The unconceivable still happens in some corporations, where employees are restricted to use technology in certain ways so that the smooth performance of the company could not be undermined. Admittedly, certain rules make sense, but those regulations based on the lack of understanding of the social ramifications of Web 2.0 technologies will slow down the performance of the company, making it inefficient and ultimately loosing valuation.
Let’s face it: bylaws in any enterprise are not only necessary; there wouldn’t be an organization without a set of norms and guiding principles. But they also need to be realistic. The great majority of employees do not come to work to intentionally misbehave; they want to do their job well and be rewarded for that. Moreover, people want to provide the best performance through the best possible means. Technology is viable component in any organization as it constantly provides solutions in problem solving. Hence, if technology assists employees to communicate among themselves and increase collaboration for the common good of the enterprise, the policies that govern the enterprise have to be in place. And here’s the apparent paradox: instead of controlling the technology (mission impossible) control or guide the choices that people make in using technology as it serves the purpose of increasing productivity of the organization.
I said it before and I’ll take the risk of saying it again. For now, investors have the board of directors as their representatives in the enterprise. It is rather the most practical solution available than the most ideal. It is practical because we cannot have five thousand investors roaming throughout the premises of the company and making sure that their monies are well used. But with advent of Social Media and eManagement things are slowly but surely changing. I’ll address that aspect in another article where the power of proxy is gradually replaced by direct participation. There’s a new model of modern enterprise emerging whereby investors and the employees of the company become closer and closer to one another due to Web 2.0 technologies.
But for now let’s turn the proverbial table around and directly address the issue of governance and enterprise communications. What sort of strategic directions are needed in the modern enterprise to make sure that, as in my metaphor, the ship (Enterprise) can successfully navigate in the right direction and reach the desired destination? And how could the technical means of communications best assist this complex process?
We have already addressed the issue of both continual and disruptive change in enterprise and what would the suitable approach be for the employees to best respond/adapt to it with the help of multi-media (GOVERNANCE OF CHANGE AND MULTIMEDIA). Now, let’s address how Social Media affects a public company (and even a private company). In today’s world of enterprise, governance still implies providing strategic direction and designing a suitable organizational frame for optimal performance. The analogy with building a solid ship and mapping out the right itinerary for navigating it still applies to the modern enterprise. But there is also a significant difference.
In the old model, the ship is built, the itinerary mapped out and then the ship is sent away to follow its course. In this model the technology is contained within the ship’s perimeters. The occasional interaction takes place when a lighthouse provides some warning or sense of distance or when another ship may beacon some danger ahead. Otherwise the ship is on its own for a long time, away from its owner(s) or investor(s) and from the shipping company and its governors. The captain and the officers are the management and the sailors are the crew or staff on the ship which has to be self-administered and self-reliable.
In the new model an incredible amount of technology is added to the ship. On one hand it serves the mechanics (propulsion, functionality, etc.) and on the other it is designed to redundantly serve all the communication needs of the ship – aboard the ship and outside the traditional perimeter ship. In the new model, the means of communications practically ensure a 24/7/365 connectivity between the ship and the shipping company (including owners and governors).
In the business world the enterprise has to similarly be highly connected within its structure and with the outside (clients, suppliers, official regulators, etc.) This connectivity is assured not only by the communications devices or technological hardware, but also by a large variety of software that is both active and passive (on standby mode or redundant backup). The enterprise architecture of the modern public company requires a high level of integration with other companies and regulatory bodies. Yet, what is really new and still frightening for some corporate managers is the level of penetration of Social Media in what used to be business as usual. There is no more business as usual. Things are changing faster than ever and adaptability is paramount for the survival of the company. A bit of information on Twitter that for some reason has escaped the radar of the company may have serious consequences (ex: product launch by competition, big find of mineral resources, accident or natural disaster, etc.). A campaign started on Facebook which is not addressed timely may prove disastrous regarding reputation of product/service or image of the company.
A few years ago a large corporation would have a dedicated department taking care of these aspects of the business. The intelligence & communications department had to be highly alert and effectual, and most of the time it did a good job. Nowadays, things are different. With practically everybody in the company carrying a wireless communication device, which more and more tends to resemble a powerful pocket computer (smart phone, pad, etc.), the connectivity level is way beyond impressive. Somebody said that these devices are transforming us into highly complex ‘pheromonal society’; we act more and more like insects that rely heavily on pheromones which trigger essential social responses in members of the same species.
All these technological devices support the development of Social Media at a dizzying pace. On one hand that is a good thing because millions of ideas are almost instantly shared and new approaches are developed in finding solutions to problems. That is progress. More problematic is the aspect of chaos in the vast Social Media digital territory. Some people, like David, call it a mess. David is partially right because indeed there is so much useless information created by Social Media that in some respects it may represent a serious threat to the public company. There is a (not so new anymore) adage that expresses this indefinable yet real menace, “If it’s on the Internet it is at least half true…” Social Media provides a huge load of half-baked information and this kind of information is not…information until we make sense out of it. Reputation management becomes an increasing and real cost added to the traditional expenses of the modern corporation.
Let’s get back to corporate management issues and what course(s) of action could be taken with regard to Social Media. Let’s start with a truism: we, human being do not have two brains, two minds, etc. (And let’s not address aberrant behaviour cases here…) It will suffice to say that when people come to work they do not radically transform into other beings; they have the same values, beliefs, worries, priorities, etc. To the extent that is required by their employment status, they will usually obey the norms of work conduct, with very few exceptions. After they finished their shift/workday, these people re-emerge into their world which is far more diversified than the micro-world at the workplace. The smartphone they carry along inside and outside the company doesn’t change in itself, but its uses are different. What worries most enterprise policy makers is that the smart phone is an extremely powerful personal computer which could potentially be connected by way of Social Media with millions of people 24/7/365.
So what could the board of directors do to make sure that the strategic direction of the company is not adversely affected by Social Media? There are a number of things that could be considered by the board and they mostly relate to avoiding a crisis or at least properly handling a crisis.
- Corporate responsibility is increasingly becoming corporate social responsibility (CSR). In a global economy and highly wired information society the board of directors’ liability increases significantly. An oil spill that occurs in a remote part of Indonesia is immediately made known in every corner of the world. The wired citizens of the world feel empowered to discuss the issue online and, also online, to organize themselves in action groups. These action groups do not consist of just a few fringe individuals who espouse radical views; the members of these groups could be numbered in thousands and even millions. Last year’s Gulf of Mexico disaster has created such an imposing reaction from citizens around the world by way of Social Media that literally forced the US Government to respond more adequately than in previous crisis, and act more firmly for imparting the legal and financial retribution that British Petroleum deserved. Moreover, as one of the consequences of this increased liability, the BP shareholders filed suit against the BP’s Board of Directors for breaches of fiduciary duty. There is no simple moral to this story as the ethics that exulted from the whole disaster and scandal didn’t suit any old patterns of social correction. But what could be learned is that an increased level of Social Media alertness and monitoring trends in Social Media pays off. This vigilance makes available to the board of the directors critical information about facts that could potentially lead to a crisis, and the board could timely correct the response of management to these fact, thus averting a disaster or at least controlling it in the best possible fashion.
- Activism and legislation have become an issue of serious importance especially for energy producing and transmission corporations. Here, in Alberta, the oil sands projects have been consistent targets for the environmentalists and other groups of activists. Many of these groups provide evidence by way of Social Media and engage the larger public into a process that not only harness strong opinions against environmental abuses, but also draw attention about lax governmental rulings against culprit corporations or lack of observance of legislative norms by key players in the industry. It used to be (and still is the case) that the board of directors of such an energy company would include ex-government members or retired parliamentarians. Their extensive knowledge of regulations and acceptable conduct in business affairs was invaluable and also an asset for the board. They had contacts and ongoing relationships with the current members of the government which ensured a fairly smooth balancing act between corporate performance and CSR. Nowadays, Social Media is changing the rules of engagement; transparency is a sought-after quality espoused by any responsible public company and we could often witness an increasingly serious three-way dialogue in which Social Media plays a critical role:
- active citizens (and wider public) with legislative and elective officials;
- government representatives (elected or high-rank bureaucrats) with directors of the board;
- corporate public affairs specialists with the public.
Often the fate of a project which could be crucial for the growth and/or the competitiveness of a company depend on how these three-way dialogues are conducted and how transparent the actions of the corporation are. Beyond any doubt, both the board and the PA department have to take into consideration the pulse of Social Media and manage information with the best means and efficient methods of communications.
- Labour unions also take advantage of Social Media and its practically free tools for social activism. Need we look any farther than the recent Wisconsin Protests? Maybe. Maybe we just had a taste of the things to come. We’ve clearly seen how labour leaders strengthen their public image, their renewed role as representatives of the underprivileged and the under-represented, how they have sharpened their communication skills and organizing methods and how they reinvent themselves one tweet at a time. When we see how the labour unions can take up on the government itself so successfully it’s not hard to imagine how easily they could play on any corporation that is not equally prepared to handle the public opinion by way of Social Media. It’s imposable to ignore the fact that Social Media is creating a much greater level of solidarity and unity among those in the labour movement, which has been sorely lacking for decades. The labour unions of our days have got rid of those old leaders that are not even clear of how to use email. And so should the board of directors that have as members just ‘names’ rather than active thinkers who understand Social Media and its importance in the dynamics of modern enterprise. As Social Media is a very affordable tool for anybody who is interested in the vital outreach of a local community, it should be clear to the board that it is better to stay involved with it than to ignore it; it is better to proactively handle the news in the Social Media’s realm before they become front-page news in the major publications or they are shouted out as the latest news on the national television networks.
- The pulse of the company cannot be measured as in a medical procedure, but it can be positively and constructively monitored by the board and the management. I’ve underlined the words ‘positively and constructively’ because a big brother approach could be the biggest mistake made in the life of a company. In the process of producing a corporate video that I was hired to make about fifteen years ago I was given a Communication Planning Outline (CPO) that in succinct phrases indicated the classical solutions for neutralizing whistle blowing. I had a hard time writing a script about that, let alone coming up with the visuals that would support such a corporate documentary. So I suggested that if my client wanted a ‘video’ I could put a professional voice (narrator) over a more detailed power point presentation. The management was agreeable to that approach, but instead of playing along I had another proposition which was considerably more expensive (productions costs) but in my opinion it would create a more effective program. Again to my surprise the management agreed with my second proposition. So basically I created a series of dramatic scene that were describing limit situations that would lead to whistle blowing. I placed emphasis on the fact that nobody who ends up as a whistle blower plans to become a whistle blower. To be a whistle blower is a traumatic experience from many perspectives. But with the precipitous advent of Social Media and the many roles it plays in our life, a whistle blower is increasingly becoming sort of the unsung well-sung hero of our time. In a casual blog anybody could say the ‘unsayable’ about an issue that is grossly mishandled by a company or a case of crass abuse could be revealed with the most compromising details. In the realm of Social Media, crowds are permanently fishing for the latest sensations in order to impart their opinions. Imagine what Social Media’s snow-ball effect could do to the reputation of a public company. I have a simple suggestion to this possible predicament: encourage ‘whistle blowing’ within the organization. Get rid of the negative connotations of the ‘whistle blowing’ expression and encourage this as a constructive activity of feed-back or continual dialogue between the employees and the management and, why not, between the employees and the board. Le the steam out but not in the public. And so, always make sure that the board is aware of the vitals of the company.
- Abuse of non-public information usually means many things, amongst which principally actus reus – mens rea in criminal law means that insider trading is ‘unfair’ and hence it has been made illegal and punishable in accordance with the law. In over twenty-one years of practicing various aspects of media-assisted legal services, I had numerous opportunities to witness how simple and (credibly unintentional) mistakes could lead to the downfall of otherwise great careers or to the considerable diminishing or even the disappearance of impressive wealth which previously had been achieved through hard-work. Also, I am more and more convinced that, with regard to insider trading, the regulators in Canada and the United States operate and impart penalties quite differently. Our British traditions (and particularly our club/pub proclivity to share ‘discreet news’) make us approach the issue of inside trading and related matters more quietly than in the United States, partly because we do not have a national regulator as in the States. Alberta and the Québec seem to be part of the reason why Canada doesn’t have a national securities and exchange governmental body like in the United States. But although Canada is significantly ‘softer’ on this type of crime, the prestige or reputation of any public company could be negatively affected, considering that the investors are not exclusively Canadian or from Canada. Moreover, these days, Social Media typically goes for the corporate jugular, which often is equated with the board of directors. And as the stock price of a company is already affected by many variables and performance indicators, when a scandal that is related to some form of information leakage (intentional or not) the stock would suffer until the ‘news disappear’ or are effectively dealt with by any possible means, including by way of using Social Media proactively.
- The blogosphere is also a fecund topography in the land of Social Media’s scandals where small mistakes are innocently or intentionally made. The average employee of a public company is hardly seen as a blogger, but members of the junior and even senior management could easily be drawn into a discussion that may reveal sensitive information about their company’s intentions/plans. So with the risk of appearing as saying Social Media should be controlled, I’d rather subscribe to the view that instead of opposing Social Media, it is better to learn about its manifestations and opportunities rather than be restrictive and reactive. And yes, the cliché of board members that represent a ‘resonant name’ that is reminiscent of the past achievements and glories is passé; the public company of our days must have a board of thinkers, who are computer literate, send emails and know how to text valuable messages, tweet and even write inspirational articles which Social Media equally accepts as it unfortunately does with a lot of “messy information”.
Apropos of messy information on Social Media…Fairly recently I had another lunch with David. It was so simple (a sandwich and no wine or beer – as dictated by the post-recession adjustment) and quite short. While chatting with him, it became very apparent to me that the Social Media Borg had defeated David’ resistance to the new social expressions of applied technologies. He spoke about LinkedIn, blogging, Twitter, Wikipedia and even about how his company now offers cloud services that could increase productivity and organizational success by identifying the status and location of human expertise in globally dispersed and increasingly virtual organizations. Anyway, I cannot replicate the abundance of new terminology about Social Media that David is abusing using these days. He is also a board member of a few companies. Statistically and demographically, David could be considered the upper end of the boomer generation, which is often being accused of not always being able to grasp the effects of Social Media technologies and manifestations. He regularly talks down on the way the ‘youth’ makes use of Social Media. He even complains that his children (both are almost twenty year old) cannot even sit in front of a PC and write an interesting blog. Well, unlike this one, blogs become shorter and shorter, perhaps because of the limits imposed by the hand-held devices.
And finally, perhaps, no matter what David and I think about the future of the public company, that future was already started now. And yes, we still have a say in shaping it, in feeling the pulse of a possibly different kind of public company. Perhaps this will be a radically different type of company where the investors and the employees may play exactly the same role both as partial owners of the company and as decision makers. But until then, for now, let’s check out more often the pulse of the current structure of the company and by adopting Social Media techniques and tools let’s be the on the winning side of the game.
