Corporate Executive Board

Corporate Confidential: How Twitter Changes Everything


Over the last two years, social media have dramatically transformed the pace at which information is shared—and the information being shared isn't just social. Millions of employees use Facebook, Twitter, blogs, and other applications to communicate with one another—and the world. Corporate blogs, applications like Yammer, and intranet discussion boards have accelerated the flow of information inside companies as well.

The Corporate Executive Board's ongoing research with dozens of legal, IT and HR executives from the world's largest companies points to a series of internal and external risks that companies should move fast to manage as employees dive further into social media.

Risks From Internal Communications Even purely internal use of social media can present real risks to companies. Information simply flows faster through this medium—it's faster than "the water cooler", and may have more credibility and impact. When can that fast flow of information cause problems?

• Secrets Are Harder to Protect. Know that material information about company plans and strategies will flow down through the organization faster. Be sure that key employees know just how slippery this slope is. • Compensation isn't Confidential Any More. Assume that information about employee compensation will no longer stay with the employee. Disparities in pay, benefits, and work arrangements will be rapidly exposed and compared among employees. • Strategic Actions May be Signaled in Advance. If there are troop movements before your next strategic strike, they will be almost impossible to conceal. If this amounts to material nonpublic information, it could require quick action if and when it gets out. • Inconsistencies in Company Positions Will be Exposed. Companies' many departments inevitably take different positions vis-à-vis customers, employees, and regulators. The blogosphere will quickly unearth these inconsistencies and lay them bare. Just when information is flowing more freely than ever before, we have to be more careful to ensure that all company positions are in harmony.

Risks From External Communications. When employees use external social media—blogs, Twitter, Facebook, etc.—they can easily harm the company, sometimes without even knowing it. A few examples. • Premature Release of New Product Information. Employees commonly leak pictures or descriptions of a new product before its official release. Even a casual tweet revealing the location of a key employee can signal new product or business development activity before it is ready for public release. • Exposure of Company Problems. Employee "venting" is ubiquitous on Facebook and Twitter. In some cases, that frustration is an indictment of the company's own products, services or, perhaps most commonly, management culture. In some cases, employee frustration with customers has come across the Twitter wire and gained real web traction. • Harassment. Of course, social media almost immediately gave rise to claims of workplace harassment—a superior using Facebook or another medium to make unwanted advances. Is this "workplace" harassment? Whatever it is—it's a problem for the company.

Companies need a plan to manage fast-evolving social media risks. Because so few companies have taken even initial steps in this area, the best approach is to start with a basic checklist:

• Develop a policy on the use of social media, both internally and externally • Work with Legal to create records retention policies for social media • Partner with Corporate Communications to monitor the organization's brand in social media • Work with Enterprise Architecture to incorporate secure social media in the organization's IT road map • Understand employees' workflows to build awareness about proper use of social media and effective information protection
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CEB specializes in helping companies drive corporate performance by identifying and building on best practices. The organization offers data analysis, research, and advisory services relevant to business leadership. CEB's client and member network includes 85 percent of the Fortune 500, 50 percent of the Dow Jones Asian Titans, 70 percent of the FTSE 100, and 80 percent of the DAX-30. CEB membership encompasses 50 countries, 5,300 individual organizations, and 225,000 business professionals.

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