Guest Contributor Jason Thatcher is the director of the Social Analytics Institute for Clemson’s College of Business and Behavioral Science, Greenville. He teaches courses on information systems in Clemson’s MBA program.
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Savvy leaders understand that paying attention to their stakeholders and environment matters. By listening and responding to the concerns of stakeholders (e.g., managers, employees, customers and business partners) as well as being attentive to trends in broader society, leaders can craft strategies that increase firms’ competitiveness over time. To realize such understanding, leaders have relied on a host of tools – ranging from the balanced scorecard to surveys of employee and customer satisfaction. With the growth of social media, business leaders have access to new channels to learn about perceptions of their firm, their products and their role in society.
Online social networking, microblogging and information-sharing services such as Facebook, Twitter and Pinterest are powerful resources for learning about and communicating with stakeholders. Through creating and sharing social content, small companies such as Buzzfeed have assumed pivotal roles in shaping citizens’ understanding of current events. By mining social data, major corporations such as Cisco and Dell have identified means to deliver superior customer service. When done well, effective use of social media can draw companies closer to their stakeholders, nip controversies in the bud, and identify opportunities for new products and markets.
However, poorly managed social strategies hurt firms. Consider JPMorgan Chase: When social media managers invited students to send questions to Jimmy Lee, a senior banker, via Twitter using the #AskJPM hashtag, non-student users were quick to respond. Within a six-hour period, JPMorgan received more than 8,000 tweets, of which two out of three were negative. In November 2013, Twitter users asked:
Layoff List – #AskJPM Is it easier to purchase a congressional representative or a senator?
Chris Lee – Why is it when the poor commit crimes we need more cops and mandatory sentences and when the rich commit crimes we need deregulation #AskJPM
The student Twitter session was quickly cancelled with a tweet: “Tomorrow’s Q&A is cancelled. Bad Idea. Back to the drawing board.”
While a swift solution to the negative tweets, the response evoked an even broader negative news reports in the national and international press. Ultimately, according to Google, more than 56,000 traditional and new-media sources directly mentioned JPMorgan’s tweet.
And the echoes of #AskJPM continued in the new year of 2014, with Twitter pundits continuing to reference the kerfluffle:
David Van Chaney – Of course, the banks have your best interests at heart. That’s why they got into the payday loan mart at 391%. Right #AskJPM @AskWellsFargo?
LDGourmet – I have Mortgage Fraud, Market Manipulation, Credit Card Abuse, Libor Rigging and Predatory Lending AM I DIVERSIFIED? #AskJPM
To avoid such missteps, leaders should adopt a proactive philosophy to ENGAGE their stakeholders through social media. In particular, a management team interested in utilizing social media tools to learn about and communicate with stakeholders should:
xpose employees to training about social media and the broader context. As evidenced by JPMorgan, when employees lack adequate understanding of how social media connects firms to the broader environment, problems can follow. Training should inform employees of the power of social media and encourage critical thinking about about how social strategies can benefit or harm a firm.
arrow your focus. Eliciting useful information from the 150-plus real-time social media feeds can be difficult. Interact with your customers to understand the services they use, the forms of content they view (e.g., pictures, blogs and video) and the times they are online.
ain an understanding of the local vernacular. Frequently, consumers create their own terms to describe your products. It is imperative for employees to search for posts that capture the “official” and “unofficial” words used to describe your firm and its activities.
ppoint a person or division to develop and implement a social media listening and response strategy. Every organization that utilizes social media to interact with its customers should have a person who is ultimately responsible and accountable for this initiative.
ather information from diverse sources. Stakeholders use diverse social media tools to receive and distribute information about your industry, your product and your services. It is imperative for firms to stay abreast of the latest trends and technologies that consumers utilize to share information.
xamine stakeholder sentiment. Develop a feedback loop to support two-way communication between the firm and its stakeholders.
Through effectively using social media, firms have tremendous opportunities to truly ENGAGE their stakeholders and build a strong foundation for future success.
