Slow adoption of social business is a failure of leadership

Posted on July 30, 2013 11:04 am by | Business | Social Media

Isolated in the C-SuiteI’ve had several encounters with CEOs recently. When the subject of social media arose, the reactions generally ran from mild interest to dismissal. One, when asked if the block on employee access to social networks could be removed, delegated the response to an IT executive, adding that social media was really something geared toward the young and that not everybody could be counted on to use it responsibly.

The uneven adoption of social media is, by and large, a failure of organizational leadership. Boards of directors and the C-suite in many organizations still shrug it off as a marketing thing. (I wish I had a dollar for every time someone approached me after a presentation and said, “My leaders needed to be here to hear this.”)

That view is reinforced by year-old data collected in a study produced jointly by the Rock Center for Corporate Governance at Stanford University and The Conference Board, What Do Corporate Directors and Senior Managers Know About Social Media? The report found that only 32% of companies monitor social media to detect risks to their business activities and 14% use metrics from social media to measure corporate performance. Less than one-quarter of senior managers and less than 10% of directors get reports summarizing information and metrics gleaned from social media monitoring efforts, and half of the companies surveyed don’t gather that information at all.

The lead author of the study, Stanford accounting professor David M. Larcker, earlier issued a white paper suggesting boards of directors embrace social media in order to identify risks before they go viral. “According to a Deloitte study,” Larcker writes, “58% of executives believe that reputational risk associated with social media should be a board room issue. Only 17% of companies currently have a program in place to capture this data.” (That 17% data point came from a Deloitte study.)

The continued leadership blindness to social media as an important input to strategic planning and decision making is also hindering businesses from becoming social businesses, enterprises that factor networks of stakeholders into the entire supply chain, not just marketing. According to research reported in the MIT Sloan Management Review, Social Business: Shifting Out of First Gear, only 36% of respondents said social business is important. (That’s double last year’s result, but still woefully low.)

Worse, more than half the respondents ranked their own organization’s social maturity business at 3 or below (out of 10); only 17% said their companies were performing at a ranking of seven or higher.

The report points to a variety of issues that hinder the adoption of social business practices. Chief among them, according to the report, is “lack of senior management sponsorship…In businesses where support from senior leadership was lacking, respondents typically assessed their organization’s maturity a half point lower.” Failure to develop a strategy is also a barrier to progress. It’s hard to imagine anyone taking the time to develop an overarching strategy when senior leadership doesn’t consider it important. “It is incumbent on leaders to be intentional about social media and have a strategy for what they want to achieve with it,” the report quotes Michael Slind, co-author of Talk, Inc: The power of Organizational Conversation.

A recent study from the Altimeter Group reinforces the problem even among organizations that do combine the data collected from social media monitoring efforts with other enterprise data, such as that gathered from market research, intelligence reports and their own CRM systems. The average enterprise-class company owns 178 social accounts, the report found, with 13 different departments engaged on social platforms—all in silos rather than coordinated based on a broad corporate strategy. “Tools tend to be organized around departments because that’s where budgets live…and the silos continue because organizations are designed for departments to work fairly autonomously,” says report author Susan Etlinger.

I’ve seen this kind of decentralization of social media in some of my own client engagements. With leadership essentially not thinking about it, there’s no impetus for the organization to treat social media in a more coordinated, strategic manner.

The benefits of becoming a social enterprise are no longer in question. The value companies can unlock just from reducing the amount of time it takes employees to find information counts in the hundreds of millions of dollars. The role of executive leadership is also not in doubt. “Although providing a tool may be a springboard for adoption, it is not enough,” the MIT study concludes. “Company leaders must actively drive its use.”

What will it take for leaders in the C-Suite and on boards of directors to recognize that, ultimately, this is their responsibility? One day—sooner rather than later—the failure of leadership to detect some issue, crisis or change evident in social data, and act on it, will result in shareholder action, litigation or regulatory sanctions.

Until then, it is up to us to continue to make the case to our leaders, to demonstrate how a leader-driven social strategy can contribute mightily to the achievement of business goals, how it can help address the issues that keep them awake at night, and how it can drive strategic decisions keep the organization from derailing. You might start by sharing this video with your CEO or board chairman:

(Photo credit: (c) Can Stock Photo)

 

Comments

  • 1.Slow adoption of <insert idea> is always a failure of leadership... For hiring people not smart enough to explain & sell the business value of <insert idea>

    Jeremy Pollard | August 2013 | Sydney

  • 2.Thanks for this very interesting blogposts. I agree with you that there is definitely a need for leadership when it comes to the adoption of social technologies within companies. I see not only the risk of missing the different value levers of social technologies, but also the risk of conflicts within the companies. There are several cases where employees started to use social platforms to organise and connect with their colleagues to improve effienciency without aproval by the board. As a result, board members found themselves in a passive role and had to "approve" the use of these platform afterwards. This loss of authority can only be prevented by leadership open to the new concepts offered by social technologies.

    David | August 2013 | Brisbane

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