Last week I had the privilege to present on Social Media in Ethics & Compliance as the invitation from the UC Berkeley Center for Executive Education. Thought leaders from banking, health care, energy and other regulated industries were present to discuss the challenges facing their professions with the growth of social media and the blurring lines between personal and professional content and use. Although each group is regulated differently, the concerns are the same. How do we control what others say, and is the associated risk of social media adoption worth the potential rewards? As a group we concluded that the answers are not universal or easy to attain as each organization approaches social media according to their own industry and policy. However, what we could agree on was that it can no longer be ignored that social media is pervasive in the workplace and that it needs to be addressed- even if it means that participation is not an option.
Not having a social media policy is a policy- and in general not very good one. So my recommendation to those that are keeping it at bay is to at the very least spell out for your employees WHY you have chosen not to participate, and outline the consequences for breach. It reminds me of the Nancy Reagan “Just Say No” anti-drug campaign of the 1980s. Although effective in building awareness- it wasn’t enough, because you’ve got to give people something to say YES too.
At Actiance we recognize that Financial Services firms and other regulated industries are completely justified in not wanting to use social media.
So with all these risks, and costs, it is easy to understand why so many firms’ social policy is still simply, “NO.” However, I would argue that the risk of doing nothing NOW is worse for a host of reasons.For one, by being overly cautious, your firm will blend into the vast majority of other firms not using social media and lose its competitive advantage. The window for opportunity in social is not going to be open for too long, and early adopters will be rewarded by recruiting the next generation of advisors and investors. Although there is always the risk of making a misstep, early adopters to any new technology stand out from the competition and tend to be forgiven for their mistakes more easily. Another factor to consider is that going forward by not participating, you risk having your brand being seen as non-innovator which could negatively affect the perception of customers, employees and suppliers. You will also miss out on opportunities to build awareness for your brand and to improve efficiency of learning, teaching and research, left with using costly traditional research methods.
However, the most serious risk of not using social media is that your firm will be unable to interact with customers in the manner they prefer. Let me say that again… THE MANNER THEY PREFER! This is not about you, it’s about them.
Financial services firms tend to think that as their customers are older, they don’t use social media. However, this is not borne out by facts. Although Generation Y and X are the most enthusiastic users (with 87% and 77% respectively), more than 47% of Boomers use social media in some form*. That should be incentive enough. However, predictions for the future are even more interesting.
Today, in the U.S., Generation Y accounts for $2.4 trillion worth of personal income and by 2025 Generation Y will account for 46% of personal income**. In other words, by not using social media, your firm risks not using the preferred method of communication for people who control nearly half of all the personal wealth. I think leaving half of all the wealth in the United States on the table seems like a very big risk indeed. Is it one you can afford to take?
* USA, Source: Forrester Research, June 2011
**Javelin Research http://www.stltoday.com/business/local/article_719f49d8-15e6-5c5d94b7992ab12d9f97.html?print=1