Why? Recent studies show us that eight out of ten CEOs are social media doubters. The majority don’t understand it or see it as a indulgence. Typically, they define it narrowly, as PR, a marketing campaign or a channel. Only a small enlightened minority sees social media’s true potential as the new global playing field for business performance, growth and leadership.
Chief among the doubters is Rupert Soames, CEO of FTSE 100 mobile power-plant company Aggreko, who told me: “My children are on Facebook, my wife’s on Facebook, and they all say they will die if I go on Facebook.” When I suggested that he might therefore look to Twitter or LinkedIn, he admitted, “I’m not good at it. It’s slightly passed me by. My first question as the chairman if I find a CEO regularly tweeting is ‘what else could you be doing?’”
So who are these enlightened CEOs? Is it just those in the tech space, or the consumer CEOs wanting to charm consumers? Jeff Immelt, CEO of industrial giant GE, does not seem like the obvious social CEO. So when I interviewed him for BBC ‘CEO Guru’ series last week, I was surprised to learn that Jeff is in fact one of the few major CEOs successfully making his voice heard. Jeff’s first move had been to acknowledge that he needed external input: “About four years ago, we brought in communication people from politics because business was way behind, and they’ve made us incredibly smarter about how to really be active in communication.”
Jeff then made smartest social media move of all: he got started. He now writes a regularblog, and tells me that he has been amazed by the response: “People have a thirst, we’re a big company, there’s no way you can ever touch everybody all the time.” Jeff is now harnessing the power of social media to “jump onto the next wave of the internet” and popularize what he calls the “industrial internet”, which involves connected machines talking to one another. He believes the business community has a lot to learn about social media: “We’re just scratching the surface of what it can do.”
So what does this surface for corporate CEOs?
Rather than me simply providing answers to non-believers, I have come up with the “Big 10”questions for CEOs to work out the social media opportunity for themselves.
So, CEOs, can you use social media to…
(1) Be the voice for your industry?
There’s a battle going on in most industries right now: on each social media platform, who can establish themselves as the industry authority? The most effective ‘thought leaders’ have a great information radar, strong points of view, and set the agenda for their industry. Many early winners are not that well known outside their industry, such as Jeff Joerres (@ManpowerGroupJJ), CEO of ManpowerGroup, who’s a mine of information on hiring trends; or Mark Bertolini (@mtbert), CEO of Aetna, who’s an expert on both national and global healthcare.
(2) Drive internal engagement and shift company culture?
The most effective social CEOs have learned to motivate their tribe from within – starting with the employees. Jack Salzwedel (@AmFamJack), CEO American Family Mutual Insurance Group, has perfected a warm, inclusive tone that builds up his staff members and a genuine sense of family spirit. This is also a great way to win respect, with the 2012 BRANDfog survey finding that seven out of ten employees believe that social CEOs make more effective leaders.
Many Western companies are still founded on a system of performance-based control from the center. Their approach to social media is often a good gauge of how controlling or empowering a company truly is. The more successful companies tend to trust their employees more and give them more freedom to act and deliver. A shift in social media position can be a very visible way of a signaling a culture change. The more employees get involved in social media campaigns, the more they naturally become strong brand advocates. Their participation can build a real sense of pride.
(3) Drive external engagement and solve the stakeholder problem?
CEOs are now expected to build sustainable value and handle “stakeholder engagement”. In reality, however, most struggle even to identify all the relevant interest groups, let alone engage them in meaningful dialogue. In the social media world – what Twitter CEO Dick Costolo (@dickc) now calls “the global town square” – the good (and the bad) news is that the CEO is equally accessible to everybody. Your social updates can tackle the concerns of multiple groups, whom you can address directly by employing the right ‘hashtags’, e.g#OpenForum, #TownHall, #Sustainability, #Talent. And your transparency will likely be welcomed by the ‘millennials’ – your next generation of customers and employees – with 58% of them saying that openness is a key imperative.
(4) Innovation and product development insights?
On a higher level, social media can be used to solicit customer feedback and input into the innovation process. For example, in China, Volkswagen embarked on a two-year project to build the perfect ‘People’s Car’, which incorporated 210,000 design suggestions from its target audience. Indian billionaire Anand Mahindra (@AnandMahindra) once asked his 800,000 followers, “Help me out with a small survey. Do you get your daily news dose principally from a) 1 newspaper b) multiple papers c) Internet d) TV?” There goes the market research budget.
(5) Improve the day-to-day performance of your business?
Here, the tech CEOs are indeed ahead, with fewer links in the chain between them and the end-consumer. CEO Tony Hseish of online shoe retailer Zappos.com founded a company on an obsession with providing excellent customer service, backed up by pro-active human interactions online and via social media. “Zappos Tony” aligned himself completely with the customer service function, personally answering customer enquiries via the @zappos Twitter channel. He did this so effectively that his business was ultimately acquired by Amazon.
Many companies now have customer complaint-handling teams to deal with issues, but the bigger benefit that the social media platforms provide to big companies is greater social intelligence. Twitter and Facebook effectively become mass customer mystery-shopper panels, which collectively bring real-time insights on customer trends, or early warning signals on emerging operational performance issues.
(6) Hire the best talent, at less cost?
For too long, headhunters have hidden behind smoke and mirrors and charged premium fees or inadequate service. Social media is bringing in a much-welcomed dose of transparency… did you know that there are actually over 1,000 CEO jobs advertised right now on the internet? Whether explicitly advertised or not, top-level hires can increasingly be made at significantly less cost, through personal online connections and referrals. Professional social networks such as LinkedIn look set to be the main beneficiaries. In such a market, recruiting companies will need to get smarter. Able to see how many degrees of separation exist between them and their dream candidate, they’ll need to invest in their in-house networks, in order to gain intelligence and connection. While this will require dedicated resources, they should be able to claw back the costs from the saving in search fees!
(7) Protect your reputation?
Most big CEOs wouldn’t dream of failing to monitor their reputation on TV, radio and in the press, so why ignore their social mentions? CEOs who fail to establish a profile on the main social networking sites create a void ready to be filled by mischief makers such impersonators, satirists and so-called ‘trolls’ (think @FakeSteveJobs).
Peter Aceto (@CEO_INGDirect), CEO of ING Direct Canada, argues that their real reputation risk lies in not establishing an online presence: “Shareholders, employees, government, community, customers will all be at the table in the future. They are talking about your business anyway. Why not be included in the conversation?”
(8) Build up the CEO as brand ambassador and champion of the company’s cause?
This is a big prize. So far, it has been practiced most effectively by pioneer Richard Branson (@RichardBranson), who, through his personal social profiles, has found a way to connect with followers who identify with his business philosophy, believe in his causes, and enjoy watching his life on social. This create fantastic brand advocates for the Virgin Group. He pulls it off through his extrovert personality, his passion and his bold identity as the “tie-loathing adventurer and thrill seeker”. The key for CEOs who aren’t Richard is to be real and authentic. In order to avoid a follower backlash, these CEO should guard against anything that might be perceived as self-servicing or blatantly commercial.
(9) Support a leading global brand?
‘Global missionary’ CEOs such as Bill Gates (@BillGates) also have an opportunity to magnify themselves, tap into the broader leadership agenda and establish themselves as visionaries with global cause.
Beyond this, CEOs can use social media as a support platform to help them go global – their individual identity the hook into their company’s portfolio of international brand.
Enlightened CEOs, truly committed to creating their own global personal and corporate brands, will also remember to pay attention to the emerging markets, and in particular China. My experience of working with Chinese CEOs is that they are actually more likely than their Western counterparts to be engaged with social media. The platforms have different names but similar functions: microblogging platform Sina Weibo has 500m users and is a legally permitted alternative to Twitter, 400m use WeChat for instant messages, while Renren is known as the Chinese Facebook.
(10) Drive sustainable return on investment (ROI) over the long term?
In defending their anti-social media stance, many CEOs are still trying to have an argument of about return on investment (ROI).
While there’s not always a 100% clear correlation between social media efforts and direct sales, you will have seen from the questions above that social media does bring many very real benefits. Social media investment brings combination of value. The intangibles include strengthened personal and corporate brands, professionally managed risk and reputation, as well as better hires and customer insight. The tangibles come in the form of new customer connections, new streams of revenue and cost savings.
And to those who say that social media has no ROI, remember that it actually brings with its own rich mix of metrics – just think about all the things that you can measure, such as followers, likes, comments, retweets and even ‘Klout’ scores of online influence. And the costs? Technology has actually reduced the cost of a lot of social media activity to near-zero. The true cost is the CEO’s time and attention.
So my proposed approach to social media ROI is this: each CEO and organization needs to work out new ways of measuring its investment in social media against sustainable value. As this evolving world is better understood, it seems inevitable social media performance will be incorporated into formal company balanced scorecards processes.
It’s a medium-term bet: in a fast-evolving field, the CEOs who succeed should be comfortable with rapid experimentation and running a ‘portfolio approach’ to a range of social media initiatives. Like any innovations, not all social media campaigns will succeed, but those that do have the potential to lead to real breakthroughs for both the CEO and the company.
Still not convinced? Think back to the 90s and the takeoff of the internet. I remember that Fortune CEOs used to cite the lack of concrete ROI hurdle as way of justify not investing into a corporate website; no longer. With social media, I believe that we are now at the same tipping point again. Yet this time, social media is already established and part of the fabric of mainstream communication, and increasingly hard-wired into the corporate world.
And as much as some big CEOs would happily switch LinkedIn and Twitter off, they are not going away. Social media will keep on following CEOs and companies, whether they “like” it or not.
By Steve Tappin | Chief Executive, Xinfu, Host BBC CEO Guru & Founder, World Of CEOs