Businesses still not taking advantage of social media

Execs claim to understand social media impact, but not using it to improve company performance

Social media, for better or for worse, has completely changed the Internet. It has changed the way people interact with each other, and the way companies interact with their customers. It has even altered the way celebrities interact with their fans, creating the sense of closeness that, in all honesty, is probably an illusion.

One thing that social media has not seemed to do, at least not yet, is impact how employers interact with their employees.

According to a new survey conducted by Stanford University’s Rock Center for Corporate Governance, the Center for Leadership Development and Research at the Stanford Graduate School of Business, and The Conference Board, titled “What Do Corporate Directors and Senior Managers Know about Social Media?” less than a third of companies today use social media to support their corporate strategy and risk management practices.

180 senior executives and corporate directors of North American public and private companies were surveyed, and revealed a “disconnect between companies’ understanding of social media and the actions they are taking to apply it to their business.”

The report states that, while 90% of the surveyed executives and directors said they understood how social media could impact their company, few put it into practice. Only 32% of the companies were monitoring social media to detect risk to their activities. 

And a scant 14% used metrics from social media to improve employee performance.

Half of the companies surveyed don’t collect any information from social media, and only 24% of senior managers, and 8% of company directors, get reports with this information.

A little more than half, 59%, of the companies use social media to interact with their customers and less than half, 49%, use it to advertise. When it comes to using social media for research, 35% use it for researching customers and 30% use social media to research competitors, research new products and services, or communicate with employees and other stakeholders.

Though they are not taking advantage of all that social media can do for their professional lives, it’s not that the executives surveyed are not familiar with social media. On the contrary, 65% of them use social media for their own personal usage. And of those 65%, 80% of them have LinkedIn account, and 68% use Facebook.

“We know that executives and board members are using social media. However, familiarity with social media is just not translating into systemic use at their companies,” Professor David F. Larcker of the Stanford Graduate School of Business and lead author of the study, in a statement.

“The majority of those we surveyed don’t have social media guidelines in place at their companies, haven’t had a social media expert consult with their company, and don’t have systems in place for gathering key information. They are putting themselves at serious risk by not taking action.” 

So what do the authors of the study suggest?

That these executives should assess their current capabilities with social media, and determine how it can fit into their strategy and business model. They should develop a formal set of guidelines for employees and directors when it comes to social media, and should also consider a monitoring or “listening” tool.

They can use social media to map their key performance indicators, and determine risk factors, the report says.

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