How should companies and their bosses deal with social media?

Microsoft boss Satya Nadella learnt recentlythat just one faux pas can cause serious damage. His comment on women counting on karma to take care of their pay raise raised an enormous storm on the social media that only just settled after he apologised.

Of course, it's important for companies and their bosses to be careful. But slip-ups on the part of bosses is just one hazard that companies face in the social media. They have to face damaging disclosures, strong criticism and lethal photographs. Schumpeter points out that while anti-corporate types have made the most of social media, companies have been slow to adapt. He cites two reasons from a recent book on the subject:

The first is the nature of the internet. It is a beast that feeds on scandal and particularly delights in the flesh of the powerful and privileged. The media world used to be policed by editors who demanded proof in the form of two sources. Now amateurs can post anything they want online (though they may eventually face prosecution) and editors are subject to the tyranny of the click: the more the stories they publish are clicked on by readers, the longer they are likely to survive in their jobs.

......The second is the nature of companies. They are designed to stay in business rather than to be good at defending their bosses from scandal. No matter what PR resources they throw at killing a story, NGOs and prosecutors will always have more stamina. In America no sensible firm will risk gambling on a jury trial when a negative verdict could bar them from doing business with the government.....No sensible company will go to the mat to protect an embattled boss when there are plenty of replacements waiting in the wings. 

The book has useful tips:

 He tells CEOs to restrict the view into their glass houses: to cover the cameras on their phones and computers with masking tape; avoid the “reply all” function on their e-mail; think twice before sending any strongly worded message. He dismisses the idea that corporate social responsibility (CSR) bestows on firms the PR equivalent of a stock of political capital: digital vigilantes will always assume businesses are guilty and can add the charge of hypocrisy to CSR-obsessed ones, as they did to BP after its spill. He warns against one-size-fits-all approaches to crises: the common prescription to come clean quickly and fully sometimes stokes the fire, he notes.

Both the author and Schumpeter are, in my view, mistaken in seeing the social media entirely as some ugly ogre against whom companies must erect defences. Leaving aside scandals, keeping taps on the social media can help companies in several ways. They can identify typical customer complaints, they can get an idea of how they are viewed by ordinary people, they can see how they stack up against competition, they can identify unmet customer needs and they can get useful ideas for re-designing products or coming up with new ones.They can also the social media to convey the company's viewpoint on particular issues or to respond to negative perceptions.

Service-oriented businesses such as banks have been quick to latch on to the potential of scouring the media. Other businesses can learn too. It would be a good idea to pick somebody who understands the company's key businesses well and appoint him or her Head of Social Media. Getting such a person to interact with top management, the PR dept and the marketing heads could turn to be a good investment for companies.