Earlier this year I wrote about some research that revealed how just 10% of CIOs had any kind of presence on social media. That means no Twitter account, no LinkedIn profile, no Facebook page.
So it’s interesting to see some new research by Stanford University that suggests that whilst they may be using social media more, they still don’t see the benefits of it. They surveyed over 180 CEOs and other senior managers in an attempt to find out what they know about social media and how it’s currently used in their business.
Sadly, but perhaps not surprisingly, most of them knew very little.
“Companies appreciate the potential that social media can have to transform all aspects of their business: branding, reputation, communication, outreach, and identifying strategic risks,” says Professor David F. Larcker of the Stanford Graduate School of Business and lead author of the study. “They also realize the serious threats that it can pose. They’re just not doing very much about it.”
Amongst the key findings in the report were:
- Less than 25% of senior managers, and just 8% of directors receive reports detailing how social media is performing for them. Almost half don’t collect any ROI information at all!
- Whilst 90% of managers believe they understand the risks involved in using social media, less than 1/3 actually monitor the social web for negative mentions, and just 14% use metrics from social media to measure corporate performance.
- 59% of companies use social media to interact with customers, 49% to advertise and 35% to research customers. 30% use it to research competitors and new products/services, or to communicate better with employees.
The report revealed that the biggest stumbling block for executive understanding of social media is that they lack an understanding of how to tie social media usage together with corporate performance.
“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,” Larcker concludes.
The study’s authors recommend that companies take the following steps to implement a social media strategy that integrates with their corporate strategy and risk management program:
- Assess their current capabilities with social media
- Determine how social media fits with their strategy and business model
- Map their companies’ key performance indicators and risk factors to information available through social media
- Implement a “listening” system to capture social media data and transform it into metrics
- Develop formal policies and guidelines for employees, executives, and directors
- Consider the legal and behavioral ramifications that could be involved if the company’s board receives summary data about social media.