Last week, I hosted a webcast on social technology in the boardroom with Barry Libert and Bob Zukis. You can view the webcast in its entirety here. At the close of the webcast, I received great feedback and have included a concise overview of what we had heard and learned. So I’d like to provide a few thoughts here along with some resources that were mentioned during the program. You can also find blogs by Barry Libert and Bob Zukis on their websites with their own commentary. We all hope you will add your comments to our respective blogs to continue the conversation that we started last week so we can shape the future of governance together.
Social technology is not just an issue for consumer oriented companies
As was shared on the webcast, social technology is a productivity enhancer. Engineers at manufacturing companies are crowd-sourcing solutions to complex engineering challenges through discussions boards. Defense contractors are improving their products based on on-the-field experience shared through social networks. And Consulting firms are enhancing efficiency by 30+ percent using social technology. So the benefits extend to all corporations; this is a tool that you can use to improve your business and create competitive advantage around.
Social Governance and IT Governance are not the same thing
Boards have been dealing with IT governance, albeit for the most part ineffectually, for quite some time. Social is a more recent phenomenon and has IT components to it, but is, in many respects, a broader issue. As such, directors need new skills and a strategic mindset to effectively realize the opportunities that social offers.
Example: Starbucks has recruited a new corporate director from Heresay Social to create social awareness, capabilities, and governance for their board.
Social technology redefines concepts of accountability, compliance, and trust
Social technology shifts accountability from the traditional hierarchy of CEOs, boards, and shareholders to a broader set of stakeholders, some of who may not be directly engaged with the company but through social technology have access to and interest in corporate behavior. At the same time, the norms and expectations of those networks apply to companies just in the same ways that legal compliance applies today. Companies that try to retain control in the traditional sense or fail to capture, listen to, engage, and meet the expectations of their constituents will find their position challenged from unexpected places. The day of a million person boycott organized through social is not far off. And while this is happening, new trust in traditional authority is low, while trust in social networks is significantly higher, meaning companies need to understand what is being said about them and engage to influence the conversation.
The role of business moves from “management” to “engagement” as the values that drive business evolve
In the industrial model of business, control is top down management driven by efficiency and execution (leading to increased shareholder value). In the social model where values like collaboration, co-creation, and transparency drive business, power disperses and the primary role of the leaders of the organization therefore becomes one focused on engagement and delivering an experience through these new tools.
Directors should begin engaging in social technology now
Boards have begun to look for social expertise to fill a key skills gap in the boardroom. Directors who are not experts in social need to understand at a minimum how to “listen” to the social conversation. There are tools that can provide metrics to directors and management and they are becoming cheaper and more accessible. But boards and management need to understand what is being said about their organizations and, where possible, get out in front of the issue with a meaningful response by getting engaged in the conversation. At the same time, boards should be listening for the key events and emerging trends that will impact their business.
Example: Taco Bell identified and effectively addressed a potential PR crisis
Boards need IT/Social expertise and a regular review of social media issues
Starbucks recently realized that they needed social experience on their board and went outside of the traditional director mold to find the expertise that was lacking. They recruited a 29 year woman that founded and runs a social media company (among numerous other accomplishments). To find the skills needed, boards will need to think differently about the profile of the individuals they recruit, including looking to IT executives and technology entrepreneurs.
Example: We’ve covered examples above of why this is the case, and board recruiters such as Spencer Stuart recognize it as well.
Throughout the webcast, a number of resources and case studies were referenced (as noted above). Some of the research covered are noted below:
- What Do Corporate Directors and Senior Managers Know About Social Media?, The Conference Board & Stanford University Rock Center for Corporate Governance
- The Negotiability of Facts in the Digital Age, Webcast, The Conference Board
- Seven Steps for Board Success in the Facebook Age, Barry Libert, Knowledge@Wharton
- The Insourcing Boom, Charles Fishman, The Atlantic
- The social economy: Unlocking value and productivity through social technologies, McKinsey Global Institute
- PwC’s 4th Annual Digital IQ Survey
- Social Media and Technology Board Calendar, Bob Zukis
And in case you missed it, you can connect with Bob and Barry online and read their newest blogs on this video at:
- Barry Libert: Blog http://www.openmatters.com/blog Twitter: @barrylibert
- Bob Zukis: Blog http://www.bobzukis.com Twitter: @bobzukis
In addition, to insure that you remain a part of the conversation, stay connected – we we’ll be posting key clips from the session and continuing the discussion through blogs that we hope will engage you. Lastly, on January 24, we’ll hold a second webcast in the series, which we have decided to name Director Cuts, where we’ll explore this topic in more detail with special guests. Stay tuned for more details. We hope to see you then!