Social media can be a “weapon of mass destruction” in business
More and more companies are facing the sobering reality that social media has an influence over the way business is conducted and the success of such enterprises.
Recent media issues are just such an example with Southern Cross Media Group facing share price issues as a result of the recent scandal over prank calls. AM radio has also seen some problems after Alan Jones made derogatory comments about the prime minister's late father.
Subsequent Facebook campaigns to get him pulled from the air saw Macquarie Radio's share price fall.
In a speech to the Ashurst Boardroom Lunch, Maxine Brenner of Investec Bank described how social media and disclosure is a whole new ball game. Case in point, she discussed how a chief financial officer tweeted: "Board Meeting: Good nos = happy board" but the issue was that the company hadn't informed the market of the positive figures.
Published in the Australian Financial Review (AFR), the Ms Brenner's speech attested to the fact that social media has a place in current business. Should the risks be appropriately mitigated, it provides an opportunity for greater competitiveness.
The managing director of the investment bank said social media provides a feedback channel that has never been seen before. Employees, shareholders and customers are all able to give their opinion which, if taken on board by management, can make the business more viable.
She also examined how a company like Nike was able to utilise social media and double their revenue within a year. The sports company gave customers the ability to automatically upload to Facebook how far they ran through technology and turned a simple purchase into a lifestyle choice.
Ms Brenner concluded by suggesting that boards possibly aren't ready to fully engage with social media unless they can find someone who is shrewd enough to combine technology skills and business intellect.
She said that by combining the old school idea of engaging with customers, stakeholders and employees with new online tools, it can be "a weapon of mass destruction".