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The Risks of Social Media: Decreased Worker Productivity

To me, the biggest concerns companies should have about social media revolve around reputation damage, legal liability and workplace issues (cyber-stalking, sexual harassment, etc.). These are the issues that can hurt the most, with some other things to watch for being improper disclosure of confidential/financial information, data breaches, viruses/malware and any other general network security concerns.

We have been covering such concerns throughout the year in our Risks of Social Media series (something we will be bringing to print in Risk Management magazine in our October issue. Look for that next week. And see the pretty cover our designer created for the story here.)

Another issue that comes up constantly whenever I discuss social media risks with executives is decreased worker productivity.

To many, this seems to be the largest drawback to social media. In their eyes, workers who previously toiled away for the duration of their eight-hour shift are now so enthralled by Facebook and Twitter that they simply cannot help but peruse the sites constantly throughout the day. While they are doing that, of course, they aren’t getting any work done. Less work equals less production, which equals lower profits.

The way they see it, that is the grand downside of Facebook: it compels people to not work while they are at work.

The way I see it … that’s a crock.

Sure. It happens. Some people do spend a lot of time on social networks. They chat with friends, they look at family vacation photos and play Farmville. They waste a lot of time.

But this is really nothing new.

The internet is full of distractions, and if someone doesn’t want to work, they will find a way to not work. Facebook and Twitter did not create a new wave of malaise and boredom among those with dull jobs. People trapped in boring jobs — or just poor workers employed in good jobs — have been finding ways to be unproductive at work since well before the internet was even used at most companies.

Cigarette breaks and the water cooler have existed for a long time. Watch Mad Men and you will see how even the high-powered execs of the 1950s and 60s wasted time boozing and socializing at the office. The Super Bowl, March Madness, fantasy football, Survivor, American Idol, the Oscars and a seemingly limitless amount of other distractions may take up a substantial part of any given employee’s attention while at work.

Or take this fictional exchange between “efficiency expert” Bob Porter and data processor Peter Gibbons in Office Space, a cinematic lampoon of the modern workplace:

Bob Porter: We’re trying to get a feel for how people spend their day at work … So, if you would, would you walk us through a typical day, for you?

Peter Gibbons: Yeah. I generally come in at least fifteen minutes late, ah, I use the side door – that way Lumbergh can’t see me, heh heh – and, uh, after that I just sorta space out for about an hour.

Bob Porter: Da-uh? Space out?

Peter Gibbons: Yeah, I just stare at my desk; but it looks like I’m working. I do that for probably another hour after lunch, too. I’d say in a given week I probably only do about fifteen minutes of real, actual work.

The point here is that if your workers don’t like their jobs, they can find many ways to not get any work done. And if they do like there jobs, the allure of Facebook — despite all the buzz you hear about its unprecedented ability to connect millions — is not nearly great enough to force quality employees to ignore their responsibilities.

Facebook Productivity

(The comical part about this whole post is that I myself was on Facebook prior to writing it — and then Facebook had a major, extended service interruption, which prompted me to actually do some work and write down my thoughts on the matter after seeing the satirical tweet above from @OPB. Yes, I’m a hypocrite. I know.)

This isn’t to say that companies should not explain to employees in a social media policy that they are not to waste time on Facebook all day. They should do exactly that.

But it’s not some new-age problem. Workers should not be wasting time doing anything. That’s the message. Rolling out some draconian policy that applies to the employee’s social media usage, however, is more likely to be alienating and de-motivational than it is to make employees want to do more work. At least that’s how I see it.

Besides, most people today who use Facebook and Twitter extensively can do it on their smartphone anyway. So if you implement controls on their desktop computer, they can just sit in their cubical and twiddle away on their iPhones and Blackberrys. Or, ya know, just sorta space out for about an hour after lunch.

For more on the topic, Gini Dietrich of the excellent blog Spin Sucks seems to share my view, calling worker productivity a “management issue” not a social media issue.

The Risks of Social Media: Avoiding Disaster

In this day and age, most every large organization or company has a Facebook or Twitter page (if they’re not living in the dark ages, that is). But just because a company puts itself out there in the world of modern marketing does not mean mayhem won’t ensue.

Tweets or Facebook posts on a company’s site can help or harm said company — and it’s a fine line between the two. For this issue, a social media policy should be put in place at any company that plays the social media game. If you want to take it a step further, a community manager should be responsible for all social media outlets that pertain to your brand.

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But that’s not all a company has to worry about. As we all know, angry customers often take to the internet to air their grievances, often launching attacks on a company via Twitter or Facebook after a bad experience. Here are a couple of angry tweets aimed at your neighborhood pizza maker, Dominos:

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But Dominos, unlike some companies, responds immediately to customer complaints on Twitter. It is obvious that the pizza chain employs several community managers to take care of such issues or forward the complaints on to the appropriate department. This, everyone, is a great example of the right way to use social media.

Another pioneer in the land of corporate social media is Delta.

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It was announced today that the commercial airline will now allow users to book flights directly on Facebook.

While it’s commendable that the company is looking to social media to boost sales, Delta is not the first airline to use the social web to reach consumers. Southwest, Virgin and event JetBlue have been communicating deals and information to customers via Twitter and Facebook for some time. I’d expect these airlines to start rolling out a similar sales feature to Ticket Window soon.

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Examples of bad business twitter moves include not checking in regularly, mixing business with pleasure (make a separate personal account), mostly self-promotional tweets/posts and not helping others. Having a Twitter or Facebook page that represents your brand means responding quickly and directly and planning for the worst while expecting the best.

What’s the worst case scenario your brand could possibly suffer in a social media PR meltdown? That situation probably won’t occur, but by imagining the worst, you can craft “first line” responses ahead of time, so you won’t be caught off guard. That way you’ll be well prepared if sentiment around your brand suddenly begins to trend negative. This kind of brand take-down, should it occur, happens extremely fast—in a matter of hours.

So, while social media is a great marketing tool for every business, a professional and responsible manager should be in charge of all communication on the various sites and this person should be very well versed on the many risks of social media.

Tweeting Earnings: Bad for Your Company?

That’s an issue many have mixed feelings about. I, for one, think it’s a great way to relay investor information to the modern, web-loving world in a timely manner. Along with posting earnings on their websites, companies (well, some of them) are using Twitter to announce, among other news, performance numbers.

The microblogging site has seen a flood of earnings tweets for the second quarter of 2010. Some, however, are doing this better than others. IR Web Report compiled a list of 10 public companies that are using Twitter as an investor relations tool — with comments on what they’re doing right and wrong. Here’s a snapshot:

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URL: https://twitter.com/PGNewsUS
Followers: 5,166
Apps used: Twitterfeed, CoTweet, TweetDeck
# of Earnings Tweets: 14
# of Clicks from Tweets: 75
Comments: The tweets are coming from P&G’s media relations team, so strictly speaking their activity doesn’t qualify as IR. Except it does because investors don’t discriminate. The tweets are plain vanilla, no hashtags or tickers. There’s a bit of “spin,” but mostly the tweets are informative. Still, the company’s IR department should have it’s own account. It’s hard to find the signal when sales numbers are mixed in with soap suds. The low click-thrus suggest that earnings tweets on this account don’t resonate.

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URL: https://twitter.com/Roche_com
Followers: 4,586
Apps used: CoTweet
# of Earnings Tweets: 21
Clicks generated: 182
Comments: Only company where I had to use a calculator to add up all the various clicks to their site! Probably the best experience from a follower’s perspective. By not live tweeting the earnings call, they don’t overwhelm their followers and drive traffic to the webcast. But the greatest value comes from them referring followers to the media’s rolling coverage of the results throughout the day. From start to finish, it’s a well-managed process that is a valuable enhancement to what the company already provides on its website. The one to emulate.

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URL: http://twitter.com/ebayinkblog
Followers: 4,638
Apps used: Blog, Seesmic
# of Earnings Tweets: 63
Clicks generated: 169
Comments: The original earnings live-tweeter, eBay continues to be a standard setter. It’s one of the few to incorporate StockTwits into its distribution. Its disclaimer at the start of earnings call live-tweeting sessions, and use of an unique hashtag for each call, are best practices. But too many tweets for my liking, but no one else complains so I’m wrong. Could say more but Richard’s already gotten a lot of ink here. He’s posted a good piece about his set-up and process.

Sure, tweeting financial performance data may be good for these large, blue-chip companies, but the same may not be true for smaller, less visible firms. According to research from the University of Michigan, small and micro-cap companies that participate in greater tweeting “during news event windows is associated with lower bid-ask spreads and greater depths.” Meaning, essentially, a lower stock price. Not good.

Tweeting earnings can have other harsh side-effects. If a company announces earnings news on other sites (such as their corporate website) first, then turns to Twitter (sometimes hours later), it is a slap in the face to the company’s loyal followers. Here are some examples of delayed earnings tweets (courtesy of IR Web Report):

  • A gold company listed both in the US and Canada issued a results release at 8:00am ET but only tweeted the news at 6:45pm ET –- a delay of 10 hours and 45 minutes.
  • A uniform company released earnings via a PR wire at 4:15pm ET and tweeted the same information 77 minutes later at 5:32pm ET.
  • A technology company issued its release at 4:15pm ET and only tweeted it at 4:43pm ET, a 28-minute period during which more than 150,000 shares were traded.
  • A health care solutions company released earnings at 4:00pm ET but didn’t mention the results on Twitter until announcing at 4:35pm ET that its conference call had started. Eventually, the results release showed up, but almost 8 hours after the fact at 11:53pm ET.
  • A networking company released earnings via a PR wire at 4:05pm ET but tweeted it only at 4:31pm ET – a 26-minute delay during which more than 100,000 shares changed hands.
  • A hard disk drive maker that released its results at 4:01pm ET but tweeted them only 24 minutes later at 4:25pm ET – a delay which saw more than 200,000 shares traded.

To investors, these are serious lapses from major corporations’ IR departments. If a company that is active on Twitter cannot manage to update its followers and investors in 140 characters or less on important information in a timely manner, how can it expect to keep such a following?

With more and more companies waking up to the power of social media, more and more sloppiness in the the Twitter and Facebook realm is visible. For companies large and small, to be complacent with such technology is to dig your own grave.

 

Facebook Posts + Tweets = Possible Lawsuit

You may remember back in May when a Chicago resident tweeted about her property management company being OK with moldy apartments. That resident, Amanda Bonnen, was subsequently sued by Horizon Group Management for publishing a false and defamatory tweet on Twitter May 12.

The tweet read: “Who said sleeping in a moldy apartment was bad for you? Horizon realty think it’s okay.” Those two sentences sparked the suit in which Horizon sought $50,000 in damages, mostly reputation-related. The case was eventually dismissed this past January, with the judge claiming the tweet was “too vague to meet the legal standards of libel.”

Though it was dismissed, this one lawsuit opened the door to Twitter-related legal action. Soon to follow? Most likely lawsuits related to Facebook posts. Not only can tweeting or posting about another company get you in trouble, doing the same about the company for which you work can also pose a risk. As an article on MainJustice.com states:

“Our board members are talking about things like Facebook and Twitter, so we are definitely paying attention to social media,” said Haydee Olinger, the chief compliance officer for McDonald’s Corporation. Grace Renbarger, the chief ethics and compliance officer for Dell Computer, said she is constantly worried that something her employees say on Facebook or Twitter could hurt the company. “You don’t want people out there saying things that could be attributed to the company for liability purposes,” Renbarger said.

Because of the risk social media poses, the role of the chief compliance officer has grown to encompass the occasional or, in some cases, often, monitoring of employee’s Facebook and Twitter accounts. Tweeters and posters beware: big brother is watching!

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