“Social is a shared service that’s used across the enterprise. As such, the CIO is responsible for being the integrator of those solutions.”

Wolberg also talked about how often CIOs, CTOs, CISOs, and other IT leaders are “at the nexus of saying ‘No’,” and how refreshing it can be to be able to say “Yes” to new initiatives or tools that enable better business outcomes—especially in cutting-edge areas like social.

IT as a Leader, Not a Follower, in Social Business

For more perspective on this, I talked with Ken Burbary, a technologist who serves as Vice President and Group Director for Strategy and Analysis at the global agency Digitas. His work puts him in touch with business leaders across different industries who are grappling with the implementation—and the implications—of social business practices.

“IT has a key role in all of these amazing and disruptive innovations. The days of command and control IT are waning, if not over, in most companies. So how can the CIO stay relevant to the business? By clearly articulating how to help internal clients be successful in achieving their goals by leveraging social technologies.”

Burbary is quick to acknowledge that this doesn’t change the IT organization’s dedication to maintaining traditional responsibilities for security, data integrity, and so on. But the approach has to be collaborative. “I’ve found IT departments that try to extend the command and control mentality into business units that are looking to be more agile and leverage disruptive technologies like social fail—they fail miserably and just get shut out and worked around.”

Avoiding the Risk of “Crowdsourced IT”

Burbary’s point was echoed by Adam Cohen, Senior Vice President for Digital and Social Media at Fleishman-Hillard. Cohen, who spent years helping major enterprises implement back-office systems, highlighted the connections between security, risk mitigation, and “crowdsourced IT.”

“If IT says no to an idea sponsored by a business unit without supplying better alternatives, employees may simply go outside the constraints of IT,” Cohen said. “Technology has changed, and people can get a lot done without involving IT if they want to.” Especially in financial services, he added, “employees talking about anything on social networks in an unsupervised or unstructured way is a risk.” In his view, these factors imply that “it’s actually riskier for an IT department not to be involved in social media.”

Again, IT organizations that embrace this viewpoint can become enablers of positive business outcomes for other areas of the company including marketing, compliance, and sales.

CIOs Look to Emerging Best Practices for Social Business

The good news is that you don’t need to go it alone. Flagship enterprises in financial services and other industries are establishing best practices to embrace the social technologies that provide a competitive advantage and improve internal and client-facing operations while maintaining compliance.

These best practices, which we will continue to discuss in future posts, allow IT departments to move away from “the nexus of saying ‘No’.” We’re here to share what we and our partners have learned from enterprises and IT departments across the industry.

Image source.

When you hear API, proxy, or hybrid used, it will typically be centered on the topic of social media archiving. And when it comes to compliance, there are some fundamental facts we know to be true:

• Social is a form of electronic communication and thus requires regulatory compliance.
• Archiving business communication on these platforms is a requirement.
• Archiving some of the communication on social networks is not enough.
• Having an effective system in place to detect misconduct is a requirement (MetLife was fined for this last year – they had a policy for email archiving, but the system of management wasn’t effective?)

Just because this is a new medium, it doesn’t mean that regulators will settle for half-measures or incomplete policies/solutions. Firms have a real challenge to not only address the core compliance risks but also figure out how to make social work for the business. And while you are evolving your strategy, be sure to keep an eye on the regulators. FINRA, for example, is issuing additional guidance in September as an extension to Notice 10-06. And in the midst of all of this, social networks are changing daily requiring a constant focus on how those changes impact policies and procedures.

While the conversation typically starts with compliance, it can’t end there. The other side of the coin is business success. You wouldn’t give the keys to a brand new car to someone who doesn’t know how to drive. Social media in financial services is no different. The guardrails of compliance are critical, but those that are getting access must also have the tools and education to deliver results for the business. If they don’t, why take the chance of giving them the keys to the car?

You might be saying, “Yes, I agree, but we are just going to start with compliance.” I can’t fault that approach. The time this becomes dangerous is when the organization focuses on the short-term deployment vs. the long term strategic needs of the business. It is a little like getting in a car to drive cross-country but deciding to leave your GPS at home. Social adoption is a journey, not an event. The road you set off on initially will determine if that journey ends in success or failure.

This puts a premium on having all of the information and education you can before making a decision. Here are some resources to help get you started:

• Social Media Adoption Life Cycle Webinar
• Morgan Stanley Smith Barney Social Media Strategy (video)
• Social Business Activity Cycle

In addition, here are a few questions you should ask of your team or your technology partners before starting your social media journey:

• Can we capture all of the content being created on social sites for business purposes?
• Can we limit access to features on the social networking sites without removing end users from the social networks themselves?
• Do we need to rely on end users to register their own accounts?
• How do we manage personal vs. professional content on these sites?
• Do you have a strategy for how you will ensure end user success (not just access)?
• Do you have a proven mechanism to associate social activity with business results?

These are just a few of the key questions you will want to dive into. After 3 years and 100+ customers, we can share many other questions that your firm will want to consider.

The agenda sparked a lot of questions and involvement from the audience including topics such as the empowered consumer and the regulatory environment especially for financial services firms. When Chad Bockius, CEO of Socialware, was asked whether there was truly a high cost of not participating in social media, Chad explained that the train had already left the station.  Firms need to take advantage of the opportunities to build valued customer relationships using social media.  Since this is constantly evolving landscape, there is no perfect time or plan.  If firms wait six months to put the “perfect” plan in place, that plan will no longer address all of the changes that will take place from now until that time.

Addressing practical implications of setting a social policy, Steve Selby of LIMRA explained that the difference between a good and bad social policy is finding the right balance vs. operating at either end of the spectrum of complete prohibition or wide open access.  Steve went on to address audience questions about FINRA regulatory notice 10-06, specifically static vs. interactive content, and guidance from other regulators like the SEC.  Steve explained that we shouldn’t look for  a “sea stage” from an expected FINRA clarification on social media later in 2011.

Edgar Rodriguez of Distribion, Bockius, and Selby all discussed the connection between the relationship dynamics of social networking and the need for technology to assist in the large volume of interactions, and Edgar expanded on the ability to measure the effectiveness of these interactions and provided helpful suggestions for getting the most of the social interactions.  To learn more about the webinar, you can follow the conversation on twitter #socialmediawebinar and view the webinar.

“It’s the dumbest policy in the world to block your employees from going to social media sites,” said Mark Ragan, a Chicago-based corporate communications specialist. “You get Gen Y entering the workforce, and those people live on Facebook. … They’ll laugh at you.”

Does this bring back memories from the 90’s when the Internet started penetrating businesses? How long did companies resist? What about email? How long was your organization able to resist that movement? Then came instant messaging, then text messages and now social media. History is repeating itself all over again and the companies that get social first will separate themselves from the pack, both in the eyes of consumers and in the resulting profits.

As I pointed out in my previous blog post, “10 reasons you should use social networks for business,” an Accenture survey of Millennial preferences found that recent grads prefer to communicate via instant messaging, text messaging, Facebook and RSS feeds. One Millennial MBA said, “I need to access my Facebook in order to do my job.” Shut down access to social networks, and you may shut down access to top employees.

“I think there’s a greater risk not to” give employees access, said Mary Henige, director of social media and digital communications for General Motors. “If you want to be an employer of choice, especially with younger people, they’re going to completely expect to do this.”

The connection coefficient remains in full effect. The more connected employees are (to other employees, partners, customers, prospects, etc) the more value the employees and therefore the enterprise will experience. This applies in all areas of business – recruiting, marketing, and even sales. In fact, a July 2009 study by the Altimeter group found that brands deeply engaged in social had an “18% increase in revenues over the last 12 months, compared to the least engaged companies who on average saw a decline of 6% in revenue during the same period.”

“One of the things they’ve talked about is how e-mail was looked at 10 years ago — as risky — and now it’s accepted so much as a business tool,” said Kristen Cislo, branch manager for information technology staffing company Robert Half Technology. “Are we going through the same thing with social networking?”

In short, lines are blurring between business and personal use of social networks so companies that want to keep increasing sales, attract the top talent and meet customer expectations shouldn’t shut down these activities. Instead create your policies, be upfront with your workforce and customers, and automate your policies so everyone wins.

“Our new collaboration cloud is the latest SaaS-based app to enable new levels of engagement, uncovering real-time influencers that gets translated into a listening grid so you can better automate outreach, nurture leads and convert high-value traffic.”

While this is all completely made up you are probably trying to think where you heard about this product. Unfortunately, marketers get sucked into the latest buzzwords (me included) and before long you can’t make heads or tails of what it is they are trying to communicate.

Since the launch of the new site last week I’ve gotten a lot of questions. Like, did you finally get some sleep? A: No (I have a 4 month old at home). Who designed the site? A: We have a very talented designer who did all the work on the site and product. And finally what is the difference between Socialware Sync and Socialware Compass? This last one came up the most so I’m going to take my own recommendation and try to shed some light on the topic.

When it comes to Socialware Sync think of it as your social networking insurance policy – similar to wearing a helmet when out on a bike ride. Whatever example you prefer, the underlying principle is the same. We all make decisions and investments every day to reduce our risk and give us greater peace of mind. Sync does this for anyone with a Facebook, Twitter or LinkedIn account. There are so many things that can go wrong. Your account can get hacked. Regulators, like FINRA, SEC, FSA, FDA, IIROC, can require you produce electronic records. Or a citizen can make a record’s request to a government agency and compel you to produce an old social media message.

Without a backup of your social activity and an easy way to search across it, you could be looking at fines, litigation or at a minimum emotional stress if your content ever gets lost. So if you are looking for peace of mind to ensure you comply with regulators, want to ensure you never lose your record of social interactions or just want a simple way to search across your entire social archive, then Socialware Sync is your answer.

Now let’s shift gears and talk about how companies enable social networking use. To date companies will start by creating a policy, some will train employees on how to use these tools and then they open the floodgates and hope that the directions are followed. This is similar to someone starting a trip with an old paper map. They plot their course and head out on the journey. Periodically they make some wrong turns but usually get back on track. Often you will run into a stretch of construction that you didn’t know about and then in the hope of making up time you go past a speed trap and are staring at a $200 dollar ticket and 6 hours of drivers education classes.  When the trip is over you have no idea how long it took you, exactly which way you went (thanks to those wrong turns) and of course this experience will be repeated on the way back home with one change – you will be driving the speed limit.

Now compare this to a GPS system. You search for your address and quickly tell the system to calculate directions. You can tell it if you want the shortest distance, shortest time, least use of freeways and more. As you start out on your trip you get notified of changes in real-time like traffic, speed traps or construction. If you need to make an unplanned stop the unit will re-route you and give you all the guidance you need to get to your destination quickly, safely and on your terms. When you finally arrive you know exactly how far you traveled, how long you were driving and the route you took.

Socialware Compass is like a GPS unit for companies that want to help employees navigate the social networking superhighway. Most companies, especially those in regulated industries, have a policy of which features can be used, which topics to avoid and who needs to review any content that is in question.  Socialware Compass does all of this and more. It automates a social media policy providing real-time guidance for any employee using sites like Facebook, LinkedIn and Twitter. Employees don’t need to worry about where they “might” violate policy; the system will guide them the entire way. In addition, it archives everything so enterprises can comply with industry or federal regulations and analyze usage across the business.  And best of all, it is as easy to use as a GPS unit – you setup the policies (where you want to go and how you want to get there) and let the system guide you along the way.

I hope this helps shed some light on how the two solutions compare and helps you decide which one would best suit your needs.  If you are looking for more information there are videos, tours and a wealth of other resources on each site (Compass, Sync). In addition, you can sign-up for a free 30-day trial of Sync to give it a test drive.

As many companies start to embrace social networking a common first step is to create a Facebook “Fan page” (54% percent of the companies studied have at least one Facebook Fan page according to the Burson-Marsteller study) or a LinkedIn company profile, or even a Twitter handle where the company will post news about the company, special promotions, and so forth. This is a fantastic start! But it is only a start.

Leading computer manufacturer, Dell is a perfect example of fully embracing this initial phase of social network marketing. Dell has several Facebook and Twitter pages, each with a specific goal.  For example, the @DellOutlet Twitter account sends Followers updates around the latest “deals” for Dell Outlet products. Dell has similar Facebook Fan Pages.

In June 2009, Dell reported it had driven $2 Million in sales directly from the aforementioned Twitter account, @DellOutlet. A great achievement for sure, but now think about the reach and impact of activating all of Dell’s employees. They have more connections, reach a wider set of the population and all have unique interests but at least one shared interest – they want Dell to succeed.

Companies that activate their employees will experience a big competitive advantage in the market.  Keep in mind activating is not just about turning on access. It is also about defining a strategy, a policy, educating your employees and then giving them the tools they need to be successful.

Here are a few examples of companies taking steps to activate their employees to drive their business:

• Online retailer Zappos has an employee leaderboard that shows who’s on Twitter and how many followers they have.
• PETCO, the pet retailing chain, used its already passionate and engaged employees use of social networking to build an in-house strategy.
• Telstra, the Australian telecom giant has mandatory Social Media training for all of its employees (Telstra has 40,000 employees!). In the training they stress “responsibility, respect and representation”.
• Best Buy’s Twelpforce is a collective force of Best Buy blue shirts offering technology advice whenever and wherever you need it.
  

Yes, companies are driving revenue through their Fan Pages and Twitter accounts but it is a mere sliver compared to the total impact activated employees are driving on social networks.

Companies in highly regulated industries (such as those regulated by FINRA, SEC, FDA, and so forth) that have blocked access to social networking due to compliance concerns are missing out on a tremendous opportunity.

There are 400 million people on Facebook alone, and that number is rising. Social networking is a channel that must be embraced to maintain a competitive advantage. Whether you are concerned about brand protection or regulatory concerns, implementing a solution to “unlock” social networking for your employees will pay off immensely.

If you were looking for more we’d encourage you to take our Social Networking Risk and Opportunity Assessment. After answering the questions we will provide a detailed analysis for you, generate a specific set of actions and help you prioritize your next steps in engaging with social networks.

Image courtesy of Jason Griffey

You can listen to the recording (about 20 minutes long) by pressing play below.

As part of the podcast I addressed the following:

• A little bit about my past experience (boring but very short)
• What is Socialware? How long has it been around and what is the company’s mission? What is “social middleware” exactly? (getting to the good stuff)
• What sort of challenges did you see at Socialware when you joined the company and how did you go about formulating a marketing strategy to address those challenges?
• As a senior marketing executive, have you started to leverage “social media” into your overall marketing strategy. Can you tell us when and how you started to think about social media as a valuable, legitimate channel of communications?
• What do you see social media developing into? What are the trends you see as social media evolves and is adopted by more and more people?
• Given that your target market is marketing and communications professionals are you seeing people starting to use social media for applications other than influencer relations, such as lead generation or sales cycle support?

I want to thank Jeff again for inviting me to participate. Please have a listen and let me know what you think. Hopefully, I was able to share at least one interesting nugget for the marketing folks out there or those just interested in social media.

To compound the problem, new regulations are being issued from FINRA, the FDA, the FTC and many others. Even without these new regulations most companies agree that traditional regulations around communications apply in the new world of social media. For example, SEC’s Rule 17a-4 requires broker-dealers to preserve communications relating to their business and NASD Rule 3110 requires that all electronic communications pertaining to a firm’s business be retained, in a format that cannot be overwritten, for three years.

FINRA CEO, Rick Ketchum, points out that these social networking tools will “challenge your ability to ensure compliance with regulatory requirements”. Translation, regulated companies must start tracking social media participation just like they are tracking and retaining other forms of business communication. This was made very clear in an interview on CNBC where he calls for companies to open up and use social media tools but also points out that there must be an “audit trail” to ensure compliance.

And now today The Hartford announced the availability of social media liability insurance. Here is how they describe the offering: “The Hartford now offers broader coverage for data privacy breaches and social media liability exposures, such as online defamation, advertising, libel and slander”. What’s interesting about this move is The Hartford recognized the problem isn’t going away, or getting any smaller and traditional approaches to dealing with monitoring, protection and enforcement, like web filtering or content monitoring, simply fall short.

So what is a company to do that is concerned about their exposure yet understand that they have to open up access to these tools because the business impact is too great to ignore? We recommend following these steps:

1. Create your policy: define the social media policy that is appropriate for your business and industry (here is a great list of corporate policies from a variety of industries to help get you started).
2. Educate the company: train your employees on the proper use of these tools and how to stay compliant with company and industry policies.
3. Implement and enforce: deploy technology that allows you to control access at the feature level, monitor and moderate content as necessary, retain and archive data and make it easy to produce any social post on demand.
4. Monitor and learn: watch how groups take advantage of these tools across the organization, highlight best practices and retrain on policies if needed.
5. Iterate and expand: modify policies if appropriate, encourage broader adoption by employees and expand on the business processes that take advantage of these tools.

And optionally you may want to look at insurance offerings from companies like The Hartford. Liability in the social space has always been a concern and it will be interesting to see how this sector of the industry evolves. In fact, it may be that companies that follow the recommendations above might even qualify for a reduced rate. Time will tell.