Archive | August, 2012

Social Media and Legal Risks for Businesses

27 Aug

Businesses are taking advantage of Social Media for different reasons: increasing their productivity, marketing, building relationships through interactions with their customers, improving internal communication. However many businesses are not aware of the legal risks that can arise from the use of Social Media by the firm or by their employees.

To illustrate these risks I will talk about a brand that everyone knows: Coca-Cola. Coca-Cola operates in the beverage industry and “strive to refresh the world and inspire moments of optimism and happiness”. They have been serving more than 3500 different beverages to more than 200 countries for 126 years.

  • Confidential information: Coca-Cola’s success is based on secret recipes. Think of how quickly the recipe would spread throughout the world should an employee disclose it on purpose or not on Social Media. Disclosure of such information would definitely put an end to CocaCola’s competitive advantage.
  • Trademark and copyright: Non-authorized use of the company logo or trademark  raises the issue of intellectual property. In the case of Coca-Cola it ended pretty well: 2 of  Coke’s fans decided to set up a Facebook page for there favourite drink and their page ended-up to be the second most popular page on Facebook even if the company marketing team had nothing to do with it. Today, the company decided to only allow for people authorized or associated with the company to make a branded page and asked the 2 creators of the page to take  it over and keep on managing it. Even with this success story we can realize how harmful it could have been for the company if someone less devoted to Coca-Cola had created a brand page with misleading information without the customers knowing if the company actually had any relationship with this page or not.
  • Human resources: With the use of social media you can fear a lack of control on what your employees are doing. What are they saying about the company? Do they use social media for their personal life during working hours? What kind of use of social media could lead to en employee termination? What I understood from Malcolm Burrows (a guest lecturer of my Enterprise 2.0 class) is that defamation or offensive comments made by an employee is a valid reason to dismiss a person. This is true even if it’s from their home computer. I didn’t find any example for Coca-Cola but it should be highlighted that they need to set boundaries of what is or is not an acceptable use of social media. They also need to monitor what they employees are saying because it has become so easy to commit defamation hiding behind a computer screen.

To address these risks Coca-Cola created a Social Media Policy (SMP). This document is set up to provide guidance to their employees so that they know and understand their role in the on-line community. In its SMP Coca-Cola explain to its employees how they are expected to behave (be respectful, act with honesty and integrity, convey the company values…) but they also remind them that they are legally responsible for their action and for any content that they post.

For a Social Media Policy to be effective it should be written clearly, employees should be trained to understand it and above all it should be enforced!

Do you have any other ideas on how to cope with the legal risks associated with social media?

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Building Enterprise 2.0: Benefits and Risks

20 Aug

In my last post I talked about how web 2.0 tools could help ME be more efficient and productive. What about companies? Businesses are always driven by the need to save time, cut costs, build a good brand image, communicate effectively internally but also with their customers or their other branches throughout the world and so on… Integrating Web 2.0 into the office environment could help them achieve these objectives and this is called Enterprise 2.0.

What benefits can companies reap from this technology and what risks will they have to handle if they want to protect the firm and its assets?

The benefits of enterprise 2.0

  • Fostering collaboration: Web 2.0 tools can help create a bridge between different large groups of people making it easier for them to communicate and therefore collaborate. This connection helps disseminate information among employees and could lead to increased knowledge sharing. Another positive aspect of a better collaboration is that it helps employees build teamwork skills allowing each of them to work together and prevent duplication of already produced output.
  • Increasing productivity:  IDC Research found that “…knowledge workers spend 15-30% of their time seeking specific information and these searches are successful less than 50% of the time.” Through quick and easy access to resources and information, employees can save time, cut costs of fruitless searches and make better informed decision rapidly which is really important in today’s more and more knowledge-based work environment. 
  • Improving brand image: Social media are key to build your reputation and strong relationships with your customers. Interacting with your customers through social media helps them get a feel for what your business is and for who the people hiding behind the keyboard are which lead the customers to trust your company and even sometimes turn them into ambassadors of your brand that share your latest updates and retweet whatever news your announcing.

Uniqlo, a japanese apparel retailer, understood these benefits really well through the implementation of a network of blogs on a Movable Type platform to gather information about customers feedback from over 700 stores around the world. Uniqlo managed to process problems raised by their customers in real time by making information available to its employees all over the world immediately, allowing them to comment, find a solution and share it with the entire company only by using their mobile phones.

Toyota uses social media to actually involve the customers in their product development process. By organizing a vote to name the new Prius, Toyota customers or followers have the feeling that their opinion is valued and that the company care about their real needs and desires.

The risks of enterprise 2.0

  • Security: One of the greatest risks of implementing enterprise 2.0 is that confidential information could leak and spread to thousands of people within an hour, making it hard to delete it and easy for competitors to retrieve.
  •  Loss of control: Because of enterprise 2.0’s unstructured way of communication, managers sense that they are loosing control of the flow of information within their company and in the outside world. They can’t possibly stand behind each employees, not to talk about customers, to see whether they are sharing negative or misleading comments that may harm the firm reputation.
  • Reputation: A misuse of social media through inappropriate campaign or lack of responsiveness to customers interaction could hamper your customers trust and affection towards your brand.

The latter risk can be illustrated by Burger King Facebook campaign “The Whopper sacrifice”. This campaign encouraged Facebook users to unfriend 10 people to earn a free hamburger, with a notification sent to the sacrificed friends to let them know your allegiance to Burger King. Here comes a problem of value that the brand is willing to share. As appealing as a free burger sounds would you turn your back to friendship? Only 23 000 hungry and “amoral” Facebookers participated in the campaign that was disabled by Facebook after 10 days claiming that users privacy was violated through the sending of a notification to sacrificed friends.

To get the most out of enterprise 2.0 and prevent the previous risks from happening, companies must create an implementing strategy  that consists of 4 steps: Understand the business drivers of the implementation, set a framework with practical policies, establish initiatives and seed pilot projects, iterate and refine to reach an ongoing culture of enterprise 2.0.

If you want to know more about Enterprise 2.0 benefits and risks here are some other posts that I found interesting:

Enterprise 2.0 – a double edged sword

Enterprise 2.0 – Doing it right and wrong

Web 2.0 Applications

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Enterprise Rozo

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