Social Media Use Among Directors and Senior Managers


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Presented by David F. Larcker, Stanford Graduate School of Business, 7th Annual SNCR Symposium, Nov. 8, 2012

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  • How about another industry with PR problems… Comcast
  • Frank gave a face to Comcast. Famous Frank Made himself available by asking “how can I help” and following through.
  • Social Media Use Among Directors and Senior Managers

    1. Social Media Use Among Directors and Senior ManagersSTANFORD GRADUATE SCHOOL OF BUSINESS David F. Larcker
    2. Who We Are• Key Stanford Resources:  Rock Center for Corporate Governance  GSB Center for Leadership Development and Research• Core Principles:  Examine important research questions  Approach questions in a neutral and scientific manner  “Get the story straight” – move from “hype” to “knowledge”  Disseminate the research results – obtain feedback and critique  Have a real impact on practiceSTANFORD GRADUATE SCHOOL OF BUSINESS 2
    3. Our Perspective on Social Media• “…a social trend in which people use technologies to getthe things they need from each other, rather than fromtraditional institutions…” (Groundswell)• It’s really about the relationships and the innate humandesire to connect, not just the technologies• Social media is not just a channel, it’s a conversation that:  is very big  highly influential  will go on regardless of what a firm does  If ignored can cause real problems (or missed opportunities)• Social media deserves serious research attentionSTANFORD GRADUATE SCHOOL OF BUSINESS 3
    4. Social Media Seems Extremely Important• Edelman survey, 2012 marks the first year that “listening tocustomers” is considered equally important as providing “high qualityproducts or services” to building trust in a corporation• According to BRANDFog, consumers expect to be able to engagewith companies and their brands through social media. Similarly,employees prefer to work for a company that is active in social media• Firms that embrace Web 2.0 (social technologies) and social mediaare more likely to be market leaders, have their market share increase,and use management practices that lead to higher margins (McKinseycalls these firms “networked enterprises”)STANFORD GRADUATE SCHOOL OF BUSINESS 4
    6. AppleA $12 Billion Move In Apple Stock Seems To Have Started With Tweets From A Single Anonymous Source In China The organization that got the news in the headlinesis a group called Chinese Labor Watch which said it got its information from "workers," but its press release was mostly cribbed from the tweets of just one person. STANFORD GRADUATE SCHOOL OF BUSINESS 6
    7. Comcast 1.4 MILLION VIEWS 7
    8. Comcast Response “Frank Eliason: Helping Comcast suck a little bit less” “I can give full kudos to Frank for being so personable, and as much as it pains me to say it, I have to acknowledge Comcast as a whole for bringing customer service to the digital age.” BusinessWeek: “I think its safe to call Comcasts Frank Eliason the Frank Eliason most famous customer service manager in the U.S., possibly in the @comcastcares world.” 8
    9. Some Obvious Questions• What do senior executives and board members reallyknow about (personal and business uses of) social media?• Is social media information incorporated into strategicdecisions and risk management at the highest levels oforganizations?• Do senior executives and board members monitor andevaluate processes for collecting and analyzing socialmedia data within the firm?• What is the precise “value proposition” for social media?Are there compelling analyses that expenditures on socialmedia are value increasing for shareholders?STANFORD GRADUATE SCHOOL OF BUSINESS 9
    10. Our Survey• Only CEOs, senior-level executives, and board members•Typically in their mid-50’s• Across a broad set of industries – manufacturing, utilities,banking, and services• Fairly large companies -- > $500 million in revenueSTANFORD GRADUATE SCHOOL OF BUSINESS 10
    11. Basic Social Media KnowledgeSTANFORD GRADUATE SCHOOL OF BUSINESS 11
    12. Basic Social Media Knowledge Pretty High for 2012STANFORD GRADUATE SCHOOL OF BUSINESS 12
    13. Basic Social Media Knowledge However, mostly Spectators (read blogs, follow others, etc), as opposed to Creators (create blogs, publish Twitter updates, etc.) Substantial overlap between personal and professional usageSTANFORD GRADUATE SCHOOL OF BUSINESS 13
    14. Understanding the Impact of Social Media • Marketing and Branding • Customer Outreach • Collaboration and Info Sharing • Organizational RiskNot Great! STANFORD GRADUATE SCHOOL OF BUSINESS 14
    15. Do They Use the Information? Maybe! Mostly Marketing and SalesSTANFORD GRADUATE SCHOOL OF BUSINESS 15
    17. You Get What You Measure • Not collected • Not valuable • Too low levelSTANFORD GRADUATE SCHOOL OF BUSINESS 17
    18. Many Firms Do Not Even Have Guidelines!STANFORD GRADUATE SCHOOL OF BUSINESS 18
    19. Some Preliminary Takeaways• Executives and board members have someunderstanding about social media for personal and (insome cases) professional applications• They understand the potential for social media to impacttheir firms in both positive and negative ways• However, they have not been convinced about the valueproposition of social media  Social media information gathering and analysis is in its “infancy”  Social media data is difficult to distill into a useable format  Possible serious selection bias with social media respondents• Executives and board members may view social media as“beneath them” and is only for marketing or public relationsSTANFORD GRADUATE SCHOOL OF BUSINESS 19