Social media creates a wave of change in the way business is done, from democratizing business opportunities to equalizing the power of corporations and the public. Trends suggest that social media demands corporations to become more "socially responsible" for their acts. The concept of wisdom of crowds seems not only useful as a tool for predictive markets but also voicing what's best for the public.
The Domino Pizza incident where two of its kitchen staffs deliberately contaminated the pizzas and posted the video in YouTube created a huge drama in the media, including the social media. Luckily, Domino's turnaround strategy was quick and witty, by firing the two employees, taking it to the court and apologized via the social media. It's not entirely Domino's fault but as a corporation Domino has a responsibility to ensure public food safety. Another case was the Nestle's KitKat brand which was accused of buying raw materials from lands that were once forests and habitat of orangutans. The activists spread viral videos on YouTube and wrote blogs against Nestle. Unfortunately, Nestle caught up in a "virtual fight" with its FaceBook fans, who bloated to more than 90,000 fans and even threatened to delete protesters' fan-ship from Nestle's fan page. At the end, Nestle had to apologize. To-date, Nestle's FaceBook page shows this line: "To repeat: we welcome your comments, but please don't post using an altered version of any of our logos as your profile pic - they will be deleted". This, again, draws negative sentiments among the public with their negative comments on the FaceBook wall. It looks like the Nestle's drama is far from over.
What lessons do we learn from these two cases? A lot. First, a new era of corporate social responsibility (CSR) has arrived (again!). The difference with the older CSR era is that today's CSR era not only demands the actual action of being social responsibility but also "sensitivity", "empathy", "listening" to the sentiments spreading among the crowds. This is the new face of CSR in the social media era. The demand for social responsibility is even greater among larger corporations, with typically larger stakeholders since maintaining "reputation" becomes second to none for business continuity. Second, corporations need to have a clear policy on social media. What your employees can or cannot post on blogs, YouTube or other social media needs to be clearly articulated in the internal social media policy. This is part of risk management in the social media. Third, know which segments are the "detractors", people who make their personal mission and vision to screw you up no matter what you as a corporation do versus the "angry crowds", whom you can befriend with again once you deal tactfully with their rage and disappointment. Finally, for corporations with significant CSR risks, it pays off to fix their CSR image and performance prior to launching into the social media.
Social media offers opportunities yet also threats. Its like playing chess - in which you cannot really tell what's the15th step is going to be after just getting into the 3rd move. Taking a plunge into the social media requires a new understanding and approach to "social" responsibility. Welcome to the new "social" world.
Yanto Chandra is digital-entrepreneur and social media enthusiast. He can be reached at [email protected] and stalked at twitter.com/ychandr