Risk-aversion kills innovation. This is one of the fundamental certainties in the world, whether one is speaking of business or personal decisions or opportunities. In fact, heightened risk aversion often leads to stagnation, the opposite of innovation.
As an attorney, and a facilitator of transactions for my clients, one of my tasks is to examine, explain and mitigate the risks of the presented transaction. Ultimately, while many clients value my advice with respect to risks, it is the client's decision to proceed with a given transaction or call it a day. If I have done my job well, the decision by the client, whether go or no go, will be a well-informed one.
When it comes to the willingness of businesses to engage with social media, risk aversion is proving to be a significant obstacle. In most cases, though, the initial reluctance to engage in social media results from a lack of understanding of both the technology and the risks associated with that technology. This is risk aversion borne from ignorance, and its adoption by businesses will undoubtedly lead to stagnation and a multitude of missed opportunities.
As social media rapidly infiltrates each aspect of our lives and our businesses, the breadth of legal issues that arise in connection with social media engagement increases in turn. Privacy rights, data security, e-discovery, intellectual property rights, contractual rights, employee/employer rights are just a few of the legal issues social media use presents.
For the business executive considering social media engagement, even a fleeting sense of the presence of just one or two of these legal issues can be daunting enough for the executive to turn away from social media opportunities. In a time when the use of social media to drive business is growing exponentially, however, ignorant risk aversion is unacceptable.
A business executive who turns away from social media because she recognizes, but does not fully understand, the legal risks, will soon find herself faced with competitors that have captured increased market share through social media. Some of those competitors will be led by executives who are naturally less risk-adverse and just jumped into the fray. Most though, will be led by executives who recognized some of the legal implications of social media engagement, but were wise enough to obtain a more thorough understanding of the risks, take measures to mitigate them, and proceed.