Controlling the uncontrollable: The inherent risks of social media

Controlling the uncontrollable: The inherent risks of social media

Summary: With an ever-increasing number of businesses adopting social media, what are the more risky aspects companies and consumers need to be aware of?

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LONDON -- The Financial Times' Innovate conference brought together speakers from world leading social networking sites such as Facebook, Twitter and LinkedIn, to discus the ways in which social media is transforming businesses across the globe.

The inclusion and expansion of social media within the daily lives of consumers is an aspect of business that causes continual debate.

(Source: Twitter)

The rapid, quick-fire way to share and link information within individual, community and business networks is expanding at an incredible rate; with an ever-increasing number of users globally using social networks.

However, it is necessary to ask whether the expansion of these services has the potential to cause more damage to businesses than benefit in the long run.

Usage and applications of social networking are changing rapidly, and many businesses may still be in the throes of catching up. In quick succession, more companies are using social media platforms in order to promote services, improve customer service -- for example, flight updates -- or use it to collate customer feedback.

With social networking sites becoming a part of our lives globally, at the click of a button, a consumer can impart a positive or scathing review of a company's service or performance. End-users can also use social networking in a fraudulent way -- such as fabricating a resume on LinkedIn for employment purposes. LinkedIn relies heavily on self-policing to try and regulate theft and fraudulent accounts; but this can only go so far.

The sheer speed at which a bad review or company mistake can go viral is quickly becoming the nightmare of corporations across the globe.

Speaking at the conference, James Quarles, Facebook's director for International Accounts, commented: "Risk management within companies needs to be put in place". It can take only one bad review, or one mistake by the company to be picked up on, and viral damage online can break a reputation.

With consumers able to impart this information quickly and across multiple networks to be viewed by potentially large numbers of users, is it possible for companies to control or regulate this exchange?

Companies are under increasing pressure to make themselves known online, and to maintain a more interactive presence than before, with the scope of the purely 'broadcasting' rather than 'interacting' company is becoming limited. The typical 'central command' structure of businesses is becoming less and less viable; with consumers beginning to expect direct and quick responses.

It is not only businesses that need to be aware of the risks associated with social networking.

Martha Lane Fox, the UK government's digital champion, and co-founder of Lastminute.com, admitted today that in the beginning of her business venture, she created and posted fake customer testimonials to drum up interest.

If such a practice is widespread, one would have to challenge the authenticity of information shared across social media.

If social media can be used in order to promote a company's services in a global fashion, it can also be part of 'black hat' techniques - a company anonymously is able to hire third-party bloggers or post fake reviews to the benefit of their business and deceive consumers.

The impact social networking can have within commercial markets is incredible. The collation of vast amounts of personal data and feedback can be invaluable for companies in market research, as it relies purely on the personal experiences of the consumer and can be gained quickly.

However, therein lies its weakness. Without regulation, consumers have the weapon in which to damage or improve a business, and companies in turn have the means in which to manipulate consumer opinion through fabricated reports.

As Quarles continued, regulation is 'not a perfect science'. Consumers may have to rely less on the authenticity of opinions and personal experiences shared across social media, and instead rely on their own knowledge of the business in question.

Topics: Collaboration, Networking, Social Enterprise

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  • RE: Controlling the uncontrollable: The inherent risks of social media

    Even before social media became such an "in" thing, you could find fraudulent customers reviews posted on blog sites and company web sites. An incredible amount of people just seem to like to speak their mind (or worse). It was that way before the computer (word of mouth) and will probably always be there. The mania with wanting to communicate instantly has just made it worse. I can't wait for the day when the Facebook, et.al fad dies out.
    Romas27
    • RE: Controlling the uncontrollable: The inherent risks of social media

      @Romas27 I don't see things moving in that direction -- a day where Facebook dies out. Social media/ social business is the way of the future.
      jocelyn.aucoin
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  • RE: Controlling the uncontrollable: The inherent risks of social media

    Thanks for the article, Zack!

    I agree -- there are inherent risks of social media in business, mainly surrounding the fact that there is so much power in the hands of the consumer, so much voice! But this is a great thing for companies, if they can harness this data. It's invaluable feedback.

    And this same "social media" that makes so many nervous in terms of consumers, can mean amazing things internally for businesses. Companies like WorkSimple call themselves "the Social Goal Management Company" and their project management software is like Facebook for work. You engage with your co-workers, manager, post things you're working on, etc. It's a glimpse into the future work place, I think.

    Anyway, as a lover of social media it pains me a bit to see words like "uncontrollable" and "risks" tied to something I find so exciting. But I do think these are important issues to be explored.
    jocelyn.aucoin
    • RE: Controlling the uncontrollable: The inherent risks of social media

      @jocelyn.aucoin The elephant in the room is workplace politics. Worker bees may indeed enjoy some recognition for their long hours in the cubicle but the real players who move ahead in the game press the flesh with decision makers.
      sw123
  • Contingency planning

    What can a company do to manage these inherent risks effectively?
    sw123
    • RE: Controlling the uncontrollable: The inherent risks of social media

      @sw123 You caught the point by this very important question! In my experiences you should have a top down approach. Find the right senior staff member who takes the ownership for managing these risks in your organization. Then set up an interdepartmental team who functions as an advisory board on these matters (creates guidelines, trains, monitors, follows up). This interdepartmental team would ideally concern brand; communication; IT security; legal and HR.
      SzilviaG
      • RE: Controlling the uncontrollable: The inherent risks of social media

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  • Martha Lane Fox publicly admits to faking it!

    Oh the shame of it all!
    And now it's all over the net as a permanent record
    sw123
    • RE: Controlling the uncontrollable: The inherent risks of social media

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