Social Era (2)

As the year wound down, Boston Business Journal published a great list of the 10 worst social media mistakes brands made in 2012.

As I read them, I saw a huge difference between the implications (and lessons to be learned) from these mistakes. In my mind, the mistakes fell into two categories:

Bad Marketing: The first I would call bad marketing mistakes. 6 of the 10 fell into this category. They included things like:

  • Chef Marc Orfaly, who unloaded an expletive-laced rant on an unhappy customer who posted her review of her Thanksgiving dinner at Orfaly’s Boston restaurant
  • Gap tweeting "All impacted by #Sandy, stay safe! We'll be doing lots of shopping today. How about you?"

These bad marketing mistakes can be attributed to an ill-considered statement by one person. These can usually be prevented just by making sure that you have good marketing people and a culture and a process to think before you hit send.

Bad Management: This second category are the really scary ones. These are mistakes that are caused by systemic problems happening far away from the marketing department. Here are the four mistakes highlighted in the BBJ article that fall into this category:

  • The tweet that went viral: "My sister paid Progressive Insurance to defend her killer in court"
  • Starbucks' #spreadthecheer hashtag campaign backfiring in the United Kingdom, where users hijacked the hashtag and tweeted out negative, sometimes expletive-laced tweets about the chain's workplace practices
  • #McDStories hashtag. People were supposed to share positive stories about McDonald's. Unfortunately for the burger chain, people began sharing some very unappetizing stories
  • Boloco CEO John Pepper alerting 50,000 email subscribers that the chain planned to keep its restaurants open for business during Hurricane Sandy. Angry tweets and emails immediately started pouring in, criticizing Boloco for potentially putting employees in harm's way.

These aren’t social media marketing mistakes. They are Social Era management failures. These are the kind of failures that should keep every leader up at night. And they are a clear harbinger of the dramatic changes to come.

Social technologies empower your customers, your stakeholders and your employees. They move the conversation away from branding where you get to say who you are to a conversation about what you do. Social means (among other things) that your actions can become part of a public conversation. And actions, as my mother always said, speak louder than words. Scary right?

So what’s the answer? The last chapter of our book Intangible Capital is entitled Reputation is the New Bottom Line. In it, we make the case that reputation is the metric that determines your ability to make profits. Starting a new year as we are this week, I submit that your reputation will be much more important to your performance in the coming year than your earnings last year.

What drives reputation? Your intangible assets. Your people, your culture, your shared knowledge, your partnerships, your business model. It’s what you do and how you do it. These intangibles are very real economic assets. And they’re actually easy to inventory and measure. And, if you want to avoid the second category of “social media” mistakes, you better start paying attention to the intangibles.

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Beyond Whack A Mole Social Strategies

Most people view social technologies as a means of marketing. And, while they are indeed a very powerful way to market, there’s a lot more to the what's going on in the Social Era.

For marketers (and managers in general), social technologies create the possibility for two-way conversations with your customers and stakeholders that can’t be duplicated by any traditional, one-way medium. Companies can talk about what’s important to them in a way that is (hopefully) meaningful for their customers. And they can listen what’s important to their customers. This is especially valuable when there is a problem. A quick reaction to customers when they have a problem or a criticism can prevent one of the social media crises that every manager dreads.

This kind of conversation is primarily handled by marketing people. But it’s dangerous to just view social as a marketing strategy. To show you what I mean, I would like to refer you to the game of Whack-A-Mole. This is an arcade game where you stand with a hammer and have to pound down little “moles” who live under ground and pop out unexpectedly in different places on the game board. The faster you react to the mole popping up, the better your score.

A great marketer is actively listening so that every “mole” in your backyard can be quickly dealt with. The marketer will hear the minute there is a problem and hopefully solve it. And the marketer that’s listening carefully can see problems developing in their early stages.

But even a great marketer isn’t in a position to anticipate where the next mole is going to pop. That’s really the job of the larger management team. What are you doing right or wrong? Where is your organization vulnerable to problems? Don't leave marketing to deal with the consequence. Anticipate them.

One of the challenges is that the drivers of success of companies today are, like our friends the moles, hidden from sight. Today 80% of the value of the average company is intangible. This means that the people, knowledge, processes, relationships and culture that drive success are outside of traditional accounting and management systems. Most people manage intangibles intuitively and lack even basic information about them. And if you aren’t watching these intangibles, the only time you see them is when a problem pops up unexpectedly.

That’s why smarter companies take a more holistic approach to management. They understand the unique intangibles driving their success. And they have concrete information about all the intangibles—the things they do and how they do it. Smarter companies find ways to track the moles while they are still underground, anticipate their moves or prevent them from even entering their yard.

Are you ready to move beyond Whack-A-Mole management? Get started using our open source index and inventory tools. And let us know how many moles you find before they have time to become a problem.

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