Social media at work. Really?

The Ostrich Strategy Photo credit:
Imagine you’re a salesperson at a big global firm and you’re paid well into 6 figures. You’re at your office, about to call a client, and you want to research her first. Who’s she connected to? Where has she worked before? What’s she up to these days?

Now imagine your firm won’t let you do any of that research on their office computer (but it’s okay <wink wink> to use your own phone to do it). And imagine your firm spends millions on training but not a nickel on how you can effectively use the most powerful client research tools on the planet.

That’s the state of social media at a lot of financial firms. Many firms block it. (You can’t even read content published by your own firm.) Most don’t train anyone. Most aren’t sure of what to do next. And most have their heads firmly planted in the sand, pretending everything’s okay.

This week, at a small event in London hosted by the Dachis Group, I got a chance to talk with a few other firms as to why that is and what we can do about it.

Risk, Responsibility, and Return

While some firms use social media for marketing, maybe even customer support, that only makes the lack of access and training more striking. For many firms the use of social media is limited to a few specialists sprinkled throughout the firm.

Perhaps the main reason for the lack of progress (at least in banks, pharmaceuticals, and other regulated firms) is that there’s too much risk. The rules are complicated (with plenty of gray areas) and so firms are confused about what they can do and say. Well-publicized missteps and scandals make them even more wary.

There’s also ambiguity as to who's responsible for helping business lines use the tools effectively. Instead, each team - marketing, recruiting, support - each figures out everything from scratch. For most businesses, that can be overwhelming and expensive.

Then there’s the money. What’s it worth? Without some clear benefits, it seems like a lot of real risk for uncertain rewards. And with no one assigned to figure it out firm-wide, it’s no wonder there’s little progress.

An approach we could all agree on

In discussing this with other firms, it seemed a good approach might be to sell different things to different audiences. To compliance, the argument is that “willful ignorance is not an option”. That they’d better fund an effort to sort out monitoring and training at a minimum or they’ll be at risk given people are increasingly using their own devices anyway.

For businesses, particularly sales, their best use of social media might not require posting at all. They can have the best rolodex they ever had by simply having read-only access to social media and some training on how to use it for client research.

We agreed that fear and greed can be a powerful combination.

Stepping back and moving forward

The discussion that night was strangely reassuring. Despite the lack of significant progress in using social media in financial firms, the absence of evangelism and the abundance of solid next steps made me feel there’s hope after all. After a lot of hype and little real results, most advocates of social media I spoke with agreed on some very sound, practical approaches:

  • They stopped talking about “social” at their firm and focused instead on the problems they were trying to solve.
  • They formed or sought to form a small center of excellence to sort out the tools, rules, and processes to make it easier for individual business lines to take their first step
  • They started with small projects and with people in business lines who were already advocates.
  • They positioned their social media work as simply part of a broader portfolio of communications and engagement as opposed to a distinct, disjoint effort.

It’s taking much longer than I expected for firms to help their people use social media effectively at work. But I’m more convinced than ever that it’s “when” and not “if”.

Your best use of social media may not require a single post

If you’re in a regulated firm, you’re still struggling with social media. Maybe your marketing department uses it, or you’ve read about a few examples in your industry. But for most of the individual businesses within your firm, you’ll quickly get mired in legal, compliance, data privacy, and data security issues before you can figure out who can post what.

So what if you could realize more value, with less risk, by never posting at all?

Why many firms block access

Over the past year, I’ve met with vendors that help financial services firms use social media. Most of our conversations focus on compliance requirements related to updating profiles, comments, messages, and likes.

You can be in a room with 20 people - lawyers, HR, compliance, technology, and business people - discussing questions such as “Are likes considered recommendations? Do they need to be pre-approved?”

It quickly gets complicated. Legal and compliance, already under siege, get increasingly nervous. And everyone is still uncertain if all this effort and risk has any appreciable return.

In the face of all of this, it’s no wonder that many firms simply block access.

Recently, though, I was talking with Pedro Barreda and Cameron Randolph from Socialware, and we talked about the value of just providing read-only access to larger numbers of people.

Embracing the 90-9-1 

Throughout much of the internet, you’ll notice a reasonably consistent participation inequality.  The “90–9–1 rule”, suggests that “1% of people create content, 9% edit or modify that content, and 90% view the content without contributing.”

Overwhelmingly, the people in your firm will be more comfortable lurking - simply reading LinkedIn, Twitter, and Facebook - than posting content.

Instead of fighting that tendency, you can use it to your advantage by focusing on read-only use cases.

4 examples

While most use cases limit social media to a handful of people in marketing or support, these are applicable for many people across different divisions.

Monitoring: advice you’ll hear over and over is that the first thing you should do when using social media is listen. This isn’t just for brand communications, but for any business and any function. Knowing what people are saying about your firm, about your competitors, and even what your competitors are saying about themselves, has always been important. Social media just makes it easier than ever.

News: Increasingly, people are getting their news via their social filter and they’re also reporting it on social networks. Many different groups - from trading to business continuity - can benefit from an advantage in being alerted to news more quickly. So they should be monitoring Twitter for news as it’s often reported there before professional news channels.

Recruiting: Companies have long been looking for alternatives to exorbitant recruiting fees, using everything from employee referral fees to alumni networks. But why build your own network when those alumni - and millions of other professionals - are already on LinkedIn and Facebook? And when both your HR department and your employees can easily tap their networks on those platforms?

Lead generation: Every broker is looking for potential clients. And those clients are on LinkedIn and looking for advice. Here are some great statistics from a recent article titled “High Net Worth clients prefer LinkedIn”:

Cogent Research...suggests that of the more than 5 million high-net-worth investors [American and Canadian investors with more than $100,000 in investable assets] that are currently using social media almost 75% picked LinkedIn as the social media platform they use the most for investment research.

The reason for this is respondents felt LinkedIn created a “trusted platform for financial service companies” to engage with HNW investors.

Furthermore, among “ultra affluent” investors [more than $5 million in investable assets] investment research was identified as the top reason they visit the LinkedIn site. And when compared to the average investor, the ultra affluent are 37% more likely to trust information on their LinkedIn network and 157% more likely to trust articles that are shared on LinkedIn.”

Start building a capability

April Rudin, who specializes in marketing in the high net-wroth space, writes:

“The best and easiest social media platform for wealth management firms, private banks and others to begin on is LinkedIn. LinkedIn's user interface is more familiar and it's an obvious business platform which makes it the path of least resistance.”

That’s a great way to think about it. Instead of stumbling on all of the complex cases, find examples and modes of access that make it easy for people - both individuals and compliance departments - to get started.

More and more, your firm’s customers will want meaningful interaction using social media.

“53% of HNW investors say they expect to receive relevant and timely content from social media platforms and 45% said they would value real-time interaction and conversation with an advisor or other investors.”

It’s time to take some steps and begin learning how to do that.

Compliance just said yes to social media. Now what?

The ABCs of social media in financial services are about getting access. But the “D” of social media (as the estimable Josh Levine commented last week) is: “Does it make or save money for the company?”

In financial services, it’s so hard to get compliance to say “yes” that many businesses aren’t thinking through what they’ll do next.

Here’s how you can be different.

Put the Why before the How

The first thing you can do is to ask yourself how social media might relate to your specific business objectives.

“What problems are you trying to solve?”

“How would you measure success?

“Have would you tie activity on social media to commercial benefits?”

I find businesses are often so focused on access that their answer to these basic questions is “I don’t know.” Or something vague like “We’ll use it for marketing” or “Our competitors are doing it and we need to keep up.”

Your best guide

Every time I have one of these conversations, I recommend “Social Media ROI” by Olivier Blanchard.

I confess to reading the book twice. The first time, I thought it was dull. I had just a general interest in social media at the time and was looking for more inspiring stories. The second time, though, I was advising specific businesses on specific use cases. Then the book was riveting.

Other books might inspire you. This one forces you to think through the details. It’s a comprehensive handbook meant for practitioners, covering topics ranging from monitoring to organizational models to specific measurements and reporting.

Blanchard sets the tone on very first page:

“Building a social media program for an organization is takes patience, long hours of intricate planning, and a razor-sharp focus on getting things right..behind every corporate success story in this space is a basic operational framework that places all the right elements in the right way and at the right time. Social media success doesn’t happen by accident. It is engineered.”

Careful, the How is messy.

But that engineering is difficult. Look at all those small companies in the Gartner Magic Quadrant. And that's just a fraction of them. The sheer newness of social media means that the tools are immature and still evolving, with many niche players and acquisitions.

And because the objectives and culture of each company (and often each business line) are different, your social media program has to be custom-tailored. While Blanchard’s book is an excellent guide, you simply can’t apply what works at other companies. You have to figure it out for yourself.

Fail cheap and early

To be effective, you’ll have to embrace the newness and uncertainty. You’ll have to learn - by doing - what works and what doesn’t.

It's important to take small steps while connecting your firm's social media practitioners so they can all share the learning. Within a large enterprise, this means individual businesses might attempt specific projects as small, thoughtful experiments. But, for the sake of the enterprise, all the businesses would be aware of these projects and their results so everyone could learn and build on them.

As Blanchard concludes in the afterword:

“It takes time, diligence, focus, and a lot of patience...You don’t have to build it all in one go....Experiment. Test. Build on what you learn...measure success and adapt as needed. That is ultimately how this works.”

The ABCs of social media in financial services

Increasingly, banks and other finance firms want to use LinkedIn, Facebook, and Twitter to engage customers. They see more of their peers doing it but, in their own firm, they’re not sure how to get past compliance. “We want access to social media but we’re blocked. How do we get approval?”

To get to “yes,” you’ll need to answer 3 basic questions.

“Are we allowed to do it?” 

Firms typically have a policy (or are drafting one) that spells out who can do what using social media. (Here’s a fantastic compendium of such policies.)

Before your firm lets you post for business, they have to have a way to enforce their policy. Should posts be pre-approved? Can individuals use “Like” buttons? Are direct messages or comments allowed?

A few years ago, it was too difficult to pick and choose which functions people could use. So, the only choice was to block access except for a select few. Now, though, a range of software options from companies like Socialware and Actiance provide the kind of fine-grained control you need. By sitting between the user and LinkedIn, for example, they can present the user with only the LinkedIn features they’re allowed to use, and so enforce the policy in a very practical way.

“Before someone posts, can we review it first?”

The regulations largely center on preventing individuals from disclosing information they shouldn’t. (This brief paper from FINRA is a good starting point. It was confusing in a number of ways, though, so updates are being considered.)

All traditional recommendations and advertisements are carefully scrutinized by compliance before being disclosed to the public. And the same rules apply for much of the content published on social media channels. It’s hard to separate, for example, a research analyst hitting “Like” on a company’s Facebook page from outright recommending a “BUY.” And a broker’s profile on LinkedIn is seen as just another form of advertising.

We’ve had supervisory software from companies like Autonomy for years and now these products, as well as newer ones, are including content on social media. So, for example, when a broker updates her profile on LinkedIn, that update is routed to a compliance supervisor who can review it before it’s published.

While finding moderation tools may be easier, though, finding the people to operate the tools is the hard part. For most firms, having to review more content means having more people. Presenting a business case to justify such expense - and then fighting for headcount - is where you’ll struggle.

“Can we capture whatever people posted?”

This is the easiest question to answer. Every financial firm already has one or more digital safes. Used at first for email, then instant messages, these safes are now expanding to become the repository of all electronic communications, including those on social media channels.

All the tools already mentioned provide ways to capture content on the public channels and route that content to your firm’s repository. Then you can do routine reporting to check for policy violations or other issues. It's a matter of integration instead of innovation.

Now what?

The issue, then, isn’t about someone in compliance simply saying “yes” or “no.” It’s whether your firm has the capacity to enforce policy, moderate certain content, and retain records for reporting.

Though the tools and practices are still evolving rapidly, it’s increasingly clear that “we’re regulated” is no longer an excuse for doing nothing.

Now, once you get to “yes,” you can move on to the truly difficult part (covered in next week’s post): actually using your newly-approved social media access in support of a specific business objective.

Why “we’re regulated” is no longer a good excuse

“We’re not sure we can, so we’d better not.” That’s what you’re likely to hear if you try to pursue a social media project in a pharmaceutical or financial services firm.

It’s because some industries have very specific regulations when it comes to moderating, supervising, and retaining electronic communications. And, when the rules were new, a “wait and see” approach might have made sense.

Now, though, more businesses want to use social media. There are more tools and practices to help address the regulations. And more firms are already using social media in compliant ways.

So, waiting on the sidelines while other firms capitalize on one of the biggest trends in a decade is no longer good policy. It’s irresponsible.

If your firm is still saying “no”, here are things you can and should do to get to “yes.”

Know the rules

Part of the issue is that too many people simply don’t know the regulations. Whether you’re in a business line or in IT, it pays to educate yourself. The material isn’t long or terribly complicated. In just a few hours, you can learn enough to eliminate most of the ambiguity. The policies you’ll need. The kinds of content you’ll have to pre-approve. The data you’ll have to archive.

And being able to quote “FINRA 10-06” will let the governing functions know you’ve done your homework.

Know the tools and practices

Since those rules first came out in early 2010, services have sprung up to meet the new requirements of regulated firms. Examples include new companies like Socialware, who “enable leading Financial Services companies to profitably build valued relationships.” (They recently enabled Morgan Stanley’s brokers to use LinkedIn to generate leads.).

Or Actiance, “enablers of safe and compliant use of unified communications.” They’re a more mature company (they were formerly known as “Facetime” until they sold the name to Apple). And they’ve been helping firms for years to handle compliance rules for instant messaging and other media.

While software services like these don’t address all the issues, they make it easier than ever for regulated firms to use social media in compliant ways.

Know the benchmarks

Perhaps the most powerful way to ease the minds of compliance and legal is to tell them “other banks have already done it.”

The governing functions might hate the idea of using Twitter, for example, to deal with customer complaints. But they’ll be mollified when they see how Citibank, BofA, Wells Fargo and others are already doing it.

Being able to point to a precedent gives them confidence that a compliant solution is possible. And they can always speak to vendors or to their counterparts at other banks to understand the details.

Strength in numbers: Connect the businesses + Prepare the case

With all this knowledge, you’ll still need to answer the questions: “What problem are you trying to solve?” and “What’s it worth?”

Too often, social media efforts shy away from these questions. They bemoan the difficulty of measuring ROI. (“What’s the value of a phone call?” they’ll ask.)

That’s a mistake. Like most legal and compliance issues, it’s all about managing risk. You have to offset the downside of introducing new electronic communications with measurable benefits (or with the political capital of your sponsor).

You further increase your chances by connecting different business lines that want to pursue similar initiatives. Say your case to use LinkedIn for recruiting isn't compelling enough. Then look within your firm to see who else could benefit and bring that aggregate case to the governing functions. They'll be more disposed to say "yes" if they see private wealth management and retail brokerage are also sponsors. (A prior post introduced the idea of an internal social media council that allows your firm to easily make just these kinds of connections.)

Simply put, your best tactic in getting approval is a strong business case and one or more strong sponsors.

Take a step

At a recent regulatory conference, Morgan Stanley's executive director of legal and compliance quoted 2 key reasons why he cares about social media:

  1. 50% of investors with $1 million or more in assets are active on social media;
  2. Social media accounts for 1/3 of the time users spend online in the United States

So even the legal and compliance people understand the need to act.

If they’ve said “no” to social media in the past, it’s because they’re typically presented with projects that include real risks and costs but few specifics about the upside.

Change that. Do  the necessary research, prepare the business case, and take a step.