Because most companies’ social media departments were founded after 2008, it’s fair to say that their leaders have yet to take them through an economic crisis. I’m not talking about the jolts we’ve seen over the past few years. No, I mean the kick-to-the-head events that put every line item, every organizational chart and every person under the performance microscope.
With economic storms raging, it’s prudent risk management to consider what might happen and how social media leaders should respond.
CONSIDER THE LAST THREE BIG SHOCKS
1. After 9/11, normal business ground to a halt. In addition to the obvious fears surrounding the attack, anxiety about an economic freeze became a self-fulfilling prophecy. M&A deals, partnerships, product launches, hiring, geographic expansions and strategic decisions of all kinds were frozen. Companies went through every line item, finding things to cut and making lists of what they would eliminate if the downturn worsened.
2. Responding to a crisis in confidence over financial statements, Sarbanes-Oxley was passed in July 2002. Companies spent the couple years reviewing every department and internal process with a fine-toothed comb to comply with new regulations.
3. In October 2008, the commercial paper crisis hit, forcing companies to immediately slash costs to shore up cash positions. Brutal cuts were made even to profitable ventures to pay the next day’s bills.
Even if you were running a social media operation in 2008, chances are it was too small to be noticed. With many social media budgets in the millions today, you’re on the CFO’s radar screen. If another shock comes, social media leaders will have to make their case anew, no matter how obvious the need or successful the performance.
EIGHT STEPS YOU CAN TAKE NOW TO PREPARE
1. Seriously, take this seriously: Social media spending has been strong the past few years, and that gives social media pros a false sense of security. You can’t see things clearly when you’re in a bubble.
2. Identify threats: Draw this chart:
Fill it in with threats that range from likely to unlikely along the bottom, and ranking by the amount of damage that would be done (to the company, not the social media department) if it were to happen. Don’t worry about getting it perfect. Even if you’re wrong about the threat, this exercise will get you thinking in the right direction. If you don’t have a good sense of what the threats could be, take this as an opportunity to reach out to other department heads in the company. Ask for their read of the economy and what they’re planning to do if things head south. You could even ask how their expectations of what your team does would change.
3. Prioritize: For the sake of time, pick the top three in the upper right quadrant. It’s easier to first look at extreme situations and then work your way backwards to the more likely ones.
4. Risks & opportunities: For each threat, list the opportunities and risks posed to the company and the social media department.
5. Let history be a guide: If you weren’t in the PR department or even at the company during one of these past crises, then you’ll need to do some digging. Fire up Google’s news archive and ask colleagues who went through the last crisis how the company responded internally and externally. Most of these crises were pre-social media, so the channels used were very different.
6. Measure the change: Investors, employees, customers, business partners, public leaders, and pretty much every community have all embraced social networking to large extents. Figure out what that degree is. That will inform how responding to a future crisis needs to be different from the last one. Tactics that were correct years ago won’t work in a new environment.
- How will your top threats play out on social media channels and search engines?
- What’s the likely chain of events that would unfold?
- To what degree is your department able to deal with this situation?
- To what degree is management aware of how their response to a crisis would be affected by this new media ecosystem?
- How can your team help to ease the pain?
- Crises create opportunities. Which ones do you see that should be elevated to management?
8. Calculate: Each action and inaction comes with costs and benefits in their implementation. Some of these can be quantified and others just listed.
EIGHT SCENARIOS TO GET YOU STARTED
1. Big decisions on the table: Hard times require hard decisions. If you’ve embraced social media analytics, you’ve got a tool that no one else in the company has. Call it an early warning system or the world’s largest focus group — you can help management make data-based decisions.
- How do people feel now?
- How did they react moments after decisions are announced?
- How are stakeholders responding to 100 other variables that the company has no direct role in?
- To what degree have stakeholders changed the way they’re interacting with our channels?
- How have stakeholder expectations of the company changed?
All of this information removes uncertainty in a world that will be defined by it. If one or two departments now get monitoring reports, there are a dozen more who would find that information — and other data sets you can summon — very useful.
- Opportunity for companies that have set up analytics programs and whose management knows what they mean.
- Threat for companies who don’t have this data, but face competitors who do.
2. Communicating change: If the company changes its strategy, communicating the nuances of that change and proving that it’s working will take a lot of effort.
- Opportunity for companies that use social media to communicate change directly to stakeholders, without the limits imposed by traditional media channels. Bonus opportunity for using multimedia, like videos of management explaining the change and diagrams explaining the nature of that change.
- Threat for companies that ignore these channels. With stakeholders expecting companies to use them, not using them can be taken as a signal of a bunker mentality. Double threat for companies whose competitors use these channels and come across as the stronger player.
3. Rumor control: Speculative gossip flourishes when change is happening and there are few facts to rely on. Expect rumors to spread faster and their nature to get weirder given how easy it is to spread and fake information.
- Opportunity to squash rumors quicker than pre-social media days when management had little idea of the information traveling through the grapevine.
- Threat for companies that don’t address rumors quickly, as they will spread faster than pre-social media days.
4. Managing leaks: If you’re a company that has embraced its employees’ use of social media, expect that the way you’re handling change internally to be even more visible externally.
- Opportunity for companies who see their employees’ social networks as a highly credible channel to quickly communicate important information to customers, partners and other stakeholders.
- Threat for companies that don’t communicate frequently, honestly and at an appropriate enough depth.
5. Maturing relationships: If another financial crisis hits, the company won’t be the only one hurting. Customers will be, too (even more than now). Businesses that have built real relationships with these customers must recognize that one or both parties in the relationship have and are going through painful times. If your messaging is exactly the same as it was before the new crisis, you’ve got a problem.
- Opportunity for companies that recognize there’s been a change and review their processes and messages to fit the new reality. The more humane and “real” the social media team is allowed to be online, the better.
- Threat for companies that come off as tone deaf when customer’s situation takes a turn for the worse.
6. Managing layoffs: If they occur, expect emotions to be expressed more publicly online. Sometimes cuts can’t be avoided, but the way that management handles them is often seen as a proxy for overall leadership.
- Opportunity for companies who handle this process with humanity and foresight. When good times return, the company will need a reputation for being an employer of choice.
- Threat for companies that ignore the fact that emotional turmoil will play out online, with horror stories visible on search engines for years to come.
7. Finding new efficiencies: The company will be on the hunt for ways to get even more productivity out of its workforce. This may be a great time to make the case (or re-make it) for adopting social media in other departments like customer service, R&D, human resources and internal communications. There are enough case studies out there that prove the ROI of these tools, and there’s nothing like a crisis to overcome cultural inertia.
- Opportunity for companies that embrace new tools.
- Threat for companies whose competitors embrace the new tools.
8. Reshaping a market: Times of crisis create opportunities for companies to grab top talent and pursue weaker competitors. We know that social media dramatically lowers the cost of building awareness, spurring consideration and inciting conversion. Critically, its real-time data allows for a greater number of smaller experiments, enabling companies to take calculated risks, fail faster and ultimately succeed more than the competition.
- Opportunity for companies that are most familiar with social media’s capabilities and have established teams and analytics.
- Threat for companies whose competitors use this technology and expertise to gain first-mover advantage.
Assess the risks, make a plan and continually ask yourself how you can help your company through rough times. Do that, and your department will take care of itself.