Should the Caged Bird Sing? Social Media in Regulated Industries

If you’re an executive who wants to communicate effectively with your shareholders, employees, customers, and other stakeholders, you probably already know how Twitter, LinkedIn, and Facebook can help. But if you’re in a heavily regulated industry—such as insurance, finance, or health care —you may believe these powerful social-media tools are off limits to you. You’d be wrong. There are ways to use them to your advantage—if you’re careful.

These tools—Twitter, certainly—are not just for celebrities and angst-ridden teens. President Obama‘s celebratory “Four more years” tweet after his reelection was retweeted by more than half a million Twitter users—a record. The recent invasion of Gaza was announced by the Israel Defense Forces not on television or radio but on Twitter. In August 2011 a magnitude-5.8 earthquake struck in the Piedmont region of Virginia and was felt in Washington, D.C. and New York. The events were reported so quickly by Twitter users that people in New York knew about the Earthquake before it hit. Thus generating faux tagline Twitter: faster than seismic waves.

Posting on social networks can do more than communicate breaking news or ideas: By carefully selecting what to share, users can encourage interest in a person or company, grow engagement among customers, build trust among stakeholders, and strengthen and solidify these relationships. Yet businesses in regulated industries are often opting out.

Take the investment-management industry, which has strict rules against selective disclosure. Harvard lecturer and Brookings fellow Robert Pozen studied how investment firms were using Twitter, Facebook, and other networks, and concluded that “U.S. investment managers can’t be very social in their social media sites.” In an op-ed in the Financial Times in October, Pozen wrote: “They often do not accept any user-generated content, such as comments on posts. And if they do, they will monitor submissions closely and quickly take down any that could raise eyebrows at the SEC.”

But that doesn’t mean you can’t make these sites work for you. Toby Ward, founder of Prescient Digital Media, a Toronto consulting firm that serves Fortune 500 companies, told Computerworld in November that “Only around 10 percent of regulated industries have a ‘truly social’ enterprise where multiple social media tools have been integrated into general content consumption.” Ward suggests that these heavily regulated industries can find ways to utilize social media as long as they remain vigilant about how the organization is representing itself.

By following these Greentarget guidelines for social media users in regulated industries, the savvy executive can reap the benefits of social networks without violating regulations:

(1) Share something of value. Your network won’t develop because your followers want to help you grow your business, it’ll develop because you’re offering something meaningful to them. Many users of social media think of their networks as news feeds—streams of information, some of it disposable and some of it exceedingly useful. What can you put out on the wire?

(2) No garage sales. No doubt there’s an abundance of material you could share with your audience, but that doesn’t mean everything should be shared. Before retweeting with abandon and facebooking for fun and profit, consider the way the information you share reflects back on the company.

(3) Avoid the icebergs. While your organization might have some strong and well-reasoned opinions, there’s no need to draw unnecessary attention to yourself or fragment your audience with polarizing statements—unless of course it’s part of your considered strategy to do so.

(4) Delegate but don’t detach. A mature and thoughtful executive knows it takes a team to get it all done. Colleagues and subordinates, especially those with a talent for writing or a knack for social media, should be trusted to manage the networking, but everyone involved should agree on the messaging.

Companies that grow and obtain high levels of success typically attempt strategies outside their comfort zone. While some businesses will travel at a leisurely pace, others will move faster than seismic waves.

 

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