Author: Nash Riggins
1 Aug 2014
Like it or not, the duties of a CEO aren’t limited to what goes on in the boardroom. Taking that top job means entering into a committed relationship with a company’s bottom line, and it means always putting the welfare of that business above all else. A CEO drives the heart and soul of a company and so becomes representative of that entity as a brand name.
Most executives would shudder at the prospect of pursuing stardom – some salivate. Yet as long-established firms begin to crumble under the weight of the never-ending start-ups, it’s become more important than ever for CEOs to take the helm and navigate towards unknown waters in order to assert their company as a strong, consolidated brand with a plethora of unique selling points. That work undeniably requires a platform – and while many greying CEOs still harbour an open phobia of all things social media, there’s no longer anywhere else to turn.
Bill Gates, Microsoft, @BillGates
Richard Branson, Virgin, @richardbranson
Donald Trump, Trump Organisation, @realDonaldTrump
Jack Dorsey, Square, @jack
Arianna Huffington, The Huffington Post, @ariannahuff
Jack Welch, Jack Welch Management Institute, @jack_welch
Dick Costolo, Twitter, @dickc
Anand Mahindra, Mahindra Group, @anandmahindra
Kai-Fu Lee, Innovation Works, @kaifulee
Marissa Mayer, Yahoo, @marissamayer
It is clear that social media isn’t just some sort of passing fad. A quarter of the earth’s population claims membership to at least one social media site – and by next year, those numbers are forecasted to swell to over two billion users. Global leader Facebook already commands an inbuilt audience of 1.28 billion. Meanwhile, niche sites like professional network LinkedIn are catching on like wildfire, growing at a rate of some 100 million followers per year. Those are figures that companies simply cannot afford to ignore.
Customers, investors and the media all live, work and shop online. The sites they frequent have new and much-needed opportunities for growth. With companies already living or dying based upon their abilities to maintain strong online profiles, the time has never been better for company leaders to jump into the deep end and widen the scope of their public profile – and the quickest place to consolidate those strengths is via Twitter.
At 255 million monthly active users, Twitter is by no means the globe’s largest social media outlet. Its audience, however, is without doubt the web’s most active. Every day, millions troll through the site’s 140-character micro-blogs on the hunt for fresh news, entertainment and general insight. Around 500 million tweets are sent out on a daily basis, riddled with hashtags that flag up every topic under the sun – and the better the content, the more clout users gain as a result.
In turn, the site is naturally populated by scores of highly motivated PR units that help companies regularly spew out official lines on new products and services. Yet, while that facility is invaluable, it doesn’t capture the authoritative punch of words from a company’s leading man or woman. If CEOs wish to enhance their company as a brand, they can’t simply leave it to the drones in marketing; they need to be delivering insightful output on Twitter themselves. At present, less than a third of top CEOs have profiles on the site. Nevertheless, a survey by BrandFog estimates that over 80 percent of corporate employees believe Twitter is now one of the most important communications channels in which to engage potential customers and investors. Slowly, but surely, CEOs are starting to realise why.
Listen and engage
The day billionaire investor Warren Buffett joined Twitter he gained over 1,000 followers per hour. Today, he has 843,000 and while Buffett is now able to transmit his sporadic, inner-most thoughts to that extraordinarily high volume of users at will, he’s also been given a direct line of feedback from thousands of clients, employees and members of the general public. That’s invaluable to a vast majority of customers who would have never been able to access the CEO’s impenetrable waiting room and it should be equally valued by bosses.
Jacqueline Gold, CEO of lingerie retailer Ann Summers, has learned that lesson only too well. Like nearly a quarter of all CEOs, Gold was initially concerned about joining the social media network because of the inherent risk of saying the wrong thing and causing some sort of backlash. When she eventually decided to toss safety to the wayside and dive headfirst into Twitter, she immediately flourished.
“I just think you can not underestimate the engagement value of Twitter – and also not to forget Twitter is the new garden fence so it is better to be in control of that and have your say,” she’s since said. “From our point of view it has really helped with perception. I think it’s encouraged people to come and take a look at Ann Summers and engage with us that maybe normally wouldn’t be our normal customer.”
Now, Gold maintains over 43,000 followers and gains more every day by seeking to engage with users by way of fresh and exciting methods. Examples include her weekly Women on Wednesday (#WOW) campaign, in which fledgling female business owners are invited to tweet any and all business questions her way. In answering those questions and building links, Gold has delivered Ann Summers far more than a solid online presence: she’s helped redefine public perceptions of the lingerie outlet as a thoughtful and hugely successful enterprise.
Similarly, Virgin CEO Richard Branson has utilised Twitter as a forum for building ties with other aspiring innovators. With the help of his irresistibly cavalier take on business, the self-made billionaire has been able to rack up 4.2 million followers on the site. Yet he doesn’t clog his personal profile with one-way posts pushing Virgin’s latest products; instead, he engages with would-be businessmen from across the globe. Branson talks back. Yet more importantly, he gives advice. That sort of engagement makes it difficult for users not to grow fond of the man, and, by association, it makes it difficult for them not to like his company.
Mark Bertolini, CEO of insurance giant Aetna, has inadvertently chalked up similar victories using the platform. Upon joining the social media site three years ago, Bertolini was inevitably stormed with abuse from unhappy customers. While such complaints would have likely fallen on the deaf ears of a corporate PR department, the CEO actually listened. Last summer, for example, Bertolini was the subject of abuse from hundreds of users after a colon-cancer patient vented on the site about hitting the cost ceiling of his health insurance plan with Aetna. Against all odds, the CEO actually reached right back to the patient via Twitter. He pulled some strings, and Aetna ended up covering the full extent of the man’s bills. Some 20 years ago, that result would have been inconceivable, and yet because of Bertolini’s decision to engage with social media on the behalf of his company, a good deed was done and Aetna was handed an invaluable dose of positive grassroots publicity.
With the help of Twitter’s immense user base, the positive business impacts of online engagements are all but limitless. In fact, there are hardly any drawbacks for CEOs, but bosses had better know what they’re talking about. The site is completely littered with cautionary tales of routine business posts gone awry; therefore, it’s worth noting some general guidelines to follow when posting on the site.
First and foremost, keep it relevant. Fashion CEO Kenneth Cole (of Kenneth Cole Productions) has caused public backlash by attempting to shove inappropriate plugs for his clothes label into posts about trending topics. Cole’s first foray into unsubtle branding came in February 2011, when Egypt found itself gripped in the bloody coils of the Arab Spring. As millions of users across the globe looked to Twitter for insight on the conflict, they were instead greeted (and appalled) by Cole’s inappropriate comment: “Millions are in uproar in #Cairo. Rumour is they heard our new spring collection is now available online.” After torrents of abuse, Cole’s company issued an apology on his behalf. Yet not two years later, Cole made an identical mistake in an effort to steal traffic from those discussing the possibility of a western military intervention in war-torn Syria. Cole’s input: “‘Boots on the ground’ or not, let’s not forget about sandals, pumps and loafers. #Footwear.” The CEO’s ill-advised online hijinks have since inspired several parody Twitter accounts, and transformed him into a proverbial walking punchline.
There’s also such a thing as being too relevant. Take the online misadventures of Carnival CEO Micky Arison, for example. In 1988, Arison decided to purchase the NBA’s Miami Heat for a cool $32.5m (€23.9m). Today, the team is worth almost $500bn (€367.8m). That’s largely because it boasts some of basketball’s best (and most expensive) talent. So, when its star players LeBron James and Dwayne Wade decided to walk out of offseason training as part of a league-wide players’ strike, Arison reacted poorly. The angry owner decided to vent his union negotiation woes on Twitter. Little did he know that was a strict violation of NBA league policy – and he ended up being fined a whopping $500,000 (€367,807) just for a brief, 140-character view on his stable of ego-driven athletes.
Former CFO of fashion retailer Francesca’s Holdings, Gene Morphis, would probably sympathise. Last May, the company was forced to get rid of Morphis after he took to Twitter with a series of snide comments about short sellers and the company’s secondary share offerings. The rest of the board was not amused, and duly asked Morphis to resign over the unbecoming public show.
That’s not to say sharing important company information is always a bad thing. In July 2012, Netflix CEO Reed Hastings turned heads when he announced on his personal page that the video-distribution company had reached the milestone of users having streamed over one billion hours’ worth of films using the service. By the end of the day, the company’s stock posted a five percent gain.
Twitter in numbers
- Incorporated in 2007 on April 19
- Twitter has 255m monthly active users
- Of its users, 785 are on mobile
- The company has 3,000 employees
- It supports over 35 different languages
- Users send 500m tweets each day
The Securities and Exchange Commission (SEC) was less than impressed. The regulatory body initially warned Hastings he may be liable for violating laws designed to ensure that all company investors have full access to any company information of notable material value. The SEC argued the announcement was unfair, as the general public wouldn’t have been able to see the information without Netflix having submitted an 8-K filing with the SEC. Hastings scoffed, arguing that sharing the information with Netflix’s 200,000 social media followers surely would have alerted more people about the company milestone than a regulatory filing. In a true sign of the viable impacts social media is forcing upon business, Netflix actually won the argument. The SEC has since agreed that companies are well-suited to share material information on sites like Facebook and Twitter, “provided that investors know to expect it”.
Ignorance is costly
Simply put, bosses can’t afford to ignore social media anymore. In the UK, a recent PwC survey indicated that 91 percent of CEOs are currently seeking to strengthen their social media engagement strategies. Last year, there was a 55 percent increase in the number of Fortune 500 CEOs who had signed up for the social media site – with analysts confident that a fresh crop of new CEOs will appear throughout the remainder of 2014.
Sites like Twitter pose a formidable set of benefits. Would-be users must tread carefully, of course. Each company and its CEO should play to their strengths. For example, those who have never been called ‘funny’ may do well to avoid attempts at humour. Likewise, bosses must know their audience. Unloading a set of sincere personal views may allow the boss of a major corporation to appear more human – but there’s no point in doing so if those views end up outing them as a bigot. That being said, the benefits of social media engagement will always outweigh the risks. Not only do they allow instant access to hundreds of millions of potential customers, clients and journalists, but they also offer leaders a chance to enhance public perceptions organically. Sometimes, all it takes to win over a customer is proof that someone is listening. Twitter-addicted journalists will take note, and consequently, a company’s profile has nowhere to go but up.