Wednesday, 28th June 2017

Business Transparency

Posted on 23. Aug, 2012 by in Entrepreneur

Melanie Herman and Chris Croll -Photography by Ray Ally

Melanie Herman and Chris Croll -Photography by Ray Ally

We sit down with Melanie Herman and Chris Croll of The Social Risk Institute, a consulting firm that teaches businesses how to embrace online transparency.

Melanie Herman and Chris Croll are an unlikely team. Melanie is an attorney who is a nationally recognized expert in risk management. For over fifteen years Melanie has been helping executives from mission-focused nonprofit organizations to become savvy about risk. Chris Croll holds two degrees in communications and has spent the past decade and a half helping companies to engage in an unmediated dialogue with audiences online. Melanie and Chris recently joined forces to form the Social Risk Institute, a consultancy that coaches leaders of businesses, nonprofit organizations and government agencies on how to balance risk and reward through the effective use of social and other online media.

How do you define “transparency” in the context of senior leaders using social media to achieve transparency?
Melanie: When I use the term transparency, I’m referring to the generous sharing of information. This includes sharing within an organization, as well as between the organization and interested stakeholders like investors, funders, customers, partners and the public. The demand for greater transparency is unprecedented; today’s leaders must use every tool at their disposal to meet and exceed stakeholder expectations. Chris: I would define online transparency as honest and open communication. On social media channels like Facebook and Twitter, transparency is about conveying information in a straightforward and truthful way, with absolutely no hidden agenda. For individuals in a leadership position, transparency is about being truthful, but it is also about being real and human, and hopefully, likeable.

THE GOAL IS TO SHOW THE HUMAN SIDE. WE ALL LIKE TO DO BUSINESS WITH HUMAN BEINGS, NOT ENTITIES.


What are the biggest risks of having company leaders engage directly with constituents?

Melanie: Lack of transparency is a risk to every business today, but open communication intended to foster transparency also carries downside risks. Information disclosed by senior leaders can impact everything from interest in the company’s products and services to board confidence. Unlike compliance, transparency is a choice that today’s leaders must make every day.

Chris: With the proliferation of online communications channels as part of standard business practice, the lines are blurring between what constitutes personal and professional information. If you are tweeting from work about a project you’re working on to your twitterverse, which consists mainly of your friends but also a few colleagues and customers—is that a professional or a personal tweet? Another risk is when companies and agencies are unclear about employee use guidelines. Even Board members need a very clear understanding of what is and what is not permissible information-sharing.

Can there be too much transparency?
Melanie: Possibly, but sometimes the perception of “too much” transparency is actually a result of changing norms within an organization. Some senior leaders are reluctant to change or abandon the communications protocol of yesteryear—running all communications up the proverbial flag pole or following a carefully scripted communications protocol. The downside risk of using a deliberate and time-consuming filter for news is that today’s stakeholders have many sources from which to gather information. When leaders are slow to respond to requests for information, informal media fills the void. By the time an official announcement hassles its way through the traditional internal channels, the story or focus has shifted and the company’s scripted announcement comes across as irrelevant.

Chris: I don’t think you can have too much transparency. To me, that’s like asking if it’s possible to be too authentic. As long as you are following your company guidelines, I advise senior leaders to be as real and as open as they can be. I even suggest that they occasionally post about their hobbies and interests and give their audiences behind the scenes looks at their companies. The goal is to show the human side. We all like to do business with human beings, not entities.

How can a leader assess the risks of transparency in their organization?
Melanie: Evaluating the risks along the opaque-translucent spectrum begins with understanding an organization’s stakeholders. Who are they and what do they want and need to know? For example, in the nonprofit sector there is growing interest in areas like executive compensation, how an organization raises funds to support mission-fulfillment and how funds are spent to deliver that mission. Stakeholders in these organizations expect a very high level of transparency.

Chris: When we talk to businesses about transparency, we spend a lot of time assessing where a particular organization is on the risk continuum. If a company works in cyber security on government contracts, for example, transparency means something very different than it does to, say, a chain of regional pizzerias trying to build its brand online. It’s different for government agencies too. They have mandates from the top to harness the power of new channels – such as social media – to communicate with constituents, garner support and engage volunteers so transparency for them is paramount.

What types of internal checks and balances can protect a company?
Melanie: Clear guidelines about who may speak for the organization and appropriate tone are key to managing social media risk, rather than overly complicated, prescriptive policies that require a significant commitment of time to digest and enforce. Chris: A good social media use policy will address 85% of a company’s concerns. The other 15% requires basic common sense like making sure you are logged into the right account when you post content and not responding in anger to something negative said about you online. No policy can protect against human error or poor judgment.

What are the key elements that should be included a social media use policy?
Melanie: In my experience, the most effective social media policies include clearly stated do’s and don’ts, such as:

  • Do strive to affirm our mission/commitment to quality/customer focus, etc. in your tweets, blog posts, etc.
  • Do pause before clicking send when posting to a social media site.
  • Do try to offer the clearest-possible answers to questions from customers.
  • Do remember that restraint is often the best response to a negative post.
  • Don’t attack or demean a customer, client or donor.
  • Don’t speculate about matters beyond your reach.

Chris: Each policy is unique because each company’s culture is unique. In general, we recommend that you include sections on privacy, trade secrets, security, disclosure, content creation, legal issues and general online decorum. Some companies outline specific policies for each social media network. Others, have more generic policies that apply to any customer communications whether online or offline. Zappos has a social media use policy that is probably the most succinct one I’ve seen. It’s “Be yourself and don’t be stupid.”

For more information about achieving transparency via online media, please visit www.socialriskinstitute.com to download a free White Paper called, “Mapping Your Organization on the Social Media Risk Continuum.”

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