Businesses Can`t Ignore Social Media

Brian P. Watson Avatar

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Social networks aren’t just a fad. in fact, they’ll become more crucial for doing business in the future. “Eventually, every company will have to work with the winning social network firm or firms, just as almost all companies work with Yahoo and Google,” John Sviokla, vice chairman of Diamond Management & Technology Consultants, wrote in a late September blog post.

Sviokla sees social networks playing a huge enterprise role in two specific areas: finding talent and burnishing corporate images. Meanwhile, the promise of social networks holds big potential for CIOs to boost their own reputation.

Sviokla spoke recently with CIO Insight Online Editor Brian P. Watson. This is an edited, condensed version of that discussion.

CIO Insight: Finding and keeping talented IT workers is a huge issue. What role do you see for social nets and IT in that area?

John Sviokla: In one of our surveys, people said technology would be less important to the human resources function in the future. We don’t know if that’s their statement against the IT department’s ability, or just a lack of understanding of what’s going on. In either case, I’m a big believer that technology is going to be more important.

LinkedIn is already profitable. Three months ago or so, they had a $53 million cash infusion on a $1 billion valuation. You look at that company and ask how it’s worth $1 billion. First of all, there are people willing to use InMails–that’s their biggest product. They sell seats to the full network–they have 27 million users.

And they’re launching a research capability. Why is that important?

To be competitive in the marketplace, every company will have to look to the market for talent, which is going to be found on LinkedIn, Facebook or some combination of these sites.

I’m not saying LinkedIn is the be all and end all. For all I know, LinkedIn could be the Alta Vista of the future. Someone may do to them what Yahoo did to Alta Vista, but we still do search, right?

It seems that social networking should be part of the HR/hiring strategy. Do companies get that message?

Sviokla: Every company will face–and is already interacting with, whether they know it or not–two phenomena of the social Web: a market for talent and a market for their reputation. They can ignore it if they want, but it’s kind of silly.

In 1997 and 1998, I was telling companies that everyone was going to be on the Internet and ordering stuff from it, so they’d need a customer service and an Internet site, just like they needed an 800 number. Few people believed it.

How will social nets work for marketing?

Sviokla: Every company needs a newsroom. Social media are the reporters of the world’s newsroom. Your company is going to be reported on, and you want to be part of that discussion.

We’re going to have a huge proliferation of channels on YouTube. There’s going to be a barbecue channel and a repair-the-tractor channel. A whole area of instructional videos and product use is going to continue to explode, because there’s someone passionate about every product on the planet. The question is, Are they going to bother to show their passion?

Are CIOs evangelizing for their companies to use social networks?

Sviokla: For organizations where it’s part of the production function, part of the core activities, it’s the CIO’s responsibility to be all over this, to be knowledgeable and understand it architecturally. He or she has to know, in enough detail, the relationship between architecture, innovation and strategy.

If you’re at a company where this is at the core, but you don’t know it, you’ve relegated yourself to be the utility provider. That’s not a bad job: If you want to be the guy who runs the server farms and e-mail and maintenance applications, that’s great. I’m not being facetious; it really is a great job.

But, if you’re in an organization like that and no one’s playing the role, then you’ve abdicated your executive responsibility. If the CFO sees a financial commitment that’s going to blow the balance sheet, it’s his or her duty to step up.

The CIO has the responsibility for social media at these companies, because architecture will matter: Who owns the links? How interoperable is it? What’s shared? Do you believe in open IT?

It’s a big deal, strategically. Even if they don’t want to run social media, they need to have an opinion about it.

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