Fortune 500 CEO’s And Social Media
I’m a social media supporter. I’m a social media user. I also don’t believe it is for everyone.
In a guest blog post on Forbes, Josh James, who sold his company Omniture for $1.8 billion to Adobe, argues that these CEO’s are doing a disservice to basically everyone involved by not participating in social media.
The problem is that Mr. James is thinking within the spectrum of a product seller. His own product Omniture was an online marketing and analytics software. His product and his brain child was based on business done on the web.
He fails to realize that a larger number of the Fortune 500 are conglomerates that have dozens, hundreds, or even thousands of products. What help would a CEO being on social media provide to thousands of products? With the amount of mergers, acquisitions, and closing of companies, brands, and products, why should a CEO that is concerned about a conglomerate stick his fingers into a product that might not be under the company umbrella within the hour? There is a reason why these products have their own individual brand marketing and individual social media presence.
What impact does an individual consumer have on an energy company or a bank? We’re talking about a group of institutions that are worth trillions of dollars that we can’t avoid unless we don’t use energy or money. What impact does the individual consumer have on companies whose sales are entirely to other corporations?
On the other hand, what do these CEO’s have to lose? They risk their jobs. They risk their credibility. They risk the image of their corporation. When corporations are worth tens of billions of dollars, the image of the corporation is carefully crafted and take sometimes generations to create. Why risk it with the immediacy of social media? Is there anything to really gain for the corporation? Or would it just feed your own ego?
To best benefit a shareholder, the CEO, executives, and board have to make difficult decisions that might be unpopular to ensure the immediate and future success of a company.
Social media can provide ideas, can provide instant interaction, etc., but ultimately your success on it depends on popularity. Fortune 500 companies have entire departments dedicated to developing new ideas. Most Fortune 500 companies have ways to instantly interact with their clientele. Most Fortune 500 companies have no need to be popular.
McKesson (take your time, look it up) had $108 BILLION in revenues last year. Does being popular with Lady Gaga’s 27 million followers or Justin Bieber’s 25 million followers make a drop of a difference?
Do decision makers in their 40’s, 50’s, 60’s, and 70’s use social media for anything other than news and connecting with family and friends? How many of those people have the time or inclination to make a connection to the CEO of the company that their 401k has some shares in? How many of them would change their investment strategies because of a Tweet by a CEO?
At the public pension fund I work for, we give hundreds of millions of dollars to private equity companies, hedge funds, fund of funds, and money managers you have never heard of…. and never will. There are trade magazines that you can pick up and see their names, but are they on social media? No. Are they doing a disservice if they don’t want to reveal their investment strategies in emerging markets to the public? No.
Social media is amazing for products that you need to sell to the horde of human beings or to niche markets that can only be found online, but when your company is more than a product seller… your marketing presence is different. It’s great for the companies that benefit from their CEO’s having a cult of personality, but for many companies… the brand, the name, and the conglomerate… is much bigger than the individuals that pass through the gate. It’s important that the message and brand is not compromised or water downed by actions of an individual.
Josh James is still in the business of selling himself…. not all CEO’s are.