According to the Nielsen Company, we each spend, on average, nearly five and a half hours per month on social networking sites, up two hours from last year. During the PRSA 2010 International Conference, Charlene Li addressed the challenges company leaders face as a result of this dramatic adoption of social media. She began with this question: “How do you get comfortable with this sense of being out of control?”
Li became an industry name with the 2008 publication of “Groundswell,” which she co-wrote with Josh Bernoff. In the book Li emphasizes, “It’s really not about the technologies, it’s about the relationships. The one constant is relationships.” As the use of social media continues to rise, she’s encouraging company leaders to enter the conversation, strengthening these relationships by improving efficiency, communication and trust.
In her new book, “Open Leadership: How Emerging Technology Can Transform the Way You Lead,” Li presents a new approach she thinks company leaders must adopt to maintain a competitive advantage. Traditionally, business is based on the concept of control, yet the growth of social media demands openness. Li outlines how companies can thrive in this new, transparent world, and how they can leverage these tools to benefit their organizations.
To illustrate this point, Li shared the example of when a Dell laptop caught on fire in June 2006. The company acknowledged the incident on its Direct2Dell blog, linked to the photo in question, and admitted that it didn’t have an answer yet as to the cause. Three months later, Dell announced the recall of more than 4 million notebook computer batteries, the largest safety recall in the history of the consumer electronics industry. But by addressing the issue quickly and transparently, Dell managed to avert a greater marketing disaster.
Her second example featured Best Buy. The company had planned to send 1,000 emails to customers as part of a customer loyalty test; instead, it sent 6.8 million emails. Best Buy CMO Barry Judge blogged this: “We screwed up the execution which makes me sick about the customer trust that we have impacted.” Judge demonstrated his openness by showing remorse when customer trust was compromised. He admitted that he didn’t have an easy answer for how to remedy the situation, and asked readers to share their ideas. By acknowledging the mistake publicly, and engaging customers to help identify a solution, Best Buy minimized the impact on customer loyalty.
According to Li, these examples demonstrate that companies can give up control, yet still be in command of their message. She ended her remarks with an observation and a question: “A company can’t be completely open or closed. How open do you want to be?”