Executive Education
Web 2.0: Serious business
Social networking is fun, but is it essential to today’s businesses?
By Marcia Passos Duffy
Smart Business Chicago | February 2009
Joe Cullinane
Executive in residence
NIU College of Business
Web 2.0 includes a dizzying array of social technologies such as YouTube, Second Life, Twitter, LinkedIn and Facebook, plus blogs, instant messaging, texting and more. Compared to 1.0, with its one-way static communication, the second generation of the Web encourages user interaction, self-expression, collaboration and community building.
While this is fine for socializing and fun, what does it have to do with business? Everything, says Joe Cullinane, executive in residence at the NIU College of Business and co-author of the upcoming book, “Surfing the Rift.”
“Web 2.0 is fundamentally changing the way we talk to customers and investors,” Cullinane says. “Executives need to be there because customers and competitors are there.”
Smart Business spoke with Cullinane about how and why CEOs should join in on the Web 2.0 phenomenon.
What are some examples of Web 2.0 applications that are useful in business?
Social networking sites can be used to gain valuable customer feedback; it is also an excellent place to promote products and train employees. IBM, for example, uses the virtual world Second Life for training and mentoring. Ernst & Young has a Facebook page it uses for recruiting. Barack Obama’s political campaign strategically used Web 2.0 tools, like Facebook and Twitter, with unprecedented success.
What is the first step in getting involved in Web 2.0?
You can’t just haphazardly jump in. First, you need to know what are the tools of choice among your target audience. For example, anyone with a teenager knows that teens rarely answer their cell phones. If you want a response, you need to text them — that is their communication tool of choice, for the moment anyhow.
The same is true for your customers or potential customers. Your marketing department should know the age group and other demographic information of your customers. Familiarize yourself with what is going on in their virtual world. Perhaps you can engage a Gen Y employee to give you a tour of what is out there. Then find out where your customers are going. Are they reading blogs or listening to podcasts? Are they on LinkedIn or Facebook?
You don’t need to know about all these technologies inside and out — just the ones that reach your target audience and are appropriate for your products and your business.
Are there any pitfalls to using social networking in business?
Yes, and the biggest one is the loss of control of your company’s message. Once you open up the message to user and customer involvement you can lose control of what is said about your company. There are also issues of violating copyrights and trade secrets and revealing sensitive financial information.
A business needs to set rules and guidelines for employees so that they do not post inappropriate things that can be online forever. Some companies are beginning to look at employees’ Facebook pages and institute rules against disclosing company information on social networking sites.
Another hazard is that competitors might publish false information about your company. There needs to be someone in the marketing department that stays on top of everything that is out there and corrects any false information.
Naturally, there is still a bit of wariness among executives about social networking because of its potential to dilute a brand. The option is to cling to older tools that have diminishing returns. A better option is to experiment, test the waters, listen in on the conversations and slowly get involved in networking that is relevant to your business.
Given the pitfalls, why should executives get involved with Web 2.0?
For one thing the Web 2.0 phenomenon is already happening and you can bet conversations are already going on in cyberspace about your company.
The other reason is that those in Generation Y are tech-savvy and are entering the work force in large numbers. But they are not necessarily using the same technology as executives. Gen Y is on Facebook, the CEO may be on LinkedIn. Businesses need to be able to reach their future employees — and their customers — on the right social networking sites, because that is where they can be found.
Granted, it is almost impossible to keep up with all the changes and all the conversations that are happening on cyberspace. Technology is driving these conversations because of the new ways of communicating that are cropping up all the time. I don’t think anyone has caught up with the full potential of these technologies, such as Twitter.
But, it is important that businesses at least try and keep up, because if you don’t, you can be sure your competitors will and are already using it to their advantage.
JOE CULLINANE is an executive in residence at NIU College of Business. Reach him at (815) 753-6393 or jcullina@niu.edu.
