Social Media Use Among
Directors and Senior Managers
STANFORD GRADUATE SCHOOL OF BUSINESS
David F. Larcker
Social Media Seems Extremely Important
• Edelman survey, 20121 marks the first year that “listening to
customers” is considered equally important as providing “high quality
products or services” to building trust in a corporation
• According to BRANDFog2, consumers expect to be able to engage
with companies and their brands through social media. Similarly,
employees prefer to work for a company that is active in social media
• Firms that embrace Web 2.0 (social technologies) and social media
are more likely to be market leaders, have their market share increase,
and use management practices that lead to higher margins (McKinsey
calls these firms “networked enterprises”). 3
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FedEx
http://www.youtube.com/watch?v=PKUDTPbDhnA
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2
Apple
A $12 Billion Move In Apple Stock Seems To Have
Started With Tweets From A Single Anonymous
Source In China5
The organization that got the news in the headlines
is a group called Chinese Labor Watch which said it
got its information from "workers," but its press
release was mostly cribbed from the tweets of just
one person.
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Comcast 6
1.4 MILLION VIEWS
4
Comcast Response
“Frank Eliason: Helping Comcast suck a
little bit less”
“I can give full kudos to Frank for
being so personable, and as much as
it pains me to say it, I have to
acknowledge Comcast as a whole for
bringing customer service to the
digital age.”7
Frank Eliason
@comcastcares
BusinessWeek: “I think it's safe to call
Comcast's Frank Eliason the most
famous customer service manager in
the U.S., possibly in the world.”8
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Some Obvious Questions
• What do senior executives and board members really
know about (personal and business uses of) social media?
• Is social media information incorporated into strategic
decisions and risk management at the highest levels of
organizations?
• Do senior executives and board members monitor and
evaluate processes for collecting and analyzing social
media data within the firm?
• What is the precise “value proposition” for social media?
Are there compelling analyses that expenditures on social
media are value increasing for shareholders?
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Our Survey9
• Only CEOs, senior-level executives, and board members
•Typically in their mid-50’s
• Across a broad set of industries – manufacturing, utilities,
banking, and services
• Fairly large companies -- > $500 million in revenue
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Our Perspective on Social Media
• “…a social trend in which people use technologies to get
the things they need from each other, rather than from
traditional institutions…” (Groundswell)
• It’s really about the relationships and the innate human
desire to connect, not just the technologies
• Social media is not just a channel, it’s a conversation that:




is very big
highly influential
will go on regardless of what a firm does
If ignored can cause real problems (or missed opportunities)
• Social media deserves serious research effort
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Basic Social Media Knowledge
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Basic Social Media Knowledge
Pretty High for 2012
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Basic Social Media Knowledge
However, mostly Spectators (read blogs, follow others, etc),
as opposed to Creators (create blogs, publish Twitter updates, etc.)
Substantial overlap between personal and professional usage
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Understanding the Impact of Social Media
• Marketing and Branding
• Customer Outreach
• Collaboration and Info Sharing
• Organizational Risk
Not Great!
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Do They Use the Information?
Maybe!
Mostly Marketing
and Sales
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You Get What You Measure
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You Get What You Measure
• Not collected
• Not valuable
• Too low level
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Many Firms Do Not Even Have Guidelines!
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Some Preliminary Takeaways
• Executives and board members have some
understanding about social media for personal and (in
some cases) professional applications
• They understand the potential for social media to impact
their firms in both positive and negative ways
• However, they have not been convinced about the value
proposition of social media
 Social media information gathering and analysis is in its “infancy”
 Social media data is difficult to distill into a useable format
 Possible serious selection bias with social media respondents
• Executives and board members may view social media as
“beneath them” and is only for marketing or public relations
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Citations
1 2012
Edelman Trust Barometer http://trust.edelman.com/).
2 BRANDfog,
2012 CEO, Social Media and Leadership Survey, 2012
(www.brandfog.com/CEOSocialMediaSurvey/BRANDfog_2012_CEO_Survey.pdf).
Bughin and Michael Chui, “The Rise of the Networked Enterprise: Web 2.0 Finds Its Payday,” McKinsey Quarterly,
December 2010. Available at: (www.mckinseyquarterly.com/;
Organization/Strategic_Organization/The_rise_of_the_networked_enterprise_Web_20_finds_its_payday_2716?pagenum=2).
3 Jacques
"FedEx Guy Throwing My Computer Monitor,” YouTube, Web, December 19, 2011,
http://www.youtube.com/watch?v=PKUDTPbDhnA.
4 goobie55,
5 Nicholas
Carson, “A $12 Billion Move In Apple Stock Seems To Have Started With Tweets From A Single Anonymous Source In
China,” Business Insider, October 11, 2012, http://www.businessinsider.com/a-12-billion-move-in-apple-stock-seems-to-havestarted-with-tweets-from-a-single-anonymous-source-in-china-2012-10.
6 http://forums.comcast.com/;
http://comcastsucks.org/; ; http://davidajacobs.com/wp-content/uploads/2012/02/Comcastmarch1.jpg; Casey Rae, “On Comcast and NBC Universal,” The Contrarian, December 10, 2009,
http://www.thecontrarianmedia.com/2009/12/on-comcast-and-nbc-universal/; ; DoorFrame, “A Comcast Technician Sleeping on
my Couch,” YouTube, Web, June 20, 2006, http://www.youtube.com/watch?v=CvVp7b5gzqU.
Melanie Seasons, “Eliason: Helping Comcast suck a little bit less,” Fake Plastic Noodle blog, August 5, 2008,
http://ubiation.wordpress.com/tag/comcastcares/.
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8 Rebecca
Reisner, Comcast's Twitter Man, BloombergBusinessWeek, January 13, 2009,
http://www.businessweek.com/managing/content/jan2009/ca20090113_373506.htm
David Larcker, Sarah Larcker and Brian Tayan, “What Do Corporate Directors and Senior Managers Know about Social Media?”,
The Conference Board Director Notes, October 2012, http://www.gsb.stanford.edu/cldr/research/surveys/social.html. Survey
conducted jointly by Stanford Rock Center for Corporate Governance and The Conference Board.
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Copyright © 2012 by David F. Larcker. All rights reserved. For permissions, contact: corpgovernance@gsb.stanford.edu.
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