As more and more businesses continue to implement social business into their overall strategy, the issue of social business governance is becoming a hot topic. What is social business governance? It’s the set of people, policies and processes that define how an organization executes its social business strategy.
Last week Altimeter Group published a new report on social business governance, exploring the relationship between governance and strategy while outlining some best practices for social business. It’s an illuminating report and I’d like to highlight some of the key findings on how this relates to our customers in financial services.
The gap between strategy and governance
One of the report’s more startling findings was the fact that, while social business strategy is well-developed and recognized as important, most survey respondents don’t believe that governance is well-defined and communicated across their organizations:
- 53% of survey respondents agree that social business strategy forms the basis for governance
- Only 16% of respondents believe that governance is well understood and deployed throughout the organization
In short, we still have a long way to go in terms of developing governance that is well-defined and fully supports an organization’s social business strategy. This is an even more critical issue for financial services organizations that operate in high-risk environments, as governance plays a critical role in preventing and mitigating risk.
Why we need governance
So why is it important to have governance that is clear, consistent, and understood throughout the organization? Altimeter lists several key drivers of governance within the report, but I’d like to call out a few that are particularly important to our customers:
- Empower Employees: As consumer expectations shift, allowing employees to to engage in social channels to grow their business is a critical new piece of business strategy. Proper governance allows these employees to represent their firm and brand in an appropriate and safe manner.
- Employee Use of Social: Recruiting the next generation of financial professionals is another important issue for many of our customers. Employees now expect to be able to utilize social media to communicate and work, as illustrated by this quote from Shel Holtz (principal of Holtz Communication + Technology, @shelholtz): “Telling a Millennial to use email is like telling someone 10 years ago to type up a memo and drop it off in the mailroom.” Social business governance enables employees to use the social tools that they want to, which in turn helps organizations recruit Millennials and beyond.
- Regulations: Particularly for our customers within financial services, regulatory and compliance requirements drive a need for strong governance within those organizations. Without well-defined governance in place, organizations risk running afoul of both existing and emerging regulations.
Improving your governance
The report presented a system for social business governance called the 4 P’s: People, Policy, Process and Practice. It’s a great framework for thinking holistically about your governance; below is a high-level overview of the various components:
For a more in-depth exploration of each of the “4 P’s” check out the full report.
The evolution of governance
I’d like to leave you with a great chart from the report, showcasing how an organization evolves its social business governance from a decentralized model to a hub & spoke model.
Where is your organization along in its social business evolution? What issues are you grappling with as you build and refine your social business strategy? Let us know in the comments below.