Not too long ago, the use of social media by corporations was considered a novelty. Visionaries such as Morgan Johnston at JetBlue and Frank Eliason, then of Comcast, were among the few who responded to customers online early on, and customers were pleasantly surprised to get a response. (Disclosure: JetBlue is an MWW Group client.)

Today, any company that doesn’t actively monitor and engage with consumers online is seen as a dinosaur that doesn’t care about its customers. But social media pioneers know that while this basic “blocking and tackling” of customer engagement is now essential, it’s no longer enough.

To build trust in this new world, companies must understand the new challenges they’ll face:

• An empowered public – Craigslist founder Craig Newmark has called writing online reviews a patriotic duty. New technologies and social media are catalyzing a great power shift in society from large institutions to individuals. The same technology that enabled citizens in the Middle East to organize and overthrow their governments are allowing consumers to band together and speak out against corporate practices or products they don’t like. As David Kirkpatrick recently wrote in a great article in Forbes, “We have entered the age of empowered individuals, who use potent new technologies and harness social media to organize themselves.”  Unhappy customers, who once would tell a handful of friends and family members about their bad experiences are now able to broadcast to the world as part of a permanent online record.
• A cynical public – Thanks to the financial crisis, a growing skepticism of the media, corporate and political scandals, trust in large organizations, from governments to corporations, is at an all-time low.
• Less control of brand – Until a few years ago, companies owned their message and their brand. Today, brands still spend billions of dollars pushing out carefully packaged, focus-tested messaging points. But customers no longer believe or put much stock in these messages. A recent Nielsen study found that 76% of consumers believe recommendations from friends are the most trusted form of advertisement, and increasingly, they’re sharing with their friends using social media.

So what can your company do to be successful in the social media space?

Unless you’re about to come out with the next iPhone model, customers on social media likely aren’t interested in your canned marketing messages. If you think of social media as another way to advertise, you’ll only be tuned out.

To be relevant and part of the social conversation, your messaging must reflect and reinforce that social media is all about community – and that you are an essential, beneficial member of that community. Old-style corporate philanthropy – writing six-figure checks without any engagement – is seen as buying good will (or political favors) rather than building it. Tellingly, many leaders of the biggest web and social media sites – Craig Newmark of Craigslist, Chris Hughes of Facebook, Ev Williams and Biz Stone of Twitter, Pierre Omdiyar of eBay – are now focusing on efforts that benefit the community.

Here are a few ways your company can do this and generate social media buzz:

• Show how your daily operations are important to society.  As one example, with the continued employment crisis, any company that is currently expanding its workforce should actively use social media to recruit candidates.  Of course doing so will not only help show the important role you’re playing in the community by creating jobs but will also help find top candidates.
• Adapt your business to benefit society – but be genuine. Though Wal-Mart has received much criticism in recent years, many environmentalists recognize the enormous positive impact of the retailer’s move to stop selling incandescent light bulbs and switch to more environmentally-friendly packaging for their products.
• Use your company’s unique skills and resources to help. In the immediate aftermath of the earthquake in Haiti, Google’s scientists worked with the State Department to build a “People Finder” database. The company also released Google Earth satellite images to help rescue workers. Similarly, my former employer AT&T as well as Verizon and other U.S. phone companies made all calls to/from Haiti free in the weeks following the earthquake.  Two other examples just announced at the Clinton Global Initiative that are sparking positive online conversations are Pepsi’s public-private partnership in Ethiopia to increase chickpea production, and Microsoft’s “Shape the Future” 3 year initiative to bring computer hardware, software and internet service to 1 million US students from low-income families.
• Find ways to help your community. While a number of companies encourage employees to volunteer, more companies can do well by developing programs that help their customers volunteer and reward them for doing so.
• Don’t think you’re the exception to the rule. As management guru Gary Hamel said in the Kirkpatrick Forbes article, “I don’t think it’s crazy to ask if your CEO is the next Mubarak…. The elites—or managers in companies—no longer control the conversation.”

Your company can be a part of the social business revolution – or get left behind.

About the Author

Richard Robbins, MWW Group Vice President, Senior Digital Strategist, provides senior-level expertise on using digital and social media as an integral part of any successful communications program. He can be reached at rrobbins@mww.com or @rich1.

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MWW Group is hosting a panel on leadership next month at World Business Forum 2010. To prepare for the panel, I’m reading everything I can find on leadership and thinking a lot about the topic.

I came across a list of the Ten Most Influential CEOs. It has the likely cast of characters – Bill Gates, Steve Jobs, Oprah, Inda Nooyi and Richard Branson – and a few you might not have expected – John Mackey (Whole Foods), Andrew Witty (GSK) and Mike Duke (Walmart).

It seems the formula for leadership boils down to a few simple qualities:

• Leaders are disruptive…and sometimes contrarian. Mike Duke made Walmart green – and he wasn’t talking about money. He changed (or at least diversified) the conversation about Walmart from labor issues, labor issues and labor issues to how the company is using its reach and influence to save the planet. Virgin’s Richard Branson has made a personal fortune by being disruptive. His latest focus? Finding new ways to fuel airplanes, and the world at the Carbon War Room. Steve Jobs is famous for his disruptiveness, and his temper. But who else can make the product you had to have under the Christmas tree this year obsolete by next Christmas? How many iPods do you have in a drawer?

• Leaders are nimble and open. John Mackey of Whole Foods is perhaps best known for his dismissal of global warming as hysteria. But did you know he became a vegan after a confrontation with an animal rights activist? That’s pretty open. And GSK’s Andrew Witty has made a name for himself by being open and urging the entire pharmaceutical industry to do the same, opening patent pools for HIV drugs.

• Leaders are fearless and take on the unsolvable problems. Oprah brought taboo topics – from incest to Dr. Oz’s health issue du jour – into the mainstream. Her latest campaign to make cars “No Phone Zones” is shining the light on the serious dangers of texting and driving. Bill Gates has declared that we will cure AIDS in Africa.

• Leaders put their money where their mouth is. After all, isn’t that what credibility is all about? Pepsi’s Inda Nooyi, who famously wore a sari on her first job interview because she couldn’t afford a suit, ties 50 percent of her personal bonus to diversity goals. John Mack of Morgan Stanley volunteered to forfeit his own bonus when the company’s performance declined, long before the Big Bank CEOs were paraded before Congress.

I can think of plenty of iconic leaders who didn’t make this list … Jeff Bezos, Warren Buffett, Lee Iacocca (showing my age, I guess). While your list of leaders may be different, I’ll bet they all have these qualities.

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It isn’t often a company makes headlines for writing a philanthropic check. But Walmart decided to go big. Two billion dollars big in cash and food to fight hunger.

This isn’t a simple, though extraordinary, act of charity. It’s smart CR. Walmart is taking some ownership of an issue that can be addressed through its core business and is in a substantial position to do something about.

It has an astronomically large consumer base, many of whom (judging from the data in the article) rely on food banks. Such a gesture is about connecting with the communities in which Walmart operates, and Walmart operates just about everywhere. The company also has “donated the services of its staff to help food banks improve lighting and refrigeration, and develop ways to increase the amount of fresh food on their shelves.” So, it’s about coupling the bills with the skills.

Mike Sacks can be reached at msacks@mww.com.

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Someone was in a Walmart in Louisiana, and took a picture of a black and white Barbie, the exact same Barbie save for skin tone, sitting side by side on the shelf. The black Barbie was cheaper than the white Barbie.

The photo found its way to a humor website, then to a Latino website, and ultimately, into an ABC News report among others, then cycled back into the blogosphere.

I don’t believe for a second there was a sinister motivation on Walmart’s part. ABC had comment from experts that feel the same. I, like them, think it was just a stupid mistake. Perhaps “smart business,” based on very business-y calculations – inventory, demand, pricing. But not smart business – boneheaded, really – in that it ignored what a customer might think, how it might be perceived, and the challenges facing Walmart’s reputation in general.

Two things are salient here.

One is that social media and mainstream news are increasingly not separate things. It isn’t breaking news, but a customer with a cell phone camera can imperil your reputation. Have you ever watched the news – be it CNN or MSNBC or Fox – in the middle of the day? It’s dotted with reporting , a term I use loosely here, on what a celebrity said on Twitter or what video is ripping hot on YouTube. We have to consider this and think more critically.

The other is the sometimes yawning gap between intention and perception. That’s where reputation much of the time lives. The spokesperson for Walmart said “Pricing like items differently is a part of inventory management in retailing.” No question, makes sense, perfectly reasonable. But I’m sure they understand why in this particular case that’s not the whole story.

Reputation managers must advocate to their company or their client that we are all communicators now, like it or not, and we need to take our thinking one or two steps beyond our job description. Of course, with 20/20 hindsight, an inventory or pricing manager should have recognized the problem here.

We should try for the foresight.

Mike Sacks can be reached at msacks@mww.com.

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