Back to Volume 14
	Business & Social By Kathy Bloomgarden

Ruder Finn celebrates its 60th anniversary in uncertain times. It is difficult to follow the news without being overcome by doom and gloom. Th e global economy is a mess, housing values have collapsed, the retail sector is in a massive dive, and the stock market is in one of its steepest declines ever. Th ere seems to be no end in sight. Pundits suggest that corporations manage cash, strengthen their balance sheet, reduce costs, and divest noncore businesses—in other words, hunker down in preparation for a long downturn.

But there is another side to the current environment that can checkmate this pessimism. In the fi rst place, just as the financial prognosticators become unanimous in their bleak assessments of the economy, that’s when we’ll see a bottom and the beginnings of a turnaround. And secondly, we need to remember that successful strategies and winning companies have emerged from every recession. Th is time will be no diff erent. Revlon, Motorola, Hewlett Packard, Texas Instruments, Fortune magazine, Miracle Whip (“A sandwich just isn’t a sandwich without the tangy zip of Miracle Whip”), and even modern basketball were all born during the 1930s. More recent examples abound. Intel was started during a recession, and eight years ago, as the economy was reeling from the burst of the dot-com bubble, a startup called Google was applying for a patent for its page-ranking system that today is the centerpiece of its success.

While most executives have never experienced a crisis like this one, they will have to learn to adapt. In fact, the downturn could be just the challenge they need to transform their business. As Peggy Noonan wrote recently in The Wall Street Journal, “dynamism has been leached from our system for now, but not from the human brain or heart… The comeback will be from the ground up and will start with innovation…that’s where the magic will be.”1

That’s exactly right. As always, the key to pulling through this economic downturn and emerging stronger on the other side will be enhanced productivity and entrepreneurial energy. Th at is what has worked in the past, and that’s what will be necessary this time as well.

Communicate and Innovate

Innovative communications strategies that take advantage of the very latest Web 2.0 technologies will be a crucial part of these eff orts. At Ruder Finn, we cannot rest on our laurels or on our six decades of serving companies. Our business is in transformation. Surveys show that the corporate world wants from their agencies greater digital expertise, more use of social media, and the ability to leverage virtual communities.

Our communications job is changing, and that presents us with tremendous opportunities. Advertising is also interested in this space, of course, but it has always been the domain of public relations to enter the dialogue and help steer it. We can make a huge diff erence in fostering the power of innovation within multinationals and in driving cultural change. Our expertise in using blogs, wikis, podcasts, and social networks helps build dialogue and debate, unlocks creative thinking, and creates pockets of entrepreneurial activity that are so necessary and so valued today by the corporate world. 

In defining and communicating a client’s message, Ruder Finn aims to:

1. Identify the scope of community. Who is part of the dialogue and what is their intent?

2. Spark the dialogue and facilitate the interaction.

3. Sustain the volume. 

The Corporate World Is Ready

Forward-thinking CEOs understand the power of harnessing engagement, and that it represents a profound shift in the way companies innovate. Intuit CEO Brad Smith says he is constantly asking himself how an established company that has prided itself on innovation for the past 25 years can transform the way it approaches innovation in this new age of empowerment. At a recent Fortune Brainstorm session, Smith noted that, over the years, Intuit has made the move from DOS to Windows, from desktop to Web, “but now we face the most profound change-management journey in our company’s history—an environment where our end users actually create the value themselves. … We have to fi nd a way to harness and unleash the passion of our 50 million end users, and ask ourselves if we are paying our employees to do work that our customers would volunteer to do for free and do better than us.”3 

In this environment, companies are ready to try new things. “In times of crisis, we have a big opportunity to stand apart from our peers, to be better connected to the market, even if it’s in turmoil,” wrote Sun Microsystems CEO Jonathan Schwartz in a recent blog post. “Yes, our customers are going to be under stress, but that’s simply another way of saying ‘open to change.’ And I want Sun to be the company engaging them in the transition.”4 

Can Facebook Save Business?

You know that social websites have arrived when neuroscientists start saying that children visiting sites like Facebook, Twitter, and Bebo are frying their brains, as several neuroscientists recently reported.5 But while Facebook and MySpace may have started as college platforms for sharing personal information, these sites are no longer a young person’s phenomenon. Facebook now has 175 million members, adds another 5 million each week, and 35-to 54-year-olds are its fastest growing demographic, doubling about every two months. Th ese platforms have the ability to replace the telephone. Already, according to the Pew Research Center, one in every eight online adults in the U.S. regularly broadcast what they’re doing on the Web. 

The Conversation Is Taking Place, With or Without You Social networks already exist at every company, of course. Employees talk to their neighbors, share information with their colleagues at the water cooler, and post their vacation pictures on Facebook and MySpace. Blogs are increasing by more than 10 million a month, and last year spending on information technologies grew to 7% of GDP, up from just .5% in 1978.

Everyone from Dell to the CIA uses Facebook as a recruiting tool, and companies that aren’t paying attention to information spreading at the speed of light through Twitter will be left behind. Forget about online news destinations putting traditional newspapers out of business. Web 2.0 technologies are now replacing online sites and even old-style blogs as the fi rst source of breaking news. During natural disasters, Home Depot uses Twitter to communicate preparation tips and where to fi nd clean water. Journalists regularly send Twitter posts from press conferences and from the courtroom during trials. Th e Sunday television talk shows sign off with an invitation to their Facebook and Twitter posts. And last year, CNN reporter James Karl Buck helped free himself from an Egyptian jail with a one-word Twitter post from his cell phone to his friends and contacts: “arrested.”

Companies are quickly learning the power of these social networks. After Jet Blue passengers were trapped on the JFK tarmac for ten hours without food, water, or working toilets, company CEO David Neeleman delivered his mea culpa on YouTube. In November, consumers who used Twitter to criticize an ad for Motrin pain reliever received a response within 48 hours from the brand’s manufacturer, a unit of Johnson and Johnson, apologizing for the ad and telling them it had been withdrawn. And Tropicana’s new design for its orange juice carton created such a fi restorm on social networks that the company quickly agreed to return to the old packaging. 

Break Hierarchy, Encourage Peer-to-Peer Interaction, Give Up Control

For corporations looking to engage either their own employees or their customers, existing platforms like Facebook, YouTube, and Twitter have the obvious advantage of not having to build something from scratch. Employees are already familiar with them, so there is no need for special training, and they can immediately become a place to share slides, videos, spreadsheets, and text fi les. Customers are already members; many of them check their Facebook pages and post on Twitter multiple times each day. 

Yet stand-alone corporate networks can foster innovative thinking, create startling effi ciencies, and create a kind of constructive disruption. At the very least, browser-based workspaces called wikis6 can allow large groups of people to view and edit documents and post project updates. But they can also provide new ideas and help people avoid getting stuck in old ways of thinking. The goal is to increase the value and lower the cost of collaboration by creating communities around shared passions, common tasks, and one vision.

Mark Sigal, CEO of Snapp Networks, says it’s not an either/or situation. “Microcommunities launched on sites like Facebook are best thought of as outposts where you can billboard to a larger, more diverse audience, and lay the bread crumbs for bringing them back to your own branded community that runs within your domain and can be customized specifi c to your goals, not the goals of Facebook,” he wrote recently. “It comes down to who owns the audience, how specifi cally you want your brand refl ected throughout, and how important it is to be able to orchestrate the community relative to the specifi c goals of your business. Subject to time, resources and clarity of purpose, both approaches serve a purpose.”7

Whether a corporation uses its own social network or a third party like Facebook, the common denominator is an exchange of thoughts that allows ideas to bubble up, rather than waiting for them to trickle down. A McKinsey and Co. study concludes that a company’s formal structure as manifested in its organizational chart does not explain how most of the real day-to-day work gets done. It suggests that social networks reduce the number of interactions and shorten the time it takes to make decisions.

Social networks are being used as a kind of always-on idea generator, tapping the collective wisdom of a corporation and fostering a sense of community. Medical researchers, for example, are increasingly using new Web platforms so that they sort through large volumes of data, analyze it quickly, and share the results of their research with other scientists in order to speed up the process of developing new discoveries and medicines. At the Web community Sermo, more than 85,000 physicians in the U.S. have collaborated on patient care and shared clinical insights. So far the site has generated more than 30,000 discussions and more than 3 million comments, and 1,500 physicians are logging on for the fi rst time each week.4

Reaching Out to Stakeholders
For customers and other stakeholders, think of social networks as 24/7 global focus groups made up of hundreds of millions of consumers. In a sense, the balance of power has changed. Let your audience be your guide to what works and what does not. P and G uses separate platforms to reach out to both consumers and professionals. Th e company has Connect and Develop, a site where designers and inventors are encouraged to suggest new technologies and commercial opportunities for P and G products and brands. It also powers Vocalpoint, where 600,000 members give the company feedback on existing products and ideas on how to develop new ones. Vocalpoint has its own CEO and now sells its services to other companies.

At Novartis, an internal blog called "Grow the Future" personalizes the Pharma CEO, celebrates global success stories, and encourages employees to engage in an open dialogue. Novartis also has a global "eCommunity" made up of eLeadership specialists from more than 25 countries and every business unit. And CML Earth is a new project that meshes with Google Maps to create a compelling online experience that helps CML8 patients of common interest and experience to link up with each other around the globe.

Companies are also increasingly using social media sites to communicate with investors. According to a study by the consultants Hallvarsson and Hallvarsson, more than four out of every five of the 150 largest companies in Europe put information about themselves on Wikipedia, and more than half put photos on Flickr, videos on YouTube, or presentations on SlideShare.  

Getting Started with the New Demographic of Intent

Sharing knowledge laterally instead of up the chain of command requires a certain way of thinking and may not feel natural within the culture of most large multinationals. Even more frightening to some is the notion of allowing people outside the corporate circle to generate ideas and drive innovation. It is our job in the new P.R. world to legitimize these new networks— to facilitate interaction between network participants and stimulate the creation of new ideas, solutions, and knowledge.

Social media is the new-age version of a crossroads, where ideas meet and brainstorms can take place that spark new thinking. They retool and establish internal channels that humanize information flow. The power of these networks comes from their ability to allow companies to link talents and assets separated by geographic location, time zone, language, culture, and business practice in ways that generate value.

Externally, there is a new demographic on the block, and it is called “intent.” In a Web-connected world, the traditional demographics of age, gender, race, income, and geography are losing prominence. Webbased social networks are driven from the bottom up by the need, passion, curiosity, and whimsy of an audience of one. At the same time, they empower people to share knowledge and build on existing ideas, and can be a vital tool for unlocking productivity within large corporations. Th ey also create a sense of community that goes well beyond the usual team-building exercises.

Established tech players like Microsoft and IBM off er the software infrastructure that allows companies to engage their stakeholders. According to ZDnet. com, 46% of those companies using social media on the intranet are using Microsoft’s SharePoint. Th e software is the part of Microsoft Offi ce aimed at making it easy for companies to provide a single, integrated location where employees can effi ciently collaborate with team members, search for experts and corporate information, and manage content and workfl ow.

That’s the easy part. As public relations professionals, it is our responsibility to give personality to corporate networks so that they engage both employees and customers, build communities, and tap into collective knowledge.

The first step is to listen, allowing the conversation to inform our message and strategy. Who is influential in your client’s space? Th ere is no Web media directory, so every company must be its own private eye. If you are going to break loose from old traditions, you need to give up some control. In the 1982 Disney fi lm Tron the hero actually entered the World Wide Web. Companies need designated social network managers to do pretty much the same thing—not to “control” the conversation, but to listen, engage, participate, and share. You need to be transparent about your involvement, remembering that your participation is not a pitch, promotion, or monologue, and that you can’t fake authenticity. It’s a dialogue— an opportunity, not a threat. We want to facilitate that dialogue, ignite it, and add value, so that our clients are an important part of the viral, democratic dissemination of information.

Intuit CEO Brad Smith likens the opportunity to feeling at times like “we’re a pretty good football team, and we look up and we’re standing in the middle of a baseball diamond, and I’m not sure we even have the right uniform on. Innovation is a moving target that doesn’t come with instructions, but we have to develop ways to connect our end users and continue to evolve our game.”9