Social networks in organizations: balancing risk, reward, and transparency

A rather popular topic these days is the risks to organizations of using social networks. An article in today’s Australian Financial Review examines the issue in detail, with an interview of me (excerpted below) hopefully balancing out the other opinions expressed in the article. Unfortunately the way I was quoted seemed to overemphasize my cautions relative to the benefits I discussed.

I am finding it very tiresome to continuously hear security consultants and vendors with big PR budgets go on endlessly about risks, without ever mentioning business benefits. This drone gets into executives’ heads, and as a result discussion of social networks – and many other potentially valuable business tools – focuses on risk and not benefit.

My Enterprise 2.0 Governance Framework explicitly addresses risks, benefits, and actions. It is critical to acknowledge, understand, and minimize risk, but executives are equally culpable if they ignore business value as if they ignore risk.

In the interview with the journalist I basically said that transparency increases business value, however providing transparency must be done intelligently and strategically. The danger is that executives become frightened of the risks, so unintelligently don’t provide transparency, and thus negatively impact the company’s value. Effective business leaders understand that in a complex world business value requires a highly nuanced approach, rather than the black and white view of organizations that is so frequently peddled. Excerpts from the article are below:

When one of Australia’s leading evangelists for Enterprise 2.0 acknowledges “there are some real dangers in an increasingly transparent world”, it’s worth listening.

Ross Dawson, chairman of the Future Exploration Network, is a great fan of online collaboration and communication, but admits there are limits. While research has revealed “a positive impact on stock prices where there is more transparency”, he warns that companies which transparently reported their customers’ private information, for example, would quickly see the opposite effect on share prices.

Dawson says it is important organisations understand both the risks and the value of transparency, and then put in place systems to manage both.

“Clearly, if people want to deliberately steal information there are no fail-safe devices, but you can marke it harder. But then there is inadvertent information loss – where people chat on Facebook, for example, and create something that is visible outside the company.

“Organisations need to think far more explicitly about what information they want to protect, what information to share with trusted partners, and what to disseminate freely.” According to Dawson, once an organisation has identified these three tiers of information it can put in policies and systems to corral them.

He says that some organisations are already doing this – citing Westpac, which allows employees to use Facebook for collaboration and communication, but blocks access to some of the widgets in order to reduce the chance of information being too widely distributed.

Last year I was quoted in CIO magazine on similar issues, and described in more detail the implications of this framework for information boundaries in Defining information boundaries provides a fundamental platform for organizational strategy.

Today’s article goes on to quote a ‘security consultant’ and security product vendor who unsurprisingly harp on about dire risks. This is worth putting into context from Forrester’s recent report (excerpted in ReadWriteWeb) which predicts that companies will spend $2 billion on social networking tools by 2013.

Later in the story I am quoted as saying:

People who use social networking tools indiscrimately certainly need to consider what information they put on public display, according to Ross Dawson. “Everyone needs to understand that anything online is visible for ever more.”

This is pretty basic stuff now. I was recently quoted in the women’s magazine Madison on how we can expect the intimate details of our lives to be visible. This is a reality. The key issue is education, so young and old understand this and act accordingly. However I think the message has already pretty much got through.