Wednesday, 8 June 2011

Small is Better Than Big - The Impact of Social Media on Openness

Big brands can be awfully reassuring but why is that when buying from smaller companies the whole experience seems better?

I know we go to Tescos for our weekly shop and we buy big brand name cars but why do we also use smaller companies to buy things from? If big brand is so powerful, why do smaller companies even get a look in?

Part of the whole thing is that we all feel perhaps a little glad to help the smaller guy. But if that means trading off cost savings for mental satisfaction we usually choose money in the bank. The reality is more that we find the whole experience more agreeable and we think we get better value for our money.

Part of this, so experts now insist, is that smaller companies are more open. A good example is if you go into a superstore you just see products stacked whereas at the local butcher may tell you more about the products they sell, you can see where they prepare their products, they may make much of the produce themselves and they will give you cuts the way you like them. They might even throw in bones for the dogs.

Smaller businesses tend to believe in and know more about what they are selling is what we believe.

But there is more. Smaller businesses will be more honest about their supply chain, overheads, what they believe is important. They will tell you their limits on price and they will try and blend their service to accommodate you, be honest when they can't and try harder when they get it wrong. There is more access to people who make decisions, the service is more personal. Bigger companies tend to shroud their cost structure in secrecy, give less power to staff who deal with customers in terms of knowledge and decision making authority, keep senior people away from customers and they try to make as many rigid rules as possible to keep process and structure to match profit expectation.

The rule is, 'You can have any colour you like so long as it's black'. So often this leads to unmatched expectations and then the fight to get what you think you paid for ends on the sallow ears of call centre staff in the 'Department of Not Giving a Damn'.

Honesty and openness is at the heart of this and part of this is being put down to social media. The theory goes that if big companies embrace social media then they will become more open and succeed. There is credence in this but in my spat with Carphone Warehouse, the person camping on Twitter was just as useless as the rest of them in terms of giving actual service.
Honesty also can work against you. How many times have I heard from phone operatives at large companies tell me that 'Directors don't take calls'. It makes me furious and it also means that I am less likely to deal with an insurance or telecom or satellite company that has that kind of policy than a company that has proper escalation procedures and can allow phone based staff to make judgement calls when required rather being left to behave like stuffed animals with fixed length communication chords.

Information is the key, not how or where you say it.

Openness in large corporations has to start from within. Too often information is shielded at the top and is deemed far too sensitive to pass down. It's not a question of amounts of communication as many companies now adopt the policy of regular 'Townhalls' or floor meetings or mass broadcasts. It is more the type, breadth, depth and quantity of information fed down and, more importantly, what is held back.

As a for instance, how can a company properly turn a situation of poor performance around if it cannot be open about its position with staff? How many times do staff wake up and read in the press that their company is being sold before management have had the good grace to say they are cashing in their chips and walking away?

I see this kind of thing everyday. I don't think social media per se will help necessarily because it is more associated with information leak than flow right now. What social media can do is to get more of that 'illicit' information into the public domain meaning that big companies can be leaking like sieves. Uncontrolled information flow is a big risk. Emails usually come with a health warning on the packet, Instant Messaging has been a big issue in court cases as is the use of things like LinkedIn but Twitter, Facebook, Bebo, You Tube and others now pose real threats to larger corporations as information can be leaked way too easily.

So the argument goes, it is better for big companies to have an internal and external culture of openness and then social media becomes less of a threat. In fact, it can be the opposite. Give enough information to everyone and they can enhance the brand by Tweeting or similar constructively in favour of the company rather than using snippets to snipe.

If smaller companies are more open anyway, then there is a huge opportunity for them to get ahead of the game to Tweet loudly and widely. And this is what experts far more intelligent than I now say.

A case in point only a couple of days ago was when an editor of a Channel news website Tweeted asking for news stories. The next day the website broke the news that the CFO of a large distributor was leaving and this forced the company affected to comment on the story to confirm veracity. If only the same company had led with openness it could have positioned the story positively and with due respect to the individual involved and the people he or she worked with.
Buyer beware

Beware of those 'social media experts' selling snake oil but get your messaging out in the open. You would be surprised how it can help you in the highly competitive world in which we live. If there is one thing that the web has really done is that has given an equal opportunity for companies large and small to expand their horizons.

Use the force wisely and increase your reach. Be more open, customers like it - your staff even more so. That's my sage comment for the day.

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