Online business risks: Social engagement vs corporate experience

The pace of technological change in the last three decades has established two extremes of engagement with the online space. Businesses face equally serious but diametrically opposed risks to their development according to the position of their strategic decision makers on what I refer to as the SE/CE Curve.

The spectrum of social engagement and corporate experience can be expressed on a simple graph – the SE/CE curve – which defines the specific risks to businesses according to the balance between these two factors.

 

Strong social engagement

The 16-24 age group represents those people joining the workforce for the first time. They may be employees, and some may take an early step towards entrepreneurship. This group will have had access to computers and increasingly complex technology from birth. Their level of social engagement is very high: they will use Facebook, Twitter and Snapchat to contact their friends. They will use a myriad of social sharing apps to listen to music (Spotify) or take pictures (Instagram). It is as natural to this age group to use electronic communication as it was for generations before to pick up the phone or write a postcard.

The risks to a business either employing or being managed by this age group are significant. Without the caution of more experienced business people, there are dangers at every turn. In simple terms, informal communication without comprehension of business protocols, and the lack of physical separation between business and personal communication, can result in (among others):

• Inadvertent breach or formation of contracts.
• Contravention of the Data Protection Act 1998.
• Crossing the boundaries of the Equality Act 2010, including harassment on social media.

Other risks are less obvious but easier to manage. Simple requirements such as those of the Companies Act 2006 to include company registration information on letterhead also apply to any online communications. The Data Protection Act 1998, The Companies (Trading Disclosures) Regulations 2008, The Privacy and Electronic Communications (EC Directive) Regulations 2003 and The Electronic Commerce (EC Directive) Regulations 2002 all have something to say about legal requirements for websites including statements of how data is collected and used (Privacy Policies). Young web designers may not be fully aware of these – and the law changes all the time.

Strong corporate experience

At the other end of the scale we find established, experienced owners and managers. They know their markets, their strategies, and the potential legal pitfalls of traditional business. They will have grown up without the technologies younger staff take for granted, are unlikely to have engaged with computers at work before the late 1980s, and even if they were early adopters of email, the internet did not open fully until 1993. Most of these senior executives will not be engaging online with social media.

This graph published by Digital Trends in April 2013 shows very clearly the skew in the US population, with high online social engagement (specifically Facebook use) among the youngest in the workforce, tailing off as people reach their forties.

So where do the risks lie? For the businesses who take the plunge into online communication there are a number of clear dangers:

• The proliferation of legal issues can be bewildering, particularly as employment law and HR requirements shift to cover social media and security policies.
• Reliance on third parties to provide online services without fully understanding the digital landscape can waste money and time. Businesses are bombarded daily with offers for dubious online services, and unless there is some understanding at the strategic level it’s easy to invest in the wrong tools.
• Instigating heavy handed controls on email and online communication, for instance monitoring too closely, can result in a breach of EU human rights.

However, there is a greater, fundamental risk: the risk of doing nothing at all. With the majority of the population in every working age group engaging online (Office for National Statistics 2012), the market is moving.

As Bill Gates once said, if your business isn’t online, you don’t have a business.

The future of the SE/CE curve

The intersection of Social Engagement and Corporate Experience can be associated with a specific age group. At the moment, this is around 40-45 year olds – but it attaches to that group, so in 20 years the SE/CE curve will look quite different! The mid-forties are currently the grey area where cultures collide. As the less tech-savvy leaders retire, the Social Engagement curve will change markedly. And without doubt, there will be a new factor coming in to play, delivering the same dilemmas to business which have existed since the arrival of the telephone over a century ago.