Many Canadian executives have dipped their toes into social media, but only a small portion are taking the plunge in a wholehearted way.
The latest C-Suite Survey of business executives unveils a cautious approach, particularly among resource and manufacturing companies. Service firms – especially those interacting regularly with large numbers of customers – are far more open to social media as a marketing and communications tool.
While more than half of the companies surveyed have a Twitter account, and more than 40 per cent have corporate Facebook or LinkedIn pages, the numbers are skewed toward service firms. Those companies are also far more likely to say social media have an important role in corporate communication, and acknowledge that it has changed the way they work. Indeed, almost 80 per cent of service firm executives say they'll devote more resources to social media in future, while half of manufacturing bosses and only one-third of resource firm executives say they will do so.
The main difference between sectors, said Michael Bernstein, chief executive officer of Capstone Infrastructure Corp., is that "customer interfacing" firms see far more value from social media. Capstone, which owns energy projects across North America, sells power mainly to governments so a social media presence is less important, he said. But the company also owns water and heating utilities in Europe, and these subsidiaries have a bigger social media presence because they deal with retail customers.
Canadian Zinc Corp., a Vancouver-based company with a mine in the Northwest Territories and several prospects in Newfoundland, exemplifies the cautious approach to social media taken by the resource sector. The firm has a Twitter account, but uses it mainly to disseminate press releases.
"We figure we should try to have a presence," said chief financial officer Trevor Cunningham, but he noted that mining companies face strict regulations on what they can say about resources and reserves. "We can't say a lot without getting into trouble." Mining firms don't need to market their products broadly, he added, so there is relatively little value from the potential connections made through social media.
At the other end of the spectrum are companies such as Softchoice Corp., a Toronto firm whose business involves connecting customers with technology. It has active Facebook, Twitter and LinkedIn accounts, a series of blogs, and its chief executive David MacDonald tweets from his own account.
It makes sense to embrace social media as a reflection of the company's culture, but they are also a valuable tool to communicate quickly and effectively, said Mr. MacDonald. "I can't think of a company that doesn't want to communicate with shareholders and employees, and make sure that people understand who they are and what they are doing."
Softchoice is shifting advertising spending from traditional media to social media, where it gets "extraordinarily good economic leverage," he said. That's a move being made by well more than half of service firms, but only 39 per cent of manufacturing companies and 7 per cent of resource firms, according to the C-Suite Survey.
Many executives expressed concerns about the risks of social media. Three-quarters of executives who responded to the survey said social media open up "reputational risks" for their companies, while 56 per cent said their benefits for business are exaggerated. Even among those whose firms have social media accounts, more than half said they do not appear to help the bottom line.
Brian Gronberg, president of recreational vehicle rental firm CanaDream Corp., said the Calgary-based company has active Facebook, Instagram, Twitter and Flickr accounts. "Is it driving more business to us? Who knows?" Mr. Gronberg said.
Willy Kruh, global chair of consumer markets at KPMG, said the reluctance of many Canadian executives to embrace social media reflects their inability to "think out of the box."
All companies need to get their message out, he said, and social media are a powerful tool for doing that, if used strategically. "They talk about reputational risk or brand risk, but I would put it the other way. There is a risk from not using it. … Don't put your head in the sand."
While many executives are still feeling their way through the new environment, a minority – 30 per cent – actively discourage employees from using social media at work. Sixty per cent of companies are neutral about their use at work, the survey found, and 9 per cent encourage their use.
A quarter of the executives who responded to the C-Suite Survey tweet under their own name.
"I do have LinkedIn, Twitter and Facebook," said Michael Bernstein, CEO of Capstone Infrastructure Corp. "I'm not very good on any of them. I go to Facebook once every six months. I've tweeted twice in my life, and both times my daughter made fun of me."
Peter Aceto, CEO of Tangerine Bank, has been on Twitter for five years, has 15,000 followers, and tweets many times daily about leadership, customer service and workplace issues.
David MacDonald, CEO of technology service firm Softchoice Corp. has several hundred followers and tweets occasionally about technology and business. "I use it a lot for listening."