It's not just everyday people who need to be wary of the pitfalls of social media. By Leon Gettler Social media is reinventing activism, and managers who ignore it are making a big mistake. If they regard social media as just a marketing tool for sending out cheap press releases, they will be caught out. Just ask Nicholas Curtis, the chief executive officer of Sydney-based Lynas. The mining company had planned to build the world's biggest rare earths plant in Malaysia, but the project has been put on hold as local activists, worried about possible contamination from the Pahang plant, used social media to rally local and foreign opposition to the facility. Save Malaysia, Stop Lynas!, a lobby group, has more than 40,000 followers on its Facebook page. It also has a blog and uses Twitter. Its activism has held up the project and every month of delay costs Lynas up to $10 million. In an interview with Bloomberg in July, Curtis admitted his company had underestimated the power of Facebook and Twitter. "We probably didn't recognise the power of the social media to create an issue," he said. Nestlé had a similar story. Greenpeace targeted Nestlé with a YouTube video that had more than 1.5 million views, and had its activists flood Nestlé's Facebook page with comments as part of a campaign to force Nestlé to remove companies from its supply chain that owned or managed plantations and farms linked to deforestation, including Sinar Mas, a major palm oil producer. Greenpeace, in effect, heckled Nestlé into overhauling its supply chain, costing the company millions of dollars. Shell Oil has also been targeted by online activists who set up a website called "Arctic Ready". Designed to look like the real thing, the site was plastered with Shell Oil branding and promoted as a tool to educate the public on the realities of Shell's drilling practices in the North. Visitors were encouraged to create captions, giving it a social media component. It was all a hoax put together by Greenpeace and another activist group, the Yes Men. The same group, with the help of the Occupy Movement, created more viral woes for the company when its members posted a video on YouTube of a Shell disaster. The whole thing was staged. Still, the damage was done. It has been shared far and wide on the internet, with postings on Twitter driving the message home. The common theme in all three cases: social media has caused problems that had not existed previously. Executives are now starting to realise the world is changing. In July, a survey by Deloitte and Forbes of 192 US executives found that while, not surprisingly, 42 per cent nominated the global economic environment as their biggest source of risk, an astonishing 27 per cent nominated social media. This is extraordinary given Facebook wasn't created until 2004, YouTube in 2005 and Twitter in 2006. Social media was not on the radar a few years ago. Now, it's being ranked among the top sources of risk, almost on the same level as financial risk. A paper from the Stanford Graduate School of Business released in May, "Monitoring risks before they go viral: Is it time for the board to embrace social media?", points out leading companies such as Procter & Gamble have taken steps such as developing a dashboard to scan blogs, tweets, and other social media to summarise consumer sentiment about their products and measure brand strength. At Procter & Gamble, the information is reviewed by the company's chairman and chief executive officer Robert McDonald. The Stanford study says monitoring social media can help companies understand more about regulatory risk, and brand and reputational risk, information that's picked up listening to the conversations happening in social media. Unfortunately, many companies are not doing this. Had the boards of Nestlé, Lynas and Shell been monitoring discussions online, they would have been alerted to the risks and addressed them before they blew up. The problem is most managers are not prepared. According to a Deloitte study, 58 per cent of executives believe reputational risk associated with social media should be a boardroom issue. Only 17 per cent of companies have programs to capture this data. Australian futurist and technology expert Ross Dawson says not engaging in social media won't avoid problems, but having a presence leaves the company better prepared. He says companies need to have the right people managing social media. "Having a presence gives the company a right of response and an opportunity to shape conversations rather than simply watch them happen,'' he says. "It is critical to have the right people working on social media. You need the best possible representatives of your company, who are highly skilled communicators, emotionally balanced and, of course, intimately understand the dynamics of social media. "A company's social media strategy needs to have a crystal clear tone and voice that gives consistency to all online engagement. While social media is a specific space for customer and community engagement, companies need to shift their overall culture and attitudes to align with their external voice." James Griffin, from social media analysis company SR7, says social media was used to target 2Day FM's Kyle Sandilands in the wake of his attack on a female journalist last year. The television program The Circle was targeted earlier this year following offensive comments made on air about Australian war hero Ben Roberts-Smith. Significantly, The Circle has since been axed by the Ten Network. Griffin says the social media campaign destroyed The Circle. "I don't think it's a long bow to draw, I think social media was the straw that broke the camel's back,'' he says. "Social media has allowed people to thump down the door of a boardroom in ways that never existed previously." He says managers can start by expanding the number of people involved in social media. "That could be as easy as creating a social media steering committee and involving people from legal, the CEO and senior management, involving HR, marketing and other departments. "It's about saying, 'Everybody has a stake in this. It's not solely a function of marketing. Let's meet quarterly and discuss what opportunities and what are the issues coming from social media and how to manage it'. Organisations and managers should invest in half- day training. There are plenty of good organisations that will provide senior management with training about what social media means and how to use it. "Then there are a lot of low-cost and free tools you can use to test it and see what's being said about your organisation and how it can work. It's not an expensive exercise to get involved in straight away. You can have a very tiered and methodical approach to how you get involved in social media. "They can also do research into social media and understand what sleeping issues might be out there and looking at it beyond the prism of 'Hey look, we have 10,000 followers on our Twitter account' or 'We have 6000 Likes on our Facebook page'. "It's all very well to say the numbers are good, but what's actually being said? What can you glean from that to improve your call centre, to improve your products, to forewarn senior management of issues? What can you pick up about competitor intelligence? "There is so much we can get from social media that's being overlooked." He says apart from courses, managers can use tools such as Topsy (topsy.com) which monitors everything that has been said about a brand in social media. They can also get Twitter accounts. That doesn't mean they have to tweet or post anything, but it does give them access to what is being said. "The first thing you would do is sign up for a Twitter account and you can use that to follow particular people,'' he says. "You can get an understanding of how many times your brand is mentioned or key words in your industry and it will tell you what's going on. That will give you a bit of an understanding of how people are talking about you.'' Some companies are starting to do this. Qantas, for example, has a team working a Twitter account to respond to queries by broadcasting information about delays, specials and helping people who have questions anywhere in the world about what time a flight is leaving. The National Australia Bank is short- circuiting the traditional call centre operation by using Facebook and Twitter to provide answers to people about any manner of issues they are having with the bank. Griffin says managers need to embrace it. "You can get an understanding of how many times your brand is mentioned or key words in your industry and it will tell you what's going on. That will give you a bit of an understanding of how people are talking about you,'' he says. "One of the biggest risks is not stuffing something up, but in fact not being involved at all because you can't participate if you don't have some sort of profile in social media or even an understanding of what's being said." But the biggest mistake companies make with social media is just seeing it as a marketing tool. Companies who have done that have learned a few lessons, the hard way. Social media can be their eyes and ears for what's going on out there. It can also be a weapon that can cause damage if they don't know how to manage it.