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Social Business Readiness: How Advanced Companies Prepare Internally

Altimeter Group

By Jeremiah Owyang, Industry Analyst, Customer Strategy

What's a crises? We did analysis on the list of social media crises aka "punkings" to find out what went wrong, why, and what should have been done.

First, a workable definition: A social media crisis is a crisis issue that arises in or is amplified by social media, and results in negative mainstream media coverage, a change in business process, or financial loss.

To refine further, while crises may happen on a daily basis we wanted to focus on crises that had the actual outcomes: We categorized each crisis according to three severity levels: Level 1 is for crises that result in negative coverage in mainstream media; Level 2 is for crises that result in negative coverage in mainstream media, and a significant response or change by the company; and Level 3 is for crises that result in short-term financial impact.

Social Media Crises on the Rise:  Annual Occurrence
Above: Social Media Crises (as defined above) are on the Rise

To make matters worse, we also saw a slight uptick from unavoidable NGO attacks against brands (like Greenepeace vs Nestle/Mattel), which is a new form of one organization and its members attacking another, causing their social media efforts to quickly be overrun from hundreds to thousands of NGO fans.

Most Crises Could Have Been Diminished or Averted if Company Was PreparedCauses of Social Media Crises

Above: Yet most can be Diminished or Averted, and Causes of Most Crises Originate from Company

Interestingly, we found that 76% of these crises could have been prevented or diminished had the brand been prepared and had proper training, staff, and processes to respond (Read the report in detail to learn more).

Social Readiness: How Advanced Companies Prepare

View more documents from Jeremiah Owyang

In this Report, Learn How Advanced Companies Prepared
What you'll find in this report, is we found out how the advanced companies (I'd also add that many of them have experienced crises as a turning point, like Dell) used this to their advantage to spearhead internal change momentum. We found there are four common ways brands are investing in internal readiness, and we dissect their business benefits, as well as where they need to continue to invest. Here's the full report, embedded below, you can download it from slideshare at well, there are no registration pages.

Companies Must Climb the Social Business Hierarchy of Needs

Be Prepared: Companies Must Acsend the Social Business Hierarchy of Needs
In a tribute to Maslow's work on our individual hierarchy of needs, we noticed a pattern than companies undergo a similar growth. Companies must fulfill the requirements at the bottom of the pyramid and then layer on top of success, building each layer. To date, we found only a few companies that are getting near enlightenment, which we will feature in our upcoming work. Here's a pattern we found from the advanced companies:

1) Foundation: First, develop a business plan and put governance in place.
2) Safety: Then, get organized by anointing a team and process to deal with crises.
3) Formation: Next, connect business units to increase coordination and reduce duplication.
4) Enablement: Grow by letting them prosper – give business units the support and flexibility to reach goals
5) Enlightenment: Finally, weave real-time market response into business processes and planning.

Open Research: Use it and Spread Widely
The more you spread it, the easier it is for me to produce more reports. This research was 100% funded by Altimeter Group, and we are releasing it under Creative Commons so you can use it in your planning, presentations, and blog posts. You can download the report directly from Slideshare, and use the images provided below for your slides. I’ve embedded sharing buttons on the upper right side of this post, for your convenience. This six month plus research project was conducted by a team, and I'd like to thank Andrew Jones, Christine Tran, and Andrew Nguyen.

Learn More: Upcoming Speeches and Webinars Presenting this Report

Related Reports: Career Path of the Social Strategist, How to Budget for Social Business, Facebook Best Practices, view all research.