And now, with social media, it's even worse. Way worse.
As far back as I can remember, executives have been shooting themselves in the foot by blabbing to the media, documenting their stupidity in emails, even divulging confidential information and getting snagged for insider trading.
Now, Bloomberg reports that HP vice president Scott McClellan tipped off competitors about previously undisclosed details of the company's cloud computing strategy on his LinkedIn profile.
That's all we need, another way for managers and executives to get themselves into hot water.
The article goes on to explain how social media has become a rich source of competitive intelligence from insiders like McClellan: "Social media has become a much more efficient way of getting information that could only be gotten in the past by things like surveillance," said Rich Plansky, Senior Managing Director of corporate investigations firm Kroll.
A Forrester Research survey showed that 82 percent of 150 companies that monitor social media are primarily searching for competitive intelligence. So that's what all those companies are doing with their social media strategy. Who knew?
Seriously, if you ever doubted the virtues and value of having a corporate culture where external communications are expertly managed and company secrets are stealthily guarded, I've got one word for you: Apple. Wait, I've got two more words: Trader Joe's. Two wildly successful companies that take this stuff seriously.
In any case, whether you're blabbing to the press, documenting your stupidity in an email, or spilling company secrets on LinkedIn, everything gets amplified in the age of social media. Here are seven examples of how being too public can land you in big trouble.
- In addition to HP's LinkedIn snafu, you've got to wonder, who was the genius behind the company's decision to publicly announce its intent to sell off HP's $41 billion PC business over a year in advance, essentially making it a lame-duck in the market?
- Just the other day, in Social Media For Dummies - er - Busy Execs, I said, "I know lots of CEOs tweet. Let's just say I wouldn't." Now here's a good reason why. Sooner or later, you're bound to let something slip that you shouldn't, and if it's either confidential information or considered "material" under Reg FD, you're sunk.
- Last year, the Galleon insider trading scandal snagged top executives at IBM, AMD, Intel, and McKinsey for blabbing confidential inside information to a hedge fund. What's ironic is the executives that lost their jobs and board seats and, in some cases, went to jail, had nothing to gain and everything to lose. That's right, they weren't involved in the trades.
- It was painful to watch Goldman Sachs executives defend themselves in front of a Senate subcommittee over Goldman's hedge against the coming mortgage collapse. The biggest problem was the way their own emails, like this one from CEO Lloyd Blankfein, documented how they bet against their own customers, "Of course we didn't dodge the mortgage mess. We lost money, then made more than we lost because of shorts."
- In a classic case of no good deed goes unpunished, BP CEO Tony Hayward spent more time in front of TV cameras than Charlie Sheen, telling America that his company would do whatever it takes to clean up the gulf oil spill. Except, in the process, he managed to blurt out a couple of idiotic remarks like, "The Gulf of Mexico is a very big ocean ..." and, for his trouble, he got skewered by the media and became the most hated man in America.
- Who can forget General Stanley McChrystal's public mocking of vice president Joe Biden and other Obama administration officials in a Rolling Stones article entitled The Runaway General? He lost his command, and rightly so.
- Employment background checks are now likely to include a scan of your social media activity. And for God's sake, don't say you're looking for a job on LinkedIn when you're already employed. I mean, come on. Have a little common sense. And don't tweet your email address, either. It's a good way to get your email account hacked.
Having run corporate marketing and communications for a number of companies, I always advise executives to never even think about writing or saying anything in any forum that they wouldn't or shouldn't write or say publicly. If you're not sure if you should, you probably shouldn't.
Moreover, every company's VP of corporate communications should advise all company officers and directors about this sort of thing and consider updating the company's communications strategy to account for the new reality of social media.
- How to Control Your Brand in the Age of Social Media
- Social Media For Dummies - er - Busy Execs
- Behold the Awesome Power of Social Media
Image cambodia4kidsorg via Flickr