The Cult of Personality

You gave me fortune
You gave me fame
You gave me power in your god's name.
I'm every person you need to be
I'm the cult of personality '
' “Cult of Personality,” Living Colour, 1990

Anyone with even the most remote connection to e-commerce cannot have overlooked the recent explosion of social media as a form of marketing and
business development (see, as a frame of reference, http://en.wikipedia.org/wiki/Social_network_services and www.independent.co.uk/news/business/analysis-and-features/battle-of-socialnetworking-sites-1691844.html).

In fact, at times it seems that an entire cottage industry has developed just to advise online and tech firms on how best to exploit the many new social media, with guidance on how to avoid disasters, while building and promoting a business, and (hopefully at the same time) making money through social networking (see, http://entrepreneurs.about.com/od/onlinenetworking/a/socnetsites.htm; www.ehow.com/how_5023224_use-social-networking-build-business.html; www.ehow.com/how_5131063_promote-through-social-networking-sites.html; and www.ehow.com/how_2097715_money-using-social-networking-site.html).

And there now are quite a few business-oriented, social media sites. In fact, even putting aside the sites that don't try to be anything other than “social,” there are so many business-oriented sites that one must wonder how anyone has any time to actually do business, when not networking, posting and commenting at all of these locations. Recent lists range from the 50 “social sites that every business needs a presence on” (see, www.insidecrm.com/features/50-social-sites-012808/) to “top social networking sites for small business” (see, www.whatworksforbusiness.com/2009/01/top-10-social-networking-sites-for-small-business) to (in a business publication for chief information officers) “social networking [W]eb sites from A to Z” (see, www.cio.com/article/175250/Social_Networking_Websites_from_A_to_Z). Sites have even sprung up focused on professionals, who presumably have more profitable things to do with their time than engage in non-billable chats with one another (see, http://online.wsj.com/article/SB118825239984310205.html; http://www.avvo.com/ and http://www.lawlink.com/; also see the sidebar below for links to other collections of such sites, as well as to many popular individual sites.)

Even non-profits have caught onto the trend, with some using social networks as a low-effort, high-return, method of fundraising (see, http://voices.washingtonpost.com/posttech/2009/04/non-profits_leverage_social_ne.html; www.washingtonpost.com/wp-dyn/content/article/2009/04/21/AR2009042103786.html; and www.washingtonpost.com/wp-dyn/content/article/2009/07/01/AR2009070103936.html?wpisrc=newsletter).

Not New, But Enhanced

Of course, as with anything else online, problems have come with that popularity (see, www.computerworlduk.com/management/security/cybercrime/opinion/index.cfm?articleid=1797 and www.suntimes.com/news/nation/1633105,CST-FIN-bloggers22.article). The perception of business risks in social media is so bad that one writer recently even gave businesses advice on “how to avoid Facebook and Twitter disasters” when using them for “professional purposes” (see, www.washingtonpost.com/wp-dyn/content/article/2009/06/24/AR2009062400304.html?wpisrc=newsletter).

Not surprisingly for anyone who remembers the growing pains of e-commerce, many of these problems are familiar from the dawn of online activity. For example, viruses now can simply be delivered in a more efficient manner through trusted contacts on a social network. (see, e.g., www.windowsecurity.com/articles/Social-Networking-Latest-Greatest-Business-Tool-Security-Nightmare.html; www.washingtonpost.com/wp-dyn/content/article/2009/07/11/AR2009071100683.html; and www.securitywatch.co.uk/2009/06/03/twitter-attack-signals-new-social-networking-security-problems/). Social networks have also facilitated new
and more insidious forms of traditional attacks, such as identity theft (www.examiner.com/examiner/x-6171-Chicago-Social-Networking-Examiner~y2009m6d21-How-Im-going-to-use-social-networking-to-steal-your-identity).

Other social networking risks, such as simple goofing off, have plagued businesses from the first office Internet connection ' and long before that, whenever work was “work” rather than “fun.” While some social networking risks are indeed new, they (like much of e-commerce) are often really just online variations of traditional problems, such as issues in checking references and hiring through social media (see, www.cio.com/article/495242/Beware_Legal_Problems_with_Facebook_As_Hiring_Tool; www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202432039774&slreturn=1).

Despite all these problems, however, tech businesses are nonetheless continuing to explore social networking (see, www.emarketer.com/articles/print.aspx?1007109). Again, that adoption is not surprising. The ability to chat with friends, trade pictures and generally live your life from 9 to 5 from your desktop is just a richer version of the Internet's “blending of work and personal time” (see, www.economist.com/displaystory.cfm?story_id=12304861). Moreover, firms have adopted other technological advances in the past, despite the risks associated with them, because the benefits of using new tools for business outweigh the potential costs of giving employees the freedom to explore how to exploit them (see, www.smsmallbiz.com/profiles/Social-Networking_Sites_Create_a_Lucrative_Business.html; www.deacons.com.au/eyelevel/eyelevel_issue2_introduction.html). You don't have to be an old-timer to recall when business managers questioned the wisdom of providing desktop Internet access, or giving everyone an e-mail address.

In fact, June's “electronic land rush,” when Facebook permitted existing users to protect names on its service, was eerily reminiscent of the domain-name grabs of the late 1990s ' 500,000 Facebook “names” were grabbed in under 15 minutes (see, www.usatoday.com/tech/hotsites/2009-06-12-facebook_N.htm?csp=Tech). Similarly, much of the fear-mongering in the press about social networking could also have been said about the phone, the desktop computer and the Internet itself. How many professionals in 1996 had to buy their own computer or use home e-mail because management saw only a time-waster that would bring personal life into the office? Two Australian lawyers recently summarized the evolution of the perception of technology in the office very well, from the fear of the unknown to an effective business tool. Their conclusion highlights the potential so many firms see in marketing through social networks. “It is also worth considering that, when employees spend time outside of their office forging relationships with potential clients or suppliers, businesses typically perceive that as a positive. If those relationships are maintained or developed more efficiently through a social networking site, why should this be considered any differently?” (see, Eyelevel, www.deacons.com.au/eyelevel/eyelevel_issue2_introduction.html).

More concretely, a recent study, “The Problem with Social Media in the Office,” showed this same “can't live with it, can't live without it” challenge. Research firm eMarketer reported that even though 74% of those surveyed feared a risk of damage to their firm's reputation from doing so, significant numbers of executives use social networking tools (see, www.emarketer.com/articles/print.aspx?1007109). In fact, thanks to social media, the “do it yourself” Internet ethic has virtually eliminated service providers such as travel agents, and has even embraced business marketing through social media sites. The same eMarketer study reported that “61% (of employees) have made significant adjustments to their social network pages to reflect their public nature ' without the prompting of their superiors.” (See, www.emarketer.com/articles/print.aspx?1007109.) From an executive viewpoint, what could be better than a trend that allows employees to choose to promote their job on their personal time, and at personal Web sites? In Europe, exclusive alumni networks that were once able to charge a premium for access to fellow graduates are similarly being challenged by the ability of anyone with Internet access to provide the same service. (See, http://johngaynardcreativity.blogspot.com/2009/01/could-linkedin-and-viadeo-creatively.html and www.lesechos.fr/management/actu/4817610.htm (French language).)

Lots Can Cause an Oops!

Unfortunately, however, plenty can go wrong ' beginning with employment law violations. While not new, implicit or explicit pressure on employees to devote personal time to work, by polishing social network sites devoted to marketing the employer's firm, may violate labor laws (see, “The Impact of Technological Developments on the Workplace,” Employment Law Strategist, Feb. '09, www.ljnonline.com/issues/ljn_emplaw/16-10/news/151625-1.html and “Keeping Track of Telecommuters,” Employment Law Strategist, April '09, www.ljnonline.com/issues/ljn_emplaw/16-12/news/151902-1.html). For example, such practices could force companies not only to have to include such time in compensable work hours, but also to pay for it at time and a half, as the hours go far beyond the traditional work week. Perhaps employees' homes would even be considered part of the workplace, subject to other regulatory laws. This would simply be an extension of the questions raised (but far from answered) when employees feel compelled to answer e-mail from home, because they can't keep up at work. That is fine for “exempt” employees ' salaried management and professionals ' but not for the mid-level staff, much less the clerical work force. Businesses, whether traditional ones or cutting edge e-commerce shops, certainly don't want to pay for their employees hanging out online in social network chat rooms, even if they are talking business, unless it results in demonstrable substantial new business that would not have developed through traditional marketing. From the perspective of labor and employment law, in short, the round peg “blending” of work and personal time that makes social media work so well must still fit into the square holes pegs of the traditional eight-hour, one-location workplace. Moreover, does any firm want to be in the business of monitoring what its employees do on their own time, whether at social media sites, or elsewhere?

Even More Serious

But another grave, and quickly killing, threat from social networking strikes at the core of all tech businesses: its intellectual property. While an employer may admire the employee who diligently establishes pages to promote the firm (and him- or herself) at many different social networking sites, what happens when that employee leaves ' especially if the departure is involuntary? Unless the company has been registered at the sites in its own name, rather than that of the employee, the employer's rights at the site are outside its control. Clients and customers who are accustomed to contacting the employer through the social networking site will either get no response or, worse, will be put in touch with the former employee's new employer. This situation is much like the one I described in “When the CEO Wants His Hotmail” in the June 2007 edition of e-Commerce Law and Strategy, which lists the business risks when employees use personal e-mail accounts for business correspondence, rather than a company-provided account (see, www.ljnonline.com/issues/ljn_ecommerce/24_2/news/148717-1.html). In effect, the employee has hijacked his employer's goodwill and brand, and usurped it to himself, in his business-related “cult of personality.”

In addition, the employer cannot respond to any attacks on the employer's brand or goodwill at the site, except in extreme circumstances. Although the employee could do so, since it is his or her site, the employer will have little recourse if the employee chooses not to respond (or, worse, agrees with the critic, as may occur after an employee has been terminated involuntarily). While the employer may have limited rights to police usage of its intellectual property, a company's rights to rebut comment at a third-party site are as restricted as its ability to challenge online reviewers. (See, “e-Commerce Meets American Idol,” in the May 2008 edition of e-Commerce Law & Strategy; www.ljnonline.com/issues/ljn_ecommerce/25_1/news/150407-1.html.) Moreover, the employee has rights as well, and should not be denied access to his or her own job history and work portfolio for use in obtaining a new position.

In fact, these social networking risks are symptomatic of only part of a larger problem created by the use of individually oriented technology in a corporate context. Consider all of the modern methods of communication controlled by an employee, and outside her employer's reach, by which an employee is known in the market, such as a cell phone number, a Twitter feed or a text-message ID. Social networking risks are simply another aspect of technology's broader challenge to an employer's control of its workplace and brand.

Taming the Potential
Ex-Employee Brand Killer

Let me illustrate this concern with a real-world example. A client in a service business had purchased the book of business of a specialty provider whose founder had effectively marketed himself in a niche industry. Part of his self-promotion included a page on a social networking site, which he used to communicate with contacts in his industry. Because all those channels had been well established by the time of the acquisition and were a key part of the goodwill of the acquired business, they were allowed to remain in place to smooth the transition to corporate ownership, with a gradual phase-out envisioned as the new business was fully absorbed.

Unfortunately, the employee was unable to maintain his sales, and his employment was terminated ' after which he used the social media site and other communication channels to broadcast his side of the story to the former employer's clients, in an effort to sway industry opinion (and keep business, in violation of valid restrictive covenants signed by the former employee). Fortunately, the commencement of an injunction proceeding put an end to the former employee's improper use of the customer list and other assets that he had sold ' but at a considerable cost to the employer, in legal fees and aggravation. And if the proceeding had not succeeded in pushing the former employee to a settlement, certainly all of the employer's ' and its counsel's ' cease-and-desist correspondence with the rogue employee would have been posted online, for maximum embarrassment value.

In such a case, the victimized employer certainly has legal rights to protect its brand and image. Indeed, any use by the former employee of the employer's trademarks or other intellectual property at a social networking site can easily be stopped. If the former employee speaks ill of the company, traditional disparagement claims can be made, too. But exercising all these rights can be expensive, in legal fees and distraction from ordinary business.

Instead, to try to avoid these problems, employers could require employees to turn over access rights and passwords to social media Web sites used to promote the firm, either in the initial employment arrangement, or if a settlement occurs, as part of the termination. The same logic would also apply to other communication vehicles used by the employee, such as the contact phone number. An employee cell-phone account for a number known in the industry should be in the employer's name, for example, so that the employer can continue to get calls from contacts in the business. (In fairness, this argument is stronger if the employer pays for the phone or reimburses the employee for business use of the cell phone.)

The employer could also provide training on the importance of consolidating work-related communications through the employer's own e-mail and messaging systems. Not only does this allow the employer to maintain control over its brand and message, but it also can avoid headaches should the employer become involved in litigation in which work-related communication is discoverable. (See, “'Can't Touch This' Or, How to Stop Worrying and Love the Litigation Hold,” in the September 2008 edition of e-Commerce Law & Strategy; at www.ljnonline.com/issues/ljn_ecommerce/25_5/news/151024-1.html, and “When the CEO Wants His Hotmail,” supra.)

But this planning step works only if the account rights are transferable. LinkedIn.com, for example, expressly prohibits assignment of an account (see, e.g., www.linkedin.com/static?key=user_agreement&trk=hb_ft_userag), and Facebook distinguishes between individual accounts and organizational “Pages” (see, www.facebook.com/pages/create.php and www.facebook.com/terms_pages.php). Facebook also prohibits users from “transfer(ring) any of your rights or obligations under this Statement to anyone else without our consent” (see, www.facebook.com/terms.php). More generally, if social networking sites are a business asset, how can they be transferred to a buyer in a corporate merger or other transaction, a routine occurrence but not one contemplated when businesses began to transform personal online conveniences into e-commerce tools? Furthering the round peg/square hole conundrum, perhaps the employer should, in the employee's employment contact, insist that the former employee forward all leads and inquiries he or she receives, as a workaround for such generally non-transferable accounts.

Easier Said Than Executed

In practice, of course, such promises often prove more theoretical than realistic. Certainly, no firm wants to have to sue a social networking site to get control of the firm's own assets, or to regain access to a source of its online leads. Not only will that cost money, but (as noted above) the complaint or demand letter will also immediately be posted online, and drown out any contemporaneous positive marketing done by the company.

A related risk of a business's investment in social marketing is inherent in the nature of e-commerce generally: Web sites come and go, along with all the investment in their goodwill. Today, there are many social media sites vying for survival (see, sidebar below), even just in the business sphere. By analogy, consider all the well regarded search engines of the 1990s that have disappeared or morphed into something entirely different. Will today's Jigsaw or Avvo, for instance, be as forgotten as one-time high-flyers AltaVista, Ask Jeeves, Dogpile, Excite and Lycos? In the same way, today's social network leaders may be
tomorrow's penny stocks, and a substantial investment in one of them, whether by the firm itself or by a well meaning employee (even with the employer's encouragement), could go for naught if the networking-site developer does not network enough to build its own business.

Another risk can occur when an employee participates in a blog or other interactive discussion at a social networking site. As mentioned previously, employee blogging on behalf of an employer demonstrates loyalty and spirit that can attract and hold customers, and can even be part of a good business model (e.g., Wal-Mart's “Check Out” blog, at www.checkoutblog.com/). However, when readers may confuse the opinions of an idle blogger with the undisclosed propaganda of her employer's marketing department, the potential for confusion exists. As a result, the Federal Trade Commission (“FTC”) has proposed to step in and clarify the application of its long-standing rules on endorsements (see, www.ftc.gov/bcp/guides/endorse.htm) to writers of blogs, particularly those who receive benefits from the vendors whose products they promote (see also, www.ftc.gov/os/2008/11/P034520endorsementguides.pdf). While no one can question the value of eliminating hidden conflicts of interest, in situations where (rightly or wrongly) the reader places trust in the writer, certainly the attraction of the blog as a low-cost, low-maintenance method of communication with customers and potential customers diminishes if postings have to be vetted through the legal department first (even assuming that a review could occur in the timeframe required by a blog writer).

Conclusion

The invention of the personal computer, combined with Internet access, has given individuals unprecedented abilities to conduct business, including to promote their employer's interests, as well as their own. Often, however, new uses of online resources can become a process of “creative destruction” (see, http://en.wikipedia.org/wiki/Creative_destruction) ' although owners of travel agencies and record shops may question the creative value of such destruction.

Businesses that don't want to see their key assets diminished or destroyed by their employees' well meaning creative use of new social networking tools should, therefore, steer clear of allowing their employees' social networking marketing plans to build a cult of personality in favor of promoting the “cult of the brand.”

Business-related Social Media Web Sites

I have listed various social media Web sites solely for information purposes; neither the inclusion or exclusion of a site from this list should be deemed an endorsement or disapproval of it, and this list is not intended to be comprehensive.

Definitions

http://en.wikipedia.org/wiki/Social_network_service
http://en.wikipedia.org/wiki/Professional_network_service

Collections

1. 'Wikipedia List,' http://en.wikipedia.org/wiki/List_of_social_networking_websites

2. '50 Social Sites That Every Business Needs a Presence On,' at www.insidecrm.com/features/50-social-sites-012808/

3. '7 Social Networking Websites That Your Business Should Be Involved In,' www.buzzle.com/articles/7-social-networking-websites-yourbusiness-should-be-involved-in.html

4. 'Top 10 Social Networking sites for Small Business,' www.whatworksforbusiness.com/2009/01/top-10-social-networking-sites-for-smallbusiness/

5. 'Social Networking [W]eb Sites from A to Z,' www.cio.com/article/175250/Social_Networking_Websites_from_A_to_Z

6. 'Facebook for Suits,' www.economist.com/displaystory.cfm?story_id=12304861

Individual Sites

1. http://www.facebook.com/

2. http://www.fastpitchnetworking.com/

3. http://www.jigsaw.com/

4. http://www.linkedin.com/

5. http://www.passitto.com/

6. http://www.plaxo.com/

7. http://www.ryze.com/

8. http://www.xing.com/

9. http://www.zoominfo.com/

Sites to Check Names on Multiple Social Media Sites

(From: http://thenextweb.com/2009/06/30/check-username-availability-sites.)

1. http://www.fastpitchnetworking.com/

2. http://www.namechk.com/

3. http://www.knowem.com/

4. http://www.passitto.com/

5. http://www.xing.com/

Legal Networking Sites

1. http://www.avvo.com/

2. http://www.hubstreet.com/

3. http://www.lawlink.com/

4. www.martindale.com/connected

5. http://www.linkedin.com/

' Compiled by Stanley P. Jaskiewicz