Financial Crisis Communication in Social Networking?

By Zuo Maohong, Rui Bingyou
Published: 2008-09-18

Top global financial executives have a new closed-door community - Meet the Boss - to thrash out and exchange opinions as their trade reels from dramatic events that have reverbereated beyond Wall Street and across continents.

If the exclusive club were abuzz with nervous brainstorming among the CIOs, CEOs and senior excutives of well known financial institutions such as ABN Amro, Barclays and Goldman Sachs; all would happen veiled from public and media prying, suggest the site's founders.

"The platform allows them to really express themselves without fear of press intervention and because of this they are using the site daily, sharing knowledge to help them through this difficult time," said John Funnel, director of marketing for Meet the Boss, which membership - to be capped at 50,000 - is by-invite-or-application only.

But Paul Argenti, a professor of business communications for the Tuck School of Business, told the EO that such tools are double-sided during crises.

"Some would say they speed up the escalation of a crisis--when bloggers spread stories throughout their networks of influencers--while others would argue that they allow executives to minimize the negative effects of one," he said.

Targeted Networking
Those who made the cut to enter Meet the Boss, launched on Sept 8, would have access to weekly exclusive video interviews with movers and shakers in the financial industry. Profiles and career notes of members would also be a click away.

More importantly, they could contact industry counterparts globally through secured video calls using instant messaging, e-mail and short messaging system to discuss common challenges.

Meet the Boss joins a stream of other niche social networking sites that have proliferated in recent years. In its own press release, Meet the Boss boasted that it "has been called Facebook for executives, but it offers more than water-cooler gossip and widgets".

Unlike LinkedIn, another targeted social networking for professionals in at least 150 industries, Meet the Boss zoomed into one niche market - leaders of the financial industry, and actively cultivated a seed community among them with invitations.

Funnel said its current user base numbered above 20,000, with some larger financial organization signing up their whole executive boards. He added that about half of the members were based in Asia, with about 1,000 in China alone.

The international nature of such a community could take on new importance as Asian markets wait anxiously for cues from a bleak and volatile Wall Street.

But though it reached around the world, Funnel stressed security and confidentiality of the closed community was pivotal to frank exchanges among members. The EO met with refusal to get in touch with individual members to discuss how the site has played a role in helping each other to ride out the current financial storm. 

Professor Argenti believed the majority of business executives were hesitant to take the plunge and use Web tools that force direct, candid interactions with their stakeholders. "Because they feel--and somewhat correctly--that there is a loss of control that could lead to reputational crises," he said.

For many social networks, usability and privacy are two sides of the same coin. Chen Huan, of venture capital firm China Growth Capital and the editor behind China Web 2.0 Review Blog, said privacy aside, these networks must really prove themselves useful in order to retain members.

"We see many sites have quite low active user rate, because people registered the sites, but find it no use, then they leave," he said.

To this end, Funnel told the EO that the average time spent on the site was about three hours per week, with thousands using it daily for communication.

Nonetheless, Guo Tianyong, director of the China Banking Institute under Central University of Finance and Economics, had his doubts if executives from different organizations would openly share information in view of trade rivalry and corporate secrecy.

Enterprise 2.0
Businesses are increasingly turning social networks, blogs, wikis, RSS feeds, and other emerging online tools to improve productivity and communication in their workplace and beyond.

Buzz over such "enterprise 2.0" software is at a crescendo. Forrester Research predicted last April that by 2013, enterprise 2.0 software will be a $4.6 billlion industry, with social networking making up almost half of that pie.

But while the market may be ripe down the line, social networking in professional environments still needed some grooming.

A McKinsey survey published in July showed that while some web 2.0 tools were proliferating in the workplace, social networks hadn't received the same enthusiasm there: in 2007, 27% of executives responding to the survey said their firms were using such sites. In 2008, that figure nudged up to 28%.

In China, though social networking sites have mushroomed over the past years, those catering to professionals or specific industries remained limited.

One site that claimed to be one of China's fastest growing online professional social network, - which caters to those in the information technology industry, and thus has a relatively young and web-savvy membership - had only in August announced that its membership crossed the 10,000 mark.

For the matured professionals or leaders of an industry, like the targeted memberships of Meet the Boss, technology barrier could be an issue. Funnel admitted that the site was designed with simple and easy-to-use interface to ensure minimal hassle, as business executives were very busy and result driven.   

Regarding this, professor Argenti told the EO: "Closed social networking communities are an ideal first step for executives who are uncomfortable with Web technologies, but that should only be a first step. 

"Once executives have experimented with these tools in a safe environment, they should begin to incorporate open networks into their arsenals of communications tools."