Why do some businesses ban social networking? The message from 'Throwing Sheep in the Boardroom' author Soumitra Dutta was 'loosen control while not losing control', at a recent enterprise conference in Turkey. Technology correspondent Jon Wilcox reported from Istanbul on how social networking is changing business values.

As the mainstream media and certain celebrities continue to fawn over micro-blogging website Twitter, many businesses are looking into how social networking can work for them – whilst others have reacted to the Facebook ‘invasion’ as a hostile act.

High-end data warehousing corporation, Teradata, recently held its annual conference in the Turkish city of Istanbul, where one seminar focused entirely on the subject of social networking, and how it is challenging traditional business values. Speaking at the event was Soumitra Dutta, a professor of business and technology at INSEAD, who presented his keynote “Throwing Sheep in the Boardroom – How Online Social Networking Will Transform Your Life, Work, and World” during the three-day event.

Dutta co-authored “Throwing Sheep in the Boardroom” with fellow INSEAD professor, Matthew Fraser, in 2008. For social networking aficionados, much of Dutta’s keynote won’t have revealed many surprises, but he did outline several key opinions for why some businesses feel threatened by the likes of Facebook and Twitter. For Dutta, and presumably the absent Fraser, social networking will continue to permeate through every facet of people’s lives, massively shifting entire value sets along the way.

Highlighting the dramatic ‘velocity of change’ throughout technology in the past century – from the 89 years it took for the telephone to reach 150m users to the five years it took Facebook to acquire the same figure – the argument of an increased acceleration in world-changing technology, is compelling. Equally compelling is the hostility amongst the corporate sector to social networking, which perceives the likes of Facebook and Twitter as some sort of anarchist emovement, used to disrupt the working day.

Embrace don't ban

According to Dutta, two-thirds of City firms have banned or restricted access to Facebook (though tech-savvy employees can presumably get to the website with web-based proxy servers), whilst the Pentagon has banned MySpace for army personnel. He didn’t reveal whether the US Defence Department had passed similar restrictions on the four other branches of the US armed forces...

Whilst businesses of all sizes can of course make a strong argument that social networking hinders the workflow of employees, Dutta points towards the contrasting architecture between organisations and Web 2.0 networks as the real reason for the hostile reception. Whilst traditional business structures and hierarchies are vertical (offering functional roles based on status and title), the world of Web 2.0 is more horizontal (based on knowledge and expertise), allowing a democratisation of ideas and values.

Loosen control

The maturing net generation, he argues, is accustomed to interactive, instantaneous, transparent, and democratic ideals, which aren’t perhaps qualities shared by the “generally a more closed, control-orientated environment” offered by businesses.

How social networks are utilised by companies to deliver messages to its potential audience is perhaps one of the most important strategies to get right. Used effectively, the relationship between company and consumer/client can strengthen, fostering an increased sense of community.

Harness social networking the Obama way

Perhaps the most successful use of harnessing social networks to foster a strong message platform is Barack Obama’s democratic primary and presidential campaigns. The message of change in the US was always going to strike a chord with a population increasingly disillusioned with the previous administration, but the campaign’s strategy to utilise social networking was solid, and so was the level of success. By Election Day, over 13m people were on the Obama emailing list; over 3m people donated online; Barack Obama acquired 5m ‘friends’ through social networking websites, 3m on Facebook alone. In addition, the campaign released 2,000 official videos, which sounds a lot, but was still dwarfed by the 400,000 user-generated videos posted about Obama on YouTube. In short, Obama’s campaign successfully harnessed Web 2.0 to convey the candidate’s message, energising the typically politically-lethargic. It’s a strategy that businesses must surely look towards for inspiration.

Also speaking at the Teradata conference, leading innovation consultant John Kao, spoke about the need for intelligent use of social media by businesses: “Social media is just a toolbox; it can be used for any purpose you can imagine. The deeper question for companies intrigued by social media is to figure out what the purpose of using it is.” He added, “The downside of social media is that people, being smart, can usually smell insincerity or marketing a mile away. That’s the double-edged sword.” For Dutta, the message for businesses is simple: “Loosen control while not losing control.”