What is the biggest risk in social media?

I've led and been involved with various social media risk assessments.  It is a worthwhile exercise for any business, and should be reexamined on a regular basis.  One critical element is assuring that the assessment has equal focus on the benefits and the risks associated with social media.  Everything has risk.  The assessment needs to determine if the benefits outweigh the risks.  In many cases, the business will decide to accept the risk based on the perceived value.  Of course, risk should always be minimized by identifying and executing mitigation activities.

The biggest risk that repeatedly arises is the risk of not participating.  It's different that all the other risks which have a direct cause and effect.  This risk is having an effect due to inaction which could lead to loss of relationships and market share to competitors.  The impact is hard to quantify, but can be significant.  The mitigation for the risk is a tough one, since it involves culture change from the top.  Senior executives need to be convinced that there is a risk of not participating.  If companies don't recognize this risk, they may find themselves lagging the competition. 

What risks have you seen for your company? I'd be interested in your insights.

FTC's "do not track" implications to Social Business

There is an article in today's NY Times titled "F.T.C. Backs Plan to Honor Privacy of Online Users".  It describes the Federal Trade Commisions (FTC) proposal to create a "do not track" mechanism that would put the same type of controls on businesses as the "do not call" registry.   While I agree with providing users with information about how their information will be used, I do think it has to be balanced with an understanding of the benefits associated with the use of this information.   A few years ago, I know that many people were very concerned about having pictures of their house taken by google maps.  But, now many accept that risk knowing that the benefit of finding directions to other places is significantly improved. 

As governance policies are created to mitigate risk, there needs to be a careful analysis of the risk and benefits.  This takes careful analysis.  It becomes even harder when you consider the dimension of what the benefit could be in the future.  As another example, I first thought that location based services were 'creepy'.  Why would I want complete strangers to know where I am?  The risk is that some crazy person will do harm to me or my family.  However ... the benefits can be huge.  If I am driving by a department store, would I welcome a coupon to shop there for 20% off?  Or, would I like to have a 'free french fries' promotion sent to me on my mobile phone as I am walking past a McDonalds?   If I am never given the opportunity to experience the benefits, how will I know if they are work the risk?

I do agree that there needs to be continued work on mitigating risks (e.g. regulations on the collectors of the information to assure that it does not get into the wrong hands along with a strong mechanism to allow users to 'opt out'), but it must be done in the context of potential benefits.

This is a key turning point for Social Business.  Too much government regulation will choke innovation.  The ultimate loser will be the consumer.  I'm hopeful that we can strike the right balance, and educate consumers on the potential benefits of Social Business and let them then make the decision about risks of sharing information.