The Risk of Fearing Social Media

“The only thing we have to fear is fear itself.”

When Franklin Delano Roosevelt spoke those famous words in 1933, he was trying to rally a nation suffering through the Great Depression. If FDR were alive today and wearing my shoes as an industry analyst, he might use those same words to rally executives around using social media in supply chain management.

A couple of weeks ago I participated in an excellent forum organized by The Center for Strategic Supply Leadership on social media in supply chain management. Because the forum discussions were confidential, I won’t go into the details about the various presentations, but there was a common thread to most of them: an overwhelming emphasis on the risks associated with social media, with numerous “horror stories” cited, including multiple renditions of the “Pink Slime” incident from earlier this year (which I wrote about in “Lesson from Pink Slime Incident: Social Media is a Supply Chain Risk”).

Granted, risk management is an important concern and responsibility for supply managers, and the forum description on the website also emphasized risk: “Pink slime…One uninformed blogger…Worldwide access…and your company or your supplier is in the crosshairs of major controversy, maybe even a public relations or legal debacle (or disaster?) for your organization.” But I was still surprised, and disappointed, that by lunchtime on the first day there had been virtually no discussion about the potential benefits and opportunities social media could provide. The glass was half empty, or viewed differently, only filled with fear and worry.

Maybe it’s because there are more horror stories to tell at the moment than success stories, or that horror stories are just more fun to tell, especially if they involve a YouTube video.

Yet, as I discussed in my presentation, there have been many positive developments over the past year, and the rate of progress is accelerating. Consider these examples:

Don’t get me wrong — it would be foolish for companies to ignore the risks associated with social media, including damage to your brand’s reputation and the release of confidential information, the top two social media risks highlighted in a report published recently by Altimeter. Therefore, companies should adapt existing risk management best practices, such as those outlined by the Supply Chain Risk Leadership Council, to include social media risks. (The sad truth, however, is that many companies lack formal risk management processes).

But it would be even more foolish for companies to get blinded (and paralyzed) by fear, and not see (or seek) the opportunities associated with social media. According to an analysis conducted by McKinsey Global Institute (MGI), “the use of social technologies to improve communication and collaboration within and across enterprises could contribute two-thirds of the $900 billion to $1.3 trillion in value that [MGI estimates] can be created across the four commercial sectors [they] study”– consumer packaged goods, retail financial services, advanced manufacturing, and professional services.

The bottom line is that you have to strike a balance between identifying and managing the risks associated with social media and identifying and going after the opportunities social media creates. In sports parlance, you can’t just play defense if you expect to score some points and win; you have to play offense too. And if you have to fear anything, fear the risk of missing out on this value opportunity, or getting there way after your competitors.

(Note: CH Robinson, Con-way, Manhattan Associates, MercuryGate, SAP, and Volerro are ARC clients and/or Logistics Viewpoints sponsors)


  1. Interesting how logistics companies are going to adapt social media. It’s so much easier in industries such as news, retail or entertainment where people are naturally motivated to share and engage. Logistics is in a way a background process in many cases and rarely reaches the audience. Maybe we’re missing somehing here. Curious where the whole social media craze will take us.