The rise of social media has been quick, powerful and unprecedented. It has torn through the fabric of our global society and continues to redefine the way we understand the world, with its magnetism holding our minds hostage in a seemingly perpetual desire for more. What makes social media such an irresistible force? The answer lies in our inherent need to connect and conform to those around us. For the first time in human history, we have gained the ability to connect and conform on a global scale. We are able to readily plug into the minds of those around us and in turn, leave our thoughts and opinions exposed and vulnerable to the judgement of others.
Planting the seed of thought
The ramifications of heightened connectivity are both cognitive and emotional, and it is with this awareness that both behavioural scientists and business folk alike are viewing the social media universe as a petri dish to understand how opinions inform trends, and how trends can evolve into fundamental shifts in behaviour and belief.
Indeed, the accessibility afforded by social media has bolstered a (now normal) phenomenon where a single, individual opinion or news item can create a noticeable movement in the online universe. This phenomenon is initiated by a cognitive bias called the cascade effect (1). This principle, coined after the natural evolution of a small stream into a boundless ocean, is founded in our innate need to conform to others and be a part of the “herd.” A cascade occurs in a situation where we become exposed to a news item or opinion that has traction with influential members of society. In our desire to assimilate with the masses, we integrate the information within our mental models of how we understand the world and then share the information with our networks.
This cognitive cascade is perpetuated by a secondary principle called the bandwagon effect (2), where the uptake rate of a particular opinion or news item accelerates at a rate proportional to the number of people boasting that particular opinion or piece of news (also known as “going viral”). The compound impact of both cascade and bandwagon effects has become so profound that some mood states on twitter have been shown to significantly predict subsequent fluctuations in the stock market (3).
We can’t escape the bandwagon
Social media platforms act to intensify the natural volatility of global opinion and belief and in turn, have induced an ever greater demand on companies to meet the expectations of their increasingly connected network of stakeholders. Our inherent tendency to hop on the bandwagon has morphed the social media universe into a reputational risk zone for corporations around the globe. As control over an organization’s reputation is increasingly shifting into the hands of stakeholders, reputation risk has likewise been rated as being more important than other strategic risks by 87% of executives. It is with this understanding that GlobeScan recently teamed up with Polecat, a digital listening firm, for a webinar to explore key trends in risk, issues and leadership within the online universe. We discussed how digital listening can complement primary research on corporate issues and risks, and how these insights can inform an effective reputation management strategy.
So, how do you make the most of a volatile, uncertain, complex and ambiguous (VUCA) world?
Embrace it. Learn from other companies’ successes and failures and use the social media universe to engage with your stakeholders, to hit the ground and identify topical conversations that have the potential to cascade into a full-blown reputational crisis, and to respond to the crises that have already began. Utilize the digital world to identify the bandwagon and proactively steer the course of the conversation and eliminate negativity. Challenge your organization to turn the reputation risk of shifting attitudes and behaviors into an opportunity for growth and empowerment. Doing so not only acts to boost transparency and personify your brand, but also acts as a buffer against the potentially harsh wind of a VUCA world and builds brand trust during times of adversity (4). Move toward an integrated intelligence platform that combines both primary and digital research and build a resilient reputation (see graphic below).
Social media platforms promote social mobilization and innovation that ripples through every facet of society. It gives the people a voice and because of that, things are a little more volatile. However, we are also at a point in human history where we can tap the minds of the masses and create products and services that provide value at scale for society. We as a business community should therefore try to not fall victim to this volatility but instead to grasp the opportunities this exciting environment provides.
References:
1 Klatzky, S. R. (1970). Automation, size, and the locus of decision making: the cascade effect. Journal of Business, 141-151.
2 Nadeau, R., Cloutier, E., & Guay, J. H. (1993). New evidence about the existence of a bandwagon effect in the opinion formation process. International Political Science Review, 14(2), 203-213.
3 Bollen, J., Mao, H., & Zeng, X. (2011). Twitter mood predicts the stock market. Journal of Computational Science, 2(1), 1-8.
4 Scott, S. V., & Walsham, G. (2005). Reconceptualizing and managing reputation risk in the knowledge economy: Toward reputable action. Organization Science, 16(3), 308-322.
Social media logo illustration courtesy of Roy Blumenthal/Flickr
This post was written by former GlobeScan Senior Research Analyst, Dr. Melaina Vinski.
