According to Deloitte’s recently released 2009 Ethics & Workplace Survey, 74 percent of those surveyed believe it is easy to damage a brand’s reputation via sites such as Facebook, Twitter and YouTube.   Why wasn’t the result 100%?

Without a social media policy and strategy the risk is 100% that your brand reputation will be damaged.  United Airlines got it wrong and this is what happened – “United Breaks Guitars,” which was the headline making public relations nightmare of the week last week.  For those of you keeping score, it is estimated this episode, viewed by over 4 million thus far, cost United a 10% drop in their stock price, equivalent to $180 million or 51,000 Taylor guitars! 

Goldman Sachs stumbled and this is what happened – http://budurl.com/xbbv.  Crocs got it right when called on the carpet by Scott McKain in a tweet of a Washington Post article.  This is what happened – www.crocs/blog.com.

Employers and employees alike are seeing instances like these and are beginning to understand the real impact of social media on their brand.  The results of the study could have very well stated 74% of those surveyed don’t understand social media and the power of social media.   

The essence of social media is that customers now have the power and ability to access, consume, customize and forward information however, wherever and whenever they want.  Social media therefore provides businesses with the ability to actively listen, watch, gather and learn from their customers.  The information gathered can be converted into customer advocacy, brand building and inspire loyalty much quicker than traditional methods.

Is it worth the effort the time and effort?  According to Nielsen, total minutes spent on social networking sites in the U.S have increased 83% year-over-year. In fact, total minutes spent on Facebook increased nearly 700% year-over-year, growing from 1.7 billion minutes in April 2008 to 13.9 billion in April 2009, making it the No. 1 social networking site for the month… and worth $10 billion last week according to analysts.

Firms that fully understand the value proposition of social media are implementing electronic communications policies which establish strict guidelines for employee participation on blogs, chat rooms and other social media.  They are not bashful about imposing these same rules on employees providing opinion or advice, even if it is from their personal computers.

One example of a corporate electronic communication policy is IBM’s.  They have established a straightforward set of Social Media Rules & Guidelines, available to every employee taking the guess work out of the rules governing electronic communications.

Firms’ that establish guidelines early foster an environment that promotes social media as a way to connect to their clients, rather than through their products, and engage and solicit their employee’s opinions on social media, will benefit the most.