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September 2022 < Back

Social Media For Business Families

Active participation in social media can serve as a powerful tool to build personal brand for leaders and members of entrepreneurial families. Many founders, start-up entrepreneurs and C-Suite leaders have adopted successful social media strategies to build a powerful personal brand. It is an effective strategy to enhance the brand identity of the organization with which the person is associated.

In the case of a family-owned business, online reputation can often get more complex with interlinkages between personal brand of the founder and/or family members and the organization. Therefore, if the individual / family strongly believes in leveraging social media to strengthen personal and the organization’s brand identity, it is important to adopt a well thought out social media strategy for personal reputation management and use it meaningfully to enhance the brand identity of the core/legacy business.

Key Benefits Of Embracing Social Media For Family Business Entrepreneurs / Leaders:

● It provides an economically cost-effective marketing tool/ platform to build one’s personal brand, that enables communicating who they are both within and outside their company.
● It allows them to engage rapidly and simultaneously with peers, employees, customers, and the broader public, especially younger generations, in the same transparent and direct way they expect from everyone in their lives.
● It offers an opportunity to learn from instant information and direct feedback.

Jeff Epstein was hired to be the CFO of Oracle after a recruiter found him on LinkedIn, and Ger Hartnett, founder of Irish software company Goshido, and his team used the network to send 700 messages to potential investors, raising $230,000 in eight days.

Managing Risks

Though the benefits of social media are very attractive, families also should consider the risks to their reputation through social media. Protecting the family's reputation is as essential as protecting any other asset.

This is quite challenging in the current times due to the speed at which information travels and the fact that negative information posted in the public domain will become accessible forever. Moreover, numerous studies have shown that business families are frequent targets of cybercrime and other perils as the social media sites are a deep source of personal information.

Framing the Guiding Principles

Let’s explore one solution that combines the principles of equity and equality in the context of the above scenario. The ownership in business is inherited by all the children equally as the family’s legacy. But if family members want to work in the business, they have to be competent, and they are compensated based on their contribution in the business. The other children are given equal value in other assets as part of wealth distribution. Therefore, most often the solution lies in ability to carefully combine both equity and equality principles in achieving a fair outcome for all.

Simply asking family members to "be careful" will not be effective. The implications of not being disciplined or cautious on social media should be discussed in a formal setting as a family.

Creating a social media policy that protects the digital and physical safety of the family is essential for all high-profile wealthy families.

For instance, in one family, their “Reputation Management Policy” commits to discussing the use of social media and potential family reputation risk at every family meeting. They used a third-party facilitator to help educate family members about safe use of social media and ensured a cybersecurity audit to protect against hackers.

A family can begin to create its social media policy by asking what purpose members hope to serve with their social media accounts.

● Is the goal of the social media policy to simply protect the family from embarrassment, identity theft, fraud and financial harm?
● Or is the goal to enhance the family’s positive image and make the family’s legacy more articulate?

The family needs to distinguish between business social media and family social media and how they can intersect.

● Will the family’s personal social media aim to reinforce the brand of the business or avoid mentioning the business entirely?
● Or will there be an impact from social media activities on the family’s philanthropic activities?

It is important to set some guidelines about what information that should and should not be disclosed – as an individual and as a family. Anything that they want to keep private and confidential should not be posted on a social media platform.

Group discussion during the policy-drafting process will help family members understand the implications of each other’s social media needs and objectives. Such a discussion raises awareness and secures the essential commitment of the family.

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Social Media For Business Families

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Thank you for your interest in PFBI Connect. Each month you'll receive a concise rundown of tips, trends and analytics on topics that can leverage the best of both family and business.