I wish I had a buck for every time somebody who works in the financial markets or the healthcare and pharmaceutical industries said something like this to me: "We can't get into social media, blogs, Twitter, and the like because of the regulations in our industry."
What I say back to these Nervous Nellies is that there is nothing fin Regulation FD (fair disclosure), the Sarbanes-Oxley Act (SOX), the Health Insurance Portability and Accountability Act (HIPAA), or any other regulations governing the financial, healthcare, or pharmaceutical sectors that says you can't communicate online. The various regulatory agencies do not ban the use of Twitter. They do not forbid you from blogging or shooting a YouTube video.
What's operating here is fear: fear of the unknown and fear of being first. And whenever fear operates in a highly regulated industry, the lawyers tend to just say, "No." It's a hell of a lot easier to not even try, the thinking goes, then to break new ground by being the first CEO in your industry to tweet.
So it is with excitement that I can report that some pioneers at leading organizations in the healthcare and financial services industries are active in social media. I'm particularly impressed by the popular Running a Hospital blog from Paul Levy, president and CEO of Beth Israel Deaconess Medical Center (BIDMC) in Boston. Levy has been blogging for several years, providing great visibility into what goes on at BIDMC, a teaching hospital of Harvard Medical School with 1,200 physicians. Blog posts range from reactions to healthcare topics in the news to profiles of staffers to insights into the inner workings of BIDMC. He's also addressed sensitive topics, occasionally admitting that BIDMC messed something up.
Levy serves as a role model for other hospital CEOs, and he maintains a blogroll of others who have joined the exclusive club. It's likely that other hospital CEOs who choose to blog, such as Scott Kashman, CEO of St. Joseph Medical Center in Kansas City, Mo., did so partly because Levy paved the way.
In the financial markets, Putnam Investments, a global money management firm with more than 70 years of investment experience, was very early to the internet with innovations such as allowing financial advisors to go onto the web and do transactions back in 1995. Now it is early again with Putnam's CEO Bob Reynolds being the first CEO in the mutual fund industry on Twitter (@robertlreynolds).
I spoke with Mark McKenna, managing director of communications at Putnam, to learn more about how Putnam chose to break into social media. "Bob was one of the first to recognize that we need to get our content out there," McKenna says. "When he wanted to get on Twitter, we shut the doors with the lawyers and said let's figure out how to do this. What we do is have a compliance person see a tweet before it is posted. But Bob has quickly become tuned to 140 characters and what he can say from the regulatory point of view. Twitter is a great place for him."
Putnam was also early into the fray with its blog The Retirement Savings Challenge, which does not promote the company's products but instead is built to start a conversation about America's workplace savings plan. The team at Putnam believes it can become a more reliable savings foundation for the nation's retirement system, and the blog delivers information to show how public policy needs to improve.
"We're proof that the SEC and FINRA have created broad guidelines, and it is up to the industry to work within the guidelines to make social media work for shareholders," says McKenna. "It's another media that we all have to learn. Some people were slow to the internet, and I see similar patterns with social media adoption where the power is underestimated." As Levy and Reynolds clearly show, companies in regulated markets can thrive in social media. Perhaps it takes a committed CEO to take the plunge. However, as more and more firms pave the way, my guess is that the Twitter streams and blog posts they are producing will serve as evidence for anyone wanting to set a social media agenda.
So if you're in the financial markets or the healthcare and pharmaceutical industries, stop making excuses. You can do it too. Tell your bosses what's going on at BIDMC and Putnam and challenge them to do it at your organization too.