How to Manage Your Company’s Social Media Efforts Using a Portfolio Approach

What can Venture Capital Firms and conglomerates like General Electric teach corporations about Social Media strategy?  By using a portfolio approach, they can increase their overall performance through diversification, focus, and transfer of best practices.

Managing Social Media Risk Doesn’t Mean Moving Slowly

A slow approach to Social Media seems logical.  “Let’s try Social Media out by creating a blog post or two, let’s tweet something cool about our brand, let’s put our advertisements on YouTube.”

But moving slowly is not likely to help your company reach its objectives because most firms in your industry have already done something similar.  While you can increase your chance of avoiding a Social Media disaster, you aren’t likely to make much progress.

Why Businesses Use a Portfolio Approach

Portfolios have been used by mutual funds, venture capital firms, and conglomerates for many years for the following reasons

  1. Diversification
  2. Focus
  3. Knowledge Transfer

Internal Benefits of a Portfolio Approach

What are some drawbacks to a portfolio approach?  In my next post, I’ll talk about governance strucutres to manage your Social Media efforts.  In the meantime, let me know what you think the disadvantages are to using a portfolio approach versus a large mass initiative.

Posted on June 23, 2009 at 10:05 pm by Ben Foster · Permalink
In: Leadership and Management, Strategy

7 Responses

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  1. Written by mike walsh
    on June 26, 2009 at 7:16 am
    Permalink

    really nice post Ben. I feel that so many technology considerations and personal choices can be aligned with economic models suck as game theory, portfolio analysis, risk analysis, etc. Keep up the good work!
    @mwalsh

  2. Written by benphoster
    on June 26, 2009 at 4:29 pm
    Permalink

    @mwalsh – you're right. People either over-apply models by trying to force them to do everything or completely ignore the principles that shaped them.

    It's a middle ground. Learn a model, apply it, and make adjustments for reality.

  3. Written by benphoster
    on June 26, 2009 at 10:29 pm
    Permalink

    @mwalsh – you're right. People either over-apply models by trying to force them to do everything or completely ignore the principles that shaped them.

    It's a middle ground. Learn a model, apply it, and make adjustments for reality.

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