Yammer, Chatter, Hot Water

Managers have long been advised to think twice before putting something embarrassing or incriminating in an e-mail, and yet the informal nature of the medium often makes for blunders. Now companies are grappling with technology that encourages even more casual communication: social networking and collaboration software offered by IBM (IBM), Salesforce.com, Yammer, and others.

Advocates of the technology say it allows global workforces to stay in touch, letting employees discuss customers, internal politics, research projects—really, just about anything. Though the services are similar to Facebook or Twitter, the conversations are typically restricted to insiders. Revenues for the sector are expected to climb 16 percent this year, to $769 million, according to researcher Gartner, which tracks some 80 companies that offer such services, either as stand-alone software packages or online subscriptions. "E-mail requires an active response," says David Sacks, chief executive officer of Yammer, a three-year-old startup in San Francisco that says it provides social-networking software to 100,000 companies. When using Yammer or its rivals, "you don't have to wait for someone to send you something. You can find it on your own." Sacks touts the applications as a way to foster camaraderie and loyalty, citing research by tech consultancy Deloitte Digital that showed almost no turnover among its employees who use Yammer frequently.

Some sociologists warn that with so many people making gaffes on Twitter and Facebook, companies should prepare for similar behavior on internal social networks. "Because this started out in the social sphere before the corporate sphere, people will bring the same cavalier" attitude, says Noshir Contractor, a professor of behavioral sciences at Northwestern University. "When people locate something in their mind as being informal, they get in trouble." That could create problems for employees who are too open on services like Yammer and Chatter, a rival product sold by Salesforce.com. "When you're considered for a promotion ... anything you said on Yammer will be used in some cases to determine if you're qualified," Contractor says.

As with e-mail, which can be subpoenaed by attorneys in a lawsuit, companies need to figure out how long they're legally obligated to store comments exchanged by employees on the services. Sometimes this means simply matching social-networking guidelines to existing e-mail retention policies. Other times, it's trickier. Research teams, for instance, have turned social networking and other collaboration tools into the virtual equivalent of engineers' notebooks. They discuss new ideas and then track how they become actual products, producing a stream of information the company could use to claim ownership of an invention.

Robert D. Brownstone, who handles technology and e-discovery matters at Silicon Valley law firm Fenwick & West, says social networking and collaboration tools offer many advantages, but warns that managers must be careful to monitor what's said. "There are benefits to capturing what people are writing and to get your arms around what employees are committing to writing," he says. If employees write things that violate regulations, though, "there are concerns in terms of keeping track of it."

Many internal social-networking services have controls and document retention built into their software. IBM's product, IBM Connections, can restrict employees in sensitive areas to reading, but not authoring, posts, and it has systems that let internal moderators oversee comments. "We can see when people create, update, and delete content," says Alistair Rennie, the general manager of collaboration solutions at IBM. Rennie urges executives to make their policies clear to employees and to put up reminders about appropriate behavior.

Like many companies, router and gadget maker Belkin has decided that the rewards of internal social networking outweigh the risks. The company has created a sales playbook with Chatter, documenting how people came up with price quotes for various products, while it uses Yammer for its broader collaboration efforts. Belkin is prepared for a certain amount of inappropriate behavior as more employees sign on, and the company's legal team is working on crafting a policy for storing the conversations, says Chief Information Officer Deanna Johnston. "The casual nature of the comments can leave a lot of room for interpretation," she says. "At some point in the future we will have a problem, and it will probably drive a policy change." Nonetheless, Belkin sees social networking as a way to foster an entrepreneurial spirit. "You have to get on the train," Johnston says. "It is not going away."

The bottom line: More companies are embracing internal social networks. The systems may create legal risks if not carefully monitored.

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