This article originally appeared on the BrainYard.

If the company claims to be a social business, look for evidence of real corporate transformation in the CEO’s letter to shareholders.

Have you noticed the length of any CEO’s letter to the shareholders in the obligatory annual report?

This is where they highlight their key strategies and market opportunities, minimize any downside impact on the business, and anticipate the business direction moving forward. Since many sound a lot alike, I’m convinced someone published a template years ago on what an exemplary one should look like and many organizations use the “find & replace” feature with a few cosmetic changes to publish their own.

Here are two other observations:

1. I’ve found a peculiar and rather direct correlation between the current and future success of the organization and the actual length of the letter. Think about it: the more space, time, words, sentences, and often convoluted examples the CEO has to use to actually explain the business–past, present, and future–probably the more complex the business. That means it’s also probably:

— too complex for prospective clients to connect the dots between their desired strategic outcomes and the vast sea of options in products and services the organization offers.

— too complex for current customers to understand which business unit, sales team, account management organization, or post-sales 800 number they should call.

— too complex for current or prospective employees to understand–“if we do all this really well, what are we really good at?”

— too complex for a myriad of internal and external relationships to understand how to move the organization really forward.

As a society, if we haven’t learned anything from microblogging apps like Twitter or Yammer, we should learn that there is value in brevity.

2. There is a lot of buzz in the market right now about becoming a “social business.” Many have no clue what that means as their social strategy is defined by the tools they use. That’s the tail wagging the dog.

If you really want a barometer for an organization’s evolution toward becoming a social market leader, look for clues in the CEO’s letter in the annual report. You probably won’t find any mentions of Twitter or Facebook–and you shouldn’t. What you should read are examples of how they’re thinking and leading differently about their business. Is the organization transforming itself from “command and control” to “trust and track?”

Is the organization listening more intently–not through stale surveys or useless hypes like Net Promoter Score–but are the CEO and the senior leadership team spending more time in the field, at the edge of where their business really happens? Are they attracting, retaining, and highlighting their next generation of leaders? Are they creating smart touchpoints along a logical customer lifecycle to really understand the evolutionary needs of that customer? Are they focused on the outcome–how their customers are better off because of them–versus input, all that they do? Are they focused on “value-add,” or value-perceived, received, applied, and impacted?

You see, social isn’t about simply having a presence on a multitude of sites such as Facebook or Twitter or developing a platform on various blogs, forums, and discussions groups. Social is about market leadership: developing an offensive strategy to take your vision to the market and a defensive one to combat misinformation or a competitive threat. Social is about thinking and leading differently in an age of connected relationships.

If you’re responsible for writing that next annual report CEO letter, how will you think and lead differently because of social?


To read more about leadership and social in the digital age, read Return On Impact: Leadership Strategies For The Age of Connected Relationships.

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedIn