Experts say Nickolaisen did well to start with his company’s business goals. Charlene Li, founder of Altimeter Group, a digital strategy consulting firm, and coauthor of Groundswell: Winning in a World Transformed by Social Technologies (Harvard Business School Press, 2008), says considering the business objectives is essential for CIOs selecting a social networking tool. “It all depends on the goals of the company,” she says. “Are you trying to engage customers? Are you looking to drive sales? Are you looking to get people talking internally? It all starts with that.”

John Kembel, CEO of HiveLive, Inc., a Boulder, Colo.-based developer of social networking software, agrees. “Some companies start with a focus on internal collaboration and efficiency, while others start with more of an external focus on customer engagement,” he says. “We’ve seen the greatest success with those companies that start externally, bringing customers closer to their business through a community. This extroverted posture makes for the fastest cultural shift, driving innovation and competitive advantage.”

Doubly Social
Nickolaisen of Headwaters may also be leading a trend with his choice of not one, but two social networking systems. Indeed, Li says many companies will ultimately select two different social networking technologies: one for internal use and the other for external use. Which approach should a CIO take? It depends. Does the CIO need something that’s one-dimensional and works internally only? Or does he or she need a bigger ecosystem that connects to public social networking services such as Twitter or Facebook?

Either way, says IDC’s Dangson, the CIO is best positioned to manage and support the flow of information within the enterprise — and to support and direct an organization’s social media strategy. The CIO should work with the CEO to develop corporate guidelines and policies that help encourage all employees to use social networks. One best practice for CIOs evaluating social networks for business, says Dangson, is to choose a flexible platform, one that aligns with the company’s business objectives and will connect all departments of the company. “Corporations that have experienced quantifiable success in deploying social networks have buy-in and support from upper management, who understand this is not just an activity for marketing and sales,” she says. “It’s about connecting the entire company and leveraging the wisdom of many, not just a few.”