Domino's Pizza learned a valuable lesson in 2009. After two employees posted a video of themselves on YouTube defacing a pizza, Domino's waited a whole 24 hours to respond. In a digital world where people exchange information in real time, that response was 23 hours too late.

When Domino's realized that the YouTube video received 250,000 views overnight, the company decided to make a video of its own. In the broadcast, CEO David Brandon apologized and thanked the online community for bringing the video to his attention, and then outlined the steps the company would take to ensure the incident wouldn't happen again. In doing so, Domino's mitigated a crisis, prevented further negative fallout, and saved its brand reputation.

Douglas J. Wood, partner at social media consultancy Reed Smith, says the Domino's incident represented a new dimension of social media. "It is a new era of marketing communications today," Wood says. "Companies that find out how to embrace that and use it to their advantage are making great headway."

However, organizations that fail to create awareness in their organizations face many risks, from data security breaches to defamation to trade secrets leaks. Essentially, social conversations become a breeding ground for regulation and litigation, Wood says. Implementing a policy that guides employees' use of blogs and social networks can protect against information leaks, damage to the company reputation, and possible harassment of coworkers, as well as allow the employer to know what people are saying about the company.

The challenge, Wood explains, is that conversations in the blogosphere are largely uncontrollable. Due to the unstructured nature of social networking, businesses struggle to strike the right balance between the social and personal nature of these tools while maintaining some degree of corporate oversight. "The old-school way is that if someone was doing you wrong, you would go to the lawyer and say, 'Stop them.' You can't do that anymore. You can't stop a viral discussion on Facebook or YouTube," he explains. "The new way has to figure out how to get into the conversation and redirect it."

Numerous companies are finding ways to do just that. From sophisticated organizations like Intel, to universities like Ball State, companies are implementing both internal and external policies on either their intranets or websites in an effort to help guide the conversations about their brands. Intel's Social Media Guidelines, for instance, on its website offers "Rules of Engagement," which is a list of employee code-of-conduct reminders like "Are you adding value?" and "Be a leader." Kodak took a slightly different approach, instead posting its "Social Media Tips," which include light-hearted advice like "Be yourself. Readers can see through marketing talk," and "Add value. Share tips, tricks, and insights. People's time is precious and they need to get something out of the time."

While many companies may choose to involve their legal team in developing social media guidelines, IBM took a vastly different approach. In 2005 the company allowed the employees to create a policy using an internal wiki and the legal department approved it after only one pass. "It seems counterculture, but they did it in such a way that was agreed upon by the employees so therefore the policy would work," says Jeremiah Owyang, partner of customer strategy at Altimeter Group, a digital media consulting firm.

The Air Force soars in social media
While most of the private sector still struggles with navigating the social media landscape, a surprising leader has been forging ahead. In 2008 the Air Force launched its Air Force Blog Assessment Chart, which maps out specific guidelines from when to follow up on blog comments to the suggested tone bloggers should take. Ever since the release of the chart, companies have been asking the Air Force for advice on developing their policies.

Capt. David Faggard, public affairs officer for the Air Force, came aboard in 2008 to lead the branch's social media strategy. At the time the Air Force had no policy in place. He immediately developed a pamphlet that included guidelines, and an Air Force designer eventually morphed that content into the organizational chart. Faggard also wrote a 40-page book that offers social media definitions, how to use social media effectively, and lessons learned. A newer version was recently written and sent to the Air Force Academy.

Faggard notes that by no means should the content be construed as governance. "You can't just close Facebook to an airman. There's something called Freedom of Speech," he says. Education and training, rather, best protects organizations from risk when its members engage in social media. With 330,000 airmen to train, Faggard says there was a "huge machine that needed to move." To help move it, Paul Bove, social media strategist for the Air Force, and Faggard give presentations to the various bases and Air Force schools to offers lessons about what the airmen should and shouldn't discuss in social media, like not giving up their position when in combat. Their intention is to provide a framework, not dictate to the airmen. "We encourage them to post comments and blogs," Bove says. "The whole idea is to tell a story."

Bove and Faggard admit that two people cannot train all 330,000 airmen deployed globally, so they're planning to introduce webinars this year as a mechanism to reach such a dispersed group of personnel.

As the Air Force demonstrates, companies need to spend more time educating their employees about how to represent the organization when engaging customers in social media. "It's a cultural change. Companies are getting their entire organizations ready for the rules that are emerging," says Altimeter's Owyang, who recommends the Air Force's organizational chart as an example for companies to follow. "The employees want the policies. They actually protect them."

Owyang cautions companies, however, about not applying too much governance. When discussing social media policies, he instead prefers the term guardrails. "This is not something that companies can control," he says. "This is a fundamental way in how information has changed. Companies can govern what they can control, but you can't control this movement."

Quicken invests in social media training
Matt Cardwell, vice president of marketing at Quicken, follows that principle when it comes to his organization participating in social media. Rather than tell employees what they can and cannot do, he educates them and encourages them to talk about Quicken on social sites. "We're not really a big policy company. We really trust our team members," he says. "I know that's a scary idea, but we trust that if they share the values of this company…they will do the right thing. It doesn't mean they don't need education and advice."

Cardwell says that because Quicken can't keep employees from engaging in online conversations, he (like the Air Force) helps employees understand what they need to do to put the brand in a positive light. In June 2009 he embarked on a two-month training mission that aimed to engage the entire organization in a "social media training boot camp." The boot camp, which was divided into three parts, helped employees understand how the Internet has changed word-of-mouth marketing, using Michael Phelps and Tiger Woods as worst-case examples of how quickly negative word of mouth can spread.

The second part demonstrated some of the unfortunate experiences that companies have had, including the now infamous photo of the Anglo Irish Bank employee who skipped out of work citing a family emergency only to be caught on Facebook later that night wearing a fairy costume at a Halloween party. "People don't understand that the Internet has a really long memory," Cardwell says. "Once something gets posted, it's hard to erase the remnants of it."

In the third part of the training Cardwell cites positive examples from within Quicken, for instance, of how a customer service rep may have reached out to a frustrated customer in a Twitter stream before the conversation erupted into a larger issue. "It's common-sense advice," he says.

Today Cardwell continues to train new hires on social media engagement as part of their two-day orientation and says that 75 percent to 80 percent of the organization participates in some form of social media. He attributes the positive word of mouth about Quicken and the reduction of online complaints to the organization's social media training, as well as to having someone (Cardwell) who owns the organization's social media strategy.

According to Reed Smith's Wood, it's rare for companies to employ someone who owns social media. "I'm amazed when we go into companies and [inform] the general counsel that they have a Facebook page. Some have been established by the employees. Suddenly you start seeing pictures from the Christmas party that no one would want to see on that page," he says.

The key to establishing a social media policy, adds Wood, is to look first at the dynamics of the company. "You don't want to create a social media policy contrary to your DNA," he says. "If you're a bank…you have to have a far more restrictive policy."

Wood advises companies to start by asking what it is they want to accomplish, what are their competitors doing, do they have insurance coverage, what is their risk level, and is the company in an aggressive market environment? After those questions are answered, legal and marketing can then craft the policy."My advice is to do your due diligence, customize goals and aspirations, police it, and adjust it accordingly," Wood says. "The new process is not to be the big, bad bully, but to make them aware of the conversation."