Take their example of ignoring a project that improves efficiencies and cuts costs in favour of increasing their presence/capabilities in social media, because they've decided that they can improve business by being more 'warm and cuddly' with the customer.

Poppycock! While this might be reasonable in a 'think-tank' scenario, quite a few of us have learned this lesson the hard way. 'Customer Relationships' come secondary to financial concerns. Sales tried this tack years ago, and I could see it's failure right away. "Sure our prices are higher than our competitor, but look at how friendly we are!" Sorry. Perform for me, and you'll get my business. Just because you add a coating of icing doesn't necessarily make it better.