Corporate communications practice is constantly evolving. Some days, it evolves more than others. Feb. 13, 2010, was one of the latter, at least for those in the American air travel industry.
That’s the day news broke that funny, feisty American filmmaker Kevin Smith (director of “Clerks” and “Chasing Amy”) had been ushered off a Southwest Airlines plane because staff deemed him too overweight for the single seat he had purchased. Unluckily for Southwest, Smith wasn’t just a regular guy. He’s what you might call a “digital influencer,” a cult figure with more than 1.5 million followers on Twitter. And he was ready for a fight. “You f—-ed with the wrong sedentary processed-foods eater,” was one of his many tweets after the incident. It wasn’t long before the “Too fat to fly Southwest” headlines were running everywhere in mainstream media.
Worse blows have been struck against public companies on Twitter, but Smith’s rant—and, just as importantly, Southwest’s adroitly executed response, as the company quickly posted its own replies on Twitter and a company blog—provide a fresh reminder of the ways in which public companies’ interactions with the world around them are evolving at an accelerating rate.
It’s not just social media, although the Internet is more and more the domain for action and response. There’s also new-found potential for rapid change in financial markets, in customer preferences, in regulation, in competitive threats and in response to opportunities. And all of it underscores the fact that if a company is going to be able to maintain control and thrive in these circumstances, it needs a comprehensive corporate communications strategy—whether the business earns $20 million a year or $2 billion.
“If you take a big step back 10 or 15 years, things have changed profoundly and forever,” says Janet Craig, one of Canada’s leading investor relations and corporate communications practitioners. She lists the changes: technology, the way we interact with shareholders, the need for transparency, more board involvement, and loss of investor trust. “This has raised the bar on what needs to be delivered to the corporate team and investors,” she says.
Listed sat down with Craig and other accomplished communications practitioners, consultants and advisers from across the country to hear what they consider to be today’s essential corporate communications principles, practices and challenges. We’ve assembled their thoughts in the following guide.
VALUE OF A COMMUNICATIONS STRATEGY
Good corporate communicators are planners first. They know that the best way to ensure a plan gets made and then gets done, is to start with an understanding of the value and importance of what you’re trying to achieve. “Corporate communications has a very low cost and high reward, high value in an organization,” says Craig, who was voted Canada’s top large-cap investor relations officer for five straight years through 2008 while at three different companies (Nortel Networks, Angiotech, ATI).
Big companies know, to varying degrees, the value of good communications. Most smaller companies, too. It’s the means by which you market and develop your brand, create a profile and reputation, meet regulatory duties, serve and interact with shareholders and other stakeholders, develop a strong employee culture, respond to crises and meet a long list of other business goals. Yet, according to Craig, who is now vice-president of corporate communications at ViXS Systems Inc., a semi- conductor company in Toronto, it’s remarkable how many companies go through the business year without ever putting a formal corporate communications strategy in place. To not do so is to short-change yourself, she says.
It’s an opinion shared by Beja Rodeck, an independent public relations executive whose career has included senior appointments at RBC and the Canadian Institute of Chartered Accountants. “Many companies can’t differentiate between strategies and tactics, and as a result end up implementing a number of tactics without having clear sight of what the strategy should be,” says Rodeck. “Without a roadmap, you’ll never know where you’re going or even if you got there.”
Though the pace of change is now measured in nanoseconds, the basic principles of corporate communications remain the same, says Craig. A good corporate communications strategy enables the business to deliver on its business strategy, pure and simple. “In any given year there are a number of business objectives. Use communications to enhance your brand influence and sell products. Tell a story, make messages memorable. Make sure the entire organization is singing off the same song sheet,” she says.
The tools are less important than the ability to deliver the strategy, Craig believes. When hiring corporate communications people, look for those who understand the value of building relationships, not just selling products. Knowing the new tools of the game and how to connect with media are important, but the key quality to look for is an ability to understand the business and how to execute the business strategy. “The philosophy of the company should be, ‘Let’s do everything well,’ rather than, ‘Let’s embrace Facebook this year.’”
Neil Bearse, manager of Web-based marketing at Queen’s University School of Business in Kingston, Ont., agrees. “The real advice is to train your entire organization to do the job at the highest standard possible. Make sure everyone understands the brand and can convey the corporate culture to the world. One negative interaction can spread around the world in a heartbeat.”
A company’s share price and market value are often the most sensitive indicators—and protecting them is critical. Bearse cites the now- classic example of the Steve Jobs heart attack hoax. When news of Jobs’ heart attack was first reported, incorrectly, on CNN.com in January 2009, Apple’s shares dropped 10% in 20 minutes. “Anyone can post anything anywhere,” Bearse says. “The information doesn’t have to be true, and it can affect stock prices. So organizations have an obligation to listen, hear and put the fires out faster.” WHAT MAKES YOU UNIQUE?
Michael Dunn, principal at Dunn & Associates Communications and Public Affairs in Halifax puts corporate communications in a different context. He believes passionately that there has been a profound shift from a shareholder world to a stakeholder world. In response, he has teamed up with Judith Richardson, of PONO Consultants International, an expert in executive leadership and organizational culture and development, to help companies find a higher, social purpose.
“Engaging one’s stakeholders in a fragmented world is the new imperative for all organizations,” he says. This includes better relations with local communities, promotion of industry-wide self-regulation practices, and employee involvement.
A part of his work as a communications consultant here, then, is to make sure companies are organizationally ready to connect with stakeholders. This begins by making sure the clear strategic intent of the engagement has been communicated to all levels. Richardson helps to prime leaders so they are open-minded and take the time to reflect and analyze what it takes to be a dynamic and creative company. Nowadays, says Dunn, communications is about reaching to the core values of the company and finding out what drives them toward a more sustainable imperative. “We try to get at the soft tissue of what they are trying to do. We ask them, ‘Is your organization ready? Is there a strategy? Why are you doing this? Are you making a sustainable, enduring change to the way stakeholders live and breathe? What makes you unique on the planet?’”
Transparency, honesty and trust are just as important now as high-quality products and services in driving a company’s reputation in Canada, says Dunn. The 2010 Edelman Trust Barometer, a credibility survey of 4,875 global opinion leaders by Richard Edelman, reflects this. In the Canadian portion of the survey, transparency and honest business practices are the number one factors in credibility, followed by trust, and in third place, high-quality products and services.
The new influencer group, according to Dunn, is “someone like me,” and the nature of that person is evolving. The challenge for firms is to get in touch with that person. “Everybody’s talking about that ability to sense, to open up, not to control. Keep on staying in touch. How’s it working? How’s it not working? You are giving up the illusion of control and championing shared interests,” he says.
Trust, alas, is also harder to come by. “The public doesn’t trust like they used to,” says Bearse. “We live in a world where we don’t know if the bank will survive.” The only way to obtain trust these days, he says, is by reaching out to the proverbial man on the street. “Communication has to be human to human. The company has to be seen as a human- shaped organization, talking about people,” says Bearse.
You probably didn’t need the Kevin Smith story off the top to know that social media has crept into the core of business operations and strategy at all companies around the word.
Your investors are using social media. A survey of 455 analysts and institutional investors in July by the Brunswick Group confirms what many already know—that lots of them read blogs (42%) and a good number of them (20%) use information gathered there to make investment decisions. The Brunswick study also found that 58% of its respondents believe social media’s influence on their decision-making will continue to grow.
Don’t be averse to exploring this brave new world, says Neil Bearse. He teaches business leaders how to use podcasts, Facebook, Twitter, blogging, vlogging (video blogging), iTunes, LinkedIn, webinars and white papers to promote their value. One simple rule: The more places and ways in which people can find you, the more ways you can influence or ensure you’re a part of the conversation. That could mean more pages on your website, but it could just as easily mean a channel on YouTube or Slideshare, a company account on Twitter or a company page on Facebook. “If all you have is a website with your annual report, your product description and FAQs, you aren’t getting much exposure,” says Bearse.
Case in point: a vlog that gets watched on YouTube—aligned with other functions in the company—creates clarity in the marketplace about what drives the valuation of your company. For instance, Cisco announced in March a new generation of routers that will be 12 times faster than their previous line. The company posted a video webcast for analysts, investors and the press, which communicated the company’s enthusiasm and revealed technical details. The benefit of this kind of thing is that it improves accuracy of the reporting. “A typical release is OK, but this lets you go deeper and make it more conversational,” Laura Graves, director of global investor relations for Cisco Systems, told a reporter in an interview after the announcement.
And don’t worry that you’ve missed the boat. Uptake is still far from universal for leaders of public companies. A 2008 analysis by the University of Massachusetts Dartmouth Center for Marketing Research on the use of blogging, podcasting, online videos, social networking and wikis found that 40% of the fastest-growing private companies in the U.S. had blogs compared to only 10% of Fortune 500 companies.
GETTING THE COMMUNICATIONS TEAM TOGETHER
When it comes to assembling the people to do your corporate communications work, bigger companies may have greater needs because of their size—but they typically need less help because they know the drill and they have both internal investor relations and corporate communications people on staff. The largest look to outside consultants only in cases of major M&A transactions, proxy votes or other unusual situations. Small- and mid-cap companies may not have as much to say or as much money to spend, but according to Rodeck, they’re often the ones that can benefit the most by having dedicated communications staff. Unfortunately, a lot of them don’t realize it. Many farm out the work to an agency and, depending on their budget, are only able to hire for specific tactics—i.e. annual report production, news release production or speechwriting. These smaller organizations typically don’t appreciate the benefits of having a long-term, cohesive communications plan— which is unfortunate, says Rodeck, since small- cap companies typically aren’t well known and in order to get more shareholders or analyst coverage, they should be focused on becoming more of a household name.
When using outside help, there still can be benefits—in particular, fast turnaround on projects and solutions that scale. With outside PR consultants, you can work on a project-by- project basis or a more continuous relationship. The latter ensures that you get the same team for the next gig, without having such a steep learning curve. An agency can work with you to identify a calendar of activities over a six- to 12- not doing month period.
PUTTING OUT FIRES
Mat Wilcox, founder of the Wilcox Group in Vancouver, has built a small empire on putting out corporate fires. Her team, which specializes in crisis management, consists of 18 people, but can expand to 300 on a dime. About 30% of their business is day-to-day corporate communications and 70% is getting a call about an immediate issue such as a merger or an acquisition.
According to Wilcox, the biggest issue on the mind of CEOs these days is the Internet. Leaders will call her to ask for guidance. “They’ll say, ‘I have 9,000 employees—do I let them go online?’ That’s when we take a step back and talk about the kind of company it is and its objectives. This needs to be mapped out beforehand.”
Others agree. “It’s still early days for social media, so it makes sense to put together a strategic plan that’s integrated into corporate activities such as marketing and sales before social media programs are launched,” says Mark Evans, principal with ME Consulting, a digital marketing and social media strategist in Toronto.
Both Evans and Wilcox encourage companies to experiment and Wilcox always counsels CEOs to join the social media revolution. “If you are not doing this, you are a dinosaur,” she says.
Earlier the point was made that your investors are online and engaged in social media. But so are critics and detractors. So whether the issue is monitoring market chatter about your company, responding to rumours, disclosing financial information or fighting proxy battles and dealing with activist and dissident shareholders, if you’re going to be able to respond effectively, you’ve got do it online.
In fact, when it comes to corporate communications in 2010, the motto could be, “If you can’t beat ’em, join ’em.” The goal in all its forms is to foster a positive, reputable and trusted company identity and communicate it to your many stakeholders: the press, investors, employees, job seekers, customers, shareholders and neighbours.
More and more, this is done through relationships rather than corporate missives, and social media is unavoidably the best way to make those relationships a reality.