Communication Director Issue 02/2016 Preview

COMMUNICATION DIRECTOR the magazine for corporate communications and public relations

eu ropean e dition

Issue 2/2016 www.communication-director.com

The unwritten contract How to win the social licence to operate for you and your company

Long-term commitments From Mongolian gold mines to Indian diamond mines, this is how you get the green light from local communities

A great transition Why it’s time for the communications profession to bring back purpose and value

Licence revoked?

The real reason why we still question the legitimacy of Google, Facebook and Amazon

700

PARTICIPANTS

30

50

NATIONALITIES

SPEAKERS

4

KEYNOTES

7-8 JULY

2016

BRUSSELS

Focus 2016

SOCIAL ACCEPTANCE The Purpose and Societal Context of Business STORYTELLING CHANGE COMMUNICATION INTERNAL COMMUNICATION COMMUNICATION STRATEGY

POLITICAL & PUBLIC AFFAIRS SOCIAL MEDIA

WWW.COMMUNICATION-SUMMIT.EU

editoRiaL

How legitimate are you?

To mark the upcoming European Communication Summit (celebrating its 10th anniversary on 7 and 8 July: for more information see pages 86 and 87), this issue of Communication Director has a special focus on the theme of this year’s Summit: the purpose and societal context of business, and in particular the social licence to operate.

The social licence is a peculiar kind of contract. Although it confers legitimacy on an organisation, you won’t find it written on the statute books, and you don’t need a pen and paper to sign it. It also keeps companies on their toes: it can be revoked by any number of different groups at any time, even after it’s been granted, and different groups and communities have different expectations for it.

Examples of lost social licences abound, from Shell in the Niger Delta, BP in the Gulf of Mexico, dam building in Myanmar to the GMO debate in Europe. In this issue, we look at how digital giants like Google and Facebook struggle with legitimacy: their size and ubiquity, not to mention our fears about data security, obliges them to constantly apply for the licence to operate.

Winning the social licence is harder to define: in this issue, Simone Niven shares some case studies from Rio Tinto’s work with local communities directly affected by its mining activities, including Aboriginal people in Western Australia, while Chris Ettery relates how risk mitigation was one of several approaches taken by Lafarge’s stakeholder engagement.

But social licence doesn’t just belong to companies. It also applies to professions, among them – of course – communications and public relations. In an age of spin, greenwashing, and budget restraints, how do communicators stake their claim to validity, and ensure that their work is fuelled by purpose? That’s another question posed in this issue of Communication Director.

DAFYDD PHILLIPs

Photo: Laurin Schmid

Editor in Chief

Brought to you by the European Association of Communication Directors www.eacd-online.eu

communication director 2/2016

3

contents

2/16

72

Licence revoked?

Even digital giants like Facebook and Google struggle to win their social legitimacy

60

Issue Focus

A long-term commitment Engaging local communities, from Australia to Mongolia, helps Rio Tinto deliver value to its stakeholders

Communicating the social licence to operate

76

Getting the goahead How Lafarge made sure all its internal departments worked together to unlock the value of engagement

64

Applying for a licence What the social licence means to speakers at the 2016 European Communication Summit

68

80

The story of a concept

A great transition

Tracing the development of the social licence to operate points the way to its future

How can the communications profession win its own licence to operate?

6 • Agenda Setter

14 • leadership

Tourism in the shadow of terror

The new CCO Looking at the evolution of the role of the chief communication officer

How do cities struck by terrorist attacks win back tourists?

10 • pr essentials

18 • data

Top 10 global business risks

The devil in the details Forget big data: small data reveals surprising insights into behaviours inside and outside the organisation

A look at the global risk landscape, from market changes to cyber incidents

4

communication director 2/2016

contents

54 • The big interview

20 • roundtable

Postcard from Latin America Leading communicators share their insights into the challenges of working in this diverse region

36 • reputation

Putting reputation on the agenda

Sharan Burrow The general secretary of the International Trade Union Confederation on the fight for a better business world

How global executives deal with today’s reputational risks and opportunities

24 • social media

Showing a human side?

From President Obama to the European Parliament, world leaders are using social media in bold new ways

40 • FINANCIAL

Don’t fear the reaper Four reasons why communication directors should not lose sleep over fears of a 2016 recession

44 • compliance

Communicating compliance Organising cooperation across the competing claims of compliance and communications

48 • engagement

84 • communication Reader

Books New and upcoming titles for the communicator’s bookshelf

Engage to win 28 • internal

Boosting dialogue and pride In a no management-era, promoting the employee as reputation manager is key

32 • diversity

Photo: Private

Gender and the bottom line

In the Age of Relationships, communicators need to engage

50 • theory

The communication value circle A new way of examining how communications adds value

86 • ASSOCIATION

European Association of Communication Directors The latest developments in the EACD

90 • private passions

Letting go with tango Concentration, teamwork, creativtiy: some of the lessons learned step by step by one communicator

New research reveals how gender parity impacts business for the better

communication director 2/2016

5

Agenda Setter

Tourism in the shadow of terror

In the aftermath of a terrorist attack, communicating the message of business as usual brings back tourists. But what are the factors that influence tourists’ perceptions and the recovery of visitor numbers?

B y J A N WI S NIEW S K I

6

communication director 2/2016

“W

here next?” That’s the question asked by civilians, terrorism experts and security forces in the aftermath of a terrorist attack, as rolling coverage brings images of chaos in cities around the globe. While the discussion in media and politics contributes to rather than counteracts a general sense of unease and paranoia, civilians and businesses have little choice but to continue as normal. However, the question of where next has a more immediate impact on the tourism industry.

As is often the advice, those not directly affected by these attacks continue with their lives and their businesses.

There is one industry however that is significantly impacted by anxious risk perceptions: tourism.

Many cities rely on attracting visitors to stimulate their local economies.

Furthermore the cross cultural exchange that goes hand-in-hand with tourism helps to quash fears and bridge the “us and them” divide that can be so devastating to society.

Agenda Setter

People attend a vigil and light candles in the center of Strasbourg for the victims of the November 13 2015 attacks in Paris

Photo: www.thinkstock.com

Terror and tourism On November 13 last year, Paris suffered a series of coordinated terrorist attacks. Although France is the most visited country in the world, the number of visitors to the French capital has fallen since the attacks. Recent French government figures showed that while numbers were up in France in general in 2015, a drop of 15 per cent occurred in tourism for November and December in Paris.

This puts a dent in French foreign affairs minister Jean-Marc Ayrault’s wish to attract 100 million foreign tourists to France yearly from 2020.

Speaking to Communication Director, François Navarro, managing director Paris Region Tourist Board underlined the economic importance of tourism to the Paris region.

“According to our latest economic report there are 500,000 jobs related to the tourism industry, which is worth €21 million. We have an economic challenge and our objective of course is to attract people and get them to come to Paris.”

More recently, Brussels faced its own tragedy. Memories from the March 22 attacks are raw and the city’s authorities are still working to ensure the security of its citizens. For the short term at least it appears people are hesitant to visit the unofficial EU capital.

According to Patrick Bontinck, CEO of the Visit Brussels tourism authority in an online video interview with Euronews. com uploaded on 1 April 2016, early figures showed a 50 per cent drop in hotel occupancy with the impacts being felt throughout Brussels and in other European capitals as well.

Indonesia attracts large numbers of visitors from the Asia-Pacific region, with tourism making up just below ten per

cent of the country’s GDP in 2015. However the country has also suffered from major acts of terrorism in recent times.

The latest of these came in capital city Jakarta in January. In the early months of 2016, foreign tourist arrivals have fallen 17.4 per cent according to the Indonesian Central Bureau of Statistics. The traditional bump in numbers around the Chinese Lunar New Year celebrations failed to come. In direct response to the attacks the Indonesian government ramped up

“Perceptions of the safety of post-attack locations is also related to media coverage.” security, deploying police officers and soldiers in Jakarta and another tourist hotspot, Bali.

It is too early to know how long visitors will stay away from these locations.

However if we look to past examples, there appears to be signs of hope.

Road to recovery Dr Yeganeh Morakabati, an expert in risk and tourism at Bournemouth University in the UK, explains that over a long time period people tend to forget about potential dangers, especially if a city experiences a one-off attack.

In her own research Dr Morakabati examined the 9/11 attacks in New York, the Bali bombings in 2002 and the Mumbai attacks in 2008. Speaking to Communication Director, she outlines how the period of time for a recovery in visitor numbers has differed with each location.

“A time series analysis of international tourism arrivals to USA suggest

communication director 2/2016

full recovery occurred around January 2005”, she explains. “Bali was a different case as we have two major attacks, one in 2002 and one in 2005, as well as the SARS pandemic in 2003 and the 2004 tsunami in between. Taking all these into account, full recovery was somewhere around March to April 2006. Mumbai was quicker and it went back to where it might have been if an attack had not happened around February 2009.”

An important factor affecting the recovery period for visitor numbers is the sense of the stability and security of the country where an attack has taken place.

For example, Turkey has suffered from a string of terrorist acts in the past year.

The subsequent tense atmosphere and the Turkish travel ban on Russian citizens following the downing of a Russian warplane over Turkish territory have culminated in devastation to the country’s tourism industry. The Turkish Ministry of Culture and Tourism reported in February that the number of foreigners entering Turkey had fallen by just over 10 per cent from the previous year.

In contrast to Turkey’s current struggles, the World Travel and Tourism Council (WTTC) reported that levels of tourism recovered within weeks following the 2004 attacks on commuter trains in Madrid, which killed 191 people. According to the WTTC, London bombings in 2005 had no notable impact on arrivals to the UK. Beyond the level of control and the sense of reassurance that is evident in destinations in developed economies, Dr Morakabati identifies social factors that can also affect travel choices. “Cultural, geographical and religious differences also influence the impact and the recovery. Those people with similar cultures and religions are more likely to rally around and support each other against what they perceive to be a common enemy,” she explains.

Tourists’ perceptions of the safety of post-attack locations is also related to media coverage, which can vary greatly depending on geography. For example,

7

pr essentials

Top 10 global business risks The global risk landscape is changing. The effects of globalisation, digitalisation and technological disruption pose fundamental challenges. The Allianz Risk Barometer identifies the top corporate perils based on the responses of over 800 risk experts from more than 40 countries around the globe. Based on the latest Barometer, we present the top 10 business risks from around the world.

10

communication director 2/2016

pR essentiaLs

1. buSineSS interruption (inCl. Supply ChAin diSruption)

the major causes of interruption that businesses fear the impact of most are natural catastrophes (51%), closely followed by fire/ explosion (46%). Supplier failure ranks third (32%). business interruption remains the top peril for the fourth year in succession, with 38% of responses rating this as one of the three most important risks companies face. in today’s increasingly complex and interconnected corporate environment many of the top 10 global business perils in the 2016 risk barometer rankings, such as cyber-incidents and political risks, for example can also have severe business interruption implications.

2. mArKet developmentS

businesses are increasingly concerned about the impact of volatility, intensified competition and market stagnation. long-term strategic issues include successfully managing challenges to business models posed by increasing automation, digitalisation and interconnectivity of industry. there is the threat posed by the emergence of more agile start-ups and disruptive technologies. many businesses are already having to manage a long list of issues, such as having to comply with changing legislative environments, import and export restrictions, more stringent safety requirements and work rules, increasing government involvement and approvals, and environmental restrictions.

3. Cyber inCidentS

it is estimated that cyber-crime costs the global economy approximately $445 billion a year with the world’s largest economies accounting for around half of this. the threat posed by such incidents is expected to increase further during 2016. According to Symantec Corporation, risks associated with the increasing use of Apple devices and the internet of things are among the factors which will drive this increase. Often the incident is identified, not by the business itself, but by the customer or another stakeholder, which is another reason why cyber risks pose a huge threat to a company’s reputation.

Photos: www.thinkstock.com (3); Private

ChriStoF e. ehrhArt head of Corporate Communications and responsibility/executive vice president, deutsche post dhl group

The anti-intuitive golden rule for communicators today is: if you don’t want to be overwhelmed by crisis you have to permanently work in crisis mode.

And in order to do so successfully there is no alternative than constantly monitoring and evaluating communications risks (and opportunities, for sure) via state of the art issues management, setting up procedures that allow for fast reaction and establishing the communications function as a go-to partner in case of crisis.

communication director 2/2016

11

Leadership

The new CCO Helping enterprises earn trust and create value for stakeholders. b y r o g e r b o lt o n a n d h erbert h eitman n

14

akin to an organism in nature, and the communications function as the mechanism through which the enterprise becomes aware of the environmental conditions – internally and externally – that necessitate adaptation. In a tumultuous business environment, those who evolve fastest and smartest are those who thrive.

In Dubai, at a similar event hosted by Mohamed Al Ayed of TRACCS, Christof Ehrhart, who heads corporate communications and responsibility at Deutsche Post DHL Group, keenly observed that the communications function of the past set out to explain the company to the world, whereas today its role is to explain the world to the company.

The Page Society’s work on The New CCO followed a previous report, Building Belief: A New Model for Activating Corporate Character and Authentic Advocacy, which described how the CCO helps the enterprise develop a character that’s deserving of trust and then builds trust with stakeholders, who then take actions that benefit the enterprise. The new report takes a hard look at how the role of the CCO in the enterprise must change in order to be able to do the work described in this model.

communication director 2/2016

A whole new world Today’s enterprises operate in the most diverse, complex and fluid environment in the history of commerce, and the unyielding pace of technological advancement accounts for much of the disruption that is taking place. Mobile technology, a flexible workforce, and consumer participation have allowed innovative start-ups to challenge established players. Consumers are hailing taxis via their phones, booking rooms in strangers’ homes on the other side of the world, and buying or selling countless items online. This is upending traditional business models and creating an on-demand economy that provides jobs, goods and services in new ways.

Data, big and small, are allowing for customised engagement between the enterprise and its customers and stakeholders. An app reminds parents when their infants need feeding. An omniscient digital assistant tells you about the weather, traffic and your schedule for the day. Products are recommended based on your purchasing behaviour. People love the personalised service, but it’s a fine line

Photo: www.thinkstock.com

A

t a meeting of Arthur W. Page Society members hosted at Bayer’s offices in Germany last October, Reidar Gjærum, who heads communications for Statoil, crisply summed up the role of today’s chief communications officer (CCO): “Interpreting society and the company’s place in it.” This simple, yet profound, statement captures the complexity of the challenge facing the chief communications officer (CCO), or the head of public affairs, in today’s rapidly changing and radically different business environment.

It was just one of hundreds of insightful observations that informed the Arthur W. Page Society’s new report, The New CCO: Transforming Enterprises in a Changing World, which seeks to foresee how the communications function will evolve in coming years. Our point of view was shaped over two years by the observations of more than 450 senior leaders in corporate communications and business from around the world.

At the same Bayer session, Michael Merk, who leads communications for Steelcase, described the modern enterprise as a “complex adaptive system,”

Leadership

between “that’s cool” and “that’s creepy.”

What would you have said 20 years ago about allowing a multinational corporation to have access to your personal correspondence and your physical location at all times? Today these allowances are commonplace.

At the same time, the rise of authoritarian capitalism and concurrent gridlock and ineffectiveness in western democracies is complicating enterprise efforts to expand globally. Not only must we contend with different cultures and regulatory requirements, but we are frequently confronted with competition that plays by different rules and abides by different values.

Stakeholders, informed by transparency and empowered by technology that allows them to share information and motivate like-minded others, increasingly expect business not only to act responsibly, but also to actually solve global problems and create societal value.

According to Edelman’s brandshare 2014 report, people say it is important that a company: “communicates openly and transparently about how products are sourced and made” (68 per cent), “has a

derstanding of these global economic, social, political and technological issues than was expected just a few short years ago.

The future of the CCO Our report envisions three roles for the new CCO. The first is what we’ve termed the “foundational” role. This is the most conventionally understood role – that of effective communicator, minder of corporate trust and reputation, builder of critical stakeholder relationships and adviser to leadership. But here’s what’s new: Given the complicated and challenging business environment and stakeholder demands, the CCO of today and tomorrow must know more about global business, geopolitical and social issues than ever before, and must be able to think critically, make strategic decisions and be a competent leader and trusted advisor with credibility both inside and outside the organisation.

The second role is that of “integrator,” through which the CCO works to align the corporate character and purpose

“In a tumultuous business environment, those who evolve fastest and smartest are those who thrive.” clear mission and purpose at its core” (58 per cent), and “uses its resources to drive change in the world” (52 per cent).

Together, all of these trends increase the pressure on business to fend off competitive threats, deal with challenging workplace issues and respond to societal expectations, all while managing ever more demanding and activist stakeholders. This places a premium on the broad stakeholder view that we possess as communicators, which is invaluable for trendspotting and managing issues, but requires a vastly more sophisticated un-

of the enterprise fully across business functions. Because the entire enterprise must be aligned behind a well-defined and authentic corporate character, and also must be involved in stakeholder engagement, the CCO must pursue partnerships across the C-Suite – with the chief information officer on data analytics and new digital platforms; with the chief human resources officer on corporate culture; with legal on issues and stakeholder management. Today’s communications function is no longer concentrated in a core team of profes-

communication director 2/2016

sionals, but must integrate the efforts of everyone across the enterprise.

The final and most aspirational role of the new CCO is that of “builder of digital engagement systems.” Unlike the chief financial officer and the chief human resources officer, whose financial and personnel management systems permeate the enterprise, the CCO traditionally has not built systems and processes. That is about to change.

The advent of social media has made troves of data available about stakeholders. Analytical systems can know, for example, if and where an image was posted, perform textual analysis on the comments, count how many times it’s been shared, etc. In the future, sophisticated systems will allow computers to know what that image depicts, what it means, and interpret that information into insights about the person who posted it or shared it. This richer knowledge about people presents a tremendous opportunity to engage them in a far more personalised and effective way.

By understanding who stakeholders are, what they need, when they need it, and how they want it delivered, we can engage them in ways that do not feel like an intrusion, but rather like customised help. Customers can be engaged with tailored information about products and services and employees empowered by personalised tools and resources – all delivered through omni-channel platforms and informed by data. Where in the past communicators sought to influence the few, who then influenced the many, now we must influence the many, who then influence many more. To engage stakeholders at scale while maintaining a trusting and personal relationship, the CCO can and will build digital systems that allow the enterprise to do so.

Fulfilling the promise The next challenge we face is to work together to elevate our capabilities in order to achieve the promise of this aspi-

15

Data

The devil in the details

Photo: Private

What does the way you arrange your fridge magnets say about your brand allegiances? And how does the way you arrange your shoe collection reveal your self-esteem level? Over the past decade Martin Lindstrom has visited more than 2,200 homes in some 77 countries, on the hunt for small signs that show how we relate to brands and to each other, as outlined in his new book, Small Data: The Tiny Clues That Uncover Huge Trends.

I n t e r v i e w b y Daf y d d P h i l l i p s

communication director 2/2016

17

Data

I

n your book Small Data, you write that “Every culture in the world is out of balance or in some way exaggerated, and in that exaggeration lies desire.” What do you mean by this?

On an individual basis, we are all out of balance. You are out of balance, I am out of balance. Maybe we feel too overweight, maybe we feel we have hit our midlife crisis and haven’t achieved enough in our lives or we feel alone and need a partner. All those out-of-balances, and we have hundreds of them, represent a need or a desire for a brand or for some sort of fulfilment. And at a national level you see cultures being out of balance. If you take Syria and the refugee crisis, it’s an entire nation which is out of balance.

And can small data help restore this balance?

Small data is a counter balance to big data. Where big data is all about a lot of numbers and seeking a correlation between these numbers, small data is about finding the causation, the reason why. We all leave emotional DNA behind that reveals insights about our personalities and where we are out of balance. For example, most people with a Facebook page would admit that in fact it’s one big lie, its meant to reveal how you would like to be perceived by the world rather than who you really are.

Just as you have a perception page online you also have a perception room in your house or apartment. When you find that perception room, which is the reflection of who you would like to be seen as by the world, then you can start looking at furniture and fittings. For example, if there is a huge, colourful painting you can be pretty sure that the person living there has fairly strong self-confidence. And if in the perception room you have a large bookshelf packed with books, quite often it indicates that the person didn’t have the most solid education as a child and is trying to compensate for it.

18

And what do you do with these observations?

Of course all these small data cannot be taken out of context or just seen as one piece of single standing data, they have to be combined. But as you create a patchwork of small data, you start to see how we as individuals are out of balance or in balance. And it’s easy to see because in many ways we are all putting our entire lives on display at home because we haven’t put up our defence mechanisms.

When I look into a fridge and I notice that you have fruits and vegetables neat-

for some reason triggering those people drinking the water, which was very surprising for the Danone team. Now let’s just pause here for a second. The reason why you and I love certain movies and play them again and again is because it’s reactivating that emotion we had the first time we watched it. It’s not because we’ve forgotten the script, it’s because that emotion is happening again and again. The same is the case with taste and smell.

We don’t have a taste preference as such; it is the memory encoding that is linking the taste. When I drank coffee for

“Big data is all about seeking a correlation between all these numbers, small data is about finding the reason why.” ly placed on top but then I bend down and see, hidden below the carrots, you have a regular coke and some chocolate, it shows what we define as a conflicted mind. All these insights are difficult to see through big data, because big data is rarely communicating people’s emotional state of mind.

You write about subtle cultural differences, for example Russians’ “fresh smell” associations compared to, say, the French. Are there parallels to be drawn in communicating a brand in a new market?

Small data allows you to fine tune that instrument you have so that the tune you’re playing plugs into the deep set of cultures and desires. For example Danone and Evian some time ago were struggling to get into the Chinese market and so the team decided to understand the psychology of drinking water. What they realised was that in China most people who had been born and raised on farmland were drilling water out of the ground and the water would have this mouldy taste. And that mouldy taste was

communication director 2/2016

the first time it’s not because I loved the taste of coffee, because I hated it the first time, but it’s because I felt adult. And the adult feeling is then embedded in my brain and as I repeat that again and again I start to like the taste. That is exactly what happened with the water. People who were raised in the farmlands of China would link their rosy memories, as I call it, with that particular subtle, mouldy taste of water, and when the people were relocated into the city areas and drank this perfectly filtered Evian water, they did not have that subconscious feeling of cosiness and homeliness. When the team went back, using small data, they discovered that they had to re-filter that water to make sure that mouldy taste would still be present in the water and so would those childhood memories. That is an example of something big data would never be able to pick up.

Are there other limitations to big data?

We are blinded by big data because it’s such a big volume we can’t even comprehend it, we just assume it’s the

Roundtable

Postcard from Latin America To mark the Latin-American Excellence Awards – hosted by Communication Director – we asked four jury members to share their insights into the corporate communications landscape of this diverse region.

The following are excerpts of interviews that were conducted separately

W

e have to talk about Brazil, which is in its deepest recession for decades and the headlines today are full of political and corruption scandals. How do you motivate and engage your audiences in such difficult times?

NELSON SILVEIRA Brazil has been through one of its most challenging experiences with enormous impact in the local market, enterprises and individuals. The level of consumer confidence is at a historical low. Companies have been forced to restructure to adapt business models to the current reality of the market. The case of the automotive industry is even more challenging, as the market dropped almost 50 per cent from the peak in 2013. In times where you have to downsize and change the business model, the impact on the communities and employees is highly relevant. At GM we believe that being a workplace of choice is the best incentive to engage employees and boost motivation.

20

communication director 2/2016

RoundtaBLe

BETH GARCIA The worst aspect of the crisis was not its economic repercussions because a country with such an ample supply of natural resources, like Brazil, will certainly recover, but the despondency it produced in various environments which has contaminated and weakened communication. The greatest challenge now is to raise clients’ and institutions’ spirits. Times of crisis provide opportunities for innovation, driving people to act in more creative ways. Storytelling platforms which can be used in publications, press guidelines and digital and media campaigns, are gradually beginning to share space with advertising. This

Photo: Private (2)

“Any company that wants to operate or expand operations in Latin America needs to be open to listening.” in-house material is a reliable source of information, for both internal and external audiences. It is down to us journalists to find opportunities and harness them.

SERGE GIACOMO Brazilians already have creativity in their DNA, in the way we develop and implement projects on a daily basis. In tough economic times, we see this even more. It is challenging, but we love challenges. For Brazilian communicators, the secret is to ensure a strong combination of business strategy with communications goals to make efficient projects and, at the same time, innovative ones. An example of this is to be more connected with the teams from different regions to leverage initiatives that bring value to the brand.

beth gArCiA

Ceo, Approach Communications a journalism graduate from the université d’Assas in paris, beth garcia worked as a contributing journalist for bloch editores in paris and in 1993, in brazil, joined the reporting team of Jornal do brasil before founding Approach Communications in 1996. beth is responsible for Approach’s general management and for new business development.

Serge giAComo

director, Communications and public Affairs, ge latin America prior to joining ge in march 2014, Serge giacomo was the head of corporate communications for vale SA, based in rio de Janeiro. before that, he held a number of communications positions at Shell, both in France and in the netherlands, and at two leading global public relations firms, edelman and burson-marsteller in various offices in europe, uS and brazil.

communication director 2/2016

To change focus to the rest of the continent: with your career experiences in both europe and Latin America, what would you say are the main differences in approach to corporate communications in both regions?

SERGE GIACOMO It may sound like a cliché, but European communication practice is more structured, based on analysis of data and facts, whereas Latin American communications are based more on creativity, relationship-building and experiences. I’m very lucky to have worked in these two environments. The two are extremely complementary and, when combined, can be really powerful.

NELSON SILVEIRA Public relations and corporate communications in mature markets like Europe and the US are in a very advanced stage. However with globalisation and the expansion of internet, emerging markets are catching up in terms of approach and public relations strategies. We have lately experienced major developments in corporate communications in most Latin American countries. Today most of the major global agencies have established branches in the region, either on a standalone basis or by acquiring local enterprises.

What about the relationship between journalists and corporate communicators here?

NELSON SILVEIRA There are important cultural differences. Latin American media tends to have a more friendly approach. European media is more aggressive and critical. But on the other side it is more difficult to do background work with media in the Latin American region, because journalists tend not to respect off the record conversations. In Europe, media has a different understanding on the benefits of the background information on writing stories. But in general there are strong media groups on both continents with great editorial independence.

BETH GARCIA The Brazilian press seems to have some peculiarities that are a bit unfamiliar to European clients.

Just to give an example, here the social

21

Social media

Showing a human side?

How world leaders are blazing a trail in social media.

B y J e r e m y Ga l b r a i t h

Source: Twiplomacy, Most Liked World Leaders on Facebook

F

irst and foremost, successful communication on social media requires you to present your human side to your audience. This is one of the major findings from Burson-Marsteller’s 2016 Twiplomacy study of how world leaders engage with their public.

The lessons of the annual survey apply equally to CEOs and the companies they run, if they want to get their messages across powerfully and effectively to their customers and their workforces.

One classic trap that communicators often fall into is that of using social media as a one-way broadcasting tool. Social media is not a megaphone and the most successful leaders recognise that com-

24

munication is primarily about creating a conversation. Leaders often want to know which social media should be their main channel, or which platform is the best to use? The simple answer is that, today, being present on just one social media platform is no longer enough. Depending on the target audience, leaders should ideally combine a range of platforms to maximise the impact of your messages.

The 2016 edition of Twiplomacy, Burson-Marsteller’s global study of how world leaders, governments and international organisations connect via social media includes, for the first time, more than just Twitter and now covers all of the major platforms such as Facebook, Instagram and YouTube. In addition, the study also includes insights on how lead-

communication director 2/2016

ers use niche platforms when it comes to digital diplomacy such as Snapchat, Vine, LinkedIn, Periscope and Google+.

The findings are inspiring and insightful – and frequently entertaining.

They confirm that world leaders have truly embraced the evolution of social media and, in so doing, offer corporate leaders and their communication teams valuable lessons in the most effective use of these platforms.

Key lessons for CEOs and companies Twitter and Facebook are the two leading social media platforms for government communications, with 89 per

Social media

cent and 88 per cent of all 193 UN member countries having a presence on Twitter and Facebook respectively. But, while these more text-based platforms continue to dominate the rankings, there is an emergence of the more visual platforms such as Instagram. This is not only a shift in how world leaders communicate, but a model lesson for communication as a whole.

A central element of the study is the rankings generated from the social media accounts which show the ‘most liked’ or ‘followed’ world leaders, as well as the ‘most engaged’, ‘effective’, ‘active’ or ‘conversational’ ones. These rankings are combined with a more in-depth analysis of the content created on the social media platforms, and thus addressing the question of how effectively world leaders and governments communicate on social media and what can we, as communicators, learn from them?

family pictures. The single most popular post by a world leader is one of a photograph of the Obama family wishing everyone a Happy Easter, posted on the White House page. Similarly, the third most popular post was another family picture of Barack Obama hugging his wife Michelle on their wedding anniversary. This portrayal of family life is also very evident on platforms such as Instagram, where world leaders have uploaded personal photographs of themselves playing sports, or during their family holidays.

Snapchat takes this human side even further, making you feel as if you really are following the lives of world leaders.

Argentinian president Mauricio Macri, for example, allows his virtual audience to follow him around the world on his official travels, making his Snapchat account appear very personal.

1 Reveal your human side While the majority of images posted by world leaders on Facebook show typical diplomatic settings and announcements, the most popular ones are mainly

Source: Instagram profile of Dmitry Medvedev

Source: Facebook profile of The White House

Instagram also offers a similar intimate connection with audiences, epitomised by the rise of “selfie diplomacy”.

This generation-wide phenomenon features on the profile of Russian prime minister Dmitry Medvedev, who takes elevator selfies, as well as on those of the prime ministers of Singapore, Norway, Spain and Turkey, who are all notorious for their group selfies or “wefies”.

communication director 2/2016

Source: Instagram profile of Erna Solberg, prime minister of Norway

2 Be bold and visual Creativity and the use of images and videos are crucial for communicating with impact today. While Twitter used to be considered as the digital diplomacy channel of choice for government leaders, recent years have seen a shift towards Facebook and other more visual platforms such as YouTube and Instagram that allow you to be much more creative.

YouTube is also the second largest search engine in the world, behind Google, proving that video remains one of the strongest tools for communicating a message.

Instagram, now the fourth most popular platform, is typically used for posting behind-the-scenes images of world leaders, who use the channel to show their creative side. Some of the best examples of visual and creative content include collages by the European Commission, Hungarian politician Viktor Orban posting a picture of his tie on a chair with the caption “Saturday 07:45”, as well as the accounts of Estonian’s prime minister, the Argentinian president and, inevitably, the White House.

World leaders can also be seen using Snapchat stories in creative ways. The UK Foreign Office, for example, celebrated International Women’s Day by asking followers who their wonder women are; the White House featured its annual Easter

25

internal

Boosting dialogue and pride In an era of no management, promoting the employee as reputation manager gains even more importance, as this case study from one of Europe’s leading telecommunication firms proves. b y Ha n s K o e l e m a n

W

e are gradually moving into an era of ‘no management’. At least, I sincerely hope so.

Because I believe that many employees are capable, willing and enthusiastic as long as they are able to organise work themselves. Managing the reputation of companies is not done by official reputation managers, whatever that may be.

It’s done by our people every day and it’s done by empowering them to communicate freely, actively, and responsibly.

I am reminded of the time I changed the way our visitors were treated in the entrance hall of our head office by giving the broadest possible mandate to the hostesses. Nowadays I often get compliments from visitors about the professional and friendly manner they are treated with when entering our premises. It’s simple: the hostesses represent KPN to the fullest and they feel responsible because they are given the authority to treat our visitors in the best possible way. No rules, just the simple request: please treat our guests as you would like to be treated yourself. Surprise and overwhelm them with our hospitality.

28

Another example is the freedom our service employees have to serve customers to the best of their ability. It is not about the targets for the amount of customer calls they handle. What’s much more important is the way they really help the customers by solving their problems. Empowering employees means giving them less systems and KPIs. These are obstacles that stand in the way of really solving the issue. The fewer barricades there are, the more responsibility employees feel for tackling issues effectively.

In this digitalised world customers are increasingly capable of handling most issues themselves. They only need a service employee on the phone or in the house when it’s absolutely necessary.

Rising reputation In February this year, KPN received an award for its reputation in the Netherlands. This award has a lot to do with the way we communicate internally and use our corporate social media communications. We began formulating clear reputation goals in 2010, part of the Long Term Incentive bonus scheme for the top management at KPN. This motivated the board to improve the company’s reputa-

communication director 2/2016

tion and, after all these years, we have achieved it, with the second best reputation in the European telecom sector after Swisscom.

Begin from the inside One of our key beliefs in reputation management is to communicate transparently, openly and honestly. This is of foremost importance for all the propositions we create towards customers. No hidden details in the small print of your contract that nobody told you about when you signed; instead, total clarity about the services we provide and the amount you pay for it.

If you are willing to generate transparency and honesty towards customers you have to start from the inside. That’s the fundament on which your organisation is built. You have to empower your employees and make them ambassadors of your company. Give them confidence.

Therefore we need to build a very open communication environment for our company in which employees are totally free to communicate whenever they want and wherever they are. We have called this environment TEAM KPN, which reflects our effort to work and perform

internal

All hands on deck: in 2015, content generated by KPN’s internal community supported SAIL Amsterdam (above) and the Rijksmuseum’s Rembrandt exhibition (right).

as a team in our company. In addition, TEAM KPN is the name of our internal social media platform. A recent study from Evolve (a Dutch company specialising in building internal communication platforms) showed that TEAM KPN is Europe’s best internal platform. In 2015 TEAM KPN also a received an Intranet

By creating so much communicational traffic we have not only boosted the possibility for dialogue in the company but also the pride of our people.

Since strategic alignment is the main goal of employee communication, we closely monitor whether our people really understand the strategy and are capable of performing on it. Key elements when driving strategic alignment are:

“You have to empower your employees and make them ambassadors of your company.”

1) Focus, consistency and repetition in the key strategic messages of the board, 2) Visible and available leadership, willing to engage in open dialogue with the people, 3) The best available online and offline communication tools, 4) Recognition for successes and telling stories about what goes right and what goes wrong in the company.

Award in Berlin. In other words, we received great external recognition for the platform, which is nice of course. But more important is the way our employees recognise the platform and the way they participate. Just to give you an impression: in 2015 13,772 employees generated two million views, 4735 blogs, 35,129 responses and 118,679 likes. Almost 100 per cent of our employees are active on the platform. Even staff in our stores, call centres and out in the field are connected.

The internal communications team has a quarterly plan which contains the central themes and describes how to operate on each of the four key elements. After each quarter the results are evaluated, communicated to the board and used to fine-tune and improve the content and the quarterly plan. In this way internal communication becomes a lively and iterative concept which is constantly changing and adapting to the internal audience. And since we clearly can see the effectiveness of blogging by managers

communication director 2/2016

and the way employees respond, we can determine the flow of internal communications within KPN. The strategic alignment monitor shows us if our internal communications are successful.

Our CEO: a popular blogger It is highly instructive to see the positive impact of an open internal platform.

The main responsibilities of our corporate communications are to produce and publish corporate articles, to oversee the development of the platform and to monitor the daily information flow. Most of the content is produced by non-corporate communications staff, particularly by senior management. And we can see how active and effective senior managers are in conveying messages to their staff.

Even amongst our board members we can hold a beauty contest, and of course our CEO is the most active and most effective blogger of the company. But you don’t have to be the CEO of KPN to be a popular blogger and have many followers. The most famous bloggers are regular employees that dare to blog about their daily work and their experiences with customers.

Also very important is directness and honesty in communication. In 2015 the supervisory board of the company decided to give an extra bonus of €425,000

29

diveRsitY

Gender and the bottom line

Companies that are recognised with ‘most admired’ reputation status by their industry peers have a higher proportion of female leaders. New research reveals how gender parity drives corporate reputation. b y r o S e d e l A pA S C uA

T

The case for improving women’s access to C-level positions has never been stronger. Not only does research suggest that companies with more women in senior executive positions report stronger financial performance, but the reputational and brand advantages are also significant. However, despite decades of analysing the reasons behind the gender pay gap and of women demanding equal representation in business, it seems that there is still a long way to go for women in business when it comes to a seat at the management table.

32

communication director 2/2016

Although seven out of 10 global executives of both genders believe it is important that the universe of female CEOs expand, the numbers remain low: just five per cent of the US Fortune 500 and four per cent of the FTSE companies are run by women. Globally, just nine per cent of chief executive officers and managing directors are women.

Evidence suggests that organisations that are diverse perform better, boast better reputations and achieve ‘most admired’ status. It increasingly appears that having more women in senior management leads to stronger financial performance, with role models becoming very important. Specifically, younger generations of women are more likely to aspire to forming part of the upper echelons of business if they have experienced working for a female chief executive officer.

Diversity

Gender forward pioneers

An undeniable premium The premium on having women in senior leadership is undeniable. Yet few companies around the world are led by women executives. Corporate commitment to achieving gender equality at the top remains scarce, despite the fact that senior executives optimistically (albeit not very realistically) expect gender equality to happen within the next generation. This made us at Weber Shandwick wonder how the world’s largest companies are performing when it comes to gender equality.

68% Executives who say that public attention to C-level gender equality has increased in the past three years

Figures taken from Gender Equality in the Executive Ranks: A Paradox — The Journey to 2030 by Weber Shandwick and KRC Research

Together with KRC Research, we sponsored a survey of 327 senior executives across 55 countries in North America, EMEA, Asia Pacific and Latin America.

Conducted by the Economist Intelligence Unit, the survey was titled Gender Equality in the Executive Ranks: A Paradox – The Journey to 2030. The purpose of the report is to offer top line findings and an understanding of what might constitute best practices for recruiting, training and promoting women for C-level positions.

According to the 2015 Index, only 12.5 per cent of senior leaders (C-suite, i.e. the most important and influential group of individuals at a company) in the world’s top 100 companies are women. In EMEA, the figure is even lower, at 9.9 per cent. These findings are a wakeup call. Senior executives around the world must make a positive commitment to redress the gender balance.

The research revealed a paradox: almost three quarters of global executives (73 per cent) believe that gender equality in the C-Suite will be achieved by 2030.

This sounds great on paper; however, there is no clear road map for making this prediction become a reality. Most executives (56 per cent) report that their company does not have specific goals in place for achieving such an outcome, and only 39 per cent of C-level executives report gender diversity in senior management as a high business priority, ranking seventh in a list of 10 priorities.

How do the world´s largest companies actually perform in terms of gender parity? To address this question, we created the Gender Forward Pioneer (GFP) Index as a supplement to Gender Equality in the Executive Ranks: A Paradox.

We call companies at the forefront of gender-balanced leadership Gender Forward Pioneers.

The GFP Index measures the percentage of women in senior management positions at Fortune Global 500 companies.

Weber Shandwick audited these companies, identifying their top executives and their genders. The survey of senior executives across 55 countries in North America, EMEA, Asia Pacific and Latin America

“Having more women in senior management leads to stronger financial performance.”

communication director 2/2016

identified weak corporate commitment to achieving gender equality at the top while senior women are simultaneously experiencing ‘gender pipeline fatigue’.

Gender pipeline fatigue is the belief that parity will only come through compulsory measures such as boardroom quotas and governmental mandates on equal pay. However, things are beginning to look up. The research identifies several ‘push’ forces that will move gender-balanced leadership further up the corporate management agenda. These include: • Increased media coverage of gender equality (globally, there has been more than a threefold increase in articles about female CEOs since 2010);

33

Reputation

Putting reputation on the agenda How global executives deal with today’s reputational risks and opportunities.

F

rom September 2015 to January 2016, Reputation Institute surveyed more than 150 global executives to gather insights on today’s trends, practices and priorities related to their stakeholder management.

The companies were sized between $1 billion and $30 billion in revenues and based in 20 countries across Europe, US/ Canada, Central and Latin America. The key topics were the top-of-mind issues for senior executives with corporate brand and reputation responsibilities, activating the right strategies to capitalise on growth opportunities, the link between reputation and corporate purpose, the organisational setup for success, communicating on corporate social responsibility (CSR), and the trends in stakeholder measurement and communications.

The biggest challenge that companies are facing in this space is the lack of a structured process for integrating stakeholder views as a leadership practice in their business. Fewer than half

36

of the executives interviewed reported their organisations have the right internal competencies, structures, processes and methodologies in place to assess and manage their reputation. Too often, companies are tracking their stakeholders in silo, meaning there is no consistent model or comparable set of data, and no consistent way to share the insight across the various departments at headquarter level (communications, marketing, HR, investor relations, etc.), as well as between the local markets.

The majority of global companies seem to have understood the importance of measuring stakeholder perceptions, and many of them are doing it in a variety of ways. The challenge at this point is in moving to market-level integration of the insights, and using the outside-in perspectives for course-correction in the business strategy.

Why is that not straightforward? For one, there is a lot of tracking research in the market that is not really actionable – basically, long reports with charts

communication director 2/2016

and numbers that are hard to interpret.

Secondly, you need to have the appropriate forum internally in the company to discuss and act on the evidence; more often than not, it never gets out of the drawers in the market intelligence unit.

Thirdly, the insight is often not anchored in a concrete set of business problems or opportunities; the knowledge base is stand-alone in nature, and perhaps highly accurate as such, but without a strong link to the business strategy, it will remain under-leveraged.

When these challenges are mapped to the reputation performance of the organisations surveyed, it is evident that companies with strong/excellent perceptions have the foundation of measurement in place and are focusing their efforts on cross-stakeholder communication, CSR and managing risks. At the same time, companies with an average reputation are still working on developing the business case for this and experimenting with the best approach to measure their brand and reputation.

Photo: www.thinkstock.com

by Carsten Wegman n

Reputation

At the high level, the business case for reputation investment is simple: your success as a company relies on people supporting you, customers buying your products, policy makers and regulators giving you a licence to operate, the financial community investing in you, the media reporting on your point of view, employees delivering on your strategy.

For them to support your business, they need to trust you as a company that will deliver on its promises. We measure this as stakeholder = business support.

The business case for reputation

“There is a unique chance for senior communications officers to elevate their role and contribute to the corporate agenda.”

At the more operational level, you either need endorsement from the very top of the firm based on the company’s strategic ambitions, or a trigger point (which often comes with a media storm) that unleashes the mandate from the top, or a very well-architected business rationale that is firmly grounded in the views and behaviour of the stakeholder groups that matter the most to the success of the company.

Our study confirms that the corporate communications/public affairs department continues to have the leading role in reputation management (60 per cent of functions represented), and the trend is clearly that the bigger the company is in terms of revenues, the more involved the corporate communications office is in the management. This means that this department has the responsibility to build and bring the case forward, unless they have sufficient mandate already.

Moreover, the study shows that communications executives are still spending most of their time on ‘classic’ matters, rather than, say, using external stakeholder views to validate business strategies, company positioning, and providing actionable market input for board-level decisions. Less than 20 per cent of the senior communications professionals are really involved in board decisions, while at the same time 45 per cent of them re-

port that reputation is a prominent agenda item for their board – so there is a gap that needs to be closed.

For the most part, corporate communications officers (CCOs) have had direct responsibility for communications-related issues, and less so on broader strategic business issues. One of the key findings in this study is that there is now a unique chance for senior communications officers to elevate their role and contribute to the corporate agenda and decision-making, taking a fact-driven approach to providing that guidance.

The point is not for the CCO to seek or take responsibility for the company’s reputation performance at the stakeholder group level, but to influence or drive the company’s stakeholder support and behaviour in line with corporate objectives a) through communications and b) by means of business advice to the company’s executive team and line units on the interactions with the company’s core audiences. The CCO in the sole capacity of the company’s spokesperson is a dying species.

Also, managing reputation risk has become top-of-mind for almost half of the executives interviewed, and twothirds of them are now involved in reputation risk assessment and crisis man-

communication director 2/2016

agement. However, less than half of them report that their organisations have the right internal competencies, structures, processes and methodologies in place to assess and manage reputation risks.

This is no surprise in today’s world, where social media enables news to travel around the world within minutes and the perception of who you are as a company has a direct impact on sales, stock price and licence to operate. However, assessing the internal capability to manage the reputation risk is as important as understanding the external impact of the risk event materialising.

Study participants from companies headquartered in the US and Canada are clearly ahead of European companies in implementing a “well-established structure for addressing and mitigating key reputation risks” and “a cross-functional governance structure to manage the key reputation risks.” This is a significant finding, given that 84 per cent of all of the respondents worldwide acknowledge their corporate communications is the most responsible entity when it comes to reputation risk management.

Budgets and resources On the matter of budgets, one fifth of the companies surveyed dedicate more than 20 per cent of their annual communications budget to reputation-related initiatives, one quarter spend between five and 20 per cent, and one-third spend five per cent or less. These numbers are relatively moderate, and likely tie with the observation that many are still working on developing the business case for a structured approach to track and use stakeholder insight. Until that case is in place, the majority of funds will continue to flow into classic communications which may not be where the business impact is the greatest, or for that matter, easy to measure.

This is important, given that our research shows the total budget for communications rarely exceeds 0.1 to 0.3 per cent

37

financial

Omens of an imminent global recession include (clockwise from top left) a looming debt crisis tied to student loans in the US, a worse than expected economic situation in Brazil, the bursting of the Chinese bubble and quantitative easing introduced by the European Central Bank.

Don’t fear the reaper Four reasons why communication directors shouldn’t lose sleep over fears of a recession this year.

By C l aus Fon n esb ec h an d An dy Oliver

A

lmost daily we see media coverage of potential downturns or various bubbles bursting. Whether or not another Great Recession is headed our way, 2016 is looking like a year of uncertainty. The US election, the UK’s EU Brexit, Middle East stability, global oil price, natural disasters disrupting supply chains, China’s volatile stock market: these are just some of the contributing factors in an uncertain time.

40

History dictates that when a recession rears its ugly head, communications departments and agencies have typically been the first to be on the wrong end of cuts.

At a series of LEWIS Futures Forums events held across February and March this year, we polled senior global public relations and communications decision makers on this very topic. So, how would they respond to a potential recession in 2016?

A third said they would expect to increase communications spend. Another

communication director 2/2016

third said they expect it to be business as usual. Fifteen per cent said it was likely that more resources would be diverted into research and development. Meanwhile, a cautious fifth said they would likely be reaching for the rope to firmly batten down those hatches.

Overall, those surveyed were fairly confident about surviving and even thriving during potential future recession. But should they be, given the track record of public relations and communications budgets during economic downturns?

financial

We think the answer is yes. There are four arguments that demonstrate why public relations is safer and provides more strategic value to organisations during periods of economic flux. Especially during any economic downturn.

1

Photos: flickr.com/Andra MIhali/CC BY-SA 2.0; Marcelo Valente - www.flickr.com/photos/mvalente - CC BY-ND 2.0; www.thinkstock.com; Picture-Alliance

Power of measurement to justify ROI: Measurement and return on investment have always been a topic of debate in our industry. But no one can deny that our

how we assess its contribution to corporate goals and strategy, is like night and day from just eight years ago. The impact and value of content we are creating has never been more influential.

It’s safe to say that the 2008 recession pre-dated content marketing becoming a serious strategy or widely used term.

In the last decade, it was difficult to prove the direct impact of content. Now we track and report back on the value and contribution of content across every company channel and platform and its direct

“There are four arguments that demonstrate why public relations is safer and provides more strategic value to organisations during periods of economic flux.”

where are you in your journey. It’s very simple to associate calls to action in digital outbound activity.

“In our weekly sales and marketing team meetings, we review leads by channels, like inbound web queries, content, social media, how many leads turned into meetings. We analyse what lead sources work or not. This gives me the ability to make brutal decisions about where to make investments, and where to reduce or stop.

“This level of insight was non-existent at the time of the last recession. The quality of the data I provide to the board on a monthly basis proves the exact value of marketing and communications.”

The public relations and corporate communications professional has always been the idea generator and wordsmith.

The Vectra example demonstrates that never before has the content we produced been so critical to achieving commercial objectives.

3

measurements methods have dramatically changed and improved since 2008.

Gone (or should be gone) are the mediaeval days of weighty coverage books.

In the 2000s, there was little clear link to contribution to business objectives, or whether the content you were producing was actually any good. By 2008 it was all about level of activity, which may or may not have impressed senior managers in determining value.

Today, sophisticated monitoring and analysis tools help us to show the exact contribution public relations and communications makes to achieving corporate strategy. Rather than simply reporting on activity, we now communicate and prove outcome and value, using data to offer insights and guidance.

2 The power of content: Measurement leads seamlessly to the incredible growth of the importance and influence of content. The way we use content now, and

impact on lead generation and sales. Sentiment, tone, share of voice, syndicaton, engagement, and so forth; we easily identify what works and what doesn’t.

The value and influence of content and content marketing strategy on marketing and sales, especially customer acquisition and lead generation can be seen directly by decision makers. Mike Banic, global vice president of marketing at cyber security company Vectra Networks, illustrated this during one of our Forum events: “I can tell the board how many inbound web visitors we had from reading articles online or engaging in social media and then linking to the website. When we publish blog posts about threat research, we can track a huge spike in web visits.

I know exactly where people are going after reading the blog.

“The most important aspect is to be able to track the customer journey. There are so many great tools today to build pathways or journeys through digital content. For example, what content resonates at what part of the buying cycle,

communication director 2/2016

Social media ensures companies cannot hide and are constantly at risk: Since 2008, the media and channels in which we operate have grown and transformed beyond belief. This of course is primarily due to the rise of social media, digital channels, citizen journalism and blogging.

Back then, social media was still in relative infancy and very much a consumer play-thing. Twitter was a celebrity tool for fans of people like Ashton Kutcher.

Facebook was still for teenagers and students. Brands, certainly not business to business brands, didn’t embrace it like they do today. Measuring social was not even an option.

Today, social media is at the heart of everything we do. And communications directors and their teams hold responsibility for managing these myriad of channels, worldwide stakeholder engagement, reputation management.

The bottom line is organisations operate in a social era of transparency never

41

Compliance

Communicating compliance Organising cooperation across competing claims.

B y C h r i s t o p h e r S t o r ck

B

oth compliance management and corporate communication have expanded their fields of activity in line with their growing importance for corporate management. This raises five organisational questions: • How can we define the roles and responsibilities of both functions in a practical way?

• Which objectives can only be achieved through cooperation between both functions?

• Which organisational and procedural interfaces are necessary to make this happen?

• In which areas do the tasks of both functions overlap?

• Which conflicts can results from these overlaps and how can they be avoided or resolved?

The establishment of compliance management as a corporate function was driven by the same reasons that also fuelled the breakthrough of the stakeholder approach to strategic management.

An increasing number of industries find themselves in the firing line of socio-economic conflicts. Increasing regulatory scrutiny and lawsuits indicate a growing alienation between societies and businesses that threatens the latter’s licence to operate. The triggers of these conflicts can mostly be associated with one of two areas where large corporations have been especially prone to fail: governance and social/environmental responsibility.

44

However, not all companies within an industry face the same issues. Some do better than others in terms of business ethics and conduct as well as paying their dues to communities in which their market activities are taking place.

The harmful potential of being accused of wrongdoing is especially high for companies with an outstanding reputation: the more prominent they are and the better they are perceived by stakeholders, the easier and deeper they can fall. Accordingly, the broader approach to corporate communication called reputation management targets the same problems that companies have been trying to tackle through implementing compliance management systems.

Changing the rules The broadening of the concept of public relations requires going beyond deploying owned and earned media to spreading key messages to employees and external mediators such as journalists or semi-professional information hubs on the internet.

Modern corporate communication demands direct involvement with stakeholders – not only talking to them but also listening. Instead of propaganda, communication managers need to dialogue with all groups and individuals who have to cooperate (or at least refrain from obstruction) if the company is to achieve its goals. Evoking and stabilising

communication director 2/2016

positive (or at least neutral) behavioural intention is the key assignment of executives in charge or corporate reputation management.

When the pioneers of reputation management were looking for a way to systematically explore how stakeholders perceive a company, they developed a tool called Reputation Model. These models consist of six to nine dimensions constituted by small batteries of indicators which are the backbone of the surveys used for stakeholder research.

One of these reputation dimensions is usually business ethics. Whereas all other dimensions are driven by indicators describing the desired behaviour of a company, business ethics are defined by what stakeholders do not want the company to do. A typical example is the indicator battery for this dimension in a reputation model used by a pharmaceutical company: • No illegal influencing of medical doctors • No lobbying against patient interests • No misleading ads or claims • No abuse of underprivileged for clinical trials • No drug testing on animals • No unfair treatment of business partners • No breach of ethical standards and code of conduct • No employee discrimination of any kind • No exploiting of workers in developing countries

Compliance

That these reputational aspects are closely related with compliance management is obvious. The critical question is how to differentiate the tasks of compliance and corporate communication management and to organise the cooperation of both functions.

Both management tasks need to involve a broad range of management functions in order to establish and maintain a framework for the alignment of employees and their activities with the

“The critical question is how to differentiate the tasks of compliance and corporate communication.” goals, values and rules of the company.

Both functions derive their organisational relevance from the ability to implement communication processes aimed at safeguarding key stakeholder relationships. Not only do compliance managers have to establish systems for monitoring

and steering corporate compliance but they also have to create a culture that fosters intrinsic adherence to the code of conduct. This requires not only training measures but also intensive internal communication and alignment with the management of corporate identity and branding – i.e. activities within the field of competence claimed by corporate communicators. The same goes for making use of opportunities to leverage successful compliance management measures for public relations activities targeted at strengthening the corporate reputation.

There is only one target group that compliance communication can address on their own: compliance managers. All other internal and external stakeholders who need to be involved belong to other corporate functions (see Table 1).

Working towards a stronger role If compliance managers want to expand the range of audiences that they are officially in charge of, they need to do two things: (1) gain access to and establish relationships with more internal and external stakeholders and (2) improve their skills in communication, controlling and strategic management. Progress in both areas will substantiate the claim for a stronger role in organisational development. It will also provide compliance

Compliance communication targets

Primary relationship manager

Corporate leadership

Corporate communication (executive communication)

Employees

Corporate communication (internal communication)

Compliance managers

Compliance management (compliance communication)

Business partners

Business units (B2B communication)

Suppliers

Procurement (vendor communication)

Investors, financial analysts

Investor relations

Regulatory authorities

Public affairs (corporate affairs)

Policy makers

Public affairs (lobbying)

NGOs

CSR (sustainability communication)

Legal authorities

Corporate council (legal communication, litigation PR)

Customers

Marketing (market communication, CRM)

Journalists

Corporate communication (media relations)

SRI rating agencies

CSR (sustainability communication)

communication director 2/2016

EXECUTIVE SUMMARY • Compliance management and corporate communication have both grown in scope and in importance for management.

Therefore, measuring their similarities, differences and overlapping tasks is important, as is identifying ways in which they can work together to achieve strategic goals.

• Both functions derive their relevance from the ability to implement communication processes aimed at safeguarding key stakeholder relationships.

• To expand their audiences, compliance managers must (1) establish relationships with more internal and external stakeholders and (2) improve their skills in communication, controlling and strategic management.

Table 1: Ownership of target groups of compliance management

45

Theory

The communication value circle How communication contributes to corporate success. b y a n s g a r z e r fass An d Ch risti n e Vi ertman n

O

One of the most basic findings in corporate communications research and practice is that communicators need to work closely with top executives to achieve excellence. Outstanding communication departments ensure a close alignment of communication objectives and business goals. However, studies prove that top executives and communication professionals seldom share a consistent understanding of the supportive role of communications. It would be short-sighted to blame the executive level for this. Communication professionals themselves use numerous rationales to explain the value of their work. These range from building reputation and brands to gaining thought leadership or boosting sales and employee motivation.

The multitude of stories told by the professionals themselves creates uncertainty among business leaders and hinders the institutionalisation of the communication function.

50

communication director 2/2016

At the same time, the variety of theories which explain the contribution of communication to organisational goals has never been analysed or combined in order to draw a ‘big picture’ of communication value. In order to address this research gap, we have systematised the academic knowledge published from the year 2000 onwards. The literature review identified 815 publications in 36 international journals across several disciplines (public relations, marketing, management, etc.), which explain value creation through communication. Moreover, various concepts of value creation in business were explored and integrated into a new generic framework for value creation through communication called the Communication Value Circle.

Communication as part of the value chain The notion of ‘value creation’ describes the transformation of resources into goods or services with a higher financial value. This supports the foremost goal of every corporation – to work efficiently and effectively to create financial value today and enable value creation in the future.

Theory

Value-based management is a wellknown concept in business theory and practice, as explained in the works of Michael E. Porter and other management scholars. It states that all corporate decisions should focus on increasing the overall value of the company and not only short-term objectives. Corporate value was traditionally equated with shareholder value and only measured in economic terms like return on investment.

From this point of view, communication contributes to the overall value merely by positioning a company in the marketplace or creating a favourable corporate image among investors.

logistics, operations, outbound logistics, marketing and sales, and service) as well as of supporting activities (firm infrastructure, human resource management, technology, and procurement).

Thus, communication is not just an organisational function which helps top executives and other business managers to reach out to stakeholders. Corporate communications is also a valuable resource for listening and learning from the environment, which helps to reposition the organisation and adjust strategies, and a key driver of creating a supportive overall framework for corporate activities.

“Top executives and communication professionals seldom share a consistent understanding of the supportive role of communications.”

However, it is common knowledge today that corporate success depends not only on shareholders, but also on sustainable relationships with employees, politicians, regulators, customers, mass media, social media influencers, and many others stakeholders. The concept of stakeholder value proposed by R. Edward Freeman expands the notion of value-based management by integrating the expectations and legitimate interests of those stakeholders. Thus, the corporation has to be positioned in the marketplace as well as within its social and political environment.

In our understanding, strategically managing and measuring this positioning by communicative means is the primary task of any communication department. In this sense, communication is an integrative part of the value chain in any corporation. Communication processes are part of primary activities (inbound

Findings from literature Our literature survey across different disciplines revealed that the research is predominantly focused on the debate about measuring and evaluating the effectiveness of communication. There are a number of models and methods for clustering communication processes into different chunks and levels of effect.

However, the contribution of communication to corporate strategy is seldom reflected upon. This is also true for recent approaches like the Barcelona Principles 2.0 for Communication Measurement propagated by AMEC. Measuring the impact on organisational performance is recommended, but applicable methods and indicators are neither discussed nor offered in practice.

Since the 1990s, there has been an additional debate on the creation of in-

communication director 2/2016

tangible assets through communication.

However, there are no standards for combining these closely linked values and for explaining their connection to organisational strategy.

Researchers and practitioners have also discussed the adaption of business valuation and management concepts. Financial indicators like return on investment are often mentioned, but mostly misinterpreted. The complexity of communication processes, the close nexus with other functions and activities, and a lack of transparency about costs and investments for communication in most corporations hinder the utilisation of such indicators. On the other hand, management systems like the Balanced Scorecard by Kaplan and Norton and associated concepts like Value Drivers have become famous over the years.

They allow professionals to visualise the link between communication activities, media and channel outcomes, changes in stakeholder’s knowledge, attitude, behavioural disposition or behaviour, and organisational impact. Based on these approaches, researchers and professional associations in German-speaking countries have developed a joint framework to capture the value chain of communication (DPRG/ICV framework), which is nowadays widely known and even accepted as a standard.

To sum up, the question of how communication contributes to value creation for organisations has not been answered until now. There are many approaches, indicators, measurement methods and concepts for evaluation, but they lead to different results and a coherent and integrative approach is missing.

There is a tendency among professional communicators and researchers to focus on ’soft factors’ like creating reputation, brands or relationships. A major gap concerns the large range of strategic contributions through corporate listening, issues management, internal communication consulting or mastering crisis situations as well as change communication and innovation support.

51

The big interview

“It’s your licence to operate that is gaining our opposition�

The International Trade Union Confederation is determined that no worker is left behind in the transition to a new economy.

We spoke to its general secretary Sharan Burrow about human rights, fair supply chains and the fight for a better business world. i n t e r v i e w b y d af y d d p h i l l i p s

54

communication director 2/2016

The big interview

T

Photo: ITUC

he ITUC launched its first international union programme on climate change policies in the year it was formed, so from the start it has put workers’ rights on a level with sustainability.

Why is it important the two go hand-in-hand?

The global decisions in regard to both the Sustainable Development Goals and the Paris Climate Agreement chart a course, if the world is serious, to a zero-carbon, zero-poverty future.

Both those things are essential for sustainability. The ITUC was formed in 2006 out of the merger of two international union bodies the International Confederation of Free Trade Unions and the World Confederation of Labour, and union advocacy for sustainability goes back to when decisions were taken that the threat of climate change was serious, that an increase in two degrees was the limit. We know workers need to be part of the advocacy in what is probably the biggest industrial transformation in our history. We were determined it would be a just transition and leave no one behind. When you look at inequality, poverty, the attacks on labour rights, all of those things are barriers to a zero-carbon, zero-poverty world. Clearly we celebrate the decisions last year but now workers and their unions have a right to know the commitments and plans by governments around the world and indeed the broader business community to reach a zero carbon, zero poverty future.

The idea of a just transition describes the move towards a low‐carbon and climate‐resilient economy that maximises the benefits of climate action while minimising hardships for workers and their communities. To what extent are sustainable solutions a potential threat to workers?

All jobs have to be both sustainable and they must be decent work. But the imperative to create decent work is in the hands of governments, employers and ourselves. If we can stop the attacks on fundamental human and labour rights then we can build a sustainable future that has at its heart decent work. But that’s not our greatest fear. Our greatest fear is on two fronts. One is that climate change is already destroying lives and livelihoods.

We say “there are no jobs on a dead planet” and that’s much more than a slogan for us, because we’re witnessing working people’s lives being devastated. We know that will increase.

We’re also seeing instability in the market driving threats to livelihoods and to vulnerable communities, particularly in coal but also increasingly in communities that depend on oil and gas.

communication director 2/2016

55

issue focus

58

communication director 2/2016

issue focus

Issue Focus

The social licence to operate 60

76

A long-term commitment

Getting the go-ahead

Engaging local communities helps Rio Tinto deliver value to its stakeholders

By Simone Niven

68

How Lafarge made sure all its internal departments worked together to unlock the value of engagement

By Chris Ettery

64

One of the field‘s leading academics traces the development of the social licence to operate

By Robert Boutilier

Applying for a licence What the social licence to operate means to European communicators today Interviews with selected speakers at the European Communication Summit

The story of a concept

72

80

A great transition Purpose-driven work will ensure communicators win their own licence to operate

By Inge Wallage

Licence revoked?

Why internet giants such as Google and Facebook risk losing their social legitimacy

By Piet Hausberg and Marc Suess

communication director 2/2016

59

VIM