MHP Index 2015 WHAT MAKES EFFECTIVE COMMUNICATION? WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
2
CONTENTS FOREWORD EFFECTIVE COMMUNICATIONS IN 2015 THE 2015 CHALLENGE SECTORIAL ANALYSIS RESULTS BY REGION ABOUT MHP
METHODOLOGY Populus interviewed 5,035 adults (18+) online across five countries between 24 March and 2 April 2015. The number of interviews conducted in each market was as follows:
1,007 in the UK
1,002 in Hong Kong
1,006 in the USA
1,012 in Brazil
1,008 in Germany
Data were weighted to be representative of adults in each country. Where appropriate, tracking results from a similar study (which included UAE) that was conducted in September and October 2013 are shown. Where results do not sum to 100%, this may be due to rounding, multiple responses, or the exclusion of ‘don’t know’ categories. Populus is a member of the British Polling Council and abides by its rules. For more information, see populus.co.uk.
@mhpc | #MHPIndex
1 2 8 18 30 32
FOREWORD BY GAVIN DEVINE CEO, MHP COMMUNICATIONS
In the first MHP Effective Communications Index, in 2014, we provided an insight into the levers which allow organisations all over the world to build a positive reputation. In this year’s Index we look again at the best ways businesses and others can engage with their consumers, regulators, funders and other stakeholders.
A
s the inaugural Index established, being an effective communicator has many facets. What is the relationship between effective communications and a strong brand, well-regarded and high profile leadership, a positive reputation, the external political environment, and shareholder returns? Where do the causal relationships between these elements exist? Where do they support one another, where do they conflict, and where, frankly, do they undermine one another? A year later, MHP returns to this fascinating subject. Via our polling partner, Populus, we have conducted conversations with thousands of people around the world, creating a unique evidence base which answers some crucial questions. What sectors communicate best? What are the differences between diverse markets and across different sectors? With companies increasingly operating in multiple markets, these questions are of fundamental importance as they seek to communicate their value stories and build their corporate reputations. The evidence we have uncovered also allows MHP’s staff to continue to have access to the best insights and analysis, and to give great advice to our clients, helping ensure they are talking to the right audiences using the right channels and delivering the right messages.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
In this, the second Effective Communications Index, we have also introduced what we consider to be an essential new element by investigating what role business can and should play in commenting on the big political and social issues of the day, whether that is healthcare reform in the US, the future of the Euro, the referendum on Britain’s membership of the EU, or the deeply sensitive issue of Scotland’s position in the UK. As with the initial Index, what has emerged is contradictory and complex, presenting a major challenge to business. We describe this as a ‘communications conundrum’, a puzzle we explore in detail later in this report. One finding that has not changed is that business still faces considerable hostility, despite the fact that seven years have passed since the economic downturn began. This has led in turn to two major trends: timidity on the part of many firms in talking about big issues, or for that matter about themselves; and a continuing enthusiasm amongst politicians for interventions which paint them as ‘tough’ on business. Businesses therefore face a major and on-going challenge: how can they communicate effectively and authentically with all of their stakeholders, being seen to discharge their responsibilities and obligations to society whilst continuing to pursue their commercial imperatives – and being celebrated for doing so. And our job as communications advisors is one we relish: how to help organisations achieve these goals. I hope you are as fascinated as we are by the data and findings in the Index. We look forward to working with you to frame and implement communications strategies that deliver sustained business success.
1
EFFECTIVE COMMUNICATIONS IN 2015 |
WHAT MAKES EFFECTIVE COMMUNICATION IN 2015? Overall communications effectiveness: overall ranking RATING
SECTOR
TOTAL
UK
RATED HIGHLY
RETAIL
1
1
FOOD DRINK & MANUFACTURING
2
2
FINANCIAL SERVICES
3
=3
TRANSPORT
4
5
HEALTHCARE
5
=3
ENERGY & NATURAL RESOURCES
6
6
RATED POORLY
2
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
Q1. Thinking about companies from the following sectors, please rank each in terms of how effectively they communicate to you who they are and what they do. [Overall rank]
USA
GERMANY
HONG KONG
BRAZIL
1
1
=2
1
2
2
4
2
3
6
1
3
5
4
=2
6
4
3
5
5
6
5
6
4
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
3
EFFECTIVE COMMUNICATIONS IN 2015 |
WHAT MAKES EFFECTIVE COMMUNICATION IN 2015?
Who performs best in the most important areas? % ranking companies in the sector as the best
4
% SAYING ISSUE VERY IMPORTANT + IMPORTANT
FINANCIAL SERVICES
HEALTHCARE
BEING TRANSPARENT AND OPEN
84%
13%
17%
BEING A GOOD EMPLOYER
76%
24%
18%
TALKING TO ME IN A LANGUAGE AND THROUGH MEDIA RELEVANT TO ME
74%
16%
14%
BEING CLEAR IT UNDERSTANDS ITS RESPONSIBILITIES TO SOCIETY
73%
13%
25%
HAVING STRONG, VISIBLE LEADERSHIP
59%
28%
13%
HAVING A POWERFUL BRAND
46%
20%
12%
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
Q2. How important do you think each of the following are to making sure that a company effectively communicates with you? / Q3,4,5,6,7,8. Thinking about companies from the following sectors, please rank them in terms of how good a job each does when it comes to‌
ENERGY & NATURAL RESOURCES
RETAIL
FOOD & DRINK MANUFACTURING
TRANSPORT
12%
27%
17%
14%
15%
18%
14%
11%
8%
34%
19%
9%
18%
18%
16%
9%
10%
23%
16%
9%
8%
29%
23%
8%
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
5
EFFECTIVE COMMUNICATIONS IN 2015 |
WHAT MAKES EFFECTIVE COMMUNICATION IN 2015?
‘You can’t play the game if you don’t know the rules’ - or so the saying goes. Last year in our inaugural survey, we set out the communications rules companies need to abide by in order to engage effectively with their end audiences and customers.
T
he first of these was for companies to be ‘transparent and open’ in their communications. An overwhelming 85% of those who completed the survey told us this was the single most important factor in communicating effectively. Our 2015 survey reveals that this is still the most important factor when considering how companies and brands need to engage with their customer audiences. Transparency and openness retained the top spot in 2015, being judged as very important or important by 84% of respondents.
6
Should this be a surprise? Transparency and openness are key ingredients in building and retaining trust, and trust (or lack of it) is critical to the fortunes of any business in winning and retaining customers and trade partners. To quote Mark Thompson, ex-Director General of the BBC, “Trust in a given institution may be based on a great tradition and great inherited values, but it depends on what you do today… it has to be earned and earned again.” But which sectors do consumers think communicate in an ‘open and transparent’ way? The retail industry holds onto the number one spot for a second year in our survey, thanks to its reputation for communicating in an appropriate and authentic way, and for doing so using media and language which is relevant to its audience. In contrast other sectors analysed in our report, especially financial services and healthcare, can be liable to slip into ‘technical jargon’ within their communications, prompting consumers to ask themselves what isn’t being said, rather than what is.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
Given the ongoing media coverage of scandals such as the Libor-fixing scandal and on-going negative reporting of bankers’ bonuses and the ongoing fall-out from the 2008 crash, it is perhaps unsurprising that financial services scored poorly on ‘transparency and openness’ – but they ranked top of the class in the second category on our list of consumers’ priorities: ‘Being a good employer’. However, the Financial Services industry also ranked first for ‘having strong a visible leadership’ - although this is less of a priority in the hierarchy of Effective Communications criteria. Leaders of the Financial Services industry have, arguably, been given more of an opportunity to consistently demonstrate strong leadership through their constant media presence and public accountability. An analysis of 2014 media coverage, featuring CEO/CFOs, showed that Financial Services leaders achieve 35% more share of voice than retail leaders, so the public’s perception of visible leadership may be attributed to the opportunity to see them in action.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
One added nuance in this year’s survey, compared with last year, was that consideration was given to the importance of industries communicating with consumers in a language, and through a media, which is ‘relevant’ to them. Greater detail on what constitutes ‘relevant language and media’ follows later in this report, but the headline is that Retail again comes out on top, perhaps bolstered by the industry’s ‘Innovative adopter’ approach to trying new media, including social and digital channels, and therefore appealing to a wider consumer base. Perhaps the most reassuring consideration of this year’s results is the uniformity of feedback across the five countries surveyed and how ‘Effective Communications’ and its constituent parts don’t vary significantly between major markets. What does this tell us? That companies must always speak to their consumers with one authentic and consistent voice: cognisant of local market sensitivities, but not led by them. How that looks across sectors will be explored further in this report, but for now, we are clear on the rules by which we need to play.
7
THE 2015 CHALLENGE |
THE 2015 CHALLENGE – NAVIGATING THE ‘COMMUNICATIONS CONUNDRUM’ BY PETE DIGGER MANAGING DIRECTOR, MHP COMMUNICATIONS
The roles and responsibilities of business in society have been much discussed for generations. Big businesses in particular are rightly subject to intense scrutiny not only around the ‘what’ of their business activities but also the ‘how’.
I
n a new element of the Effective Communications Index, MHP Communications this year explores a question that can cause much anxiety amongst business and commentators alike: should businesses get involved and comment upon contentious political issues if they feel that their business or the economy would be affected? This comes on the back of a series of macro political decisions within individual markets and, in some cases, across Continents, which had or have the ability to severely impact on local and regional economies. Businesses are routinely urged to make their views known on sensitive issues ranging from healthcare reform in the US to the Scottish independence referendum, challenges to democracy in Hong Kong, and the merits and disbenefits of the UK’s membership of the EU. They tend to be inherently reluctant to do so, but is their reluctance well founded? What are the expectations of the public as to whether they should make their positions known, and what are the attributes of a company whose views are sought, welcomed and believed?
From this we can conclude that, in general, the public expect business to step up to the plate and articulate a view on major issues. So far so good. But in response to the statement ‘I trust the chief executives and chairs of big businesses when they make statements on political issues’, only 25% of respondents indicate they either ‘somewhat’ or ‘strongly’ agree. In both areas, the differences are more marked in some regions than in some others. In Brazil, for example, 71% of respondents believe big businesses should comment, and 39% believe them. In the UK the figures are 54% and 14% respectively. In Hong Kong they are 39% and 29%. Notwithstanding those regional differences, the problem is the same. Fundamentally, respondents indicate that they expect big businesses to get involved. They just reserve the right not to trust them when they do so. How should businesses respond to this conundrum? MHP posed a further series of questions to respondents to find the answer, which identifies a subtle change of approach needed by firms when commenting on political hot topics.
We believe that this series of questions points to the most fascinating challenge to business within the Index. We have dubbed it the ‘Communications Conundrum’. In response to the statement ‘big businesses should make public comments on political issues if they feel their businesses or the economy would be affected’, 55% of global respondents either agreed strongly or indicated that they somewhat agreed.
8
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
30%
10% 5%
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
NEITHER/DON’T KNOW
STRONGLY AGREE
I TRUST THE CHIEF EXECUTIVES AND CHAIRS OF BIG BUSINESSES WHEN THEY MAKE PUBLIC STATEMENTS ON POLITICAL ISSUES
SOMEWHAT DISAGREE
35%
STRONGLY DISAGREE
SOMEWHAT AGREE
BIG BUSINESSES SHOULD MAKE PUBLIC COMMENTS ON POLITICAL ISSUES IF THEY FEEL THEIR BUSINESS OR THE ECONOMY WOULD BE AFFECTED
20% 7%
18%
33%
23%
19%
9
EXECUT OM CHr IdEF IV R F TS o you agree o isagree with the folloES AN N win MEextent d gs D C E tat t T em HA a A wh en T o ts? IR S 9. T S Q
25%
42 %
“I trust the chief executives and chairs of big businesses when they make public statements on political issues”
42% DISAGREE
33%
THE 2015 CHALLENGE |
THE 2015 CHALLENGE – NAVIGATING THE ‘COMMUNICATIONS CONUNDRUM’
10
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
Q10. You said that you do not trust the chief executives and chairs of big businesses when they make public statements on political issues. Would the following make you more or less likely to trust such business leaders or would it make no difference? [% saying much more or a little more likely to trust]
69%
IF THE INDIVIDUAL AND COMPANY CLEARLY UNDERSTOOD THEIR RESPONSIBILITIES TOWARDS SOCIETY
68%
IF THE INDIVIDUAL AND THE COMPANY CLEARLY EXPLAINED WHY THEY WERE MAKING THE STATEMENT
47%
IF THE INDIVIDUAL AND COMPANY USED MEDIA AND LANGUAGE THAT WAS RELEVANT TO YOU PERSONALLY
42%
IF YOU LIKED THE INDIVIDUAL INVOLVED
40% 39% The clear imperative is for business to ‘earn the right’ to be heard by the public and establish their locus for doing so.
H
istorically, the deep-seated reluctance of businesses to declare their hand on contentious issues has resulted in them only doing so late in the day or in a muted fashion that fails to achieve cut through. Recent examples of this would include business comment and involvement in the highly-charged referendum for Scotland to become independent from the UK in Autumn 2014. Many businesses ultimately chose to come out in support of the Union - but only did so at the eleventh hour. Because they remained silent for so long, instead of taking the time to establish why they had a view, and the rationale on which it was based, their contribution was not seen to have ‘legitimacy’ and was interpreted by sections of the media, political class and public as naked selfinterest. Business leaders who had been contributing to the debate for longer, on both sides, were more integrated into the debate.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
IF YOU WERE A PERSONAL CUSTOMER OR USER OF THE COMPANY
IF YOU OR A FAMILY MEMBER WERE AN EMPLOYEE OF THE COMPANY
As a result, such interventions were broadly received as being counterproductive. It is clear that this ‘legitimacy deficit’ tends to undermine efforts to demonstrate leadership and be heard on issues that the public nevertheless expects business to have a view on. These lessons will be of critical importance as other topics arise on which the view of business is salient and legitimate. The approach should be either to articulate a position from an early stage, and to do so consistently, or to remain silent. For companies to be deemed to communicate effectively, however, it is clear from the Index that a significant majority of respondents expect them to adopt the former approach.
11
THE 2015 CHALLENGE |
SCOTTISH INDEPENDENCE REFERENDUM The Scottish independence referendum triggered unprecedented political debate as both sides sought to engage with the public. Unsurprisingly, many businesses found themselves pulled into a conversation that necessarily involved customers, employees and investors. By the end of the campaign, business involvement had reached fever pitch. One major Scottish pensions and insurance provider’s interventions were of particular note as they broke ranks early and engaged consistently throughout the campaign. The company made headlines with its unconventional comments about looking into the possibility of leaving Scotland if the ‘Yes’ side won. This sentiment was latterly backed up in the media by a series of financially significant businesses with headquarters in Scotland. On the ‘Yes’ side, the pro-independence Business for Scotland movement was a regular commentator on the latest developments and by the end of the campaign it had attracted 3,800 vocal members.
12
The significant pressure to take sides during the referendum campaign is likely to set the new standard for business involvement in future political debate. While the mainstream media largely supported the ‘no’ campaign, and by extension businesses aligned with it, social media was very different. Some business leaders spoke of their fear of speaking out due to the potential online repercussions. This is now a reality that businesses engaging in political debate must also factor in, above and beyond traditional media reaction, when deciding whether or not to get involved.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
AMERICAN HEALTH CARE SYSTEM The American health care system has always been the subject of contentious political debate, and was a system which Barack Obama vowed to reform in his bid to become President. On being elected in 2008, it remained one of his main priorities, however he fought an uphill battle to reach agreement with Congress on what ‘Obamacare’, would actually look like. Given the nature of the reforms, commentary on the legislation mainly came from small organisations and small business trade groups, who perceived little commercial downside in being vocal during the debate. Small firms held a fairly negative view of the reforms due to concern that ‘Obamacare’ would hit their bottom line and argued that that they simply couldn’t afford such measures, despite the inclusion of the insurance exchange which was designed to reduce such risk.
The nature of the legislation meant that big businesses didn’t play a huge role within the debate, leaving small businesses to provide most of the commentary during the continual back and forth between Capitol Hill and the White House. Whether this was because they felt it was not their place to hold a public view or because it simply didn’t affect them is not clear; however precedent of business involvement in political debate in the past suggests that it is probably the latter.
Big business, on the other hand, tended to take less of a strong view on the legislation. Given that most had schemes already in place for employee health insurance, it was felt that the reforms wouldn’t affect them – with prominent figures only really arguing against the creation of additional bureaucracy and emphasising that the resulting system must be transparent.
WHAT MAKES EFFECTIVE COMMUNICATION? ||MHP MHPINDEX INDEX2015 2015
13
3 THE | RESULTS 2015 CHALLENGE BY SECTOR |
CHANNELS MATTER: SOCIAL MEDIA AS THE 21ST CENTURY TOWER OF BABEL
The Biblical legend of the Tower of Babel claims mankind was quickly advancing as a civilization 4,000 years ago. This was due, in part, to the fact that everyone spoke just one language, making communications and interactions with their fellow citizens clear. Fearing an uprising, God confounded their language, nullifying their ability to unite, to be heard and to be understood. Unable to communicate with their neighbours, people soon started to drift apart into their separate communities and move away to distant parts of the land.
P
rior to the rise of the Internet and global social media channels, our media predominately served the individual countries, communities and languages we have today. The information age – and especially the Internet – has given the media the potential to reach more people and to bring them together again as one global community. A number of significant events in 2015 - the Parisian Charlie Hebdo killings, two Nepalese earthquakes and a terrorist attack levied at holidaymakers in Tunisia – have demonstrated the ability of social media to facilitate a global response and mechanism for support. Increasingly, global trending topics on social media break through language barriers, and the rise of visual content and emojis reflect this trend towards a single unified language. Witness the universal spread of the hashtag #jesuischarlie in the immediate aftermath of Charlie Hebdo.
14
But what is the language of social media and how can brands learn to join the conversation? Much of the social media lexicon is focussed on authenticity, vulnerability and openness. Individuals share stories of love, life, tragedy and hope on their personal social media pages and they expect the brands they engage with to do the same. Social media is not always the place for glossy, high production content. Consumers want to feel connected with the brands and businesses they follow, and this means creating and sharing authentic content which reflects both the personality of the brand and the way people express and share feelings on social media in their day-to-day lives. But what does authentic mean? “Consistent”, “transparent”, “timely”, “believable” and “spontaneous”, to name a few definitions. Social media can personify brands and organisations, and make them more relevant to the end consumer or customer, but only if they communicate in an authentic way that the target audience recognises. Why should authenticity matter? Authenticity inspires trust and therefore sales. In a recent 2015 survey, featured in AdWeek.com, 63% of social media users said they would buy from an authentic brand over a brand that isn’t perceived as honest. When JetBlue responded to a social media crisis by owning up and posting a mea culpa video on YouTube, the community responded and now they have one of the biggest social media followings in the airline industry.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
% saying issue very important
34% RETAIL
In contrast, only 39% of respondents to the AdWeek survey were concerned with brand popularity. Just as in our own social media networks, no one likes a show-off. But who does it well? Our 2015 survey asked consumers which sectors talk to them in a ‘language and through media relevant to me’. 34% of respondents ranked the retail industry as the most authentic communicator, which is perhaps not surprising given the relatively unregulated nature of the industry, and its ability to respond quickly to trends while adopting a lexicon which is more colloquial and better understood by its end audiences.
19%
FOOD & DRINK MANUFACTURING
16%
What can communicators learn from this? Getting it right on social media has the power to elevate the reputation and visibility of a brand to a new global audience, but only if they enter into it in the same was as any relationship: with commitment and the desire to listen to what the other partner (your audience) wants to hear, rather than just the message that a brand wishes to broadcast.
FINANCIAL SERVICES
14%
HEALTHCARE
9%
TRANSPORT
8%
ENERGY AND NATURAL RESOURCES
15
THE 2015 CHALLENGE |
WHAT COMES NEXT – CAN BUSINESS RECOVER ITS REPUTATION?
BY JONATHAN LOMAX HEAD OF CORPORATE AFFAIRS, MHP COMMUNICATIONS
In the aftermath of the 2008 global crash and the ensuing fall out, the cliff that business had to scale in order to achieve cut-through and deliver effective communications appeared insurmountable for many.
Just 39% of respondents in Hong Kong, for example, said they would be more likely to vote for a political party if it was tougher on big business, compared with 53% in the UK and Germany, which marginally emerged as the toughest markets in this context.
T
Similarly, Hong Kong was the only market in which respondents agreed, to any extent, with the suggestion that ‘big businesses help ordinary people’.
here is little in the data that emerges from the 2015 Index to suggest that this situation is likely to change any time soon. Hostility towards big business and cynicism about its activities remain a global phenomenon, fuelling the complex environment that communicators must navigate when seeking to get their message out. A significant majority – 55% – of respondents believe that ‘big businesses in my country are failing to meet their responsibilities to society’. Meanwhile only 28% believe a business when it says it is changing for the better. In no market across the globe did respondents believe that ‘Government regulates business too much’. Indeed, 48% of respondents agreed with the statement ‘I would be more likely to vote for a political party if it was tougher on big business’. Regional differences were slightly less marked in this area, although Hong Kong emerges as the market in which the actions and statements of big business are received with the greatest degree of good faith.
16
Given what appears to be a universally hostile environment, what lessons can communicators take from the Index to inform the approach they should adopt? Unsurprisingly, the headline figures mask considerable subtleties in the underlying data. The sectoral rankings also suggest that despite what may appear to be routine cynicism about what motivates big business, respondents are nevertheless prepared to give individual companies and sectors a fair hearing. This is particularly the case if those companies are perceived to communicate effectively on the issues that are of most importance to them, addressing expectations and concerns head on. In this context it is notable that, given the backdrop of the 2008 global crash, financial services as a sector ranks third overall.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
THE PROBLEM FOR ‘BIG BUSINESS’ AROUND THE WORLD Q11. Which of the statements in each of the pairs below do you agree with more? TOTAL
UK
USA
GERMANY
HONG KONG
BRAZIL
Government needs to do more to regulate how businesses behave
Government regulates businesses too much
Big businesses take advantage of ordinary people
Big businesses help ordinary people
Big businesses only behave ethically and responsibly when forced to
Big businesses do their best to behave ethically and responsibly
Making a profit should only be one consideration among many for business
The primary purpose of business should be to make a profit ahead of other considerations
Q9. To what extent do you agree or disagree with the following statements? SOMEWHAT AGREE
STRONGLY AGREE
NEITHER/DK
SOMEWHAT DISAGREE
STRONGLY DISAGREE
Big businesses in my country are failing to meet their responsibilities to society 22%
33%
30%
11%
4%
I would be more likely to vote for a political party if it was tougher on big business 19%
29%
35%
10%
7%
I believe it when a big business says it is changing for the better 7%
21%
35%
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
23%
14%
17
SECTORAL ANALYSES |
FINANCIAL SERVICES: FAILING TO CONVINCE ON THE BIG ISSUES
Financial Services’ image continues to perform poorly in those areas of significant concern to global audiences – “Transparency and openness” and “understanding its responsibility to society”.
The systemic difficulty of explaining the inherently complex messaging associated with the financial services industry may be an explanatory factor. Equally, hanging over all of this is the long term reputational damage done by the financial crisis.
Given the continued string of high profile scandals to have followed in the wake of the 2008 financial crises, these results are unsurprising.
Rebuilding trust, over and above issues of style, content and medium, will be paramount. In this regard there is some cheer for the industry, with a 2% improvement in how effectively the industry is perceived to communicate “who they are and what they do”, compared with last year. Doubtless, it will be a long road yet.
Strong Leadership, Visible Brands
U
nfortunately, these criticisms persist despite the sector scoring well in regard to having both visible brands (3rd) and strong leadership (1st). That the financial services industry is seen to be communicating, yet regarded as extremely opaque, is concerning. The increased global scrutiny the financial services sector has been under doubtless explains some of this recognition. However, the failure to influence perceptions of financial services suggests it continues to struggle to convey its point of view.
Financial Services retains its reputation as an excellent employer, topping the rankings globally as the best sector “when it comes to being a good employer”. This reputation holds up strongly over both developed and developing markets, and despite strong scepticism about the industry understanding its social responsibilities in other areas. To some degree this may be the flipside of concerns around compensation and inequality – a reflection that the industry does indeed look after its own. However, optimists would point out this result comes despite a historical association with long working hours, and a competitive working environment.
BY JONATHAN GOODSTONE MHP FINANCIAL
There are various possible explanations. Only 16% of respondents believe the industry communicates through relevant channels in an interpretable style. This is clearly unsatisfactory, but not vastly different from other sectors.
Excellent employer
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
Certainly the Financial Services industry has made significant efforts in recent years to continue to attract talent in the face of increased competition from the tech sector, and reputational challenges.
BEING TRANSPARENT AND OPEN
13%
BEING A GOOD EMPLOYER
24%
A failure to convince in Germany While results have remained relatively stable relative to other sectors globally, a notable change has occurred in regard to the effectiveness of financial services industry communications in Germany. Having ranked in the middle of the pack in our last index, financial services are now rated as the least effective communicators in the country. Macro factors have played a role, with Germany’s political and economic establishment, including the European Central Bank and the Bundesbank, dragged into the limelight over crises involving Greece and Russia. At the same time, several flagship financial services institutions have been hit by scandals and poor performance. In June, Deutsche Bank’s Co-Chief Executives, Anshu Jain and Jürgen Fitschen, resigned after just three years at the helm - a period riddled by disagreements with investors over strategy, missed targets, and heavy fines from regulators. Commerzbank, the country’s second largest bank, has also been caught up in scandals involving sanctioned Iranian banks, and has retrenched some of its international operations.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
UNDERSTANDING RESPONSIBILITIES TO SOCIETY
13%
TALKING IN A LANGUAGE AND THROUGH MEDIA RELEVANT TO YOU
16%
STRONG AND VISIBLE LEADERSHIP
POWERFUL BRAND
28% 20%
19
SECTORAL ANALYSES |
HEALTHCARE: WHO ARE YOU AND WHAT DO YOU DO? “Who are you? What do you do?”. We hear ourselves saying these words, or similar, in social gatherings. We listen politely and then often move on, forgetting a good portion of what we’ve been told.
H
The first of the positives is a high rating (2nd) for perceptions of being a good employer – an unsurprising finding considering that healthcare companies regularly feature in ‘great places to work’ listings. Second, the sector ranks top for understanding its responsibilities to society. This is extremely significant. After over a decade of criticism for a perceived slow-down in innovation and new drug launches, in 2014 the US Food and Drug Administration (FDA) approved a record 51 new medicines. These new treatments are filtering through to markets and to patients, and they are being read about in the media. Also garnering attention have been the industry’s concerted effort to tackle Ebola, advances in the battle against malaria, and recognition among industry commentators of improved performance on access to medicines in developing countries, as evidenced by the Access to Medicines Index.
BEING TRANSPARENT AND OPEN
BEING A GOOD EMPLOYER
17%
18%
UNDERSTANDING RESPONSIBILITIES TO SOCIETY
14%
TALKING IN A LANGUAGE AND THROUGH MEDIA RELEVANT TO YOU
STRONG AND VISIBLE LEADERSHIP
13%
25%
These results, combined with efforts to communicate the scale of the healthcare contribution to economies, appear to suggest the public blames health systems, rather than manufacturers, for barriers to access - consider the positive sentiment expressed in the UK for AstraZeneca when Pfizer sought to take over the company. However, one has to question how long this will last while public understanding of the workings of the industry remains so low.
When the original survey was fielded in 2013, transparency was high on the agenda for the healthcare sector. In the USA the Sunshine Act, legislation requiring the publication of individual payments to healthcare professionals, was coming into force. “Dollars for docs” drove attention to the financial relationships between the industry and doctors. A similar debate was opening in Europe, with the industry pre-empting legislation in most countries with publication of a new voluntary code requiring publication of similar information. Meanwhile the issue of transparency of clinical trial data dominated much of the debate in Europe, with respected institutions such as the British Medical Journal strongly criticising the industry for how it shared results of its trials, arguing that negative data was hard to access. Neither issue can be said to be fully resolved, but both have shifted into the more technical and complex space of exactly what to do and how to do it; visibility of the issues is greatly reduced. POWERFUL BRAND
These findings suggest that the public recognise this as the sector delivering on its side of the social contract, but it also brings challenges. Average cost to develop a drug has now risen to $2.6 billion, up from $1 billion a decade ago, adding pressure of higher prices to an already difficult burden of volume of treatments being used. Price pressures raise concern among some stakeholders who struggle to unpick the complex process surrounding medicines pricing and see companies arguing that they need to raise prices despite making substantial profits.
Over recent years we have seen a good deal of scrutiny and criticism of the sector for how it operates, including debate over payments to healthcare professionals and practices regarding publication, and the wider sharing of clinical trial data. It is focussed engagement rather than broad communication that has probably shifted perceptions here – a strong reminder that effective communication is measured through impact rather than impact.
12%
CO-AUTHORED BY RACHEL ROWSON HEAD OF MHP HEALTH
AND JOHN GISBORNE HEAD OF MHP HEALTH GLOBAL
ealthcare companies rank 5th out of 6 industries for effectively communicating who they are and what they do, and yet there is much that is positive below this finding. Lack of headline effectiveness does not prevent the sector from doing well on some of the constituent factors. It is perhaps benefiting from our very human tendency of focussing on the bits of information we understand and retain.
The surprise of this index, for some industry-followers, will be that the industry rose two places to rank joint second in the category “being transparent and open” – the most important factor for effective communications, according to our index. What lies behind this shift?
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
These results on transparency, being a good employer and understanding responsibilities to society are particularly important, ranking as the 1st, 2nd and 4th drivers of effective communication according to our index. However, it is important to recognise that they are also those where the industry is most comfortable communicating – they generally do not stray into the highly regulated area concerning discussion of individual drugs except for relatively straightforward communication of what new drugs are and what they do. It is the other three factors; using language and media relevant to the public, having strong, visible leadership and having a powerful brand, where the sector struggles. This matters because it is here that communication centres on what companies actually do, and where the foundations of trust are built. Healthcare as a sector comes in 4th (of six) on talking to the public in a language and through media relevant to them. The sector is also 4th on having strong, visible leadership (up from 6th) and 4th again on having a powerful brand (up from 5th). Upward movement is encouraging but room for improvement remains. Part of the explanation for the findings is the range of stakeholders that can be considered “customers” of healthcare companies, reducing the immediate need to communicate with “the public”, and also driving a reliance on senior clinicians as primary communicators. Governments are customers. They need good healthcare for their citizens to ensure they remain productive contributors to the economy; but those that pay for the products that are used are also customers, as are those that prescribe treatments. Finally there are the patients who take and benefit from the treatments and devices the sector produces. Less direct need to communicate to the public at large, and extensive regulation concerning what can be said about the sector’s products, certainly restricts how companies talk about what they do. Three issues stand in the way of more effective communication on these factors.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
•T here is deep concern about starting conversations that may stray into challenging areas in terms of compliance. The industry is improving its engagement through social media, but it remains wary. There is appreciation that the essence of communicating should be free-flowing conversation, but this can lead to comments being made about drugs, or side effects, with very real regulatory implications. • If the sector is to build understanding among the public, what aspects should it lead on? When it comes to medicines, the powerful elements within the sector that discover new drugs have a distinct voice. Another element develops these into marketable products, another manufactures, yet another focusses on sales. Each element has its own perspective, style and tone. It is a key strategic communications challenge for this sector to establish exactly what its story is, and the tone with which it should be told. • Beyond story and tone, the industry is changing so rapidly, from how it discovers new drugs to how it engages with their use by health systems, that a final challenge is whether to build understanding of the sector as it is now, or to shape understanding for what the sector may become. These three issues can each be addressed. The sector needs to grow understanding in order to maintain legitimacy and licence to operate in a new age of personalised medicine, with rising treatment costs and shrinking willingness among key stakeholders to pay for them. One wonders if, as part of bringing this about, we will see a revisiting of the regulatory framework for direct engagement with patients. In an information age where patients are empowered to make decisions over their care and exercise choice over many aspects of their treatment, the question must at some point be asked: is it right that the only sector that can’t communicate directly with patients is the makers of medicines they may or may not choose to take? Maybe doing well in this survey is being damned with faint praise considering the negative response about businesses in general and the ranking nature of the scoring. But for those in the healthcare sector, there is encouragement that, while the public may not really know who the companies are, or what they do, they are not yet running screaming to the other side of the cocktail party.
21
SECTORAL ANALYSES |
ENERGY AND NATURAL RESOURCES: LITTLE GOOD NEWS FOR THE SECTOR THIS YEAR
There was little good news for the energy and natural resources sector in this year’s survey. Overall, the sector was rated by respondents as effectively “communicating to you who they are and what they do” by just 8% of respondents. The figure was down from 11% in 2014. The sector was rated sixth in terms of its overall communications effectiveness, the same place as in last year’s rankings.
T
BY NEIL STOCKLEY DIRECTOR, MHP CORPORATE AFFAIRS
he reasons for this poor performance were not difficult to discern. On the issues of most concern to respondents, and especially those relating to communications and transparency, the sector was seen as a poor performer. For “being transparent and open”, the sector was rated as the best by just 12%, putting it at the bottom of the league table. For “being a good employer”, it was rated as the best by 15%, giving it a fourth place ranking. And for “talking to me in a language and through media relevant to me,” the sector had a dismal 8% rating, another sixth place showing. This surely reflects the parallel, heated debates about power bills and “trust” in electricity and gas retailers, which have been stoked up by politicians in some countries. They also reflect allegations over many years of corruption by companies in the natural resources sphere. The sector may also be taking some of the blame for public concern about climate change – and the less than open efforts of some oil companies to undermine the case for taking urgent action to reduce emissions.
In just one area, “being clear it understands its responsibilities to society”, did the sector have a respectable score of 18%, putting it second equal with retail. But this was seen by respondents as the fourth most important driver in making sure that a company effectively communicated them. The country-by-country breakdowns were hardly more encouraging. For overall communications effectiveness, energy and natural resources had a double figure rating (10%) in just two markets, Hong Kong and Brazil. In all but two countries, Brazil (fourth) and Germany (fifth), it was at the bottom of the league table. And in the UK, energy and natural resources had a dismal 5% rating. • In the UK, the top two drivers of communications effectiveness were “being transparent and open” and “talking to me in a language and through media relevant to me”. The energy and natural resources sector had a 7% rating for transparency and ranked fifth. It had a 5% rating for language and media relevance and ranked sixth. • I n the USA, the top two drivers were “being transparent and open” and “being a good employer”. Energy and natural resources had a 16% rating for transparency and was ranked third. It had an 8% rating for language and media relevance and ranked fifth. • In Germany, the top two drivers were “being transparent and open” and “being a good employer”. Energy and natural resources had a 15% rating for transparency and was ranked fourth. It had a 17% rating being a good employer and ranked joint third. • In Hong Kong, the top two drivers were “being transparent and open” and “being a good employer”. Energy and natural resources had a 10% rating for transparency and ranked fifth. It had 15% rating for being a good employer and ranked third.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
• In Brazil, the top two drivers were “being transparent and open” and “being clear it understands its responsibilities to society”. Energy and natural resources had a 15% rating for transparency and ranked fourth. It had a 16% rating for social responsibility and also ranked fourth. The message for energy retailers is clear: they need to take positive action on trust and transparency and show they are on the side of consumers. There is a longer term challenge, to demonstrate that they are leaders in addressing climate change, whether as players in the renewables sector or by enabling consumers to use energy more efficiently. To some extent, policy and regulatory action will force the issues: the UK Competition and Markets Authority investigation into the energy market is a case in point, although the smarter companies are already working hard to address these challenges. Similarly, regulatory moves to foster greater transparency may help the extractives sector to address its communications challenges. In 2002, the Extractives Industries Transparency Initiative (EITI) was formed. In 2013, the EU approved the new Accounting and Transparency Directives, obliging oil and mining companies to publish tax, royalty and other payments to foreign governments. The UK has adopted the EU directives and the first set of British disclosures is expected next year. The US has similar legislation in place through the Dodd-Frank Act, but it is subject to legal challenge from the American Petroleum Institute.
Even so, some companies have taken the initiative on transparency and may gain first mover advantage in reputational terms. Last year, for example, Tullow Oil, anticipating the new EU and UK legislation, became the first oil company to disclose its payments to foreign governments on a project by project basis. Kosmos Energy and, now, Statoil have followed suit, thereby undermining the resistance of some of their American counterparts. The energy and natural resources sector should look at its solid if not spectacular scores for “being clear that it understands its responsibilities to society”, because some global companies have launched interesting initiatives on social impact and environmental responsibility and have done a good job of explaining their achievements. The next challenge - and the opportunity - is to do the same for the other key drivers of their sector’s reputation. BEING TRANSPARENT AND OPEN
BEING A GOOD EMPLOYER
UNDERSTANDING RESPONSIBILITIES TO SOCIETY
15% 18%
TALKING IN A LANGUAGE AND THROUGH MEDIA RELEVANT TO YOU
8%
STRONG AND VISIBLE LEADERSHIP
POWERFUL BRAND
WHAT MAKES EFFECTIVE COMMUNICATION? ||MHP MHPINDEX INDEX2015 2015
12%
10%
8% 23
SECTORAL ANALYSES |
TRANSPORT: PEOPLE IN SOME OF THE WORLD’S BIGGEST ECONOMIES DON’T RATE THE WAY THEIR TRANSPORT COMPANIES COMMUNICATE WITH THEM That’s the conclusion of this year’s Effective Communications Index survey into the sector. As someone who’s worked on communications with the sector for a number of years, it’s a depressing but not surprising conclusion.
In all the markets surveyed, people thing being open and transparent is the most important factor in effective communications. And in all those markets – except Hong Kong – people think transport companies lag behind other sectors on openness and transparency.
I
In Brazil, only 6% think transport companies are the most open and transparent sector; in the US and Germany this only creeps up to 11% and 12% respectively.
Only Hong Kong, where our client MTR Corporation runs most of the public transport services, bucks the negative trend.
Another area in which the sector performs particularly badly is talking in a language and via media relevant to the public: between 5% and 8% of the British, American, German and Brazilian publics rate companies in the transport sector as the best at this (again it’s higher in Hong Kong, at 20%).
t’s pretty clear the sector in the UK, Germany, US and Brazil needs to be seen as more open and transparent, and talk in a language and via media relevant to the wider public.
As communicators, we need to challenge the sector to move away from just using dry, rational and technical language to talking more emotionally, clearly and simply.
BY TOM WADSWORTH DIRECTOR, MHP CORPORATE AFFAIRS
So what’s driving these perceptions?
And we need to be open and transparent with the public about the challenges the sector faces – whether that’s why a major airport development is needed, or simply why the metro they’re on is stuck in a tunnel.
People in those four counties also don’t rate the sector’s companies as understanding their responsibilities to society, or being good employers. That means in all four of the most important drivers of effective communications, transport companies fall short of other sectors in the UK, US, Germany and Brazil.
What the numbers tell us
Changing the narrative
In the UK, USA, Germany and Brazil, less than 10% of the public think transport companies communicate effectively. These results are comparable to companies in the health and energy/natural resources sectors, but it’s sobering that in all the markets we surveyed apart from Germany, people thought financial services companies were more effective communicators – and retail companies were streets ahead.
So far, so gloomy. But these problems aren’t insurmountable, and in some cases ought to be straightforward to solve – even if there are no quick fixes.
Being seen to be open and transparent Transport is a complicated business. Visit an air traffic control or train operations centre and you’ll be amazed that any planes and trains ever arrive on time. Trying to wade through the regulation and financing behind the industry would leave most of us baffled.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
But that doesn’t mean transport companies need to tell complicated stories. Too often, transport companies look like they’re being evasive and unclear because they don’t explain themselves well enough. In part this is also due to the fact that transport companies frequently work very hard on extremely tight margins. If a business’s main driver is based up[on incremental benefits from transactional relationships – with customers, regulators or commercial rivals – it is sometimes hard to see and communicate the bigger picture. It’s our job as communicators to simplify the most complex of stories. In the UK, TfL has been exemplary. They communicate early and often, clearly and simply explaining the challenges they face. This means TfL has avoided the worst of the criticism that infrastructure operators often face when undertaking major upgrades. And by empowering their staff to be honest and funny on platforms and trains, they give a human face to the organisation that elicits the sympathy and patience of their passengers.
The UK needs more airport capacity to ensure people have a better choice of flights when visiting their relatives in the US. California needs high speed rail so that small businesses can grow more quickly with quicker access to other markets. Brazil needs better road infrastructure to give the next generation access to better paying jobs that will help them buy better homes for their families. Transport companies need to make their stories more personal, and more emotional. Doing so won’t just mean they are seen as better communicators, it will also gain them the trust of their publics, and permission to be seen as better employers who understand their responsibilities to society. In such a public-facing sector, where governments take a particular interest and role in regulation, the licence to operate requires the buy-in of the public. So improving communications isn’t just important in its own right – it’s business-critical. BEING TRANSPARENT AND OPEN
14%
BEING A GOOD EMPLOYER
11%
Changing the language Too few transport companies speak human. In the UK’s on-going debate about new runways at airports we’ve been assailed by statistics – relevant to the technical deliberations for sure, but not engaging for the public. Talking in terms of billions of dollars of investment, tens of thousands of jobs, or minutes saved in journey time is, on its own, too abstract. Transport companies need to tell their stories in terms and language their audiences can relate to.
UNDERSTANDING RESPONSIBILITIES TO SOCIETY
9%
TALKING IN A LANGUAGE AND THROUGH MEDIA RELEVANT TO YOU
9%
STRONG AND VISIBLE LEADERSHIP
9%
POWERFUL BRAND
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
8% 25
SECTORAL ANALYSES |
RETAIL: KEEPING CUSTOMER AND RETAILER ON TALKING TERMS
The reputation of retail in the UK has taken something of a hammering in recent months. More specifically, shoppers have spurned their traditional big 5 out-of-town loyalties and headed off to smaller formats and quirky new entrants offering less glamour but greater value.
T
he bond between customer and retailer is gradually being pulled apart and it is testing the communications abilities of the best – and the sector as a whole. The days when mass advertising could suffice as the major means of communication are clearly long gone. In their place have spring up the multitude of loyalty schemes and customer clubs. The data modern retailers have amassed is considerable and permits cleverly targeted marketing and product placement to fill the void left by advertising.
Retailing Leads the Way
BY RACHAEL SANSOM HEAD OF MHP BRAND
So it comes as no surprise that, according to MHP research, Retailers are the top rated communicators across the board internationally in terms of who they are, what they do and what they provide. Internationally Retail’s reputation is built on a strong lead in the area considered to be the most important factor of communication - being ‘transparent and open’. 10 percentage points separate Retail from its nearest rival sectors of Healthcare and Food & Drink manufacturing. It is a considerable margin. Similarly, Retail has a considerable lead – a whopping 15 percentage points in the third most important factor - ‘talking to me in a language and through media relevant to me’.
Of all six factors considered internationally to be the most important factor in making sure a company communicates effectively with individuals, Retail is never out of the top two. It is a remarkable achievement. Only in Hong Kong – where there is the greatest belief that ‘big businesses help ordinary people’, does Retail lag significantly compared with the favourability elsewhere internationally. There is most ground to be made in the Brazilian and Hong Kong markets, and every indication that the sector has the capability to improve its reputation considerably if it applies the lessons learned in UK, USA and Germany.
Communications Weakness If retail has an Achilles heel, it is in the perceptions of being a good employer and being clear it understands its responsibilities to society. It is perhaps no coincidence that these two lowest ranked positions are closely related. Where communication has the power to motivate and leverage huge consumer loyalties, those loyalties are predicated on ever more community-based concerns. There is evidence that – certainly in the UK - supply chain concerns are beginning to surface. Germany and the UK lead the way in the perception that ‘big businesses take advantage of ordinary people’, and there is a clear communications challenge for retailers emerging: How to maintain and enhance brand loyalty whilst at the same time delivering cost-sensitive products to shoppers with everincreasing aspiration.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
The way forward With all its undoubted communications success to call on, it is therefore surprising to see that the sector sits second to Financial Services in terms of having ‘strong and visible leadership’. And perhaps this is where the greatest challenges for Retail sits. By some considerable margin the UK’s retailers exceed their international rivals in strong leadership stakes. Were retail leaders in USA and Germany able to achieve the recognition levels of their UK conterparts, the sector would have moved considerably internationally. They need their own Andy Street, Dave Lewis, Steffano Pessina – not necessarily household names in the UK, but ones which do a lot of communicating with those households nonetheless. Finally there is clearly some considerable way to go for the sector to establish its concern for and investment in its staff. In public affairs communications retail has for some time sold its staff as a major beneficiary of their investment and as a major economic asset in crude ’new jobs’ stories. But in order to sweep the board as communicators, Retailers must apply the same communications diligence to their wider public audience and move away from the notion that the only thing their customers need to know about is their products and prices. Some retailers, such as the John Lewis Partnership, have a natural advantage in their back-story, and they have not hesitated in playing it to the full over a number of years. They are not the only company with such a compelling story to tell. The sector will benefit as a whole if other industry participants follow suit.
WHAT MAKES EFFECTIVE COMMUNICATION? ||MHP MHPINDEX INDEX2015 2015
BEING TRANSPARENT AND OPEN
27%
BEING A GOOD EMPLOYER
18%
UNDERSTANDING RESPONSIBILITIES TO SOCIETY
18%
TALKING IN A LANGUAGE AND THROUGH MEDIA RELEVANT TO YOU
STRONG AND VISIBLE LEADERSHIP
POWERFUL BRAND
34%
23% 29%
27
SECTORAL ANALYSES |
FOOD & DRINK: FACING UP TO RESPONSIBILITIES
Food and drink is, by its nature, a sector that depends on the sensory responses of its consumers and the perceptions they generate. In the communications that surround it, the task is no different.
T
his year’s Effective Communications Index survey sees Food and Drink manufacturing retain its position as second in overall communications effectiveness and ‘powerful brand’ status, coming second to retail in both cases. In a crowded consumer-led sector, where datadriven insight is king and marketeers rule, and strong brand retail loyalties can be established and nurtured over time, it is perhaps unsurprising that this order has become established between the two sectors.
BY JAMES GURLING MANAGING DIRECTOR, MHP CORPORATE AFFAIRS
The Communications Challenges As with Retail, perceptions of the Food & Drink sector start to dip when it is challenged with more community-based expectations such as questions on its responsibilities to society or being a good employer. But unlike Retail, this depreciation is more comprehensible. Food and Drink manufacturers concede several advantages to their retail colleagues, with far less direct interaction with the end consumer, and much lower ability to condition the circumstances of the point of sale. Perceptions are based on direct personal experience, but they are also readily generalised, or transferred from one product to many others, and are therefore far more likely to be impacted by a ‘crisis’ occurrence, with the consequent impact also likely to linger for longer.
Given the limitations set out above, it is something of an achievement that the sector out-performs Financial Services, Energy and Transport in the transparency stakes. The same applies to ‘talking to me in a language and through media relevant to me’.
Benefits of regulatory intervention In a counterintuitive way, the sector’s communications practices have perhaps benefited from regulatory demands on better labelling and traceability. It has also capitalised on a growing trend for favourable nutritional information, clearly signposting ingredients in line with a drive for improved health and wellbeing. This is an area where manufacturer’s brands can build their credentials, insulate themselves against the next round of media scrutiny, and compete to build a halo effect. The impact of the Groceries Code Adjudicator in the UK is yet to feed through, but it is clear that its establishment fits the general consumer mood with ever greater attachment to provenance concerns feeding through into a desire to secure the UK supply chain and treat farmers fairly. These are concerns which can only grow as the international supply chain becomes more widely understood. And as this move takes hold, it will be for manufacturers to seize the opportunity before their retail cousins run away with it - and the growing relationship with the end consumer.
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
Threats Just as regulatory interventions can have unintended benefits for the sector, they can have predictable and highly disruptive consequences. In the UK, the willingness of officials in Government to be seen to respond to health campaigners is beginning to become clear in terms of sugar and salt. Cigarette style warnings on products likely to be consumed by children are now routinely talked of. To resist the direction of public policy manufacturers are going to have to do more than lobby politicians. Motivating, educating, and enabling, employees just as much as consumers will be key to how the public reaction to Governement actoin conditions its perception of popularity.
Clear Leadership Where Food & Drink manufacturers have most ground to make up in their communications is in the establishment of a sectoral voice, and a cadre of clear ‘leaders’. With the appointment of Ian Wright, Diageo’s former global Board Director for Communications, as the new DG at the Food & Drink Federation there is a clear and unambiguous indication that the sector is willing and able to address this communications deficit in the UK. But now is the time for business leaders themselves to step to the fore and provide the strong and visible leadership the sector has thus far failed to display in its communication engagement.
BEING TRANSPARENT AND OPEN
BEING A GOOD EMPLOYER
UNDERSTANDING RESPONSIBILITIES TO SOCIETY
17% 14% 16%
TALKING IN A LANGUAGE AND THROUGH MEDIA RELEVANT TO YOU
STRONG AND VISIBLE LEADERSHIP
POWERFUL BRAND
19%
16% 23%
Next Steps In the UK alone the sector employs 400,000 people. Largely unseen and unknown outside of their respective organisations, a huge communications resource is going under-utilised. If at the same time as developing its leadership credentials the sector can articulate its backstory better, by exploiting internal communications to bring its community involvement activities to life, there is no reason why the food & drink sector could not close the communications gap with its close cousins in retail.
WHAT MAKES EFFECTIVE COMMUNICATION? ||MHP MHPINDEX INDEX2015 2015
29
RESULTS BY REGION |
REGIONAL HIGHLIGHTS
20%
Respondents in the United States are most likely to say having a powerful brand is the key factor in effective communications but at 20% this is nowhere near as important to them as being transparent and open (47%) or communicating in language and through media relevant to them (40%).
65%
65% of those polled in Brazil believe big businesses in their country are failing to meet their responsibilities to society – a view held by just 39% of those polled in Hong Kong.
30
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
14%
Only 14% of people in the UK trust the chief executives and chairs of big businesses when they make public statements on political issues. This compares with 39% of those polled in Brazil.
47%
To German respondents, being seen to be a good employer is as important as being seen to be transparent and open in making sure that a company communicates effectively with them (47%).
WHAT MAKES EFFECTIVE COMMUNICATION? ||MHP MHPINDEX INDEX2015 2015
27%
27% of respondents in Hong Kong rank financial services as the sector that best demonstrates that it understands its responsibilities to society. This is a view held by only 5% of respondents in the UK and Germany. Hong Kong was also the only country in which the majority of those polled answered positively to the suggestion that ‘big businesses help ordinary people’. The majority of respondents in every other market agreed with the alternative view that ‘big businesses take advantage of ordinary people’.
31
ABOUT MHP
175 strong with offices in London, Hong Kong and Sydney, and a burgeoning network of partners and affiliates worldwide, MHP Communications is a multi-award-winning PR and public affairs consultancy that excels at delivering focused and effective communications strategies and campaigns for our many clients. MHP’s approach is to build fully integrated teams to work with clients drawing on expert skills from financial PR and investor communications, corporate media relations and public affairs, brand and consumer PR, design, health communications, and internal communications and employee engagement. We create bespoke campaigns to reach all stakeholder audiences, with digital and social media infused throughout everything we do. We have a very simple proposition: our talented and experienced team of bright people add bottom line value to our clients through creative, practical, strategic smart thinking. Bright people, smart thinking, great outcomes.
mhpc.com @mhpc | #MHPIndex For more information, please contact Gavin Devine on 020 3128 8100 or gavin.devine@mhpc.com Research by Populus Designed by MHP Design
32
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
WHAT MAKES EFFECTIVE COMMUNICATION? | MHP INDEX 2015
33