The Corporate Communication Conundrum
An old friend called up last week. We used to work together many years ago when he decided to join a small company that has now emerged as a multi-business, $210 million group. My friend is the CEO of one of the businesses of this group. He had called me to refer to him a “young and bright” candidate who could fill in a newly created corporate communication position in his group. This is the first time the group is hiring a communication / PR person, so our conversation went something like this:
My friend: Shreesh, you are the right guy to recommend to us a good candidate for our new corporate communication position. I told our Chairman that I would be asking for your help.
Me: Flattered. Sure. It would be a pleasure. What kind of profile are you looking at?
My Friend: Well, someone who can bring out a newsletter and do a press release, and do a bit of media relations…will report to our Group Managing Director…
Me (Jokingly): Are you making me an offer?
My Friend (Emphatically): No, no. We cannot really afford a very senior person like you. You see we are doing it for the first time, and we need a person with 3-4 years of experience only.
Me (Trying to sound a bit disappointed): Well…Sure.
Two weeks and three candidates later, they have yet to firm up their decision. They are happy with all the three candidates referred by me, and would soon take a decision. My friend has told me that, after the selected candidate joins, he will be inviting me to meet up with his managing director over a cup of coffee…
Welcome to the what-the-hell-is-it world of corporate communication.
One of my former bosses once told me that they did not teach communication at the management institutes, and that one had to learn it on the job (is that also why most management professionals tend to have scant regard for the discipline?). After all, anyone who understands English language, and can make friends in the media can do wonders in this field. Well, that is how the belief goes, at least (Is that why media professionals seem to be losing faith in the usefulness of this discipline?).
Being the person I am, I started thinking, “What would, or should, be the topic of our discussion if I were to meet the Chairman of this business group?”
In fact that got me really thinking. How representative is this situation (while hiring a communication professional for the first time) among corporate houses in India? To what extent is this hiring approach ridden by a problem of semantics? Why do corporate houses, willing to spend large sums of money on marketing, want their public relations / corporate communication results without making appropriate investments? What is “appropriate” investment? Why do corporate houses feel uneasy investing in this field when they are happy investing in similar, and closely related fields like marketing?
My friend tells me that his group spends anywhere between 10 and 15 percent of its revenue to market its various products and services. Put conservatively, that amounts to a whopping $20 million per annum! Pray, why then are they only willing to tinker with what is gloriously known as “corporate” communication? This article tries to explore the mind of the business owner / managing director warming up to the discipline of corporate communications (and obviously does not have all the answers).
If the managing director or the owner of a business believes that he/she knows what is good for his/her business (after all the business has succeeded so far), and can therefore decide what constitutes corporate communication in the context of his or her own business, this belief may throw up two completely different situations.
First, let us assume that he/she (the business owner) has a fair understanding of the “corporate communication” part of his business. One can then surmise that he/she is taking a considered view on what parts of the communication jigsaw puzzle he/she wants to deal with at a given point in time.
The second possibility is that this person has a very limited view of what constitutes corporate communication, and probably understands it in terms of only a few of its various components. In this case, we may be facing a problem of semantics.
In both the situations, the managing director or the owner (however, savvy he or she is) may end up (if hiring a communication professional for the first time) spending a considerable amount of precious time attending to the literature produced by a junior level communication professional he/she intends to hire. However, one must hasten to add that the managing director or the owner is still the best person to judge, and decide, if the return on investment of his or her time on the communication activity is worth it. There is no debating that.
While learning, mastering and practicing communication are activities noble enough by themselves, something tells me that, barring a few noble exceptions, most upcoming business owners rarely have the time and energy to devote to the understanding of this field. And unless they trust a competent professional to determine the objective behind their “communication” efforts, they are likely to miss out on the understanding of the natural synergy that exists between corporate communication and the function of marketing.
In fact, a large number of businesses that I have come across tend to equate “corporate communication” with what they do for marketing communication. Experience shows us that first-time users want to send out press releases, create brochures, set up websites, make friends in the media, and perhaps start a magazine for the employees. Even a cursory analysis can reveal that they carry out these activities as if they were marketing. Take, for instance, preparing and sending out press releases. The intent is to get the media to publicize what the organization considers as an achievement, without either having an understanding of the needs and constraints of the media, or having the ability to package “the development” as news. When such releases are dumped by the recipient, it is the communicator who gets the flak. The same communicator is also expected to make friends in the media to somehow get the “news” in print, or on air. I am sure many of us must have faced these situations in our early years.
Another example that comes to mind is starting an internal magazine for employees. How many internal magazines have you come across that define what they want to deliver, and deliver what they stand, or were supposed to stand, for? Most internal magazines fail because they are either mere substitutes for the products or services brochures of their companies, or simply an attempt to showcase the greatness of the organization’s leadership. These are nothing but veiled marketing efforts in the name of corporate communication.
One may then ask what “corporate communication” is or how one can distinguish it from a marketing effort.
There are several ways to make this distinction, and I will attempt to define only some of them. In a business context, simplistically put, corporate communication prepares the environment that may facilitate marketing efforts. Let me elaborate that statement. Let us take the example of a company that sells an educational product. It can always market it through various means to its intended audiences, be they libraries, schools, colleges or universities. The larger business environment, however, consists of all those stakeholders who might influence the decision to buy the product. As the parent of a child who may be the intended audience for the product in question, I might want to know how the product would benefit my child before I purchase it. The marketers’ solution to this problem is simple: Advertise.
While advertising may/will work fine (if the marketer has a large budget available), the ability to influence a very large number of people normally comes from being able to identify some uniqueness of the product that can make news and find the media vehicle to do it. Also, while it may not always be possible to identify something unique about a product, a seasoned communicator can help extend the scope of the product in several other ways. For instance, as a link between the company and the stakeholders, he or she may use feedback mechanisms to help improve, modify or improvise the product so that it may appeal to a larger audience. Again, he or she may help innovate better, by getting the company to focus on the quality of the product. One may argue that these are activities undertaken by the marketer or the quality control people in any case, and one would be right. But a good communicator also plays both these roles, and in that sense often provides better value for smaller investments. Elaborating it any further would mean quarreling with the marketer or the quality control person! Besides, a good communicator not only identifies what is newsworthy, but also shares it in time with the right media. Then again, a seasoned communicator can articulate an organization’s vision, mission and branding roadmap that marketing departments tend to leave to expensive advertising efforts.
In fact, understanding the “connect” between an organization’s marketing/advertising spend and its corporate communication spend can easily establish the efficacy of hiring an experienced and well-qualified communicator. But while most businesses are happy to spend as much as they can afford on their marketing efforts, they appear to make a faulty judgment when it comes to spending on corporate communication efforts – my friend’s organization being a case in point.
But, pray, what is this “appropriate” spend that we may be referring to? Research-based studies by leading communication and marketing organizations in the west have benchmarked corporate communication spend for a business with a revenue of around $200 million at around one percent of the gross revenue. Assuming a company spends only five percent of its revenue on marketing initiatives (and not 10 percent as in the example of my friend’s organization), it gives us a ratio of 1:5 between the two types of spends. Now, while most companies of this size would happily budget $10 million toward marketing expenses (to get revenues of $200 million), they would fight shy of allocating $2 million toward communication expenses. This is probably because business owners are convinced about the efficacy of spending on marketing, whereas they are not sure about corporate communication.
This brings us to our next question. How does one measure the efficacy of corporate communication?
There is anecdotal as well as research-based evidence that demonstrates how companies that consistently invest in both areas grow faster than those that only spend on one of the two activities. Second, in regard to very large companies ($5 billion or larger), studies demonstrate that, over time, the corporate communication spend comes down to less than a quarter, and in some cases to less than a tenth, of a percent of gross revenue proceeds, whereas the marketing spend remains in the range of around five percent. By deductive logic, this can lead us to conclude that corporate communication initiatives provide lasting and cumulative value. Third, while marketing folks insist that the “brand” of a business is entirely a creation of their own initiatives, one only needs to look around and check with a few employees in any organization to understand that messages coming from the management, both inside and outside of the organization, have an equally important (and sometimes bigger) role to play in creating brand perception. I have always believed that unless corporate communication and marketing go hand in hand, no business can fully exploit the potential of its brand.
Why then has corporate communication remained a neglected child of the business? The answer is easy and yet not easy to find. After working for nearly two decades, I decided to find the answers for myself by pursuing a graduate communication program from a leading US
The classical approach says that the communicator should be able to assess the overall environment in which the business operates, learn and articulate the management’s ambitions, and recommend a roadmap for communication. This not just takes technical competence but also a deep understanding of social psychology and persuasion techniques, unlikely to be found in a junior level resource. If need be, the communicator should also be able to lead change in the organization’s internal culture, which requires a deep understanding of inter-personal relations. And last, but not the least, the communicator should be able to contribute to checks and balances that ensure ethical practices in the conduct of business.
These steps in turn assume that the management has the ability and the inclination to trust the communicator because that is the most important, first step to ensuring success through corporate communication. And put the money wherever its mouth is, by starting at the top of the communication ladder rather than at the bottom. Until then, managing directors would continue spending precious time supervising greenhorns to find their big answers.
(A quintessential learner, Shreesh Sarvagya has the curiosity of a five-year old. He works with one of India
