Corporate communications is due for a reset
No company has ever gone under because of bad corporate communications. For those who think differently, please read a recent book by Jim Collins, How the Mighty Fall. I challenge you to find one instance where corporate communications caused a business to fail, and I doubt that it will ever happen in the future either.
But the function may be fatal for senior executives. And that’s true now more than ever before. In most cases, corporate communications has been treated by organizations as a nice-to-have department, rather than a must-have, strategic part of the business. I believe three factors are going to change this view, and transform the modus operandi of corporate communications.
1.) The economic cost of the recession – The crisis is not a typical downturn to be followed by a quick recovery, as we saw with recessions from the last few decades. This is serious. Third-quarter results may finally bring home what the recession is all about. Communicating how the crisis is shaping your corporation’s business strategy is no longer an exclusive purview of investor relations or your yearly social responsibility report. And don’t assume that senior executives are unaware of the problem facing their communications in the next few years. As one CEO told me last week, “we have to do better to understand and communicate what our business objectives are in this economic crisis and how we are relevant to our society.”
2.) The social cost of the recession – It absolutely behooves me how little attention we are paying to the consequence of millions and millions of unemployed. We read every day about the great depression and stimulus packages introduced by FDR. What we have missed in these history lessons is how radicalized social and political opinions became back then, once the unemployment rolls hit 20 percent and more. We may not be at the 25-percent mark but, in real numbers, there are more unemployed people in the US today than at the height of the great depression. In 1932, there were 12.83 million unemployed. According to Bureau of Labor Statistics’ June 2009 report “the number of unemployed persons (14.7 million) and the unemployment rate (9.5 percent) were little changed in June.”
3.) The impact of technology fueled by a phenomenal growth of social media – This is not your father’s PR anymore. Worry less about information you send out and pay a lot more attention to what comes back. Formulate your strategy and engage your critics in a meaningful dialogue. Here’s an example on how not to do it on the age of social media: Goldman Sachs’ response, quoted in the New York Times, to Matt Taibbi’s article The Great American Bubble Machine, published in the Rolling Stone magazine. “[Taibbi's] story is an hysterical compilation of conspiracy theories. Notable ones missing are Goldman Sachs as the third shooter [in John F. Kennedy's assassination] and faking the first lunar landing.” Not a likely winner in starting a meaningful dialogue.
Another example to prove my point is an interesting paper about the changing role of corporate communications, posted in the Economist’s Management section, called “Corporate affairs, speaking with an authentic voice.” Written by A.T. Kearney, it explores the failure of corporate communications to align its objectives with business strategy and recommends a new reporting structure to improve its effectiveness. I may not agree with all of its recommendations, but it’s right in its conclusions – we’re due for a reset in corporate communications.
