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.

Five reminders for CEO speeches in the recession

I wondered what it must be like these days writing speeches for CEOs of the recently bailed-out banks.  So I dug up a few and they look like something written by a large committee and edited by many, many lawyers.  You could tell when a corporate committee gets creative – speeches get full of BFOs.  If your mind wonders if there is anything obscene in the acronym, looking at the middle letter, it’s not. It just means Blinding Flashes of the Obvious. Some of these speeches are so careful not to offend anybody or touch anything of substance, they define boring.

At the same time, there are a few things to absolutely avoid in your next CEO speech:

#1 It’s not over until it’s over

Unless your CEO’s name is Nouriel Roubini, don’t say the recession is over just because some guy lost his stash of Ritalin, went on TV, and said the recession was over.  Quote the optimists and the pessimists rather than try to make your CEO sound like he or she won the Nobel Prize in economics last year.  Nobody knows and everybody is guessing, big time.

#2 Recession hurts

Please don’t say: “recession is a blessing.” If you think nobody would ever say that, just google it. I couldn’t believe it when I was reading this statement either. You can say that you made a “pretty good return” from the market crash if you are George Soros, have all the money in the world, or don’t care what people think about you. If you want to make your CEO in touch with the real world, quote the unemployment numbers or, if your company is doing well, just say how many number of jobs you’ve saved compared to others in your industry.

#3 Doing more with less

Doing more with less begs a question: have you been doing less with more before the market crash? Avoid such trite statements because they are meaningless.  Offer concrete examples of true creativity that will help your company weather the storm.

#4 Quick fixes

It’s often tempting to come up with one decisive move that will make all the difference. I found a blog post that asked if social media would lead us out of the recession. Now, maximizing social media tools is absolutely essential for any business, especially now. But there is no single solution that will turn this economy around. It’s going to take a concentrated effort by many, using diverse tools to get us out of this mess. Forget quick fixes, there are none.

#5 Don’t try to get funny… about anything to do with the recession

Please don’t let your CEO say: “Some of my best friends are bankers.” Saying “Some of my best friends are Canadian bankers” is a lot better.  With unemployment numbers hitting double digits, there is nothing funny about this recession. Just be extraordinary careful and judicious with anything that tries to be funny these days.

 

As always, if you have any other ideas for speeches dealing with the recession, please let me know.

An Essential List for Corporate PR

If anybody has any illusions that this recession is going to be just like the last two, here is something to change your mind. The U.S. gross domestic product decreased at a seasonally adjusted 6.2% annual rate in the fourth quarter of last year, way more than anybody expected, according to an article in the Wall Street Journal online.  The U.S. Department of Labor reports that 598,000 jobs were lost in January alone. It should not come as a surprise that every big PR agency already stated that 2009 would be tough.  Corporate PR won’t be spared from the wrath of the downturn either. Here’s a list of five critical factors to keep in mind in these demanding times.

#1 – Content

Content in PR, like cash to every business in recession, is king. Your company will still need press releases, your executives still give speeches and presentations, your website still needs new content. And, let’s not forget, social media without content is about as useful as a hole in the head. Content is absolutely essential to your business. Make sure you have people on your staff who can write and edit. You can hire outside help if absolutely necessary, just keep in mind that consultants are less than welcome when your business is suffering. The Financial Times reported last month that Siemens issued a ban on external consultants, hoping to save $386 million.

#2 – Deliver & Report

Deliver results and make sure that your senior executives know what you delivered. We all know that statistics play well, just keep in mind that not everything that can be counted counts, and not everything that counts can be counted. Your CXOs’ speeches are remembered longer than most statistics and speeches are amazingly cost-effective for reaching your customers and other key stakeholders. Produce monthly reports, but keep them short. Anything longer than a page gets far less attention than a well-written summary.

 #3 – Extend Your Reach

We are, above all, communicators and our functional expertise and skills are essential for media relations as much as they are for internal and customer communications. Help your sales and marketing people with RFPs and RFIs. Make them stand out over your competition with clear writing and appealing visuals. Work with your HR department to improve communications with employees. Help your investor relations with better presentations. Offer your board members help with their presentations as well.

#4 – Maximize Your Channels

Maximize social media. As my colleague Mark Evans says, there are a growing number of social media that companies can use to extend their messages in new and different ways. This ranges from blogs and Twitter to video and Facebook. The key is determining the social media tools that meet your strategic needs, and then committing the resources and time to leverage them effectively.

#5 – Downsize Right

Create the worst-case scenario model to find out what is absolutely essential to deliver basic PR to your business if you have to lay people off. Keep in mind that, under Sorbanes-Oxley, companies are required to meet certain communications standards. Consider short and long-term contracts for people you want back when this recession is over. Because like all other downturns this one will end eventually.