Communication Director Issue 02/2016 Preview

european editionIssue 2/2016

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The unwritten contract

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

the magazine for corporate communications and public relations

COMMUNICATION DIRECTOR

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

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

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

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S O C I A L A C C E P T A N C EThe Purpose and Societal Context of Business

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STOR YT E L L I NG CHANGE COMMUN I CAT I ON I NT E RNA L COMMUN I CAT I ON

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D A F Y D D P H I L L I P s

Editor in Chief

How legitimate are you?

To mark the upcoming European Communication Summit (celebrating its 10th anniversary on 7 and 8 July: for more information see pages 86 and 87), this issue of Communication Director has a special focus on the theme of this year’s Summit: the purpose and societal context of business, and in particular the social licence to operate. The social licence is a peculiar kind of contract. Although it confers legitimacy on an organisation, you won’t fi nd it written on the statute books, and you don’t need a pen and paper to sign it. It also keeps companies on their toes: it can be revoked by any number of diff erent groups at any time, even after it’s been granted, and diff erent groups and communities have diff erent expectations for it.

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

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

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

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

c o m m u n i c a t i o n d i r e c t o r 2 / 2 0 1 64

10 • pr essentials

Top 10 global business risks

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

2/16

I s s u e F o c u s

Communicating the social licence

to operate

6 • AgendA Setter

Tourism in the shadow of terror

How do cities struck by terrorist attacks win back tourists?

14 • leAderShip

The new CCO

Looking at the evolution of the role of the chief communication officer

68

The story of a concept

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

76

Getting the go-aheadHow Lafarge made sure all its internal departments worked together to unlock the value of engagement

80

A great transition

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

60

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

72

Licence revoked?Even digital giants like Face-book and Google struggle to win their social legitimacy

64

Applying for a licence

What the social licence means to speakers at the 2016 Euro-pean Communication Summit

18 • dAtA

The devil in the details

Forget big data: small data reveals sur-prising insights into behaviours inside

and outside the organisation

c o n t e n t s


32 • diverSity

Gender and the bottom line

New research reveals how gender parity impacts business for the better

40 • FinAnCiAl

Don’t fear the reaperFour reasons why communication directors should not lose sleep over

fears of a 2016 recession

28 • internal

Boosting dialogue and pride

In a no management-era, promoting the employee as reputation manager is key

24 • SoCiAl mediA

Showing a human side?

From President Obama to the European Parliament, world leaders are using

social media in bold new ways

20 • roundtAble

Postcard from Latin America

Leading communicators share their insights into the challenges of working

in this diverse region

36 • reputAtion

Putting reputation on the agenda

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

90 • privAte pASSionS

Letting go with tango

Concentration, teamwork, creativtiy: some of the lessons learned step by step

by one communicator

84 • CommuniCAtion reAder

Books

New and upcoming titles for the communicator’s bookshelf

44 • CompliAnCe

Communicating compliance

Organising cooperation across the competing claims of compliance and

communications

86 • ASSoCiAtion

European Association of Communication Directors

The latest developments in the EACD

50 • theory

The communication value circle

A new way of examining how communications adds value

54 • the big interview

Sharan Burrow

The general secretary of the Internatio-nal Trade Union Confederation on the

fight for a better business world

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48 • engAgement

Engage to win

In the Age of Relationships, communicators need to engage

A g e n d A S e t t e r

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

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Tourism in the shadow of terror

here next?” That’s the question asked by civil-ians, terrorism experts and security forces in

the aftermath of a terrorist attack, as roll-ing coverage brings images of chaos in cities around the globe. While the discus-sion in media and politics contributes to rather than counteracts a general sense of unease and paranoia, civilians and busi-nesses have little choice but to continue as normal. However, the question of where next has a more immediate impact on the tourism industry.

As is often the advice, those not di-rectly affected by these attacks contin-ue with their lives and their businesses. There is one industry however that is significantly impacted by anxious risk perceptions: tourism.

Many cities rely on attracting visi-tors to stimulate their local economies. Furthermore the cross cultural exchange that goes hand-in-hand with tourism helps to quash fears and bridge the “us and them” divide that can be so devas-tating to society.


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cent of the country’s GDP in 2015. How-ever the country has also suffered from major acts of terrorism in recent times. The latest of these came in capital city Jakarta in January. In the early months of 2016, foreign tourist arrivals have fallen 17.4 per cent according to the Indonesian Central Bureau of Statistics. The tradi-tional bump in numbers around the Chi-nese Lunar New Year celebrations failed to come. In direct response to the attacks the Indonesian government ramped up

security, deploying police officers and soldiers in Jakarta and another tourist hotspot, Bali.

It is too early to know how long visi-tors will stay away from these locations. However if we look to past examples, there appears to be signs of hope.

Road to recovery

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

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

“A time series analysis of interna-tional tourism arrivals to USA suggest

Terror and tourism

On November 13 last year, Paris suf-fered a series of coordinated terrorist at-tacks. Although France is the most visited country in the world, the number of visi-tors to the French capital has fallen since the attacks. Recent French government figures showed that while numbers were up in France in general in 2015, a drop of 15 per cent occurred in tourism for No-vember and December in Paris.

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

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

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

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

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

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

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

An important factor affecting the re-covery period for visitor numbers is the sense of the stability and security of the country where an attack has taken place. For example, Turkey has suffered from a string of terrorist acts in the past year. The subsequent tense atmosphere and the Turkish travel ban on Russian citi-zens following the downing of a Russian warplane over Turkish territory have cul-minated in devastation to the country’s tourism industry. The Turkish Ministry of Culture and Tourism reported in Feb-ruary that the number of foreigners en-tering Turkey had fallen by just over 10 per cent from the previous year.

In contrast to Turkey’s current strug-gles, the World Travel and Tourism Council (WTTC) reported that levels of tourism recovered within weeks follow-ing the 2004 attacks on commuter trains in Madrid, which killed 191 people. Ac-cording to the WTTC, London bombings in 2005 had no notable impact on arrivals to the UK.

Beyond the level of control and the sense of reassurance that is evident in destinations in developed economies, Dr Morakabati identifies social factors that can also affect travel choices. “Cultural, geographical and religious differences also influence the impact and the recov-ery. Those people with similar cultures and religions are more likely to rally around and support each other against what they perceive to be a common ene-my,” she explains.

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

“Perceptions of the safety

of post-attack locations is also related to media

coverage.”

people attend a vigil and light candles in the center of strasbourg for the victims of the november 13 2015 attacks in paris

p r e s s e n t i a l s


The global risk landscape is changing. The effects of globalisation, digitalisation and technological disruption

pose fundamental challenges. The Allianz Risk Barometer identifies the top corporate perils based on the responses

of over 800 risk experts from more than 40 countries around the globe. Based on the latest Barometer, we

present the top 10 business risks from around the world.

Top 10 global

business risks


2. mArKet developmentS

businesses are increasingly concerned about the impact of volatility, intensifi ed compe-tition and market stagnation. long-term strategic issues in-clude successfully managing challenges to business models posed by increasing automa-tion, digitalisation and inter-connectivity of industry. there is the threat posed by the emer-gence of more agile start-ups and disruptive technologies. many businesses are already having to manage a long list of issues, such as having to com-ply with changing legislative environments, import and ex-port restrictions, more stringent safety requirements and work rules, increasing government in-volvement and approvals, and environmental restrictions.

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The anti-intuitive golden rule for communicators today is: if you don’t want to be overwhelmed by crisis you have to permanently work in crisis mode. And in order to do so successfully there is no alternative than constantly monitoring and evaluating communications risks (and opportunities, for sure) via state of the art issues management, setting up procedures that allow for fast reaction and establishing the communications function as a go-to partner in case of crisis.

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

1. buSineSS interruption (inCl. Supply ChAindiSruption)

the major causes of interruption that businesses fear the impact of most are natural catastrophes (51%), closely followed by fi re/explosion (46%). Supplier fail-ure ranks third (32%). business interruption remains the top peril for the fourth year in suc-cession, with 38% of responses rating this as one of the three most important risks compa-nies face. in today’s increasing-ly complex and interconnected corporate environment many of the top 10 global business perils in the 2016 risk barometer rank-ings, such as cyber-incidents and political risks, for example can also have severe business inter-ruption implications.

3. Cyber inCidentS

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

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The new CCO Helping enterprises earn trust and create value for stakeholders.

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A whole new world

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

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

At a meeting of Arthur W. Page Society members hosted at Bayer’s offices in Germany last October, Reidar Gjærum, who

heads communications for Statoil, crisp-ly summed up the role of today’s chief communications officer (CCO): “Inter-preting society and the company’s place in it.” This simple, yet profound, state-ment captures the complexity of the chal-lenge facing the chief communications officer (CCO), or the head of public affairs, in today’s rapidly changing and radically different business environment.

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

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

akin to an organism in nature, and the communications function as the mech-anism through which the enterprise be-comes aware of the environmental con-ditions – internally and externally – that necessitate adaptation. In a tumultuous business environment, those who evolve fastest and smartest are those who thrive.

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

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

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between “that’s cool” and “that’s creepy.” What would you have said 20 years ago about allowing a multinational corpora-tion to have access to your personal cor-respondence and your physical location at all times? Today these allowances are commonplace.

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

Stakeholders, informed by trans-parency and empowered by technology that allows them to share information and motivate like-minded others, in-creasingly expect business not only to act responsibly, but also to actually solve global problems and create societal value. According to Edelman’s brandshare 2014 report, people say it is important that a company: “communicates openly and transparently about how products are sourced and made” (68 per cent), “has a

clear mission and purpose at its core” (58 per cent), and “uses its resources to drive change in the world” (52 per cent).

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

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

The future of the CCO

Our report envisions three roles for the new CCO.

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

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

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

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

The final and most aspirational role of the new CCO is that of “builder of digi-tal engagement systems.” Unlike the chief financial officer and the chief human re-sources officer, whose financial and per-sonnel management systems permeate the enterprise, the CCO traditionally has not built systems and processes. That is about to change.

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

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

Fulfilling the promise

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

“In a tumultuous business environment, those who evolve fastest and smartest

are those who thrive.”

D a t a


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

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n your book Small Data, you write that “every cul-ture in the world is out of balance or in some way ex-aggerated, and in that ex-

aggeration lies desire.” What do you mean by this?

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

And can small data help restore this balance?

Small data is a counter balance to big data. Where big data is all about a lot of numbers and seeking a correla-tion between these numbers, small data is about finding the causation, the rea-son why. We all leave emotional DNA behind that reveals insights about our personalities and where we are out of balance. For example, most people with a Facebook page would admit that in fact it’s one big lie, its meant to reveal how you would like to be perceived by the world rather than who you really are. Just as you have a perception page online you also have a perception room in your house or apartment. When you find that perception room, which is the reflection of who you would like to be seen as by the world, then you can start looking at fur-niture and fittings. For example, if there is a huge, colourful painting you can be pretty sure that the person living there has fairly strong self-confidence. And if in the perception room you have a large bookshelf packed with books, quite often it indicates that the person didn’t have the most solid education as a child and is trying to compensate for it.

And what do you do with these ob-servations?

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

ly placed on top but then I bend down and see, hidden below the carrots, you have a regular coke and some chocolate, it shows what we define as a conflicted mind. All these insights are difficult to see through big data, because big data is rarely communicating people’s emotional state of mind.

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

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

for some reason triggering those people drinking the water, which was very sur-prising for the Danone team. Now let’s just pause here for a second. The reason why you and I love certain movies and play them again and again is because it’s reactivating that emotion we had the first time we watched it. It’s not because we’ve forgotten the script, it’s because that emo-tion is happening again and again. The same is the case with taste and smell. We don’t have a taste preference as such; it is the memory encoding that is link-ing the taste. When I drank coffee for

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

Are there other limitations to big data?

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

I

“Big data is all about seeking a correlation between all these

numbers, small data is about finding the reason why.”

R o u n d t a b l e



To mark the Latin-American Excellence Awards – hosted by Communication Director – we asked four jury members

to share their insights into the corporate communications landscape of this diverse region.

The following are excerpts of interviews that were conducted separately

We have to talk about Brazil, which is in its deepest recession for decades and the headlines today are

full of political and corruption scan-dals. How do you motivate and engage your audiences in such difficult times?

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


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To change focus to the rest of the continent: with your career experienc-es in both europe and Latin Ameri-ca, what would you say are the main diff erences in approach to corporate communications in both regions?

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

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

What about the relationship be-tween journalists and corporate com-municators here?

NELSON SILVEIRA There are im-portant cultural diff erences. Latin Amer-ican media tends to have a more friendly approach. European media is more ag-gressive and critical. But on the other side it is more diffi cult to do background work with media in the Latin American region, because journalists tend not to respect off the record conversations. In Europe, me-dia has a diff erent understanding on the benefi ts of the background information on writing stories. But in general there are strong media groups on both continents with great editorial independence.

BETH GARCIA The Brazilian press seems to have some peculiarities that are a bit unfamiliar to European clients. Just to give an example, here the social

BETH GARCIA The worst aspect of the crisis was not its economic repercus-sions because a country with such an ample supply of natural resources, like Brazil, will certainly recover, but the de-spondency it produced in various envi-ronments which has contaminated and weakened communication. The greatest challenge now is to raise clients’ and insti-tutions’ spirits. Times of crisis provide op-portunities for innovation, driving people to act in more creative ways. Storytelling platforms which can be used in publi-cations, press guidelines and digital and media campaigns, are gradually begin-ning to share space with advertising. This

in-house material is a reliable source of information, for both internal and exter-nal audiences. It is down to us journalists to fi nd opportunities and harness them.

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

“Any company that wants to operate or expand

operations in Latin America

needs to be open to listening.”

beth gArCiA Ceo, Approach Communications

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

Serge giAComo director, Communications and public Affairs, ge latin America

prior to joining ge in march 2014, Serge giacomo was the head of corporate communica-tions for vale SA, based in rio de Janeiro. before that, he held a number of communications positions at Shell, both in France and in the netherlands, and at two leading global public relations fi rms, edelman and burson-marsteller in various offi ces in europe, uS and brazil.

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irst and foremost, success-ful communication on so-cial media requires you to present your human side to your audience. This

is one of the major findings from Bur-son-Marsteller’s 2016 Twiplomacy study of how world leaders engage with their public.

The lessons of the annual survey ap-ply equally to CEOs and the companies they run, if they want to get their mes-sages across powerfully and effectively to their customers and their workforces.

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

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

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

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

The findings are inspiring and in-sightful – and frequently entertaining. They confirm that world leaders have truly embraced the evolution of social media and, in so doing, offer corporate leaders and their communication teams valuable lessons in the most effective use of these platforms.

Key lessons for CEOs and companies

Twitter and Facebook are the two leading social media platforms for gov-ernment communications, with 89 per

Source: Twiplomacy, Most Liked World Leaders on Facebook


How world leaders are blazing a trail in

social media.

b y J e r e m y g A l b r A i t h

Showing a human

side?

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

Snapchat takes this human side even further, making you feel as if you really are following the lives of world leaders. Argentinian president Mauricio Macri, for example, allows his virtual audience to follow him around the world on his official travels, making his Snapchat ac-count appear very personal.

Instagram also offers a similar inti-mate connection with audiences, epito-mised by the rise of “selfie diplomacy”. This generation-wide phenomenon fea-tures on the profile of Russian prime minister Dmitry Medvedev, who takes elevator selfies, as well as on those of the prime ministers of Singapore, Norway, Spain and Turkey, who are all notorious for their group selfies or “wefies”.

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Be bold and visual

Creativity and the use of images and videos are crucial for communicating with impact today. While Twitter used to be considered as the digital diplomacy channel of choice for government leaders, recent years have seen a shift towards Facebook and other more visual plat-forms such as YouTube and Instagram that allow you to be much more creative. YouTube is also the second largest search engine in the world, behind Google, prov-ing that video remains one of the strong-est tools for communicating a message.

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

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

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

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

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Reveal your human side

While the majority of images posted by world leaders on Facebook show typ-ical diplomatic settings and announce-ments, the most popular ones are mainly

Source: Facebook profile of The White House

Source: Instagram profile of Dmitry Medvedev

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

i n t e r n a l


Boosting dialogue and pride

In an era of no management, promoting the employee as reputation manager gains even more importance, as this case study from one of Europe’s leading telecommunication firms proves.

b y h A n S K o e l e m A n

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

Because I believe that many employees are capable, willing and enthusiastic as long as they are able to organise work themselves. Managing the reputation of companies is not done by official repu-tation managers, whatever that may be. It’s done by our people every day and it’s done by empowering them to communi-cate freely, actively, and responsibly.

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

Another example is the freedom our service employees have to serve custom-ers to the best of their ability. It is not about the targets for the amount of cus-tomer calls they handle. What’s much more important is the way they really help the customers by solving their prob-lems. Empowering employees means giv-ing them less systems and KPIs. These are obstacles that stand in the way of really solving the issue. The fewer barricades there are, the more responsibility em-ployees feel for tackling issues effectively. In this digitalised world customers are increasingly capable of handling most is-sues themselves. They only need a service employee on the phone or in the house when it’s absolutely necessary.

Rising reputation

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

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

Begin from the inside

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

If you are willing to generate trans-parency and honesty towards customers you have to start from the inside. That’s the fundament on which your organisa-tion is built. You have to empower your employees and make them ambassadors of your company. Give them confidence. Therefore we need to build a very open communication environment for our company in which employees are totally free to communicate whenever they want and wherever they are. We have called this environment TEAM KPN, which reflects our effort to work and perform

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

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

1) Focus, consistency and repetition in the key strategic messages of the board,

2) Visible and available leadership, willing to engage in open dialogue with the people,

3) The best available online and of-fline communication tools,

4) Recognition for successes and telling stories about what goes right and what goes wrong in the company. The internal communications team has a quarterly plan which contains the cen-tral themes and describes how to operate on each of the four key elements. After each quarter the results are evaluated, communicated to the board and used to fine-tune and improve the content and the quarterly plan. In this way internal communication becomes a lively and iterative concept which is constantly changing and adapting to the internal audience. And since we clearly can see the effectiveness of blogging by managers

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

Our CEO: a popular blogger

It is highly instructive to see the posi-tive impact of an open internal platform. The main responsibilities of our corpo-rate communications are to produce and publish corporate articles, to oversee the development of the platform and to mon-itor the daily information flow. Most of the content is produced by non-corpo-rate communications staff, particularly by senior management. And we can see how active and effective senior managers are in conveying messages to their staff.

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

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

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

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

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

“You have to empower your employees and

make them ambassadors of your company.”

d i v e R s i t Yd i v e R s i t Y

The case for improving women’s ac-cess to C-level positions has never been stronger. Not only does research sugg est that companies with more women in senior executive positions report strong-er fi nancial performance, but the repu-tational and brand advantages are also signifi cant. However, despite decades of analysing the reasons behind the gender pay gap and of women demanding equal representation in business, it seems that there is still a long way to go for women in business when it comes to a seat at the management table.

Although seven out of 10 global exec-utives of both genders believe it is impor-tant that the universe of female CEOs ex-pand, the numbers remain low: just fi ve per cent of the US Fortune 500 and four per cent of the FTSE companies are run by women. Globally, just nine per cent of chief executive offi cers and managing directors are women.

Evidence sugg ests that organisations that are diverse perform better, boast better reputations and achieve ‘most ad-mired’ status. It increasingly appears that having more women in senior manage-ment leads to stronger fi nancial perfor-mance, with role models becoming very important. Specifi cally, younger genera-tions of women are more likely to aspire to forming part of the upper echelons of business if they have experienced work-ing for a female chief executive offi cer.


Companies that are recognised with ‘most admired’ reputation status by their industry peers have a higher proportion of female leaders. New research reveals how gender parity drives corporate reputation.

b y r o S e d e l A p A S C u A

Gender and the bottom line

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Together with KRC Research, we sponsored a survey of 327 senior execu-tives across 55 countries in North Ameri-ca, EMEA, Asia Pacific and Latin America. Conducted by the Economist Intelligence Unit, the survey was titled Gender Equal-ity in the Executive Ranks: A Paradox – The Journey to 2030. The purpose of the report is to offer top line findings and an understanding of what might constitute best practices for recruiting, training and promoting women for C-level positions.

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

The research revealed a paradox: al-most three quarters of global executives (73 per cent) believe that gender equality in the C-Suite will be achieved by 2030. This sounds great on paper; however, there is no clear road map for making this prediction become a reality. Most executives (56 per cent) report that their company does not have specific goals in place for achieving such an outcome, and only 39 per cent of C-level executives re-port gender diversity in senior manage-ment as a high business priority, ranking seventh in a list of 10 priorities.

Gender forward pioneers

How do the world´s largest compa-nies actually perform in terms of gender parity? To address this question, we cre-ated the Gender Forward Pioneer (GFP) Index as a supplement to Gender Equal-ity in the Executive Ranks: A Paradox. We call companies at the forefront of gender-balanced leadership Gender For-ward Pioneers.

The GFP Index measures the percent-age of women in senior management po-sitions at Fortune Global 500 companies. Weber Shandwick audited these compa-nies, identifying their top executives and their genders. The survey of senior execu-tives across 55 countries in North Ameri-ca, EMEA, Asia Pacific and Latin America

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

Gender pipeline fatigue is the belief that parity will only come through com-pulsory measures such as boardroom quotas and governmental mandates on equal pay. However, things are beginning to look up. The research identifies several ‘push’ forces that will move gender-bal-anced leadership further up the corpo-rate management agenda. These include:

• Increased media coverage of gender equality (globally, there has been more than a threefold increase in articles about female CEOs since 2010);

An undeniable premium

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

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

“Having more women in senior management

leads to stronger financial performance.”

Executives who saythat public attentionto C-level genderequality hasincreased in the pastthree years

68%

R e p u t a t i o n


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

b y C A r S t e n w e g m A n n

and numbers that are hard to interpret. Secondly, you need to have the appro-priate forum internally in the company to discuss and act on the evidence; more often than not, it never gets out of the drawers in the market intelligence unit. Thirdly, the insight is often not anchored in a concrete set of business problems or opportunities; the knowledge base is stand-alone in nature, and perhaps high-ly accurate as such, but without a strong link to the business strategy, it will re-main under-leveraged.

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

rom September 2015 to January 2016, Rep-utation Institute sur-veyed more than 150

global executives to gather insights on today’s trends, practices and priorities re-lated to their stakeholder management. The companies were sized between $1 billion and $30 billion in revenues and based in 20 countries across Europe, US/Canada, Central and Latin America. The key topics were the top-of-mind issues for senior executives with corporate brand and reputation responsibilities, activat-ing the right strategies to capitalise on growth opportunities, the link between reputation and corporate purpose, the organisational setup for success, commu-nicating on corporate social responsibil-ity (CSR), and the trends in stakeholder measurement and communications.

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

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

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

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

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At the high level, the business case for reputation investment is simple: your success as a company relies on people supporting you, customers buying your products, policy makers and regulators giving you a licence to operate, the fi-nancial community investing in you, the media reporting on your point of view, employees delivering on your strategy. For them to support your business, they need to trust you as a company that will deliver on its promises. We measure this as stakeholder = business support.

The business case for reputation

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

Our study confirms that the corpo-rate communications/public affairs de-partment continues to have the leading role in reputation management (60 per cent of functions represented), and the trend is clearly that the bigger the com-pany is in terms of revenues, the more involved the corporate communications office is in the management. This means that this department has the responsibili-ty to build and bring the case forward, un-less they have sufficient mandate already.

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

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

For the most part, corporate commu-nications officers (CCOs) have had direct responsibility for communications-relat-ed issues, and less so on broader strate-gic business issues. One of the key find-ings in this study is that there is now a unique chance for senior communi-cations officers to elevate their role and contribute to the corporate agenda and decision-making, taking a fact-driven ap-proach to providing that guidance.

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

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

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

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

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

Budgets and resources

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

This is important, given that our re-search shows the total budget for commu-nications rarely exceeds 0.1 to 0.3 per cent

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for senior communications

officers to elevate their role

and contribute to the corporate

agenda.”

f i n a n c i a l


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

b y C l A u S F o n n e S b e C h A n d A n d y o l i v e r

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

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

History dictates that when a reces-sion rears its ugly head, communica-tions departments and agencies have typically been the first to be on the wrong end of cuts.

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

A third said they would expect to in-crease communications spend. Another

lmost daily we see me-dia coverage of potential downturns or various bubbles bursting. Wheth-er or not another Great

Recession is headed our way, 2016 is looking like a year of uncertainty. The US election, the UK’s EU Brexit, Middle East stability, global oil price, natural dis-asters disrupting supply chains, China’s volatile stock market: these are just some of the contributing factors in an uncer-tain time.

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

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

1

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

measurements methods have dramatical-ly changed and improved since 2008.

Gone (or should be gone) are the me-diaeval days of weighty coverage books. In the 2000s, there was little clear link to contribution to business objectives, or whether the content you were producing was actually any good. By 2008 it was all about level of activity, which may or may not have impressed senior managers in determining value.

Today, sophisticated monitoring and analysis tools help us to show the exact contribution public relations and com-munications makes to achieving corpo-rate strategy. Rather than simply report-ing on activity, we now communicate and prove outcome and value, using data to offer insights and guidance.

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

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

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

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

impact on lead generation and sales. Sen-timent, tone, share of voice, syndicaton, engagement, and so forth; we easily iden-tify what works and what doesn’t.

The value and influence of content and content marketing strategy on marketing and sales, especially customer acquisition and lead generation can be seen directly by decision makers. Mike Banic, global vice president of marketing at cyber security company Vectra Networks, illustrated this during one of our Forum events:

“I can tell the board how many in-bound web visitors we had from reading articles online or engaging in social media and then linking to the website. When we publish blog posts about threat research, we can track a huge spike in web visits. I know exactly where people are going after reading the blog.

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

“There are four arguments that demonstrate why public relations is

safer and provides more strategic value to organisations during

periods of economic flux.”

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

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

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

The public relations and corporate communications professional has always been the idea generator and wordsmith. The Vectra example demonstrates that never before has the content we produced been so critical to achieving commercial objectives.

3

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

Back then, social media was still in rel-ative infancy and very much a consumer play-thing. Twitter was a celebrity tool for fans of people like Ashton Kutcher. Facebook was still for teenagers and stu-dents. Brands, certainly not business to business brands, didn’t embrace it like they do today. Measuring social was not even an option.

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

The bottom line is organisations oper-ate in a social era of transparency never

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Communicating compliance

Organising cooperation across competing claims.b y C h r i S t o p h e r S t o r C K

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

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

One of these reputation dimensions is usually business ethics. Whereas all other dimensions are driven by indica-tors describing the desired behaviour of a company, business ethics are defined by what stakeholders do not want the company to do. A typical example is the indicator battery for this dimension in a reputation model used by a pharmaceu-tical company:• No illegal influencing of medical doc-

tors• No lobbying against patient interests• No misleading ads or claims• No abuse of underprivileged for

clinical trials • No drug testing on animals• No unfair treatment of business

partners• No breach of ethical standards and

code of conduct• No employee discrimination of any

kind• No exploiting of workers in develop-

ing countries

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

The harmful potential of being ac-cused of wrongdoing is especially high for companies with an outstanding rep-utation: the more prominent they are and the better they are perceived by stake-holders, the easier and deeper they can fall. Accordingly, the broader approach to corporate communication called reputa-tion management targets the same prob-lems that companies have been trying to tackle through implementing compliance management systems.

Changing the rules

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

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

oth compliance manage-ment and corporate commu-nication have expanded their fields of activity in line with their growing importance for

corporate management. This raises five organisational questions: • How can we define the roles and

responsibilities of both functions in a practical way?

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

• Which organisational and procedur-al interfaces are necessary to make this happen?

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

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

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

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

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That these reputational aspects are closely related with compliance manage-ment is obvious. The critical question is how to differentiate the tasks of compli-ance and corporate communication man-agement and to organise the cooperation of both functions.

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

goals, values and rules of the company.Both functions derive their organisa-

tional relevance from the ability to imple-ment communication processes aimed at safeguarding key stakeholder relation-ships. Not only do compliance managers have to establish systems for monitoring

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

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

Working towards a stronger role

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

“The critical question is how to differentiate

the tasks of compliance

and corporate communication.”

eXeCutive SummAry

• Compliance management and corporate communication have both grown in scope and in importance for management. Therefore, measuring their similarities, differences and overlapping tasks is important, as is identifying ways in which they can work together to achieve strategic goals.

• Both functions derive their relevance from the ability to implement communication processes aimed at safeguard-ing key stakeholder relation-ships.

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

Compliance communication targets primary relationship manager

Corporate leadership Corporate communication (executive communication)

Employees Corporate communication (internal communication)

Compliance managers Compliance management (compliance communication)

Business partners Business units (B2B communication)

Suppliers Procurement (vendor communication)

Investors, financial analysts Investor relations

Regulatory authorities Public affairs (corporate affairs)

Policy makers Public affairs (lobbying)

NGOs CSR (sustainability communication)

Legal authorities Corporate council (legal communication, litigation PR)

Customers Marketing (market communication, CRM)

Journalists Corporate communication (media relations)

SRI rating agencies CSR (sustainability communication)

Table 1: Ownership of target groups of compliance management

T h e o r y

One of the most basic findings in corporate communications research and practice is that communicators need to work closely with top executives to achieve excellence. Outstanding com-munication departments ensure a close alignment of communication objectives and business goals. However, studies prove that top executives and commu-nication professionals seldom share a consistent understanding of the support-ive role of communications. It would be short-sighted to blame the executive lev-el for this. Communication professionals themselves use numerous rationales to explain the value of their work. These range from building reputation and brands to gaining thought leadership or boosting sales and employee motivation. The multitude of stories told by the pro-fessionals themselves creates uncertainty among business leaders and hinders the institutionalisation of the communica-tion function.


How communication contributes to corporate success.

b y A n S g A r z e r F A S S

A n d C h r i S t i n e v i e r t m A n n

The communication value circle

OAt the same time, the variety of the-

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

Communication as part of the value chain

The notion of ‘value creation’ de-scribes the transformation of resources into goods or services with a higher fi-nancial value. This supports the foremost goal of every corporation – to work effi-ciently and effectively to create financial value today and enable value creation in the future.


T h e o r y

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logistics, operations, outbound logis-tics, marketing and sales, and service) as well as of supporting activities (firm infrastructure, human resource man-agement, technology, and procurement). Thus, communication is not just an or-ganisational function which helps top ex-ecutives and other business managers to reach out to stakeholders. Corporate com-munications is also a valuable resource for listening and learning from the envi-ronment, which helps to reposition the organisation and adjust strategies, and a key driver of creating a supportive overall framework for corporate activities.

Findings from literature

Our literature survey across differ-ent disciplines revealed that the research is predominantly focused on the debate about measuring and evaluating the effectiveness of communication. There are a number of models and methods for clustering communication processes into different chunks and levels of effect. However, the contribution of commu-nication to corporate strategy is seldom reflected upon. This is also true for recent approaches like the Barcelona Principles 2.0 for Communication Measurement propagated by AMEC. Measuring the impact on organisational performance is recommended, but applicable methods and indicators are neither discussed nor offered in practice.

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

tangible assets through communication. However, there are no standards for com-bining these closely linked values and for explaining their connection to organisa-tional strategy.

Researchers and practitioners have also discussed the adaption of business valuation and management concepts. Fi-nancial indicators like return on invest-ment are often mentioned, but mostly misinterpreted. The complexity of com-munication processes, the close nex-us with other functions and activities, and a lack of transparency about costs and investments for communication in most corporations hinder the utilisation of such indicators. On the other hand, management systems like the Balanced Scorecard by Kaplan and Norton and associated concepts like Value Drivers have become famous over the years. They allow professionals to visualise the link between communication activities, media and channel outcomes, changes in stakeholder’s knowledge, attitude, be-havioural disposition or behaviour, and organisational impact. Based on these approaches, researchers and professional associations in German-speaking coun-tries have developed a joint framework to capture the value chain of commu-nication (DPRG/ICV framework), which is nowadays widely known and even ac-cepted as a standard.

To sum up, the question of how communication contributes to value cre-ation for organisations has not been answered until now. There are many approaches, indicators, measurement methods and concepts for evaluation, but they lead to different results and a coher-ent and integrative approach is missing. There is a tendency among professional communicators and researchers to focus on ’soft factors’ like creating reputation, brands or relationships. A major gap concerns the large range of strategic con-tributions through corporate listening, issues management, internal communi-cation consulting or mastering crisis sit-uations as well as change communication and innovation support.

Value-based management is a well-known concept in business theory and practice, as explained in the works of Mi-chael E. Porter and other management scholars. It states that all corporate de-cisions should focus on increasing the overall value of the company and not only short-term objectives. Corporate val-ue was traditionally equated with share-holder value and only measured in eco-nomic terms like return on investment. From this point of view, communication contributes to the overall value merely by positioning a company in the market-place or creating a favourable corporate image among investors.

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

In our understanding, strategically managing and measuring this position-ing by communicative means is the pri-mary task of any communication depart-ment. In this sense, communication is an integrative part of the value chain in any corporation. Communication processes are part of primary activities (inbound

“Top executives and communication professionals seldom share a

consistent understanding of the supportive role of communications.”

T h e b i g i n T e r v i e w


“It’s your licence to operate that is gaining our opposition”The International Trade Union Confederation is determined that no worker is left behind in the transition to a new economy. We spoke to its general secretary Sharan Burrow about human rights, fair supply chains and the fight for a better business world.

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The ITuc launched its first international union programme on climate change policies in the year it was formed, so from the start it has put workers’ rights on a level with sustainability. Why is it important the two go hand-in-hand?

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

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

All jobs have to be both sustainable and they must be decent work. But the imperative to create decent work is in the hands of governments, employers and ourselves. If we can stop the attacks on fundamental human and labour rights then we can build a sustainable future that has at its heart decent work. But that’s not our greatest fear. Our greatest fear is on two fronts. One is that climate change is already destroying lives and livelihoods. We say “there are no jobs on a dead planet” and that’s much more than a slogan for us, because we’re witnessing working people’s lives being devastated. We know that will increase. We’re also seeing instability in the market driving threats to livelihoods and to vulnerable communities, particularly in coal but also increasingly in communities that depend on oil and gas.

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Licence revoked?Why internet giants such as Google and Facebook risk losing their social legitimacy By Piet Hausberg and Marc Suess

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A great transitionPurpose-driven work will en-sure communicators win their own licence to operate By Inge Wallage

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A long-term commitment

Engaging local communities helps Rio Tinto deliver value to its stakeholders By Simone Niven

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The story of a conceptOne of the field‘s leading acade-mics traces the development of the social licence to operate By Robert Boutilier

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Getting the go-aheadHow Lafarge made sure all its internal departments worked together to unlock the value of engagement By Chris Ettery

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

I s s u e F o c u s

The social licence to operate

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