By Jaideep Shergill, CEO, India, MSLGROUP
Reputation is a growing concern – globally and in India too
A New York Stock Exchange (NYSE) study a few years ago of 205 CEOs reported that 75% of them track their firm’s reputations through surveys, 44% said that their firms’ reputations were more important then than three years earlier, and 84% said that they were taking action to protect their firms’ reputations.
More than 80% of these CEOs undertook informal discussions with relevant stakeholders, 70% either held regular interactions with employees or commissioned surveys of them. About 65% regularly tracked their rankings in surveys published by credible sources.
It’s clear, then, that reputation is a serious business concern.
The modern business environment is complex in the best of times, let alone during a global economic downturn such as the one we’re grappling with. This makes reputation even more important because it is a priority for internal and external stakeholders. Loss of reputation can adversely impact share price, the ability to attract and retain talent, customer acquisition and retention, and government and community relations.
This is as true in India as elsewhere.
There are few markets as complex as India, and corporations are discovering that traditional models of reputation management are crumbling. Stakeholders – both internal and external – want real engagement and actions that match their value systems and expectations.
Stakeholders today are empowered because of the information explosion, and they are not satisfied with merely information about products or services. They instead want a 360-degree perspective that includes value for money, product lineage, corporate philosophy, credibility, ethics and sustainability. Sadly, in most corporate messages, the factors that build belief are missing.
Businesses are beginning to revisit communication strategies
For the public relations (PR) industry, this is a huge opportunity.
Across the world, advertising’s role as a brand custodian is losing firmness. Today, businesses need help through integrated communications.
However, businesses have been slow to recognise that PR is perfect for this role. There is an urgent need to showcase the role it can play in reputation management.
The good news is that businesses are beginning to revisit communications plans. Apart from synchronising paid and unpaid communications, they are evaluating how activation can lead to reputation building and not be limited to media coverage.
Corporations and PR agencies need to work on a partnership that is mutually beneficial. If reputation management is to make a genuine impact, the client and the agency have to establish a sustained partnership in which media coverage is incidental and the primary focus is on achieving business goals.
Already, we are witnessing important changes within organisations:
- Firstly, while marketing communication is driven by the marketing team, corporate communications is becoming an increasingly important voice in the business set-up. Corporate communications desks are spending more time with CEOs, who should ideally be the business’ chief corporate communicators.
- Communications plans are being aligned with business calendars and discussed against a set of corporate objectives. Media relations are being used to ensure traction and long-term loyalty from various stakeholders rather than merely for exposure.
- Communication to build reputation is becoming part of top managements’ key result areas. Again, the key is the use of strategic communication to achieve business objectives.
- This is accompanied by the establishment of stringent yardsticks to gauge the effectiveness of communication. For instance, in some organisations where recruitment advertising budgets have been slashed, the function heads are being asked to use PR instead.
- Communications teams are being linked to central research desks – an indicator that for the first time PR is being acknowledged as a brand building tool on par with other tools.
The Indian PR Industry must rise to meet these demands
As an industry, however, PR needs to effect some quick changes. First of all, it needs better measurement systems. Our stress on advertising value equivalents is hurting us. We must focus instead on research-based measurement of impact on reputation and the achievement of business goals. Audits, measurements, monitoring, accountability, research and insights are missing from the PR lexicon.
Our inability to project ourselves into the bigger picture is primarily why bigger budgets have eluded us.
Lastly, there is no substitute for robust client engagement. In order to play the central role in reputation management, PR consultants must initiate a constructive education campaign within the client organisation and show it the path to long-term organic and symbiotic growth.
If we can do all of this, there is no reason why PR won’t take its rightful place at the forefront of the reputation business.
This post is part of the People’s Insights magazine “The Future of Reputation“