Stuart Smith\'s Collective Conversation Blog

This article was prompted by a conversation started on the Holmes Report’s LinkedIn page by @arunsudhaman.  He asked a couple of questions:

• Is internal communications dead?
• Does it amount to nothing more than vanity publishing programmes, while the actual conversations about a business take place elsewhere?

All the best questions are simple and direct. But the simplest questions often have complex answers.

The conversation reminded me of the notes that someone takes at a private supper and then distributes to the participants just in case the wine was flowing a little too freely. For the full, unedited version join up to the LinkedIn page (Arun, as promised a small plug).

There were some interesting perspectives being voiced which prompted me to go back and re-examine my own opinions and experiences.

The Blurring of Internal & External Communications

One strand talked about whether there was, or should be, a closer convergence between internal and external communications.

Personally I have great sympathy for this view. When in-house I once made a video for the cascade process (yes, it was that long ago) which became more popular for sales people to use with customers than the official ‘corporate’ video.

The reason? It was full of real people talking with genuine passion about their jobs and the company. There was plenty of humour thrown in by the staff themselves; including one newly-promoted manager who insisted on being interviewed lying on his desk confessing to the HR Director that he didn’t have a clue how to do the new role. I think this is what’s meant by authentic and entertaining content (and that was fifteen years ago).

Heavy weight or Feather weight?

A stronger line of discussion was around whether the internal communications function is punching its weight. There wasn’t a consensus as such but my own personal experience is that there is still huge variability in the strategic influence of internal communications departments. We’ve all met the IC manager who sees the role as magazine production. We’ve also met the IC manager who has become the trusted advisor to the CEO and the HR Director – and has influence over ‘what we do’ not just over ‘what and how we say it’.

Will Convergence Suck In Internal Communications?

A third strand asked whether the convergence between marketing and communications will have implications for the internal communications manager.

If communications, PR and marketing eventually converge in an organisation, will marketing people have any interest in internal communications? My guess is that most often the answer will be ‘no’ and the IC function will be tossed back and reabsorbed as part of the internal trade-offs around any reorganisation (aka “turf war”). Three possible final destinations for the IC function post-convergence are:-

• inside a smaller corporate function purely focussed on elites
• merged into the private office function of the CEO (if it exists) or
• back to Human Resources (who either wanted it all along, never wanted to lose it in the first place or were just tired of PR people who didn’t understand their craft)

All these options have their pros and cons. Who owns IC may or may not have a detrimental effect on the output of the function. Much depends on the mindset of the C-suite member who has ultimate ownership. Frankly, I am not overly dogmatic about where IC should sit but, wherever it does sit, it needs to be practiced creatively.

People with Purpose (Right here, Right Now..)

Here’s my top-of-head view on the current IC value proposition driven by digital, recession and the often unarticulated need of employees to find an emotional connection with the ‘Purpose’ of the company they work for.

Everyone has been right about the potential value proposition for internal communications for at least two decades but the time is now for this discipline. For all the reasons stated above but my favourite Top Four are:-

1. Digital Channels:- All employees can now potentially have a significant external voice as companies adjust to the use of digital and social media

2. Trust Issues:-  The trust of ‘company spokespeople’ increases in inverse proportion to their seniority (with the exception of the ‘PR person’ who is the least trusted)

 3. Leadership:- Uniting, focusing and motivating a workforce is the most important job that any manager or C-suite member has (especially in austere times)

4. Interdependencies :- companies are finally realising that internal communications is utterly essential to the delivery of strategies intended to be transformational (and there are a lot of companies trying to do this – again driven by economic necessity)

Entertain Me (Too)

Employees can be the toughest audience to convince because companies too often engage rationally with this audience and not emotionally.

Brands have learned to entertain their external publics with compelling content, yet still companies are nervous of ‘entertaining’ their staff even when we all know it helps to deliver a message.

My favourite example? The Ricky Gervais videos that Microsoft used (and were leaked onto YouTube before The Office became famous).

Getting the right answer to the question “why should I give my employer that extra 10% effort” is easier for the emotionally intelligent company – especially for their top talent which has choices even in these economically tough times.

My thanks to Arun who asked a question which allowed me to re-affirm my faith and belief in the importance of internal communications. And as Oscar Wilde might have said, reports of the death of internal communications have been greatly exaggerated.

Arun has initiated an interesting conversation on the Holmes Report’s LinkedIn page about internal communications.

http://linkd.in/b5lTN0

Here’s my view top-of-head view on the current value proposition driven by digital, recession and the often unarticulated need of employees to find an emotional connection with the ‘Purpose’ of the company they work for….

Everyone has been right about the potential value proposition for internal communications for at least two decades but the ‘time is now’ for this discipline. For all the reasons stated above but my favourite Top 4 are:-

1. Digital Channels:- All employees can now potentially have a significant external voice as companies adjust to the use of digital and social media

2. Trust Issues:- The trust of ‘company spokespeople’ increases in inverse proportion to their seniority (with the exception of the ‘PR person’ who is the least trusted)

3. Leadership:- Uniting, focussing and motivating a workforce is the most important job that any manager or C-suite member has (especially in austere times)

4. Interdependencies :- companies are finally realising that internal communications is utterly essential to the delivery of strategies intended to be transformational (and there are a lot of companies trying to do this – again driven by economic necessity)

And whilst employees can (sometimes) be the toughest audience to convince, this is because companies too often look to engage rationally with this audience and not emotionally. Brands have learned to entertain their external publics with compelling content – and yet still companies are nervous of ‘entertaining’ their staff even when we all know it helps to deliver a message. Getting the right answer to the question “why should I give my employer that extra 10% effort” is easier for the emotionally intelligent company – especially when top talent has choices even in these economically tough times.

My favourite example was the Ricky Gervais videos that Microsoft used (and were leaked onto YouTube before The Office became famous) – and we could debate for days about the value of Scobel as an employee advocate when he was employed by Microsoft.

Once convinced though, employees can truly become evalgelists for the brand and are far less fickle than other endorsers.

About The Survey

The 2010 survey results from the 4^th European Communications Monitor (from EUPRERA et al.) covers nearly two thousand responses from forty-six countries and is, according to the lead researcher Professor Ansgar Zerfass from Leipzig University, probably the largest transnational survey of public relations ever conducted world-wide.

 The respondents are largely in senior positions. Nearly 80% are Heads of Communications Departments; Unit Leaders of Agency CEOs; over 50% have more than ten years of professional experience. Their average age is 41 and 56% of the respondents are female. The sample is representative of the region: one third of the respondents are from Western Europe; Northern Europe (28%); Southern Europe (25%) and Eastern Europe (11%).

 A Bigger Picture

There is a habit of assertion in our industry where people declare trends and omniscient insight based on the evidence of a couple of meetings (or because they felt strongly enough to blog about it). It doesn’t mean they are wrong. It may just mean they are right for the wrong reasons. Or maybe they are having what Malcolm Gladwell would call a ‘blink’ moment.

So this survey is a refreshingly detailed piece of work and provides one of the few pieces of independent research that can help companies and agencies design forward-looking strategies. The survey provides actionable insights into the trends in specialisms, channels and the structural implications for organisations that deliver PR as a service.

The PR and communications industry across Europe is facing dramatic shifts in its craft and discipline driven by digital and accelerated by the recession. As clients shift their budgets and demand more proof of results, the survey indicates that agencies and in-house teams are struggling to adapt to the new ‘crowd engagement’ model of communications. Without strong leadership and some radical re-thinking is it possible that we will look back on 2010 as the year when PR consultancies lost their relevance? Or will we look back and see it as the moment the industry grasped the opportunity to find radically new solutions to grow its position in the world of marketing services? Note, all assertions carefully positioned as questions. Having said that, what does the survey say in detail?

Reasons to be cheerful? Despite the negative backdrop of the economy, communications professionals are generally satisfied with their job (70%). Of all the regions, Southern European practitioners are least happy. The factors affecting this metric include: ‘importance of engaging in interesting and diverse tasks’; being ‘valued by superiors and clients’ and ‘the perceived status of the role’. Interestingly further data in the survey suggest women in senior positions are the most content with their roles across all markets.

Why after so long can so many of the respondents be admitting that their activities are not aligned with key commercial objectives? The survey authors feel that communications professionals in Europe “neglect one of more of the basic courses of action by which communications management may contribute to overall organisational goals”. In other words, only 63% commit themselves to activities and measurement of specific business goals: e.g. influencing consumer preference; raising the organisations profile or motivating employees.

Despite the seniority of the sample, only 58% play the role of strategic facilitator while others have more limited roles and/or vision for the potential of their function to be influential.

On budgets, the received wisdom is that PR has somehow been protected from the recession by an influx of money from the ‘beleaguered advertising industry’. However, CFOs have clearly had a tighter grip on many budget holders than people would have us believe. Whilst 72% of respondents felt that communications has become more important in the last year; 37% reported that communications fared proportionately worse than other departments in terms of resource cuts.

The strongest decline in resources is reported in Eastern Europe. Across the 46 countries, 18% of practitioners have managed to improve the perception of the value of their work and increased their budgets. The authors attribute this simply to the fact that “communications departments with a strong focus on supporting organisational goals by adding visible value (reputation, pride, sales) report significantly better development of resources during the recession”. It is worth adding here that PR showing the capacity to deliver highly creative campaign ideas which engage and excite the company is also a factor in igniting budgets – but the money won’t last if they don’t deliver results.

The survey listed the predicted growth in importance of various communications specialisms by 2013. This year there has been some significant shifts:-

Still at Number One is corporate communications and its associated services. Still at Number Two is Brand and Marketing communications. Internal communications moves up one place to Number Three. CSR moves up a place to Number Four and International Communications enters in at Number Five. Of this year’s losers, public affairs and crisis management both drop out the Top 5. The latter hopefully was related to the fact that companies are facing fewer crises driven by economic circumstances.

The rise of internal communications represents a three-year trend. This discipline has never been more important for respondents. It demonstrates that, finally, internal communications is being seen as the preserve of the communications department. It also recognises the moves by companies to unleash the power of employee advocacy through the use of online and social media – using their more authentic voice to boost reputation and sales.

In terms of channels, the overall trend demonstrates PR is following the unstoppable march to the consumption of content online. Twitter leaps into the Top Five at Number Three for the first time. The Top Three channels that will be most important by 2013 are predicted to be: online communications; online media and social media. Print and broadcast media fall to Number Five. Clearly the money is following the eyeballs. It’s that simple. This does not of course suggest that traditional media brands are weakening, just the print channel. Although we all watch with interest the experiments by the Murdoch media with paywalls.

Carat has predicted that by 2020, 80% of all content will be consumed online in some shape or form. These overall results mask some big variations in the popularity of certain channels in individual countries (e.g. radio) or the lower adoption rates in some countries of certain types of social media.

Sadly and predictably the study shows that the respondents frequently over-estimate the annual growth or rise in importance of disciplines and channel by somewhere between 50% and 300%. In 2009 social media growth was the most over-estimated even though its importance did nearly double between 2009 and 2010. PR people given to hyperbole or making poor predictions? Surely not.

One particular result to highlight is that interactions with print journalists were predicted to shrink last year and in fact grew by 5%. Perhaps this is a transition phase or maybe a more likely explanation is that the traditional media are incredibly important in setting the mood on a topic, and that traditional journalists are still the route to online coverage in the big media brands world-wide.

This could be likened to the over-heated predictions that Twitter would kill off the need for PR by disintermediating the need for ‘brokers of information’. In fact Twitter has augmented the relationship between PRs, their clients and journalists. The relationships are better, the conversations are deeper and richer (and not just about the latest product launch). One thing’s for certain, these conversations are a lot more transparent and public.

The authors note clear evidence of growth of online and social media in 2010. Now, 68% of respondents feel that all these channels are important ways to address stakeholders and other audiences – up from 59% in 2009 and 54% in 2008.

Bearing in mind the likelihood of this group to over-state the growth rates of different channels, they are still predicting big rises in all online and social media – most importantly in online communities and video. This is probably reflecting a pre-existing trend for PR to move away from ‘just producing words’ to producing other forms of entertaining content.

The data also picks up on a new ‘C’ (for community), reflecting the growing importance of Facebook and other sites which activate P2P communication on grand, global scales.

The last two years has been about agencies helping clients to experiment with social media; train their people and pilot Twitter feeds and Facebook campaigns (yes even now this is still happening). It is likely that we will look back on 2010 as the year as the ‘tipping point’.

Yes, a prediction, but carefully distinguished from an assertion. This is the year that online and social media will be seen to have driven the reshaping of communications departments and their agencies in fundamental ways. It will also be seen as the year when budgets were finally re-shaped around the recognition of the importance of these channels. Some evidence for this is to be found in the survey data – 25% of the respondents have put in place the pre-requisites to embed online and social media into the mainstream of their communications; 18% have key performance indicators to measure social web performance and 29% have social media guidelines. All of which is enough to be classed as critical mass.

Surprisingly, however, many respondents (c. 45-50%) have no plans to implement any of the pre-requisites of a coherent social media strategy. These include: setting KPIs for online activity; training programmes for social media or establishing guidelines for use of social media.

There are some regional variations within Europe, but they are not overly significant. By a small margin, Eastern Europe seems to be a little behind the rest of Europe in adopting some of the tools and processes necessary to embed online and social media into their communications models.

Fascinatingly the survey designers have created a unique insight into the interactions between PR and marketing.

Who controls social media strategy inside an organisation? There seems to be roughly a 2:1 split between communications/PR and marketing. Not unsurprisingly the ownership of the strategy is aligned with the ownership of the budget to a large extent – but marketing seems to have the edge on funding even though PR has an edge on online/social media strategy design. Across all regions in Europe the same pattern plays itself out.

 What gets measured, gets funded.

One of the main reasons for the fact that budgets have slid whilst the perceived importance of the discipline has increased is down to the fact that the industry has still not got to grips with how to measure and demonstrate success to itself, let alone budget decision makers (who for big campaign spend are CMOs).

The survey states that “communications managers in Europe still rely on monitoring clippings and media response (82.3%) and internet/intranet usage (69.7%) when evaluating their activities”. However, only 25% “track the impact on financial or strategic targets”.

The survey is highly critical of the profession stating “…self-reporting in this much-discussed area tends to be rather optimistic, this is a strong hint that measurement practice is falling a long way behind the ideal”.

Not being able to demonstrate the value of PR in terms of outcomes and outflows (impact) is one of the key barriers to the growth of the discipline – particularly when compared with the battle for a larger slice of the marketing wallet.

Digital transformation and the continuing recession are clearly shaping the industry and the change has only just begun. The top challenges for communications in Europe were reported as:-

1. Coping with the digital revolution and social media (54%)
2. Linking business strategy and communication (44%)
3. Dealing with sustainable development and social responsibility (37%)
4. Dealing with the demand of new transparency and active audiences (33%)
5. Building and maintaining trust (33%)

 So where does that leave us? At Hill & Knowlton we have predicted, shaped and adapted ourselves to new models of communication for over eighty years. By being agile we have helped our clients stay ahead of changes in the communication landscape. Right now we are helping global multi-nationals; Governments and their agencies and even NGOs future-proof their communications strategies and evolve their own organisational structures.

Based on our own insights and experience, the findings of ECM 2010 lead to six key challenges and opportunities for the profession:-

1.       PR Leads The New Engagement Model, For Now.

Whilst PR excels at long-term engagement with audiences through conversations and relationship building, the communication function is only twice as likely as marketing to own a company’s online strategy.

 2.       Listening Not Talking Is The Key Conversational Skill.

The authors point out in their summary of the main challenges, that the industry is still focussed largely on speaking and not listening and that, in this new world of transparency and social media, companies will have to correct this imbalance. Listening is a research and insights skill, not a social media discipline.

 3.       PR Is Not Making The Business Case For Investment.

Whilst many of the people surveyed viewed their discipline as being more important than last year; nearly 40% had been unable to protect themselves from cuts which were deeper than those for other departments.

 4.       What Gets Measured, Gets Funded.

Whilst, there is clearly more pressure on budgets than ever before, there is an almost negligent lack of measurement and evaluation of the discipline – particularly in the form of results which prove business impact (only 25% practice this form of measurement).

 5.       Structure Will Follow Strategy, Eventually.

Communication and PR departments need to decide what disciplines they want to own and which they will cede to marketing – since marketing can see that their world is changing too and the future is digital. There is an understandably fierce battle raging silently inside organisations for ownership of the digital channel.

 6.       Maybe It’s Not Only About Social Media At All

Social media is nowhere near yet being the major driving force for the majority of B2C and B2B marketing strategies and does is not burning a big hole in the CMOs pocket. What we are witnessing, obscured by the noise of social media pundits, is actually the painful re-birth of integrated marketing and communications.

 There are of course many answers; half truths and conclusions that could be drawn from the results of the survey. After all, as the saying goes: “Data will tell you anything if you torture it for long enough”.

One conclusion I prefer (notice no assertion) is that whilst the future is largely online and social, the PR discipline as currently practiced will not flourish until it can engage and convince the most influential planners of its true potential. What gets measured, gets funded.

Another H&K week, another H&K supper event, this time with Sir Christopher Meyer, ex-British ambassador to the USA and until recently chair of the UK’s Press Complaints Commission, kindly accepting our invitation to speak on the topic of ‘The future role of diplomacy and country branding in a new era’.

Sir Christopher used his deep personal insights to form a strong point of view on the future of local and national diplomacy. He sparked a lively and interesting debate on the need for local ‘high touch’ diplomacy. In essence he argues that local face-to-face negotiations are an essential lubricant of the cogs of bilateral and multilateral negotiations. He also argued that calls in the UK for a review of defence spending are premature and should be preceded by a comprehensive review of British foreign policy. He has strong opinions on how Britain should structure its foreign office embassies and combine them with bodies which promote international development and investment. He sang the praises of organisations such as UKTI, the trade and investment body, who he sees as doing a vital job promoting Britain’s interests abroad.

 In his own TV series, called ‘Getting Our Way’, soon to be aired on BBC 4, he interviews Henry Kissinger who likens the current state of world affairs as more closely akin to the 19^th century than the late 20^th century and that there are serious jobs to be done by diplomats to contain and control threats to economic and political stability. Sir Christopher will be publishing a new book (also called ‘Getting Our Way’) on the 29^th October which covers a wide-ranging view on the last 500 years of diplomacy.

We had representatives from various embassies and trade organisations and there was a lively debate on the difficult task they all face in playing a significant role in promoting their countries when resources are often highly constrained.

Our H&K view on country branding; attracting investment; attracting tourists and building influence on the world stage is that this is an increasingly complicated business. Many countries have a wide range of institutions with sometimes overlapping remits that do not always join up to deliver the maximum impact.

All this adds up to a complex picture of organisations trying to influence a range of elite stakeholders, businesspeople, consumer and media. All at the same time. All through a range of different communications channels. And all for, potentially, slightly differing commercial, social and political ends.

Our thesis is that few countries, cities or destinations feel they have got it ‘quite right’. We do not feel we have all the answers but, through our work, we often feel the very real pain of our clients and we often see that the time, effort and money spent on country branding or stakeholder programmes is sub-optimised.

Sir Christopher’s talk touched on a very important point. Embassies and diplomats in this new era are not necessary just to help stranded tourists, fight terrorism and represent policy abroad. Embassies have a strong and vital role to play helping their countries (and other sister agencies) compete for talent, capital, tourists and business investment in a tough economic climate.