The strategic
  management of
 communications

       By Keith Jackson




A Jackson Wells Morris White Paper

        Rev...
Contents

1 – ISSUES: THERE IS A BETTER WAY..................................................................................
1 – Issues: there is a better way
In January 1985, after two years lecturing in communication at the International
Trainin...
Issues management involves the planning and deployment of strategy to control existing or
potential issues so they do not ...
Failure to anticipate has destructive consequences                                                    2




         Signi...
2 – The communicating organisation
The creation of a communicating organisation – whether it be a government, a
corporatio...
INFORMATION FLOW FACTORS

                   UBIQUITY. The extent to which relevant information
                   penetra...
INFORMATION CONTENT FACTORS

                       CREDIBILITY. Information is believable and relied upon.

             ...
3 – The value of effective communications
Within organisations, the communications process performs many functions: it can...
BEST PRACTICE GUIDELINES FOR EFFECTIVE
                      ORGANISATIONAL COMMUNICATIONS

         1 - The CEO is our ch...
Writing and sending email messages is easy but crafting effective messages
can be a challenge. You need to make sure your ...
4 – Culture, performance &
communications
Culture is the invisible glue that bonds an organisation. It comprises the colle...
The foregoing model assumes that management's primary goal is high performance and that
strategic planning is the starting...
KEY CONSIDERATIONS IN PLANNING CHANGE

                       A change in one performance factor inevitably induces
      ...
5 - Communicating strategically
                            Communications & strategy

We can't assume that the future of ...
In this context, issues management is in no way an adornment but an integral part of
management planning, decision-making ...
The PR function may focus on any of the external and internal relationships critical to the
organisation: media relations,...
There used to be a school of thought, still prevalent in some circles, that any publicity is
good publicity. Australian bu...
small district to: (a) the 7.30 Report, (b) the local community, (c) your local employees
who are taking a lot of flak?

D...
Lessons in communicating uncertainty                                          7




         Use redundancy and repetition...
6 - Communications breakdown
Here are some common reasons why communications fails.


                                    ...
Distortion
Information is omitted or recast by the sender. It may be deliberate. US research showed
individuals with caree...
Overload
Information overload (a term coined by Alvin Toffler in his 1970 book Future Shock) refers
to having more informa...
When image (perception) is badly tarnished, there is only one sure way to resurrect it: the
organisation must improve perf...
7 - Stakeholders
The notion of stakeholder is one of the underpinning ideas of issue management. A
stakeholder is any grou...
Maintaining good stakeholder relationships, however, goes beyond this elementary two-way
transaction of information. There...
difficult for the major retail banks. This was no conspiracy - simply stakeholders behaving
interactively in pursuit of th...
Once the sub-groups are defined as in the foregoing example, the next consideration
concerns which specific media within t...
8 - Issues management
Issues management is about caring where you end up. And, therefore, it is about
caring which way you...
In the 1993 Federal election, each of the two major political parties was
       confronted with the need to manage a vola...
Morale/self image                    n/a             30%




                            What is issue management?
Issue m...
Unmanaged issues, whether external or internal, can make life very difficult for an
organisation. They can, amongst other ...
Issue management is about facing up to the unpalatable, picking the issues early, building the
networks which will deliver...
Early in 1988, in one of the greatest misbegotten ideas in the State's history,
        then NSW Minister for Natural Reso...
How an issue emerges
When an organisation makes a planning decision it sets out on the desired change path
leading from th...
9 - Approaches to issues management
                                    Zone of reaction
No less than three separate categ...
opinion refused to accept that position and eventually there was politicial
        intervention.

Sometimes, when an issu...
lengths start. It also means making decisions on the run, often without adequate information
or research and with the pros...
Zone of pre-emption
Finally, there is the best idea of all - the pre-emptive approach. An organisation is pre-
emptive whe...
There are very few beneficiaries from an issue gone bad - which is pretty much a lose-lose
situation.

It is often difficu...
surrounding neighbourhood before the development application was made.
        It resulted in the Order's fear being overc...
10 - The practice of issues management
               1 - Assign responsibility for forecasting issues
Assigning responsib...
HOW TO BRAINSTORM ISSUES

                •   Convene a suitable group of people.

                •   Brief the group on ...
4 - Create a data base
The effective management of issues requires the maintenance of a comprehensive and
systematised bod...
6 - Deploy resources to deal effectively with the issues
These may include:

      people to plan, organise and coordinat...
10 -Assure a good inwards flow of information
Issues management is not only concerned to ensure a good and reliable outwar...
14 - Explain and defend the organisation publicly
All organisations must expect to be criticised from time to time and mus...
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Strategic Management of Communications

  1. 1. The strategic management of communications By Keith Jackson A Jackson Wells Morris White Paper Revised July 2006
  2. 2. Contents 1 – ISSUES: THERE IS A BETTER WAY.................................................................................3 2 – THE COMMUNICATING ORGANISATION....................................................................6 3 – THE VALUE OF EFFECTIVE COMMUNICATIONS......................................................9 4 – CULTURE, PERFORMANCE & COMMUNICATIONS................................................12 5 - COMMUNICATING STRATEGICALLY..........................................................................15 6 - COMMUNICATIONS BREAKDOWN...............................................................................21 7 - STAKEHOLDERS................................................................................................................25 8 - ISSUES MANAGEMENT.....................................................................................................29 9 - APPROACHES TO ISSUES MANAGEMENT..................................................................36 10 - THE PRACTICE OF ISSUES MANAGEMENT.............................................................42 2
  3. 3. 1 – Issues: there is a better way In January 1985, after two years lecturing in communication at the International Training Institute, I joined the Australian Broadcasting Corporation as its first General Manager of Corporate Relations. The ABC was attempting reform on a massive scale. A new Board wanted a fresh start, fresh ideas and fresh faces. The old order was duly expunged and the new management set its course. But good intentions do not produce change and the Board encountered serious resistance each time it tried to modify the existing system. Opposition came from managers whose careers were endangered; unions whose power base was eroding; employees who wanted certainty but doubted the ability of management to deliver; a shrinking audience fighting for its favourite programs – all inflamed by an excited media. Through 1984 and 1985, the organisation lurched from crisis to crisis. Within months of his appointment, managing director Geoffrey Whitehead remarked that a day did not pass without him contemplating resignation. The issues seemed to appear at random. Queenslanders resisting the axing of a three-minute local TV news bulletin. The union leaking option papers, purporting them to be policy. Prime Minister Bob Hawke fulminating on alleged left wing bias in Four Corners. A Senate inquiry into horse racing broadcasts inspired by an aggrieved ex-race caller and his mate, Senator Mal Colston. An infamous ‘phantom army’ of casual employees. The ill-fated National which moved the 7 o’clock news to 6.30, to the disgust of legions of viewers. As the pressure grew, the ABC Board fragmented into feuding factions - culminating in walkouts, resignations and the staff-elected director suing the CEO. As the ABC discovered, there is no easy pathway to change; immense forces of discontent can be released. But issues need not steal the agenda - no matter how seismic they may be. In the competent, communicating organisation, they can be managed effectively and, if renegade, brought under control quickly. 1 There is a better way – and it’s called ‘issues management’. 1 A detailed and accurate chronicle of the events of this period can be found in ‘Whose ABC? The Australian Broadcasting Commission 1983- 2006’ by Ken Inglis Black Inc, August 2006 3
  4. 4. Issues management involves the planning and deployment of strategy to control existing or potential issues so they do not jeopardise the interests of the organisation or its stakeholders. At the heart of every organisation, present in each nerve and sinew, is culture: the complex collection of values, norms, attitudes and behaviours that constitutes the organisation’s personality and influences much about how it functions, including how it conducts its relationships. Indeed, issues management is mainly about relationships. Using corporate culture as its entry point, this paper explores the background and the practice of issue management. Over the last 25 years, governments, corporations and organisations have placed new emphasis on improving business performance. In the last 10 years, this has extended to a focus on corporate governance. These trends have been driven, respectively, by increasing competition and growing demands for accountability. Many factors have made the external environment more dynamic: global business as the new norm, political shifts in favour of individual rights (and individual enterprise), increasing deregulation, the burgeoning economies of Asia, a new focus on the customer. In order to maintain its position, let alone improve it, Australia had to change its approach to work and to how work was managed. The community experienced similar change. Citizens are better informed. They are more conscious of their rights. And they are better equipped than ever to exercise them. In adjusting to this new order, substantial demands have been made of managers. People must be managed more creatively. Individual and collective talent needs to be better recognised and rewarded. Process has to be subordinated to customer. Efficiency demands synergy and synergy demands effective relationships, effective communications and the effective management of issues. This is the world we have inherited in the 21st Century. Issues management implies identifying and dealing with problems either before they occur or before they develop into crises for the organisation. It is a mandatory executive skill in a world that demands an unprecedented degree of professional rigour and competence from its managers and communicators. 4
  5. 5. Failure to anticipate has destructive consequences 2 Significant examples of failures to read a changing environment can be found even in the largest and best resourced organisations. Major US corporations such as IBM, GM, Sears and CBS, to name just a few, have all failed to anticipate dramatic external shifts. For much of the 1980s, IBM ignored signals that the computer industry was changing. It focused on the mainframe not the PC. In the late 1960s, GM failed to heed signals of a potential energy crisis or the increasing attractiveness of small, fuel efficient Japanese cars until its market share skidded almost 30 percent. Sears fiddled with self-branded merchandise and monolithic department store and catalogue delivery systems while customers demanded name brand merchandise and more quality in products and services. CNN pre-empted the networks in the 24-hour news category at a fraction of the cost CBS was paying for just one hour of nightly news. 2 Cited by William C Ashley and James Morrison, Anticipatory management tools for the 21st century, http://horizon.unc.edu/courses/papers/AntiMgt/ 5
  6. 6. 2 – The communicating organisation The creation of a communicating organisation – whether it be a government, a corporation or a small business - involves accepting the principle that managers do not just deal with the closed system of their own entity but with an open system, exposed to the dynamics of the external environment and the manoeuvring of stakeholders. Stakeholders are more than the organisation’s shareholders, customers and employees. They include a vast range of other interested parties who occupy and influence the environment in which the organisation works, from which it draws resources, to which it markets and upon which, ultimately, it is dependent. The creation, building and maintenance of relationships through effective communications is a keystone for successful organisations. There are four communications effectiveness factors: relationships, information flows, information mechanisms and information content. 1. Effective relationships need to be established with those stakeholders who have an interest (or stake) in the organisation. TYPICAL STAKEHOLDER GROUPS Shareholders Electors Customers Politicians Employees Community Suppliers Media Competitors Public servants Pensioners Unions 2. Effective, reciprocal and timely information flows. The word reciprocal is important because it implies that information does not move only in one direction. And note the word timely – information that gets beaten by the grapevine is not going to generate much that is positive about an organisation for the average stakeholder. 6
  7. 7. INFORMATION FLOW FACTORS UBIQUITY. The extent to which relevant information penetrates the organisation. SPEED. The timeliness with which information reaches its intended destination. DIRECTION. The capability of information to move in a reciprocating fashion. 3. Effective information mechanisms. There are literally thousands of mechanisms, ranging from the humble memo to the million dollar website. Mechanisms can be categorised according to whether they are interpersonal (eg meetings), print (eg newsletters), electronic (eg television) or interactive (eg Internet). INFORMATION MECHANISM FACTORS UTILITY. The usefulness and practical capability of the mechanism to deliver the information people require. RELIABILITY. The capacity of the mechanism to protect the integrity of the information it is disseminating. SUITABILITY. The acceptability of the mechanism to the intended audience. 4. Effective information content. The mechanisms may be first class but if content is poorly articulated or impaired, perhaps because the organisation does not want to disclose, even the best mechanisms won’t work. In communications, content is King and the audience is God! 7
  8. 8. INFORMATION CONTENT FACTORS CREDIBILITY. Information is believable and relied upon. CLARITY. Information is easily understood. RELEVANCE. Information is meaningful to people in terms of their lifestyle and work. SCOPE. Information takes into account the differences and requirements of specific parts of the organisation. How much new information is created each year? 3 In 2002, about five exabytes of new information was created: 92% of which was stored magnetically, mostly on hard disks. Five exabytes of information is equivalent in size to the information contained in 37,000 new libraries the size of the Library of Congress book collections. The world population is 6.3 billion, thus almost 800MB of recorded information is produced per person each year. It would take about 9 metres of books to store the equivalent of 800MB of information on paper. The US produces 40% of the world's new stored information and the amount of new information has doubled in the last three years. Most radio and TV content is not new information. About 70 million hours of 320 million hours of radio broadcasting is original. TV produces about 31 million hours of original programs of 123 million broadcasting hours. The average American adult uses the telephone 16 hours a month, listens to radio 90 hours a month and watches TV 131 hours a month. About 53% of the US population uses the Internet, averaging 25.5 hours a month at home, and 74.5 hours a month at work. 3 From University of California (Berkeley) School of Information and Management Systems, How much information: 2003, http://www.sims.berkeley.edu/research/projects/how-much-info-2003/ 8
  9. 9. 3 – The value of effective communications Within organisations, the communications process performs many functions: it can disseminate information, share core values, strengthen morale, build value and contribute to issues and crisis management. 1. Disseminating information. A stock role of communication process is to ensure that information is distributed within the organisation and to stakeholders. 2. Sharing core values. The unifying values of an organisation (eg, teamwork, quality, performance-to-plan) are empty of meaning unless there is systematic effort to communicate them. Values depend upon communications for their implementation. Teamwork is unachievable in the absence of good communications. 3. Building value in the market. Quality information contributes to creating public trust and confidence. This assumes that promise is matched by consequent performance. Organisations that over-promise and under-perform have a credibility gap. 4. Strengthening employee morale. Good communications can lead to a more positive outlook which can contribute to greater job satisfaction among employees. 5. Contributing to issues and crisis management. Effective stakeholder communications is significant in creating relationships that contribute directly to an organisation’s capabilities at adeptly handling issues and crises when they arise. One of the most sweeping changes in organisational communications has been the growth of teamwork. Boeing’s new 777 jetliner was manufactured by more than 200 design-build teams. The teams comprised employees from engineering, quality control, finance and manufacturing. Each concentrated on a specific part of the aircraft. Even suppliers and potential customers were sometimes included in team meetings. 4 4 Wall, 1992, p. 110, http://www.mhhe.com/socscience/speech/commcentral/mgorgcom.html 9
  10. 10. BEST PRACTICE GUIDELINES FOR EFFECTIVE ORGANISATIONAL COMMUNICATIONS 1 - The CEO is our chief communicator and is visible, articulate and proclaims values, vision and strategy. 2 - Managers effectively transform top management’s vision and goals so they are understood and endorsed by employees. 3 - Managers accept responsibility for good communications and for improving their own performance as communicators. 4 - Multiple channels - print, electronic, interactive and interpersonal - are used to reach stakeholders. 5 - Priority is placed on content ahead of means of communication. 6 - Employees are encouraged to engage in communications through feedback and feed-in. 7 – Employees are involved in the life of the organisation and managers ensure employees have a good grip on key issues. 8 - Managers recognise that employees have a personal life as well as a work life. 9 - Communications is strategic: planned, programmed and integrated with business planning. 10 – The organisation measures and evaluates the way in which it communicates and uses this data to improve its performance. In the 1980s, the Australian Graduate School of Management asked senior executives what they would most like to improve in their organisations. Most of the executives ranked good communications at the top of their list. A similar survey in the 1990s provided the same outcome suggesting that, while managers generally rated communications of high priority, this was not reflected in actual performance. Communicating effectively by email 5 5 http://www.allbusiness.com/articles/content/15315.asp 10
  11. 11. Writing and sending email messages is easy but crafting effective messages can be a challenge. You need to make sure your message not only says what you want it to say, but that it conveys the right impression. An email full of misspelled words or typos can give people the impression that you're careless, and an angry message sent in haste can jeopardise a relationship. Knowing email’s limitations can help prevent these disasters. Grammar. All kinds of rules are broken in email. Don't forget that the recipient evaluates you based on your message. Spelling. In business correspondence, you want your words to carry weight, not to highlight inattention to detail. Tone. It's much harder to gauge tone in email than in conversation. Your recipient doesn’t have the benefit of the cues they would have in conversation. They can't see you wink or hear you laugh, and the ironic sentiment you mean to convey might be misconstrued. Emoticons. Although ‘smileys’ or ‘emoticons’ have become hallmarks of online communication, they're usually inappropriate in business correspondence. Once you have a solid working relationship, you can judge whether or not emoticons are appropriate. Signature. If you use a pre-formatted email signature with your business's contact information, be sure to type your name at the end of your message as well. Relying on the signature in lieu of your name can be construed as cold and impersonal. Subject headers. Providing an accurate subject header is essential. Many people choose what to open based on the subject line; blank subject lines or subjects that have little to do with the message contents are frustrating for the reader. Think twice. Always re-read your outgoing messages before you send them — especially if you're angry. Email makes it easy to fire off a message you might regret later. 11
  12. 12. 4 – Culture, performance & communications Culture is the invisible glue that bonds an organisation. It comprises the collection of beliefs, values and attitudes that forms the personality of an organisation and differentiates one organisation from another. It is culture that dispenses the initial shock you experience upon joining a new company. Most people quickly adapt to prevailing culture; some accept it with reluctance; a few remain antagonistic. The main output a rational organisation seeks for itself is high performance, which can be measured in a number of ways: e.g., in terms of productivity, quality, profitability or social utility. Research suggests the basis of high performance in organisations lies more in cultural factors than in planning, marketing and skills. High performance organisations, the argument continues, have a strong culture: they are unified, outward looking, strategic and optimistic. Low performance organisations, on the other hand, are unwilling to examine and test embedded opinions and generally show no sensitivity of the need to manage culture. They tend to be fragmented, inward looking, short- term in focus - and low in morale. Culture & performance There is a business effectiveness model that seeks to fit a number of the elements we have been discussing into the one performance model. CULTURE STRUCTURE STRATEGIC PLAN LEADERSHIP PERFORMANC E RESOURCES SYSTEMS Factors influencing organisational performance 12
  13. 13. The foregoing model assumes that management's primary goal is high performance and that strategic planning is the starting point with executive leadership an integrating function. Like all models, it is not perfect - but there is plausibility and power in the way it draws together the five elements influencing performance. Centrally there is leadership. Without good leadership the most perfectly structured and richly resourced organisation will fail to perform. Supporting leadership there is:  Structure. How the organisation arranges itself to do what it has to do. Structure should be a response to market demand rather than an internal dimension driven by production considerations.  Resources. The range of human, financial and physical assets the organisation applies to fulfilling its mission.  Systems. The methods and techniques the organisation adopts to respond to demand and to deploy resources most efficiently. Amongst the systems organisations employ are communications, information technology and quality systems.  Culture. The attributes that make up the character of the organisation and which distinguish it from other organisations. Surrounding all this activity and impacting upon it profoundly is the external environment – the relationships in which the organisation is enmeshed and which, if it is to survive, it must manage. The central task of management is to design and direct each of these interdependent factors so they work together as effectively as possible. Let us consider a simple example. It is obvious that a change in structure – e.g., the Administrative unit taking over the Finance function - will affect the way resources and systems are deployed in an organisation. The change may also result in a culture shift especially if the demise of Finance as a separate unit removes a well-established and tradition-bound entity from the organisation. The organisation’s leadership will of course be the integrating influence in all this activity. 13
  14. 14. KEY CONSIDERATIONS IN PLANNING CHANGE A change in one performance factor inevitably induces changes in them all. The relationship between each factor must be defined, planned and communicated if the organisation is to achieve high performance. Communication implications If you change structure without adequately informing employees of the reasons and the implications, it is likely morale and even industrial problems will ensue. If there are resource constraints necessitating a change in strategic direction and managers are neither consulted nor persuaded of the merits of the new strategy there are likely to be implementation difficulties. If operational systems are changed without users being fully briefed there are bound to be significant downstream problems. The Erebus tragedy: death by culture 6 The Air New Zealand aircraft that crashed into Mt Erebus in Antarctica underscores the notion that organisational cultural and communications patterns influenced the actions of its pilots who unwittingly flew directly into the mountain at 1500 feet. To make sightseeing more exciting, upper management changed the route from circling the mountain to flying over it prior to a low altitude circumnavigation. The aircraft’s flight management systems were reprogrammed by avionics personnel, but no one told the crew. Flight briefers advised new altitudes but not in the context of new routing. The pilots assumed the altitudes were guidelines rather than requirements. Disaster ensued. 6 Catherine A Adams, Organizational Culture and Safety, 2003, http://techreports.larc.nasa.gov/ltrs/PDF/2003/mtg/NASA-2003-12isap-caa.pdf 14
  15. 15. 5 - Communicating strategically Communications & strategy We can't assume that the future of any organisation is likely to be a continuation of the past. An increasingly competitive world means that past assumptions about appropriate policies, strategies, products and markets are no longer very useful. In Australia modern and traditional organisations exist side by side, often within the same corporate walls. This is true whether we are discussing the public, private or not-for-profit sector. The key differences between traditional and modern organisations are summed up in this comparative table. CHARACTERISTIC TRADITIONAL MODERN World view Economic Political-economic Focus Internal (micro) External (macro) Concerns Static (size, structure) Dynamic (adjustment to external influences, competition) Management Concerned with control, Concerned with strategic coordination, process, resolving decisions, issues management, work-related conflict external challenges Definition of A technical matter based on A political matter established effectiveness objective standards through bargaining with constituencies Limits to the Set mainly by its own Set mainly by environmental organisation capabilities constraints Organisation’s Limited. Judged in terms of Multiple. Subject to public scrutiny impact on society output of products and services and bargaining by stakeholders Traditional and modern organisations If we are to avoid becoming victims of the future we must develop some understanding of what it may hold. Communications methods and techniques offer a way of influencing the shape of future issues and events. They make it possible to influence the future by narrowing its range of uncertainty. 15
  16. 16. In this context, issues management is in no way an adornment but an integral part of management planning, decision-making and controlling. Strategic communications can be defined as the organised and systematic application of communications methods, materials and techniques to support management in its pursuit of the organisational mission and goals. COMPONENTS OF STRATEGIC COMMUNICATIONS Understanding the organisation, its culture and its external environment. Creating a network of effective relationships. Ensuring the free flow of reliable information. Identifying and managing internal and external issues. Factoring in communications considerations at the planning stage of corporate activity. Designing and executing communications programs which blend with management strategies. Committing management to thoughtful intervention to bridge gaps between intent and performance. Corporate communications & public relations The main facilitator of formal communications in most organisations is the public relations department. This function may sail under many different flags - public relations, corporate relations, corporate affairs, public affairs, public policy, external affairs or group communications. In each case the basic task is the same: to support the development and maintenance of effective lines of communication with groups inside and outside the organisation. The qualifiers "facilitate" and "support" infer that communications is not a unique task assigned to a particular professional group but the responsibility of every manager and supervisor. 16
  17. 17. The PR function may focus on any of the external and internal relationships critical to the organisation: media relations, community relations, government relations, customer relations, investor relations, employee relations and so on. In addition, it may be given responsibility for marketing, corporate image, publicity, promotions, advocacy advertising, publications, displays and exhibitions, and special events. Even relatively small organisations have their own public relations personnel and in large organisations there is commonly a flotilla of ‘flacks’ or ‘spin doctors’, as journalists somewhat unkindly call them. Like in every other profession in a changing world, under the weight of management expectations the nature and characteristics of public relations are changing. This comparative table looks at what may be termed the ‘old’ and the ‘new’ PR: CHARACTERISTIC OLD NEW World view Economic Economic-political Prime concern Marketing Strategy Focus Products Stakeholders Performance indicator Quantity Quality Priority Image Performance Positioning Below the line Above the line Impacts Limited Multiple Thrust Supportive Synergistic Mood Manipulative Analytic Timeframe Short term Medium term Challenge Credibility Acceptance The old and the new PR PR runs into major problems when it is used to build facades over chronic problems. Stakeholders see such tactics as dubious - and they are dubious. The bottom line is always performance. Image is never a substitute for substance. 17
  18. 18. There used to be a school of thought, still prevalent in some circles, that any publicity is good publicity. Australian business history attests to the thin ice on which this premise rests – the stories of John Elliott, Brad Cooper, Rodney Adler, Ray Williams, Rene Rivkin, Christopher Skase and Alan Bond being obvious examples. In the short term, PR glitter may beguile and even persuade. Ultimately, however, because PR’s substance can be no better than the product, company or idea it is trying to promote, it will not endure. Ill considered attempts to create ‘good news’ stories, or to suppress bad news or to crash through with bluff and bluster can come seriously adrift. Some supermarkets saw ‘green friendly’, photo-degradable shopping bags as a great marketing initiative. But doubts were soon cast on the environmental soundness of the process by which the bags were manufactured. Then, when a daily newspaper encouraged people to peg bags to clotheslines and report on how long they took to disintegrate, it was the beginning of the end. Ugly grey bags flapped in the breeze month after month. We no longer see many photo-degradable shopping bags. Corporate communications as a tool of strategic management has the capacity to enhance business opportunities, protect the organisation, assist with the implementation of corporate plans, provide an input to strategic decisions and promote a continuing awareness of the total context in which the organisation is operating. Case studies Bountiful banker brings borrowers to brink A bank manager in a far-western wheat and sheep area has been lending in an irresponsible way. Ladling out credit, his speciality is negotiating loans in local pubs and clubs, assuring credulous farmers of a golden opportunity to improve property and machinery. The banker single-handedly inflates property prices in the district. Then, when interest rates soar, the bank starts foreclosing. (1) You're the PR manager. Upon learning the 7.30 Report is working on this story, what do you do? (2) What are the pros and cons of the options you face? (3) When the reporter calls asking for an interview, do you say yes or no? (4) What are the pros and cons of either course? (5) How do you explain forty foreclosures in this 18
  19. 19. small district to: (a) the 7.30 Report, (b) the local community, (c) your local employees who are taking a lot of flak? Dubious deals dishonour despatch A new management team is appointed to run a public sector rail organisation. The CEO comes from interstate and immediately faces resentment about his appointment and public controversy over a leaked staff reduction plan. In his first month on the job, shocked by a long history of theft from the despatch department, he authorises a late night raid of a warehouse and is lucky enough to catch the culprits red handed. They are insiders. The CEO suspends them without pay and calls in the police. The police tell him it was known all around town that new generators, machine tools and other equipment could be ordered from the nearest pub and delivered at a fraction of the market price. (1) Should the CEO keep the wraps on this one or should he disclose? (2) What are the pros and cons of either course? (3) If he does disclose, to whom: (a) Minister, (b) unions, (c) employees, (d) customers, (e) media? (4) And what should he say? Perplexing prattle peeves personage A major construction company is under siege. It has diminishing contracts, buoyant bad debts, a drooping share price, disgruntled contractors and poor employee morale. And now it has another problem. Sensitive documents are being leaked to the media in a steady flow. The managing director decides something must be done: so an instruction on how to protect and safeguard documents is issued. Soon after, the instruction about preventing leaks is itself leaked. The MD decides he had to go further. So he forms a committee to consider, and remedy, the problem. (1) Suppose the committee chairman asks you how you see the problem. What do you say? (2) What steps would you propose for minimising the leaks - or preventing them altogether? (3) In what terms would you communicate these steps to: (a) top management, (b) employees, (c) customers who have voiced concerns that documents embarrassing to them might surface in the Sydney Morning Herald? 19
  20. 20. Lessons in communicating uncertainty 7 Use redundancy and repetition to communicate core messages over an extended time period. Redundancy communicates a similar message in different ways, like a stop sign using language, shape and colour to send the same message. Repetition increases the odds that everyone will at least hear the core messages. Allow the core messages to evolve over time. Changing circumstances will demand messages that develop. But such development must not include contradictory messages. Utilise employees at all levels to communicate messages. Managers often make the mistake of assuming sole responsibility for communicating. Both managers and employees need to be an integral part of the process. Anticipate and respond to employee resistance points. Messages may generate employee discomfort and resistance. Skilful managers do not minimise employee concerns, they acknowledge, legitimise, and objectify them. Frequently discuss the organisation’s future. While reassurance about job security is necessary, the future is the predominant issue. Employees want to know about future products, marketing plans, new customers and research efforts. Use messages to frame auxiliary issues. To frame a subject is to choose one meaning over another. The frame acts as a lens through which other issues are viewed, highlighting certain images and refracting others. Align communications tools with the messages. In most organisations there is a strong temptation to use the same communications tools regardless of the messages. In a situation of change, traditional tools may subtly undermine messages. 7 Phillip G Clampitt, Bob DeKoch & Tom Cashman, Communicating strategically: a perspective and case study about creating comfort with uncertainty, 2001, http://www.imetacomm.com/otherpubs/pdf_doc_downloads/strat_commg_uncertainty_v4.pdf 20
  21. 21. 6 - Communications breakdown Here are some common reasons why communications fails. Bias Perceptual bias by the receiver can mean people hear only what they expect or want to hear and filter out unexpected or unwelcome information. Federal Opposition leader, the late Billy Mackie Snedden said he hadn't lost the 1974 election, he just hadn't got enough votes to win. In the organisational context, it can take the form of selective perception. A British study cites the case of a production manager who recorded himself giving instructions on 165 occasions. His subordinates recorded receiving only 84 instructions. Conclusion: Nearly half the time the manager thought he was communicating, employees didn't get the message. Conflict Where there is interpersonal or interdepartmental rivalry, information is often withheld or distorted. In IBM, internal rivalry over quality became so intense that divisions were not disclosing crucial information to each other. This had a major impact on performance and IBM ended up scrapping the approach. Distrust A study of 330 United States scientists found that, where trust was weak, communications was evasive or aggressive. This can be seen in organisations where managers evade their responsibility to fully disclose and employees search for the hidden agenda. Distance The old sage said it first, "out of sight, out of mind". The greater the distance, the less one communicates. People in branch offices often feel they are not kept adequately informed. 21
  22. 22. Distortion Information is omitted or recast by the sender. It may be deliberate. US research showed individuals with career ambitions systematically withholding information that might threaten or detract from their position. Or it may simply be the well-known weakening and misconstruing of information as it passes along a chain. A study of 100 US companies showed that, of information disseminated by the CEO, the first level down recalled getting 65%, the third level 40% and the fifth level 20%. Immediacy More immediate communication tends to drive out less immediate (the tyranny of the telephone). A Columbia University survey revealed that, while half the major points made in a lecture were retained at the end of the lecture, this figure dropped to a quarter after two weeks. This was most likely due to a combination of overload and failure to understand or reinforce the key points. A critical factor in effective communications is the need for consistent repetition of the same message over a lengthy period of time. Obfuscation This is caused by a variety of factors including inadequate explanation, jargon, imprecision, ill-defined objectives and so on. A lecturer at the International Training Institute asked a group of African trainees to wait for him outside a department store in Sydney's central business district. When the lecturer returned, he found the group had moved some distance up the street. Questioned on the reason for this, one trainee pointed to a nearby road sign which said ‘No Standing’. Obliteration We know that non-verbal communication (facial expression, gesture, tone of voice, dress, etc) has four times the impact of verbal communication and can result in its obliteration. This is especially so on TV where the images can sink the words. 22
  23. 23. Overload Information overload (a term coined by Alvin Toffler in his 1970 book Future Shock) refers to having more information available than can be readily assimilated. It can lead to confusion and incomprehension. Status Status differentials pose problems for communication. Individuals of lower status find it difficult to initiate communication with higher status people (and with groups). This places an obligation on managers to establish an appropriate climate for effective communication. US research showed that:  90% of managers said they understood supervisors' problems but only 51% of supervisors said managers understood their problems  95% of supervisors said they understood their workers' problems but only 35% of workers said supervisors understood their problems Reality and perception A survey in the United States has found that the overwhelming majority of chief executives believe public perception is as important as performance in determining corporate success. It's not just what you do that matters; it's what people think you do. It's not just what you are that matters; it's what people think you are. Problems flowing from perception are more intractable than most. More often than we’d like to believe, perception is more influential than reality. Long after the actual performance of an organisation has improved, the perception that things are bad can continue to pose problems. When perception combines with stereotyping, it is very difficult to shift the image of an organisation. Here are some solid as rock stereotypes: public servants are inefficient; banks are ripping us off; you can’t trust a political promise; engineers are unimaginative; accountants are dull. Having recognised there are two factors at work in defining an organisation's reputation, the point is not complicated. Perception and reality both influence where you place your emphasis when communicating and how you communicate. 23
  24. 24. When image (perception) is badly tarnished, there is only one sure way to resurrect it: the organisation must improve performance (reality) then communicate the new reality. It is at this point that we move more deeply into the substance of issue management. A note on the grapevine In the participatory organisation, information moves more freely. In the bureaucratic organisation, information flows are impeded and, as a result, informal channels (the grapevine) tend to become the main means of information dissemination. It is commonly claimed that the grapevine (aka rumour mill, bush telegraph, coconut wireless) is reliable. Unfortunately this is rarely the case. For the most part, the grapevine is an unreliable means of distributing and acquiring information. Grapevines carry without discrimination fiction, fantasy, speculation, exaggeration, interpretation, misconstrued analysis and, yes, sometimes even the truth. But you never know for sure what you're getting. Grapevines are open to abuse, they yearn for mischief and should never be regarded as credible. The expression grapevine telegraph was invented in the USA sometime in the late 1840s or early 1850s. It provided a wry comparison between the twisted stems of the grapevine and the straight lines of the then new electric telegraph marching across America. The term became widely known during the American Civil War period, so much so that the phrase permanently entered the standard language. Soldiers used it in the sense of gossip or unreliable rumour.8 8 Taken from Michael Quinion’s ‘World Wide Word’, http://www.quinion.com/words/qa/qa-gra2.htm 24
  25. 25. 7 - Stakeholders The notion of stakeholder is one of the underpinning ideas of issue management. A stakeholder is any group with a direct or indirect interest in the organisation. It is any group that influences how the organisation achieves its objectives. Companies wishing to improve the bottom line or under financial duress frequently cut staff. Not an uncommon issue and clearly one with a large impact on a number of key stakeholders. Of central importance are employees and unions, the latter wielding influence in their own right. The government, especially a Labor government, may also emerge as a key player. So too the Industrial Relations Commission where any disputes may unfold. Customers clearly have an interest, especially if there is a prospect of industrial action, and there is always clear media interest. Two other stakeholders with a keen interest in how things turn out will be shareholders (usually keen to bid up the price of a stock when employees are shown the door) and competing organisations. Stakeholders must be identified, communicated with, listened to, understood and - ultimately - accommodated. We are talking here about establishing and maintaining relationships, the central element of effective communications and effective issues management. THRESHHOLD RULES TO MAINTAIN RELATIONSHIPS • Talk with stakeholders and ensure they’re listening. • Talk in terms stakeholders are able to understand. • Make sure stakeholders talk back to you. • Listen to them and understand what they are saying. 25
  26. 26. Maintaining good stakeholder relationships, however, goes beyond this elementary two-way transaction of information. There is a high level of interaction and inter-reliance between a large number of stakeholders and relationships are, in reality, much more complex. The organisation does not even need to be part of the argument to be dragged into it by stakeholders. In the Illawarra region of New South Wales, the local Trades and Labour Council opposed the closure of the casualty facility at Port Kembla hospital. When the State Health Minister ignored them, the TLC threatened a strike against the steelworks - an innocent bystander. Faced with losing $10 million a day in lost revenue from a shutdown, the steelworks intervened to keep the facility open until eventually the Health Minister changed his mind. A clear analogy we can make is that of the solar system. If the organisation is Planet Earth, locked into its own orbit and hurtling through space, then stakeholders appear as sister planets - travelling their own paths but exercising considerable gravitational pull on each other and on the Earth. To take the analogy a step further, the whole system is moving and interacting with other systems within the galaxy. The total environment in which we find ourselves is dynamic and constantly changing. KEY FEATURES OF STAKEHOLDERS • They influence greatly the climate in which the organisation operates. • They can intervene on matters in which they have an interest. • Their influence on the organisation can be as strong as, and rival, managers own more direct control. • They can collaborate to get their way. The Australian ‘bank bashing’ phenomenon showed how customers, consumers, unionists and politicians can collaborate in a loose and informal alliance with the media to make life 26
  27. 27. difficult for the major retail banks. This was no conspiracy - simply stakeholders behaving interactively in pursuit of their own interests. To the extent that this interaction between stakeholders affects the organisation, there is a need to pre-empt or intervene. This was seen clearly in some of the events which led to the downfall of Australian entrepreneur Alan Bond. Tiny Rowland, a onetime business ally of Alan Bond, was so angered by Bond's share raid on Rowland's Lonrho organisation that he launched a concerted public relations-based attack on the financial soundness of Bond Corp. The subsequent critical media reporting of Bond's affairs undermined investor confidence and created enormous problems for the entrepreneur. The Bond Corp share price and credit rating dropped, the market took flight and bankers got jittery. Bond Corp's subsequent demise would probably have happened without Tiny Rowland but it unlikely that it would have occurred with such speed. Stakeholder groups Stakeholders represent the basic building block of strategic communications but, in reality, it is impossible to communicate effectively with them in their macro formations of government, media, business, community etc. These groups are simply too big to relate to and they are too diverse to allow the fashioning of relevant and focused messages. Upon examination, it is seen that each stakeholder group contains within it many sub- groups. These more specific formations become the focal point of communications. EXAMPLES OF MEDIA SUB-GROUPS • Television • Metropolitan dailies • Radio • Suburban press • Provincial press • Magazines • Trade press • Professional journals 27
  28. 28. Once the sub-groups are defined as in the foregoing example, the next consideration concerns which specific media within the sub-groups to communicate with. Media choice depends very much upon the stakeholder’s distance from us and position in relation to us, the message generators. If the target audience is distant and dispersed, we deploy the mass media (radio, TV, press) or interactive media (Internet). If the audience is closer and less dispersed, the electronic and print media choices tend to be lower tech and cheaper (telephone, memo). If the audience is very close, the options are again different as interpersonal communication comes into play. It is worth reinforcing that we first identify the stakeholder, then define the sub-groups and then select the media to reach them. The stakeholder always comes first; the media choice second. We don't ask questions like: "Who will we send the newsletter to?" Instead, the question becomes: "Which mechanism will best reach our supervisory staff?" There is a hierarchy of targets for mass media messages. The message is designed for the primary target, but there are also subsidiary targets. Say, for example, you circulate a memo on a planned restructuring for which the primary target is staff. An important secondary target is the union, so the memo will clearly need to be designed to avoid plunging you into an industrial dispute. A tertiary target for the memo might be the media, given that it could be leaked. Stakeholders complicate Internet’s future 9 The architecture of the Internet has always been driven by a core group of designers but the form of that group has changed as the number of interested parties has grown. With the success of the Internet has come a proliferation of stakeholders - stakeholders now with an economic as well as an intellectual investment in the network. We now see, in the debates over control of the domain name space and the form of the next generation IP addresses, a struggle to find the next social structure that will guide the Internet in the future. The form of that structure will be harder to find, given the large number of concerned stakeholders. 9 Barry Leiner, A Brief History of the Internet, Vinton Cerf, David Clark, et al, 1998 28
  29. 29. 8 - Issues management Issues management is about caring where you end up. And, therefore, it is about caring which way you go. This requires understanding of the external environment, effective analysis, reliable forecasting and the competency to realise plans. "Cheshire Puss" Alice began, "would you please tell me which way I ought to go from here?" "That depends on where you want to get to," said the cat. "I don't much care where," said Alice. "Then it doesn't matter which way you go," said the cat. - Lewis Carroll, ‘Alice in Wonderland’ The Cheshire cat might have been a philosopher - but it was no strategist. Otherwise the fat feline might have pointed out that it mattered a great deal where Alice went and that, maybe, she should stop and think about the question some more. Nicolo Machiavelli, the arch strategist who flourished 500 years ago, understood this when he wrote: "For knowing afar off the evils that are brewing, they are easily cured. But when they are allowed to grow until everyone can recognise them, there is no longer any remedy to be found." The advice is as relevant today as it was in Machiavelli's time. Pick the issue early, we are advised, and do something about it. Undue delay may lead to failure. What is an issue? In the context of this paper, an issue is any event impacting on - or which may potentially impact on - the performance of an organisation. There is an abundant supply of issues. They may involve economics, environment, health, engineering, international trade, parent-teacher relations, crime, property, politics or any other dimension of human activity. Every organisation faces scores of issues, which unhappily often manifest themselves as win-lose situations. 29
  30. 30. In the 1993 Federal election, each of the two major political parties was confronted with the need to manage a volatile issue. The governing Australian Labor Party had to manage the issue of double- digit unemployment. The Liberal National Party coalition went into the campaign burdened with an unpopular goods and services tax. The poll outcome essentially revolved around which party could minimise its own killer issue while playing up the others. Labor managed the unemployment issue by injecting the goods and services tax with a monster virus. The GST stalked the coalition all the way to polling day, when it lost a close election. When consulting to Westpac a few years ago, I sought senior managers’ assessment of key issues in surveys conducted two years apart. As you can see, the issues in consideration varied considerably over that time. CHANGING PERCEPTIONS OF KEY ISSUES ISSUE 1989 1991 Service quality 55% 40% Overseas expansion 33% n/a Organisational culture 30% 30% Consumerism 27% n/a Profitability 24% 20% Growth 24% 10% Image 21% 60% Product awareness 15% 10% Technological change 15% n/a Leadership 12% 40% Government regulation 12% n/a Quality of investments n/a 40% 30
  31. 31. Morale/self image n/a 30% What is issue management? Issue management is an action-oriented management function that seeks to identify actual, emerging or potential issues that may impact on the organisation and to mobilise and coordinate organisational resources to influence their development. COMPONENTS OF ISSUE MANAGEMENT • Identification, analysis and prioritisation of actual, emerging and potential issues. • Mobilisation and coordination of resources to deal with them. • Active and strategic influence of their development. What is so crucial about adopting a strategic approach to managing issues? Can we not deal with them simply by handling problems as they come along? Perhaps the best answer to this rests in a consideration of what can happen when there is no effective issues management. Take a look at today's newspapers. Many of the stories are the result of issues that have not been managed effectively. The issues that were managed properly probably didn’t make the headlines. Every organisation constantly confronts and needs to manage a range of issues. The liquor industry positions itself as a good corporate citizen. It volunteers to uphold advertising codes, takes a stand on underage drinking, supports government campaigns on drink driving, and focuses on moderation in alcohol use. Result: by acknowledging and dealing with the issues, the industry manages its way through. In the absence of effective communications, many issues will either not be resolved or perceptions that they have not been remedied will linger on long after the reality has changed. 31
  32. 32. Unmanaged issues, whether external or internal, can make life very difficult for an organisation. They can, amongst other things:  generate controversy which may destabilise the organisation  create a hostile climate of opinion which may detract from its image  deflect from planned and rational action as interest groups exert pressure  cause managers to lose focus and impact adversely on employee morale Organisations (and individuals) that do not manage issues are jeopardising control of their own destiny. Planned action gives way to ad hoc reaction. Issues management becomes crisis management. Unresolved issues distract organisations from the main game. They waste time and they waste energy. If not confronted and managed, issues persist. They rarely go away of their own volition. When he became managing director of Westpac, Frank Conroy was determined to revive the bank’s flagging fortunes. Part of his armoury was an upbeat advertising and public relations campaign. A few months into his new appointment, Conroy said Westpac had turned the corner on its financial problems and that the bad news was over. Soon after, the bank announced a record loss. Further reassurances were given. But it seemed each time it was claimed the worst was over there was another crisis: a share float that sank, a huge overseas tax liability, unexpected property writedowns and bloodletting on the board. The constant attempt to talk things up made matters worse, especially as it was perceived there other issues the bank was not addressing. PERCEIVED UNADDRESSED ISSUES • Damaged credibility particularly with customers and investors. • Media cynicism at the bank's evasion and arrogance. • Diminished customer service which kept stories of the bank's errors in the public domain. Being stalked by the issues is not good management. Yet organisations frequently allow themselves to be trapped by issues rather than getting on the front foot and managing them. 32
  33. 33. Issue management is about facing up to the unpalatable, picking the issues early, building the networks which will deliver information and influence, understanding exactly where the opposition is coming from and doing something about it early enough to make a difference. Issue management requires an ability to see other people's points of view and to understand the difference between emotional and intellectual debate. It is also a point of convergence between business management and business communications. It reflects the reality that organisational issues may have a public, political or industrial dimension that may determine the course of events just as much as any decision made by management. Once an organisation is negatively perceived it may be able to extricate itself only with great difficulty. It's clearly best to avoid getting into this position in the first place. Sydney’s monorail only ever had one birthday party and it was an anniversary that should have been allowed to pass unheralded. Just as people were beginning to forget the controversy surrounding construction (environmental outrage, heritage arguments, oil leakage scares, nuns trapped aloft for hours on one of its first trips), the monorail operators decided to celebrate its first year of operation. It was a debacle. At the commemorative news conference a toy monorail lurched around a model railway and broke down for the cameras. TV viewers later witnessed the spectacle of the general manager instructing journalists "not to film that". The real life monorail carrying the media came to a grinding halt halfway around its circuit. The celebration provided a gold- leafed invitation for Citizens Against the Monorail to renew their campaign. And the ABC chipped in with an investigative piece claiming that the monorail was losing $20,000 a week. It was quite a marketing exercise. Issues management involves taking a planned and analytic approach - not ‘gut feel’, not emotional, not subjective, not random, not short term. When you fix the problem, you want it to stay fixed. In the absence of effective communications, many issues will either not be resolved or perceptions that they have not been fixed will linger on long after the reality has changed. Issues management is not a synonym for the so-called ‘public relations fix’. There is, in reality, no such thing as a ‘PR fix’. Not in the medium to long term, anyway. The best PR can do without substantive backing is to offer a temporary repair which will split open next time there is a bit of pressure. There is no such thing as an advertising fix either. There is only a management fix. 33
  34. 34. Early in 1988, in one of the greatest misbegotten ideas in the State's history, then NSW Minister for Natural Resources Janice Crosio plunged into the Bondi surf in a public relations stunt designed to show that the water at Sydney's finest ocean beach was clean. As the truth about Sydney's beach pollution unravelled over succeeding months, the community realised that Sydney's beaches needed more than PR treatment. Issues management is not crisis management, although the two are frequently confused. In fact, issues management is the antithesis of crisis management. It involves an effort to fix problems before they occur, or at least to minimise their impact. It involves picking the issues early enough to do something about them before the crisis descends. A sound issues management approach constantly scans and analyses internal and external environments, seeking telltale signs of emergent difficulty and planning the management of worst case situations. Crisis management is the practice of dealing effectively with issues that have well and truly gone off the rails. How issues are generated At the point when an organisation translates intent into action, or when it broadcasts a decision, its intent becomes tangible. A range of groups may be impacted by the decision and they will react depending upon how they perceive their interests are affected. In human terms, an issue is generated when your intent and a dissonant interest collide. Each day, there are many such moments in the life of an organisation. Most issues are minor enough to be dealt with as they arise, or they can be accommodated within the normal planning and operational framework of a strategic organisation. But, where an organisation is not strategic or where the issue is not discerned or is more volatile than anticipated, the collision can be devastating. GOAL Deflection path ZONE OF REACTION ISSUE EMERGES ZONE OF PRE-EMPTION Intervention path Planned change path STAKEHOLDERS DECISION / ACTION 34
  35. 35. How an issue emerges When an organisation makes a planning decision it sets out on the desired change path leading from the decision to the achievement of a defined goal. When the decision is implemented, subsequent action is evaluated by those stakeholders who believe their interests may be affected or who believe they may be able to influence the decision in their own interest. If a stakeholder assesses it is likely to be affected adversely, or believes it may be able to leverage its position in some way, it will react. It is in this initial exchange of initiation and eraction that an issue is generated. Depending upon the nature and extent of the reaction, the stakeholder may intervene in the change path envisaged by the organisation. A significant intervention can deflect the organisation from its planned pathway. This deflection can effectively undermine the attainment of the defined goal. The practical application of this model, however, lies in understanding that it has two zones. Most organisations wait until an issue has been generated before taking any action. They operate in the zone of reaction, and are price takers in issues management terms. Other organisations try to move to the zone of pre-emption, and are price makers in issues management terms. This means they plan all decisions of consequence in terms of how stakeholders will react and assessing how such reaction may impact on the change path. If the assessment is that deflection may occur, the organisation will act pre-emptively to ensure the issue either does not arise or, if it does, that it can be managed effectively. 35
  36. 36. 9 - Approaches to issues management Zone of reaction No less than three separate categories of response are identifiable in the zone of reaction: passive, defensive and reactive. The passive approach supposes the issue will go away if it is ignored. It won't. It will probably get worse. When random breath testing was proposed for the state of New South Wales, the two major breweries chose not to enter the debate. The result was the imposition of a .05% blood alcohol limit. In South Australia, where local breweries became actively involved in the debate, a higher limit of .08 was set. KEY POINTS OF THE PASSIVE APPROACH INDICATORS • The issue may be identified or it may not be. • There is an assumption that it will go away eventually. • There is no productive action to manage the issue. OUTCOMES • There is an abdication of management responsibility to act and influence. • The issues frequently generate major failure or crisis. A defensive approach is not much better than passivity. Here, the organisation identifies the issue, sits on it until it is raised publicly and then grimly tries to defend itself. This not only relinquishes control of the agenda but the defence is often weak and unconvincing. The former Sydney Water Board's initial response to public outrage about polluted beaches was to say that everything was under control. Public 36
  37. 37. opinion refused to accept that position and eventually there was politicial intervention. Sometimes, when an issue looms, it is possible to temporarily hold back the tide. But the process is usually inelegant and a source of embarrassment. Sydney's major newspapers and most newsagents have a cosy arrangement where newsagents agree to home deliver (an unprofitable activity) in exchange for the granting of exclusive rights to sell in certain areas. This restraint of trade has effectively prevented deregulation of the industry and was investigated by the Australian Competition and Consumer Commission. The ACCC ran into successful resistance from newspaper groups and newsagents' associations, a crude defensive fix to keep out potential competitors. KEY POINTS OF THE DEFENSIVE APPROACH INDICATORS • The issue is usually identified. • It's rarely analysed or prioritised. • It may be discussed but there is no action. OUTCOMES • Control of the agenda is relinquished. • Defensive explanations convey weakness and lack of conviction. By far the most common means of dealing with issues is to adopt a reactive approach. Once again, the issue is often spotted in advance but either the organisation has no appropriate means of dealing with it or there is an inclination to lock it out of sight and hope it will go away. Finally the issue starts running and the organisation is driven from the closet to deal with it. But control of the agenda has been relinquished to others and it is difficult to regain the initiative. Nevertheless, this is how most issues are handled. It's like giving Phar Lap three 37
  38. 38. lengths start. It also means making decisions on the run, often without adequate information or research and with the prospects of success diminished by having to build substance and credibility out of controversy and pressure. The Multifunction Polis seemed like a good idea at the time but the media soon made great capital with the notion of 'Japanese enclaves' and bureaucratic confusion surrounding exactly how the polis would work. A consultancy was paid a million dollars to design a model that nobody liked. Corporations funding the project suspected rivals were trying to seize a competitive advantage. The Commonwealth Government thought it should be in charge. State Governments thought they should. It was decided to give the MFP to Queensland but the Queensland Government didn't own the proffered land. The Japanese wanted Sydney but ended up with a swamp full of noxious chemicals outside Adelaide. In 1999, after ten years of dashed hopes, the MFP was laid to rest. The MFP people later said they decided not to communicate what they were doing because people might misunderstand and that this would create problems for them! KEY POINTS OF THE REACTIVE APPROACH INDICATORS • The issue is usually identified. • It is frequently subject to some analysis. • A reactive plan is often formulated but no pre-emptive action is taken. OUTCOMES • Control of the agenda is relinquished. • Reactive management is often successful but damage has been done where it might have been avoided. 38
  39. 39. Zone of pre-emption Finally, there is the best idea of all - the pre-emptive approach. An organisation is pre- emptive where - having identified the issue - it tries to do something about it before it causes problems. SOME PRE-EMPTIVE MANAGEMENT ACTIONS • Prior consultation with constituencies to achieve an acceptable decision. • Gathering good intelligence about constituency positions. • Varying decisions to accommodate constituency views. • Explaining decisions fully and carefully. By emphasising pre-emption rather than reaction, managers provide a safeguard for the organisation: a distant early warning system. Further, managers ensure that stakeholders benefit from problems being solved before they get out of hand. KEY POINTS OF THE PRE-EMPTIVE APPROACH INDICATORS • The issue is identified, analysed and prioritised. • A strategic plan is formulated. • Pre-emptive action is taken to manage the issue. OUTCOMES • The issue is managed effectively. • It may never actually impact on the organisation. • A win-win situation for the organisation and its stakeholders. 39
  40. 40. There are very few beneficiaries from an issue gone bad - which is pretty much a lose-lose situation. It is often difficult to see pre-emptive issues management at work. Often, the issue simply never surfaces - it has been fixed first. The victors rarely boast (Messrs Tuckey and Moore who engineered John Howard's first downfall as Federal Opposition leader were exceptions). Occasionally, though, you can spot the telltale signs. In many cases of pre-emptive issues management, a particular initiative or "game breaker" can be identified, which provides the key to the resolution of the issue. Such was the case when Telecom (now Telstra) outmanoeuvred its business opponents, the Economics Ministers, the Department of Transport and Communications, the then Overseas Telecommunications Commission, the Trade Practices Commission, the media and just about everybody else in securing the position it wanted in the new telecommunications order. There were two key lessons in what Telecom did. Firstly, it got on the front foot with a politically viable and intellectually robust position. And then it committed itself to the hard work of lobbying. Telecom's pre-emption flowed from recognising that it would have to give away something substantial - its monopoly - in order to secure the position it wanted in the new order. When Kentucky Fried Chicken changed its name to KFC, it decided to place the name change in the context of a range of other planned initiatives: plans to double in size over five years, build 250 new restaurants and employ 7,000 more people. It was an impressive investment in the middle of a recession - including the name change as just one issue among many. KFC's pre-emption was based on an understanding that a name change was not all there was to the game. By placing the name change in the broader context, it was seen correctly as but one change among a raft of changes. Taking a pre-emptive approach allows you to plan your way through issues and to strongly influence, and even determine, their outcome. Mary MacKillop, Australia's first Saint, founded the Sisters of St Joseph in 1867. At the headquarters of the Order in North Sydney, they are turning a ragtag rabble of buildings into a national shrine. But the Order was concerned that its redevelopment of the site might be seen as a grab to turn a quick quid from Mary's beatification. The solution was to ensure an exhaustive program of consultation with the local council and the 40
  41. 41. surrounding neighbourhood before the development application was made. It resulted in the Order's fear being overcome. The Order of St Joseph's pre-emption was to take its case to all the people affected - including the community - before making any formal move. Maybe this was overcautious but there was a reputation of great integrity to protect. The Independent Panel on Intractable Waste was appointed by the Commonwealth, NSW and Victorian Governments to determine what to do with Australia's stockpile of toxic waste given community opposition to the building of a high temperature incinerator. The Panel decided that, before seeking to find a means of disposing of the waste, it should first define precisely the problem for itself and the rest of the community. So the issue was exhaustively reviewed through public consultation, expert hearings, a comprehensive review of documentation and research. The outcome was recognition that the toxic waste issue was not a single problem - it was a range of problems. This was the key that unlocked the door to a successful resolution. A range of problems required a range of solutions and, once on this track, the Panel identified a number of acceptable alternative technologies to deal with the waste. The Independent Panel's pre-emption involved not leaping to a conclusion before everybody understood the problem and the various options for resolving it. The panel took the community along with it as it tracked through a public enactment of the scientific method in a logical, step by step way. The point about each of these interventions is that, irrespective of how obvious the strategy may seem in retrospect, it was deliberate, pre-emptive action that secured success. This action was planned, not random. And it was planned in a thoughtful and structured way. Being pre-emptive allows you to plan your way through issues and to strongly influence, and often determine, their outcome. 41
  42. 42. 10 - The practice of issues management 1 - Assign responsibility for forecasting issues Assigning responsibility for forecasting and assessing issues does not mean centralised control but certainly there has to be a uniformity of approach and a good exchange of information across the organisation. Issue forecasting is the research part of issues management. In forecasting issues an organisation scans the environment and uses collected information to determine how it and its stakeholders might react to a future event, trend or controversy. Research by Cranfield School of Management, a business school in the UK, revealed companies that addressed planning and forecasting issues consistently outperform sector averages. These companies had an average share price growth of 116% over three years (101% sector average), 2 - Develop monitoring & analysis skills Having developed skills in identifying, monitoring and analysing emergent issues, decisions need to be made about how to deal with them. This applies not just to current issues but also to emergent or over-the-horizon possibilities. Most problems are foreseeable to some extent and - even if specific issues can't be pinpointed - experience will suggest which parts of the organisation are most vulnerable and which stakeholders most likely to pose problems. A wide network of contacts, a good knowledge of the organisation's strengths and weaknesses, and a sensitivity to the climate of opinion in which the organisation is operating, are all helpful in detecting pertinent issues. There are training programs available in detecting and managing issues – such as the well- proven program offered by Jackson Wells Morris. 42
  43. 43. HOW TO BRAINSTORM ISSUES • Convene a suitable group of people. • Brief the group on the process (suspend judgement, keep an open mind, let yourself go, all ideas accepted, build on others' ideas). • Record ideas so everyone can see them. • Assemble the issues into categories. • Ask the group to prioritise the issue categories. • Refer the issues for analysis and strategy development. 3 - Analyse the issues Gather together relevant background information including statistical, documentary and other data to table all there is to know about the key issues and their context. HOW TO ANALYSE AN ISSUE • Compile a history and background of issue. • Identify the internal and external stakeholders. • Assess influence of corporate policy on issue. • Review research conducted into issue. • Gather statistics that might help clarify issue. • Define positives and negatives of issue. • Analyse threats and opportunities around issue. • Prepare forecast of best and worst case outcomes. • Appoint manager responsible for dealing with issue. 43
  44. 44. 4 - Create a data base The effective management of issues requires the maintenance of a comprehensive and systematised body of information that can ‘stack and track’ the main issues facing the organisation. A continually updated database will keep issues under review. Issues can be prioritised according to their impact and urgency, with high impact/high urgency issues requiring a crisis management response. This chart depicts possible management responses to issues of varying impact and urgency. Issue has high impact Issue has high impact Issue has high impact & low urgency & moderate urgency & high urgency Response: Response: Action Response: Crisis Contingency planning planning planning & execution Issue has moderate Issue has moderate Issue has moderate impact & low urgency impact & moderate impact & high urgency urgency Response: Document Response: Action in database & keep Response: planning under review Contingency planning Issue has low impact & Issue has low impact & Issue has low impact & low urgency moderate urgency high urgency Response: Document Response: Document Response: in database & accept in database & keep Contingency planning risk under review Issue prioritisation chart 5 - Develop an efficient system of notification A good referral system will ensure the Board, chief executive and senior managers are alerted immediately new issues or major communication problems arise. Action taken may vary from a simple media release or internal memo to more complex programs of activity to remedy a matter having serious implications for the organisation. 44
  45. 45. 6 - Deploy resources to deal effectively with the issues These may include:  people to plan, organise and coordinate a campaign  budget to employ expertise, produce publications, buy space for advocacy ads etc  time taken to explain to employees, customers or other stakeholders what is going on; time taken to listen to what the involved stakeholders have to say 7 - Establish effective contacts with key stakeholders Formal networks of reporting, consultation, coordination and advice need to be in place. These must be supplemented by the development of widely dispersed informal networks; not merely to provide social or professional opportunities but to gather useful information. Issues cannot be properly managed unless there is a profusion of such networks and some assurance that the information moving through them actually ends up somewhere useful. 8 - Be aware that decisions may have inadvertent impacts Most managers have the capacity to take actions that may become matters of public comment and controversy. In practical terms, this not only means making good decisions but communicating them effectively, warning if adverse public reaction is anticipated and ensuring the Minister and managers are equipped to deal with this. 9 - Assess the public impact The public impact of an action must be a consideration when decisions of importance are made - and thinking through how they should be communicated. Among the important questions are: Who will be affected? What is their likely reaction? What affect will this have on the organisation? What are the political implications? How can we optimise our position? Sometimes these considerations will affect the substance of the decision itself. More frequently, they will affect the way in which the decision is implemented. 45
  46. 46. 10 -Assure a good inwards flow of information Issues management is not only concerned to ensure a good and reliable outward flow of information. It is crucial, also, that there be a reciprocal flow into and around the organisation. While none of us should be guided wholly by public opinion or the views of pressure groups, such attitudes must be taken into account when decisions are being made. There must be a continuing awareness of the position of key constituencies. 11 - Disseminate messages to create the desired response This also means being sensitive to the impact of words; to ensuring you say what you mean - and mean what you say; and to making sure that what you say today won't come back to haunt you in the future. 12 - Build rapport with key groups The more hostile the group you are dealing with, the greater need for personal (face-to-face) communication. 13 - Accept responsibility for error Never try to defend the indefensible. If there has been an error or negligence, providing litigation is not pending, a full admission should be made together with an announcement outlining what corrective measures are being taken. Toughing things out is not a plausible option, especially for organisations with a clear accountability to the public or to shareholders. "Honesty is the best policy" certainly applies to issues management. As damaging as it may seem to have to admit error, it is nowhere near as damaging as it is to be caught out later. Adopting a policy of candour with the media is vital. This does not mean that the press have the right to know everything. But it does mean that they have the right not to be deceived. 46
  47. 47. 14 - Explain and defend the organisation publicly All organisations must expect to be criticised from time to time and must react maturely to this. This means not lashing out intemperately. If criticism is not factually based or flows from misunderstanding, it should be addressed directly and dispassionately. 15 - Provide media training It's important that management communicate competently in public. There is a need to conduct interviews so key messages are communicated. Formal media training, anything from a few hours to regular refreshers, and even training in public speaking may be required. Depending upon the issues, rehearsals may also be required. 16 - Build media relations The news media will be one of the most important conduits for delivering information. It is important that the organisational management establish a good network in the local media: finding out who they are, dealing with them on a personal basis and making sure they know you and your key managers and that they understand what your organisation does and what its major programs are. Regular press briefings, even when there is no major announcement or story, are a good idea. Briefings should include media owners and editors not just working journalists. Conducts these meetings when your organisation is not in crisis or beset by problems to present information in a balanced non-controversial context. Make sure the media have contact numbers and that they are re aware they can contact you or your spokespeople any time. Plan an approach for dealing with the media in crisis situations. 17 - Develop communications materials Depending upon the level of previous communications, the community may have only a vague idea of exactly what your organisation does. This is where materials may be important: brochures, handbooks, fact sheets, internal talking points for managers, videos, kids' workbooks, posters, stickers, badges, bookmarks, etc. 47

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