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The Narrative Gap - Does British Business Feel Misunderstood?

Analysis of the frustrations experienced by British businesses in telling their corporate story

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The Narrative Gap - Does British Business Feel Misunderstood?

  1. 1. Does British business feel misunderstood?
  2. 2. What is the Narrative Gap?  Business leaders often claim their organisations are not properly understood  But how deep is the problem?  What is the disparity between the story businesses want to tell and the story which is heard… or simply not heard at all? How wide is the Narrative Gap?
  3. 3. The Narrative Gap study  Communications consultancy Powerscourt set out to understand how misunderstood corporate Britain believes itself to be  Interviews were conducted with 100 ExCo members in FTSE 350 businesses and privately held businesses with over £100m turnover  The fieldwork was conducted by Kantar Millward Brown in February 2018
  4. 4. The seven dimensions of understanding Your equity growth story The features & benefits of your products & servicesYour employer value proposition Your contribution to society  We began by identifying the elements which are found in most corporate narratives  We call them the seven dimensions of understanding  This is what we found…
  5. 5. Listed entities believe themselves to be poorly understood  The values in the chart represent the proportion of respondents who said their organisations are VERY WELL UNDERSTOOD by the relevant audience(s)  Even the best understood dimension is only 35 per cent while some of the most business-critical dimensions, including EQUITY GROWTH STORY and STRENGTHS OF OPERATING MODEL, are extremely low
  6. 6. It’s a similar story for privately held businesses Your equity growth story The features & benefits of your products & servicesYour employer value proposition Your contribution to society  The overall average score for listed and privately held businesses is 24 per cent  In other words, BRITISH BUSINESS BELIEVES ITSELF TO BE MISUNDERSTOOD MOST OF THE TIME  Superficially, it appears that the narrative gap is more of a narrative chasm Privately held businesses
  7. 7.  There is no single overriding factor but the most frequently cited cause of poor understanding is complexity of the operating environment. This was cited by 26 per cent of our sample So what are the causes of misunderstanding?
  8. 8.  Over half of the companies we spoke to believe the quality of their people is the differentiator which is most misunderstood Human capital is the most misunderstood differentiator
  9. 9.  Over half of the respondents say they have successfully taken a lead on an industry issue in order to give themselves a platform to achieve better understanding Taking a lead helps companies tell their story more effectively
  10. 10.  The values on the chart represent the proportions of each audience with very good levels of understanding, according to our respondents. Analysts and principal shareholders are perceived to be the best informed audiences, but scores are surprisingly low No audience is perceived to have high levels of understanding
  11. 11.  Businesses have a moderate risk appetite when it comes to external communication, but a significant minority reports a very high appetite Willingness to take a risk in communications in modest
  12. 12.  Almost six in ten businesses have changed corporate policies and practices in the past year in order to reduce reputational risk and improve their corporate narrative  Corporate governance and Quality Assurance/Quality Control were the two biggest areas where policies had changed We asked if businesses have changed their policies to improve reputation Changed corporate policies Not changed corporate policies Don’t know
  13. 13. Changes made to policies have a positive effect on reputation  Six in ten businesses that had made changes to corporate policies said it had a positive effect on reputation
  14. 14. Do businesses feel fairly treated by the media, or foully misunderstood?  Only 8 per cent of listed entities and 4 per cent of privately held businesses describe their treatment at the hands of the media as very unfair (bottom two scores combined), while 13 per cent and 26 per cent respectively said it was very fair (top two scores combined)
  15. 15. In summary  Businesses do not feel well understood – the narrative gap is more of a narrative chasm  Complexity the biggest hurdle to understanding  Equity growth story & operating model are the two least well understood dimensions  Human capital is the most misunderstood differentiator  Taking lead on industry issues helps improve understanding  Corporate Britain may be a little too timid in its approach to communication
  16. 16. So what does the Narrative Gap look like in your organisation?  Powerscourt and Kantar Millward Brown have developed a methodology to help you find out  For more information contact : 020 7250 1446