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W2O Group Function Optimization 2014 report

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Over the course of our existence, W2O Group has been working with global organizations, specifically Chief Communications Officers (CCOs), to better organize, structure and fully develop corporate communications as a function, a system, and a set of capabilities to better align with strategic priorities. The report is a compilation of lessons learned, insights gleaned and recommendations for companies of all sizes.

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W2O Group Function Optimization 2014 report

  1. 1. A Report on Function Optimization for Corporate Communications Page 1 Are You Built for the Future… Or Solving Yesterday’s Reality? Creating Value for a Social and Digital Age
  2. 2. Prologue As a function, Corporate Communications plays a vital role in influencing and maintaining organizational health, setting priorities, establishing a clear direction for strategy execution, managing reputational efficacy, impacting decision-making, telling the business story and directing competitive positioning. Under this construct, Corporate Communications’ efforts drive demand for products and services, attract and retain talent, build comprehension around purpose, mission, and values enhancing financial valuation, softening barriers to market entry, building critical relationship capital, easing governmental and NGO relations, and nurturing and growing stakeholder trust. Consequently, the function spans an entire organization while simultaneously being tasked with bridging various agendas, priorities and egos between and among other functions. This can be a daunting task for any Corporate Communication function, whether housed in a large, medium or small organization. The Business Truth Business conditions in the global marketplace are continually changing. Competition is more intense, consolidation continues, media is fragmenting, customer skepticism is rising, and information dissemination is happening faster than ever. Against this backdrop, an individual’s belief in a company or institution continues to decline. The results of recent research are indicative of the tumultuous times, with close to 60 percent of the surveyed global audience admitting that they trust companies less now than they did in 2012. Corporations’ ability to present a sustainable, meaningful, and authentic corporate reputation to consumers, customers, employees, shareholders, and other key stakeholders is critical. In the fiercely competitive global marketplace, marketing products, services, or consumer facing brands alone are insufficient. Stakeholders, particularly customers and employees, want and need to know about the company behind the brands, including how they connect to the greater whole. Organizations need to focus on building stronger relationships with individual groups and positioning messages to cater to their specific needs and/or interests. For example, information on a company’s brand strategy can’t be sent out as a message to all employees, it needs to be strategically formulated to pertain to individual groups (e.g., line managers vs. factory-floor workers). Page 2 Evaluating your Function’s Positioning: Company Corporate Communications on the continuum
  3. 3. Companies must be more transparent and develop new sources of involvement due to increasingly global overcrowded markets. A formal, disciplined corporate branding effort can help organizations discover, develop and express distinctiveness through consistent relationships with stakeholders. One way to increase involvement is to utilize the plethora of media and new platforms. Customers and employees are two of the most important influencers for any organization. If employees are to support the company’s vision and values, they need to understand their importance to the corporation in order to translate it into supportive attitudes, behaviors, and positive word of mouth. Employees want to work for companies that “promote trust,” “empower,” and “inspire pride.” That said, Corporate Communications should manage and communicate the company’s brand and reputation carefully. Companies pursuing corporate brand strategies are much more dependent on their employees delivering their brand promises than companies engaged in arms-length product branding strategies. Organizations that are able to understand and orchestrate their employees will differentiate themselves from mediocre firms to high performing firms. From a customer standpoint, corporate reputation is critical to believing in and interacting with products and services at a brand or business level. It signifies that the company behind the brand is doing the right things from an ethical, moral and operating standpoint. Given the social nature of business, communication should be tailored to reach individuals, not masses. But a number of factors stand in the way, not the least of which is public opinion. Public opinion shaped by the conversations being conducted on-line pose a challenge to discerning reputation and determining the precise communications and organizational efforts needed to strengthen engagement. Where Do I Start? Currently, Corporate Communications Functions in many organizations are over-exerted with unnecessary roles and responsibilities. This creates dissatisfaction and lack of productivity, which negatively impacts overall return on investment (ROI) and diminishes the importance of its value in the eyes of leadership. It’s what leads Chief Communications Officers (CCOs) to ask “Where do I start?” in architecting a new model. Page 3 Critical Path for Company Corporate Communications
  4. 4. Against this backdrop, W2O Group over the last several years has conducted a number of Function Optimization initiatives for organizations - large and small - around the globe working with CCOs to address and answer that very question. Interestingly, we have found that throughout our work a number of important and consistent themes have surfaced regarding how Corporate Communications Functions can best optimize their efforts to deliver stronger ROI to their organizations. This report is a summary of that work. Finding a New Center of Gravity As noted, W2O Group has a wealth of experience helping CCOs modernize their Corporate Communications Function, spanning clients of varying size and industry, including healthcare/pharmaceutical, financial services/banking and consumer technology. This experience has led to the development of several key recommendations and best practices for corporate communications to introduce new technologies, improve strategic thinking and ultimately boost ROI. In assessing Corporate Communications Functions and the ability to provide long-term value to the business a number of lessons and insights emerge. However, one overarching question permeates all of these assignments: How Do You Fit? The major truth to better aligning Corporate Communications with Company Performance lies in the ability to ensure that corporate communications functions are well-defined internally, specifically as it relates to realizing their mission has organizational connectors. Page 4 Methodology
  5. 5. All organizations should constantly strive to make Corporate Communications a fully realized and integrated function. This can be difficult to achieve as it demands relatively universal organizational support. The hallmark of a successful Corporate Communications Function is the transition of the team from simply occupying a “serving” role to that of “leading.” This entails having a say in wider organizational decision-making and the clout to dictate strategy. To accomplish this, corporate communications must work to become a proactive catalyst, assert their own priorities and leverage new technologies (such as analytics) to inform decisions. When Corporate Communications embrace these roles, there is the potential for substantial ROI, a more engaged workforce and a leaner and more dynamic function. Under this approach, corporate communications must have a deep understanding of employee and leadership opinion, brand narrative, current strategy and a vision for the future. Strategic Directive Is the Corporate Communications Function designed to: • Communicate on behalf of the organization? Or, • to strengthen the organization’s capability to communicate? The answer places emphasis on the hierarchy of factors considered essential to optimization and ultimate value. Lessons, Insights and Considerations What Are You Chasing? The real question for CCOs to answer in evaluating the potential and capabilities of their function is: “What are you chasing?” For organizational communications professionals, the answer becomes a critical element in securing a viable solution to myriad workforce realities. The subtle but deadly outcome for not determining the specific goal or state you are aiming to accomplish is chasing symptoms which give the illusion of achievement through activity. Here are some simple steps we uncovered during assessments that avoid that fate: In the end, ‘what you are chasing?’ is about ensuring that the means lead you to the end result. So, before you finalize your next program ask yourself exactly what it is you’re chasing….you may be surprised! Page 5 Start with the Strategy If an organization’s corporate communications strategy and function is not directed toward the business strategy then it is not of any value period! Specificity rules A great method to test what you are chasing is to “run the play.” What this means is that after you execute your program what will happen? Increase sales? Increase purchase consideration? Perform a new task? The point being that the strategy and tactics developed must elicit specific outcomes or your approach needs to be rethought. Connectivity ensures success It’s also important to realize that communications in and of itself as a discipline, technique or system cannot be successful unless and until it’s linked to other components of the organization’s management model. Precision is realism Precision is at the heart of addressing the ultimate goal or cause of your effort. Analytics now afford the opportunity to focus, clearly comprehending the priority at hand and establishing a reality check. People (Behavior), Process, Perception Bottom-line: what you are chasing tends to fall in one of these three areas. Either you’re trying to change behavior (purchase a product, gain a new skill), improve a process (streamline customer service), or perception (reputation, brand).
  6. 6. A Different Voice; A New Type of Value First and foremost, the most telling outcome associated with a Function Optimization effort for a Corporate Communications group is the realization that the CCO must adopt a new voice both inside and outside the organization. This “new” voice consists of three levels: • 1) Insights on employee, customer and influencer behavior ( in addition to media) • 2) Comprehension of how brands, products, policies and leaders are being discussed and shaped • 3) Connection with story drivers inside the company to convey holistic solutions and a clear narrative In this regard, the CCO’s value is wrapped around a directional view of the organization as opposed to a current state perspective reinforced by tactical activities. Shifting Mindset: From Reactive to Proactive For the most part, companies we’ve worked with share a fundamental reality with regard to how they think, how they are built and what they deliver. Corporate Communications Functions are currently built to be reactive. Many deploy resources based on what the business is asking them to do. This over-extends the functions and inhibits it from realizing its full potential. In order to be effective and drive ROI, Corporate Communications will need to be proactive in the future. This means eliminating a lot of work that functions are currently doing. For example, the old mission of Corporate Communications as “communicating for the company”, should be adjusted to “ensuring the company communicates effectively.” As a whole, this idea of moving from “serving” to “leading” crosses both internal and external communications. It places emphasis on training, governance, and selection of actions from which to align resources. Being proactive means the Corporate Communications agenda and priorities mirror the businesses and thus are measured in the same manner. Being proactive means consistently carving out new opportunities and pushing the narrative to better reflect marketplace and internal whitespace. Being proactive means discarding non-essential activities to free up time to think, innovate and plan. Moving from a Coverage Model to an Influence Model Corporate Communications Functions have operated under a Coverage model throughout their entire existence focusing on media relations and one-way conversations to generate interest and coverage. That model is being replaced by an Influence model -- identifying and cultivating influence in a social and digital space including leveraging employees as brand ambassadors and discovering outside influencers who are impacting your company, brand, product, issue or leader. The Influence model places on premium on the power of conversations and trusted voices, emerging communities of interest, networks and on-going discussion. The Influence model changes audiences to communities, coverage to characterization, content to context, and information to platforms and visual interpretation. Page 6
  7. 7. “It would be helpful to understand the impact of all the communications we’re doing…what we should continue…stop doing…start doing.” – CEO at a top financial institution Establishing metrics and outcomes that indicate progress and success while developing an approach to ongoing measurement is absolutely essential. It demonstrates hard, empirical information and allows for strategy to be adjusted on a regular basis. Developing a standard practice of measurement can help corporate communications discover areas of improvement/concern and showcase its successes. Strategy and Environment Determines Structure “We were built for a different reality and it was a subtle yet powerful barrier to success.” – CCO at a global manufacturer and marketer of industrial products For all industries, corporate reputation is now based on trust and transparency as much as leadership and share-price performance. To ensure that the Corporate Communication Function is operating effectively and efficiently, it is critical that CCOs compare/contrast the current business strategy and the current business environment. As such, CCOs need to establish communication and process governance procedures to improve coordination and integration; decide on a new structure for the Corporate Communications team; train, recruit for and staff new roles; an identify new Key performance metrics (KPIs). The “right” or “best-in-class” structure flows directly from Company’s business strategy requirements, and is only one element of an operating model, system or value proposition for any Corporate Communications function. Other elements that must be considered, balanced and aligned in choosing the “right” Corporate Communications structure, operating model and value proposition are: Page 7 • Existing and desired staff roles, skills and competencies • Leadership ability among senior or key staff • Integration and alignment with internal customer needs, operational priorities and the business environment • Management practices and processes of the function • Culture of the organization • Informal and formal ways of working within and outside the function • Budgets for external or agency support Value vs. Non-Value Work Change in Corporate Communications will not happen without senior leader support. The CEOs of “best-in-class” companies are seen as fully embracing the corporate communication function. At these companies, communication professionals are involved in business decisions, planning and the function tends to report directly to CEO or senior leadership. They are viewed as the key providers of stakeholder perspectives and as counselors on corporate reputation management. This is all part of a communications savvy culture, or one that understands how communications functions offer value to the bottom-line or ROI. This is a complete shift in viewing corporate communications as a “cost center” towards a function worthy of constant investment. In achieving such a position within the Leadership “inner sanctum,” a complete and thorough analysis of the various work products produced by the function must be conducted (see graphic below). For work deemed a non-value add but still important to the company, a new model needs to be developed whereby Corporate Communications trains and provides the methods – toolkits, templates – to the proper people or area within the company that will now be responsible for the activity.
  8. 8. Precision: Employing Analytics to generate Insight and drive Action The best Corporate Communications functions address issues by getting ahead of them to more effectively manage the discourse. Having pre-existing plans which enable an organization too quickly and effectively address emerging issues by bringing all the right people to the table can eliminate crises and tensions. Additionally, companies that are seen as truly successful in their communications are always top-of-mind, remaining present in the media, influence, and constituency landscape in both good times and in bad. How can a function ensure it does all of this? Employing analytics internally and externally to see trends/issues forming among your influence networks and among communities of interest is essential to being proactive and precise in all communications and decision-making. Managing the Future with the Mindset of the Past: Overcoming the Skills Deficit The business environment is asking communicators to operate in new roles and in new ways – without clear roles and training to support the challenge, employees will provide status quo execution. Committed company Corporate Communications staff (despite the high volume of work) benefit from the immersion and information-sharing on best practices in communications including cross-training. Core existing skill sets among Corporate Communicators are writing, execution, research, internal client management and strategic thinking/planning. New strategic skill sets and roles are needed to reposition the function to deliver on business goals and support business continuity. These include social and digital immersion; analytics and data gathering; content modeling; channel and platform optimization; influence monitoring and outreach. Also important is possessing a highly valuable “strategic integrator” skill set and institutional knowledge allowing projects and information to flow easily through the organization leading to quicker absorption and stronger, sustainable business results. Page 8 Core Process Improvement Evaluating Work: High/Low Value and Volume
  9. 9. It’s all about the Story: Write a Blockbuster Script “Where we struggle is in defining exactly what the company strategy means to the larger employee base.” – HR Executive at a top pharmaceutical company Corporate communications must create a company master narrative that tells a cohesive story of the company’s past, present and future, including supporting messages and proof points. Best-in-class companies are seen as having an established corporate image and position, providing the “framework” around which other communications are built. When developing the narrative, analytics can be extremely useful. They can provide insights that may not have been previous uncovered, identify overall sentiment and track perceptions of how different function view themselves.. Once complete, corporate communications must strive to immerse and equip key leaders, marketers and communicators to incorporate the new narrative and messaging into existing communications and interactions. Spending Time on Ourselves: Shaping Culture In many of the organizations we’ve partnered with on Function Optimization Assessments and Implementations, the overall Employee Value Proposition (EVP) appeared weak and incomplete (Why work here? What’s in it for me?). Such weakness tends to manifest itself in the organization’s culture. If EVP is made up of “My Company, My Job, My Deal”, companies need to build out “My Deal” messages and plan. An integrated strategy for the company that addresses needs of broad employee base must be part of the Function’s new set of priorities. In this regard, employee insights are needed to put employee needs, preferences and participation at the center of a new effort. Page 9 Culture: Strengthen leadership and internal communications
  10. 10. Extend Reach, Influence among Colleagues, Peers, Partners Corporate Communications can’t nor should it attempt to control all the of the communications channels of an organization. In order to ease the burden, Corporate Communications Functions lead by CCOs must reach out to internal colleagues and peers in other functions and recast outside partners/agencies with much more specific areas of responsibilities, based on expertise. Outside vendors/agencies should provide the function with additional skills and staff resources to bring greater value to organization without adding full-time staff. Also, consider using them to train staff in relevant areas. When doing so, prioritizing which skill sets are critical can help define the training needed. Internally, functions such as HR, IT, Customer Service, Marketing, Legal, and Sales provide the necessary alignment and collaboration that optimizes each individual group’s role in addressing and solving organizational issues (retention, recruitment, productivity, engagement, revenue, share) while simultaneously maximizing the total contribution of everyone’s efforts. Technology as Driver Technology pervades our lives and best-in-class Corporate Communications Functions understand that that technology must lead the way in creating new solutions - forums or channels (or enhance existing ones), measures or monitoring, statistics, etc. - to support the entire set of goals, vision, strategy and communications. When implementing new technology, Corporate Communication must work closely with IT to articulate needs, realities, expectations, and most of all, vision. To that end, articulate business requirements upfront and often to ensure tools and infrastructure work together to build a roadmap for implementation: scope, timing, cost and ROI. Fail Fast; Learn Faster “There is literally no time today to wait to determine success. Our approach is to try new things, set realistic goals, and either continue with it or change course quickly.” – CCO at a leading consumer technology company The business environment is essentially a real-life and real-time laboratory. Technology is changing the way people interact with one another, establishing new sets of expectations. Different communities prefer different combinations of push and pull communications. Listening to what people want can lead to greater insight into content consumption and preferences helping you become more effective. This is grounded in the belief that the faster we can adapt and learn from what we do, changing techniques for better results will identify new and better preferences. A New Value Proposition Implication: Corporate Communications must evolve to address the new realities of the organization’s business, reputation management, marketing and communications in order to be an accepted and trusted advisor and resource Page 10 Optimizing the Function • What is the current/desired value proposition for the function? • Do employees in the function have the same perceptions about the function’s value that internal customers do? • What are hidden barriers of the current structure? How much do we understand what’s working well and what is not? • How does the external environment challenge the current structure? • In what other ways should professionals in the function be integrated with non-communications areas of the business? • What is the current funding model? Is there a need to reconsider it to tap into other budgets and functions that have a stake in effective communications and reputation outcomes? • Are we measuring and reporting results of the efforts in a way that supports our value proposition?
  11. 11. To get there, several factors are to be considered: • Environment: Comprehending the competitive and customer environment you are operating in • Communities and Stakeholders: Company shareholders, customers, community and employees are adjusting to the “new normal” needing more real-time, high-touch communications • Organization: respecting the management model and organizational structure • Positioning: What are your market positioning and communications challenges? What is your trajectory for growth/loss? • Operations: Balancing roles that have changed and those that have not • Rapid Change: Ongoing change in the market forces the need for new communication practices and procedures, highlighting areas for continuous improvement Page 11 Summation: A New Value Proposition
  12. 12. About W2O Group Founded and led by Chairman and CEO Jim Weiss, W2O Group is an independent, fast growing network of complementary marketing, communications, digital and content development firms - WCG, tWist, BrewLife and Nextworks - focused on integrated business solutions to drive change and growth through “pragmatic disruption” for the world’s leading brands and organizations. W2O Group firms employ proprietary analytics and software models, approaches and methodologies to strengthen communications, marketing and digital initiatives to achieve business results. W2O Group firms serve clients through a network of offices in San Francisco, New York, Austin, Los Angeles, Minneapolis, Atlanta, Boston, Chicago and London. For more information on W2O, please visit www.w2ogroup.com. Follow W2O Group on Twitter Find W2O Group on Facebook Read our CommonSense Blog Page 12 About Function Optimization Function Optimization is a proprietary methodology designed to: • Determine opportunities for optimizing the operations and staffing for Corporate Communications functions (or areas within its purview – Internal, Media, Gov’t Affairs, Marketing) • Identify and characterize value-add, non value-add activities along with a plan for handling appropriately • Determine alignment with business strategy and KPIs • Frame a system for project initiation against strategic goals • Encourage collaboration and integration both within team and with business partners • Identify current and future skills necessary to provide value-added counsel and services • Develop a future staffing and resource recommendation, including guidance on necessary skill sets, competencies and resource allocations for Corporate Communications to meet business objectives • Provide data, as needed, to inform any cost-benefit analysis or financial justification for recommendations # # # For more information, please contact Gary Grates at ggrates@w2ogroup.com or 212-257-6994.

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