Business is under attack: It’s time for companies to stand up for themselves
THERE was a time when corporate communication was straightforward. The chief audiences were shareholders and analysts. There was a well-established way of reaching them through the financial media.
The combination of the financial crisis and technological change has created a new landscape. The crisis brought into sharp relief the negative externalities that business can create. The audiences that care about business are now much broader and more hostile. Technology allows negative sentiment to multiply quickly. The days of controlling a message through good relationships with a few financial journalists have gone.
As such, chief executives need to fundamentally change their approach to communications. Business reputation matters more than ever, but reputation in this new climate is harder to control.
Portland teamed up with ComRes to look at sentiment to business. Size matters: 64 per cent of people trust businesses with fewer than 50 employees, but only 36 per cent say the same about firms with over 1,000 employees. A strong majority think that trust in business has decreased in the last few years: 67 per cent of people think so, and 72 per cent of MPs agree.
This has led to politicians adopting a more critical tone. In the past, protesters like the rock-throwing turtles in Seattle or Reclaim the Streets in London were oddities. Now, national politicians win applause from attacks on business that would have been unthinkable a few years ago, and executives are grilled by MPs in an extraordinarily hostile and accusatory tone.
Our research also offers some clues as to how companies can cope in this new world. The starting point is that businesses’ actions are judged according to their reputations, not the other way round.
Politicians know this. In the depths of Opposition, the Conservative Party found that focus groups would support a policy in principle, but baulk when told it was a Tory policy. Voters were judging policies based on which party promoted them, not judging parties on their policies.
In the same way, audiences discount issues for one business that would have plunged another into crisis. Whether businesses survive controversial episodes is not a matter of dumb luck – it depends on whether they are in control of their reputation.
People are better disposed towards their employers, and those of their friends and family, than to business in general. Closeness matters – and social media is word of mouth, magnified. A company without a social media strategy does not have a communications strategy.
The most successful brands stand for an ideal beyond their products or services. Clearly articulating that ideal to multiple audiences is key to building a reputation. Chief executives need to be able to do that, rather than rely on just communicating to shareholders on results day.
Only when businesses have changed the way they communicate will they rebuild reputations and change attitudes. That is the key to convincing politicians that bashing business through rhetoric or ill thought through interventions is not a viable political strategy. It’s time for business to stand up for itself.
Tim Allan is the founder of Portland.
http://www.portland-communications.com/bringingbusinesshome