Archive for June 2007
In research I have been undertaking, two of the topics were the management of reputation and the management of relationships. One of my respondents, a top corporate communications person in a multinational firm, responded with a very good question – “Who is the owner of the relationship: the PR professional or the business line?” Acknowledging one of the favoured models in public relations is “PR = relationship management” (Bruning & Ledingham), he has raised the very challenging question of how can this model be operationalised.
Although public relations academics and practitioners are staking out this ground as their own, the reality in the maze of relationships between an organisation and its stakeholders is that they may not be able to control or even substantially influence this field. For example, they could do so in the relationships between the organisation and government and with communities in general but it is almost impossible to “manage” the relationship between a sales force and its customers, purchasing staff and suppliers, and the Chief Financial Officer and bankers. These are crucial relationships to the performance of the organisation and are “owned” by those who are responsible for, in this case, sales, purchasing and finance.
In a recent Harvard Business Review* paper on reputational risk, Eccles, Newquist and Schatz propose that one person is put in charge of reputation in each organisation. Although 84% of respondents to an Economist Intelligence Unit survey in 2005 said it is the CEO’s job, the authors say, “the CEO does not have time to manage the ongoing process of coordinating all the activities that affect operational risk [including reputational risk]” (p.110).
This person will be responsible for “assessing reputation, evaluating reality, identifying and closing gaps, and monitoring changing beliefs and expectations” (p.114). For this task, they suggest the COO, CFO or those with responsibility for risk management, strategic planning or internal audit as “they have the credibility and control some of the necessary resources to do the job” (p.114).
But what of the claims of PR/corporate communication people? “In general, those whose existing responsibilities pose potential conflicts probably shouldn’t be chosen. People holding top “spin” jobs such as the heads of marketing and corporate communications, fall into this category” (p.114).
What strange logic. Why would the COO, CFO and functional managers not have “conflicts” which affect their bonuses and position within the organisation or their ability to take an objective view? As the heads of marketing and, especially, corporate communications are in contact with the widest range of stakeholders unlike the inward-facing senior management staff, surely they are best suited to the task of monitoring reputation and coordinating responses. They usually have a greater set of research skills than operations and financial senior management, too.
What’s your view on this model of the single person to monitor and manage reputation and organisational relationships? Can it be operationalised or is it a coordination task? If it isn’t the CEO, then who should be responsible?
* Eccles, RG, Newquist, SC and Schatz, R (2007) Reputation and its risks, Harvard Business Review, February, pp104-114
The debate over ROI and accountability has taken an interesting turn in the Advertising column in this week’s Media Guardian. The advertising grandee Simon Marquis reviewed a new analysis of advertising effectiveness, Marketing in the Era of Accountability, written by Les Binet and Peter Field, and published by the Institute of Practitioners in Advertising.
The focus is wholly on marketing and advertising but has interesting messages for those involved in PR and related marcoms activities. Most notably, it is about how ROI and accountability have not necessarily improved advertising effectiveness.
Marquis says: “The obsession with accountability has, the IPA says, actually prompted marketers to pick on single things that can be easily measured. In truth, effectiveness is not predicted by any one metric but by a whole range of them. As we have long suspected, success in advertising ain’t that simple.
And that is the case with PR and marcoms, too. The search for the ‘silver bullet’ of a simple, single metric or a financially-based construct called ROI doesn’t give the answer to effectiveness in below-the-line communications either.
Marquis continues: “A proper focus on profit-generation makes the report authors a bit sniffy about the fashion for ROI (return on investment) in marketing. I’m not convinced the two are incompatible. Indeed, Antony Young, president of Optimedia in the USA, concludes in his new book, Profitable Marketing Communications, by saying: ‘Marketing ROI is not just an alternative term for effectiveness, impact or results. Nor is it a magic equation or formula. It is an attitude about creating profit.’”
To paraphrase Simon Marquis, “success in PR ain’t that simple”. This column recall the CIPR’s 2005 paper that said evaluation and measurement are complex matters in all organisations that aren’t solved by simple, simplistic metrics. Too true!