Communications and Corporate Strategy: Good News from the FD/Forbes Study
In the latest study exploring strategic initiatives — new market entry, M&A, product launches, recaps, downsizing, etc. — FD and Forbes Insights asked 180 CEOs, corporate strategists, and senior communications officers how much the recession has changed the rules of the game in the corporate world. We found that risk aversion and caution still dominate the corporate psyche, leading to no-fail standards and, of course, fewer initiatives. But concerns over risk are shifting from avoidance to successful management, and corporations are adapting through innovation and flexibility — a refreshing willingness to try new things. That’s good news for PR. We’ve long been fighting for a seat at the table, and it seems the recession might have actually given us the boost we need.
Lack of understanding and support from major constituencies persists as a major cause of failed strategies. Still, senior executives and strategists have begun to emphasize communications during the last two years, suggesting their belief that meaningful commitment to communications can solve issues, particularly in the areas of internal/employee engagement, government relations and reputation management. The vast majority of CEOs (92%), communicators (92%) and strategists (88%) say communications is critical to the success of their strategic initiatives, and nearly half of respondents (46%) report that communications comprises an integral and active component of the strategic planning and execution process. However, when respondents say strategies fail due to lack of understanding and follow-through by the organization and its key stakeholders, nearly half cite employees —senior management down to frontline workers — as the ones least convinced of strategic initiatives’ viability. Companies need to close the gap between developers of the strategy and those responsible for executing it, and we’re glad to see that a large majority of companies (73%) plan to increase communications to better engage their workforces.
More good news: Increased communications (41%) tops the list of key changes companies are making to up the success rate of strategic initiatives. As government and policymakers exercise more influence and control over business practices, communications is shifting toward more government outreach. A majority of companies (59%) say addressing regulatory threats has become more critical, and a full third (up 12% over last year) report that they’ll use communications to conduct regulatory or legislative outreach this year.
In the maelstrom that was the recession, no position took more of a beating than the Chief Executive Officer. Today, only 34 percent of American adults view CEOs favorably — higher only than the ratings earned by members of Congress, and lower than stockbrokers, journalists, lawyers and bankers (Rasmussen, August 2010 – sub req’d). Research has also found that it will take until 2013 for the collective reputation of CEOs to fully recover, and only if CEOs start to rebuild their reputations now. No surprise that respondents found CEO thought leadership significantly more critical than it was two years ago (68%) as companies move to strengthen the their own reputation and that of their management.
Communications matters more than ever to the successful execution of corporate strategy. The data says it all: Companies are turning to public relations as they attempt to clear a way ahead to their future success. Yet the numbers we’ve presented here are only the beginning. To learn more about corporate strategy — its creation, implementation and what impacts its success or failure — and how corporations have adapted their strategic plans to deal with the credit crisis, recession and beginning of an economic recovery over the past two years, read the FD/Forbes Insights Strategic Initiatives Study white paper (PDF). You’ll be happy to learn that public relations has indeed become more relevant than ever.
Hi Betsy – great piece and study. CEO Thought Leadership is a huge component of regaining trust – and I’m glad to see it as critical in the study. This thought leadership must also happen at the local and regional level, in addition to the national level. The gap in trust (for a variety of reasons) between our corporate leaders and the everyday shareholder/customer is huge.