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Learning to map read

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Building up knowledge of your stakeholders will deliver big wins for corporate professionals trying to find systematic PA solutions, says Terence Lyons

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Recent McKinsey statistics from a survey of 1,400 global executives, conducted in January 2011, make for startling reading. The economic value at risk through new regulation and policy over this business cycle has placed external affairs engagement as a top three priority for over 50 per cent of CEOs.

Yet despite 71 per cent believing proactive and regular government engagement is critical regardless of immediate interest, only 43 per cent admit they do it. Less than a third say they are very effective at relationship building with governments and less than a quarter believe they succeed in influencing government decisions or that their opinions are valued and sought by government.

So an effective strategy for engaging government and other stakeholders clearly has a place on the CEO agenda, but what can the external affairs practitioner do to improve the internal perception and external impact of their function? And by external affairs read the wider reputation management bench spanning government relations, public affairs, corporate communications and other functions vested with that responsibility.

Our experience suggests that practitioners should emphasise three priorities. The first is their status as a “seat-at-the-table” business partner and thought leader for the corporation. There has rarely been a better opportunity. The strategic and financial reward of proactive public affairs in Asia is growing exponentially in this business cycle. Issues can quickly become flashpoints and unforeseen incidents can spiral badly in an atmosphere of declining levels of trust in business.

With stakeholders on all sides eager to sound tough or gain some advantage, this is creating a perfect storm of increased regulatory risk, increased media exposure and increased interest group pressure which has bottom line implications on reputational ‘goodwill’ and market share. Practitioners need to position the value of their role in mitigating these risks if brought to the table early and empowered to provide a wide commercial view of the business risks rather than a narrow reactive issue management perspective.

New approaches

The second is that outmoded approaches to reputation management need to give way to systematic, rigorous process to scale their influence. Across Asia every company can expect many more demands to engage with stakeholders over environmental, accountability, consumer, human rights, labour and other volatile issues. These issues and how companies face them will largely determine the cost of the company’s license to operate. Yet this also requires a new practitioner mind-set to encompass three fundamental shifts in the influence model.

First, the importance of scale. Many more new stakeholders influence business strategy than ever before; a constantly shifting ‘Star Wars bar’ of the unfamiliar and unknown. Given the centrality of stakeholder perception to corporate reputation, companies must go beyond traditional PR and external affairs influence strategies to develop a rich, system-wide approach to managing and engaging with stakeholders.

Proactively identifying engagement opportunities to regularly educate, inform, motivate, activate and maintain involvement to build your relationship capital before the crisis hits is critical. Second, engagement style. Your traditional audience is being influenced in many new ways. Embrace and leverage new communication tools and platforms wherever possible.

The third is organisation design. A new nimbler and more communication – savvy class of advocates and opponents is proving more capable of influencing opinion than many corporations with well funded and resourced teams. Focus on execution capability, breaking down the corporate silos between corporate affairs, PR, public affairs and your online team to make a total impact, greater than the sum of the parts.

The fourth priority is to retool your operational capability.  While no serious corporation would be without rigorous processes and systems to manage customer interactions and records, surprisingly few external affairs teams leverage anything more sophisticated than their traditional and often ineffective tool set such as XLS, Outlook and Rolodex alongside disconnected vendor services, to manage their programme. As a result, responses to reputational issues can be short term, ad hoc, and defensive – a poor combination today given the intensity of public concern.

Increasingly the competitive edge will come down to how well practitioners can embrace new technology and services to proactively scale their influence. These include new ways of identifying and monitoring emerging issues through network conversation analysis. As the Internet is nothing but software fabric that connects the interactions of human beings, it makes sense to have a sophisticated way of monitoring these.

Other tools include influencer mapping to identify, rank and profile networks of amplifiers and key opinion leaders. Stakeholder services also exist to systematically map a complex landscape of governments, NGOs, academics, media and other key opinion leaders. Finally, engagement platforms that capture, organise, prioritise and scale engagement nationally, regionally and globally are an important capability driver to getting and staying ahead of the issue curve.

Expect deep sea oil rigs to blow up, accelerator pedals to stick and toxic ingredients to show up in baby milk formula. Add to these the hundred other more minor issues that will appear on your radar in the next year which you will need to manage. With stakeholders on all sides eager to sound tough or gain some advantage in this business cycle, expect also to be charged by your senior leadership team with a much higher degree of responsibility and accountability for protecting and creating tangible economic value over the next year.

Terence Lyons is managing director of TSC, The Stakeholder Company

business business strategy Crisis Government internet Management McKinsey Opinion Public affairs

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