The Role of Communication in Effective Organizational Strategy

Good communication is vital for effective organizational strategy. But we need to get the communication role consistent. As communication professionals, we can’t have it both ways. On one hand we want to be represented and respected at the highest levels in our organization. But on the other hand, the PR activities that 82% of senior operatives say they most commonly undertake include copywriting and editing, which is at the same rate undertaken by junior staff (83%), according to a 2020 State of the Profession survey.

The two biggest challenges for the profession are seen as ‘under-representation of PR at board level’ and ‘not being seen as a professional discipline,’ according to the respondents in the survey, which was conducted by the CIPR (UK’s Chartered Institute of Public Relations). And yet when a majority of respondents reported their most commonly undertaken activities included copywriting and editing, their focus seems hardly appropriate for potential board members! The consoling thought is that 83% of senior practitioners reported ‘PR activities most undertaken in current job’ included ‘strategic planning’.

(It seems strange to ask members about their ‘representation at board level.’ What does this phrase actually mean? Does it refer to board membership? Or does it mean we should get someone already on the board to represent the PR function at board meetings? Very few PR/corporate comms people get to sit on a board, so what’s the point of asking about it? I think it would be more relevant to ask them about membership of their organization’s executive committee.)

Conflicting job priorities

About 48% of senior practitioners said their work most undertaken included ‘defining mission/values, corporate governance’. Seems a wrongly worded question. Can you seriously imagine yourself sitting down frequently to define mission/value, corporate governance? Surely, your busiest work around these topics should be in developing strategies to explain them to the masses rather than only defining the terms.

Also, it seems that only 64% of respondents frequently engaged in research, evaluation or measurement, which is disappointing.

In a similar lack of professionalism, the Gatehouse 2020 State of the Sector report on the feedback of internal communication respondents in 45 countries, found only 55% of respondents had a ‘written communications plan/calendar covering the entirety of your internal communication activity over a 12-month period.’ And only 33% had a ‘written internal communication strategy covering a period of more than one year.’ How unstrategic are these people?? And both figures were slightly lower than in the previous year’s survey!

At the same time, only about 42% of respondents rated their employees’ understanding of their organization’s long-term strategy as ‘excellent or good.’ And only about 34% of them said their employees had an ‘excellent or good’ understanding of ‘how they contribute to the long-term strategy.’

Three things we should be doing

As Professor Anne Gregory, former chair of the Global Alliance of Communication Management and Public Relations said in July 2020:

…we need to examine what we do and how we act as a profession. Automation and AI will take away the need for many of our traditional skills such as writing, indeed, all kinds of content creation, identifying and researching stakeholders or audiences and standard evaluation. We should embrace that so we can be then truly ‘strategic’.

Being at the heart of governance is for us because we know what the reasonable expectations of society and stakeholders are, because we understand context and because we have practical wisdom and judgement. Then we might just deserve recognition at board level because we will have something important to contribute.

Third, we need to understand and celebrate the complexity and importance of what we do. Society, professions, organizations exist because of communication. Take it away and there is no society, profession or organization. Let’s get away from being defined as story tellers, content developers, creatives or social media whizzes. We help create, build and sustain all those things that are precious and meaningful as this awful COVID-19 crisis has demonstrated. We need and can create a narrative that tells that story.

A strategic mindset for comms heads pays off

As we have seen from the responses to the two 2020 surveys, above, and many other surveys and CEO interviews around the world over the past three decades, opportunities for strategic communicators are available. CEOs repeatedly offer opportunities to corporate communication heads who are strategically oriented. The financial rewards are there at the enterprise (whole-of-organization) level for the communication/PR people who do take a strategic perspective. For instance:

The 2020 scandal in which Rio Tinto, the world’s third biggest mining group, destroyed a 46,000-year-old Aboriginal heritage site at Juukan Gorge in Western Australia, gave some insight into mining executive pay levels. Top executives were docked their annual bonuses in response to the destruction, including one of the 11 members of Rio Tinto’s executive committee, the Global Group Executive of Corporate Relations, Simone Niven, who lost her expected annual bonus of US$700,000. And this was just her bonus! We can only speculate on the value of her full annual pay package.

Images: Before-and-after shots of the land clearance and drilling in preparation for blasting and surface mining of iron ore at Juukan Gorge in Western Australia.

Stakeholder pressure won

Later, on 11 September 2020, Rio Chairman Simon Thompson announced that the three executives taking responsibility for the destruction decision will leave the company “by mutual agreement,” including Ms Niven.

Pressure from stakeholders – especially investment funds and fund managers as well as Traditional Owners –  won the day. Mr Thompson acknowledged that shareholder concerns played a significant role in the eventual decision to part ways with the three executives who were seen as directly accountable for the Juukan Gorge blasting. He said, “We have listened to our stakeholders’ concerns that a lack of individual accountability undermines the group’s ability to rebuild that trust and to move forward to implement the changes identified in the board review.”

Good communication is vital for effective organizational strategy

Corporate communication strategy is developed within the context of the organization’s vision, mission, corporate culture, policies and strategies, and focuses on the organization’s assessment of the internal and external operating environment. The role of corporate communication is to:

• Identify, prioritize and differentiate between strategic organizational issues, strategic communication issues and tactical communication issues
• Scan and communicate intelligence on the internal and external environment
• Focus on key stakeholder relationships and issues that may constrain or enhance the organization’s ability to achieve its goals
• Advise top management on how the different strategy options might influence relationships and outcomes achieved with key stakeholders.

Three roles of corporate communication

Corporate communication incorporates 3 roles:

1. The role of the strategist dealing at the top management level of the organization — gathering strategic information on stakeholders and issues from the external environment through scanning of the operating environment, and feeding this strategic intelligence into the organization’s strategy formulation processes. Communication is not the cause of strategic organizational issues, but can either provide a solution, or at least explain the issues.
2. A role at the departmental or functional level of the organization, of which the most important activity is to develop corporate communication strategy for providing direction to the communication function. Issues: too little, inadequate, or no communication with external stakeholders or employees may cause problems.
3. The role of technician working on implementation at low organizational levels. Tactical communication issues may mean that messages, or correct messages, are not reaching priority target groups, and are not being received sufficiently in return.

Strategic comms/corporate PR role

Strategic thinking leads to strategic planning

Strategic thinking is both internally and externally focused, a process in which top managers set direction and articulate their vision. “A strategist’s job is to see the company not as it is…but as it can become,” quotes Benita Steyn. Then strategic planning should be used to convert into action the strategies already created by other processes such as scenario planning, strategic thinking (eg, reviewing what can be created from what you have already, discussing where you want to be, extrapolating from today, looking closely at emerging trends and events, seeking perspectives from multiple sources, brainstorming responses to technical impacts such as digital availability, automation, robotics, artificial intelligence, and the internet) etc. Strategic planning should not be used to create strategy.

Strategic planning is needed to implement strategic decisions, ie operationalizing strategies already created. Strategies are developed for each division or business unit, creating a strategic, long-term master plan for the respective division or business unit. This enables them to integrate with and support organizational-level activities, detailing timelines and budgets for each stage. Good communication is vital for effective organizational strategy. My article, “How to make communication planning directly support operational strategic planning” gives more insights into the strategic planning role for the comms function.

Implementation of strategy

Strategy is implemented through detailed and shorter-term plans/schedules at progressively lower operating levels. Operational planning is used to allocate activities to achieve particular objectives within each planning period. Operational or action plans incorporate five elements:

• Specific functional tactics (actions) to meet agreed deadlines. Each function, eg. marketing/corporate communication/human resources needs to identify and undertake important activities that contribute to building a sustainable competitive advantage.
• Broad goals point to the end points towards which effort is directed. They are broad, relatively abstract and may be difficult to quantify (“Our goal is to increase our share of the marketplace for [our product].”)
• SMART objectives are set with specified outcomes – read my article on setting measurable objectives
  
• Clear time frame for completion
• Accountability, by nominating a person in charge of each action in the plan.

Five levels of strategy can apply in large organizations – enterprise, corporate, business-unit, functional and operational levels. However, these would apply only in the largest organizations like banks, big retailers, big mining companies, and international companies, they are not discussed in detail here. Three levels of strategy apply in most organizations:

Image: Cascade Strategy

1. Enterprise/organizational/corporate strategy

This is the whole-of-organization, broadest level of strategy, where the legitimacy of the organization is considered, especially the relationships with those who have an interest in what the organization does and how it conducts its business – the stakeholders. It involves the level of strategic thinking necessary for an organization to be fully responsive to today’s complex and dynamic operating environment.

According to Professor F. Edward Freeman, whose landmark book, Strategic Management: A Stakeholder Approach, paved the way for stakeholder theory to become a powerful influence in business around the world, the fundamental issues to be addressed in enterprise strategy are:

1. What is the role of the organization in society?
2. What principles and values does the organization represent?
3. What obligations does the organization have to society at large; and therefore, what are the implications for the organization and its allocation of resources?

Management is increasingly implementing a stakeholder approach to corporate strategy formulation, leading to greater recognition of the value of corporate communication’s contribution. Unfortunately, many practitioners are still obliged to operate at arm’s length from the mainstream process of strategy formulation, ie providing counsel and advice to senior management about communication-related issues – and they don’t sufficiently participate directly at the corporate and business-unit levels. This may be partly due to the fact that many practitioners don’t have a strategic mindset or training. For instance, 45% of respondents in the 2020 CIPR survey worked in the media (journalism) or publishing before entering PR. These career backgrounds are not conducive to a strategic mindset. Experience in developing good communication is vital for effective organizational strategy development.

Social license to operate

The network of support and direct or indirect permissions from key audiences / stakeholders is broadly referred to as a company’s social license to operate, as discussed by Isadora Levy from the Reputation Institute (2019). Willingness to give an organization the ‘benefit of the doubt’ is a key indicator of a license to operate. It means believing an organization is doing the right thing unless proven otherwise. Your license to operate matters most critically among regulators, and is also influenced by other groups.

A recent example is Uber’s struggles in London: In November 2019, regulators’ ongoing concern for passenger security and fraudulent accounts resulted in the company literally losing its license to operate. The social license to operate is the collective acceptance by stakeholders that allows an organization to manage its business. It is directly related to corporate reputation.

Government entities can adapt most of these principles to their development of public services.

In summary, the strategic role of corporate communication in enterprise strategy development is to assist the organization to determine its values, manage its reputation, adopt sound corporate governance principles and fulfill its social and environmental responsibilities. The communication function is central to effective two-way communication of these decisions with stakeholders, and the ensuing development of positive relationships. This will ultimately lead to the organization being trusted by its stakeholders as well as being regarded as sustainable, legitimate, and socially responsible by society at large.

Role of communication at the enterprise-strategy (organizational-strategy) level

Image: Cascade Strategy

The corporate communication function’s contribution to the organization’s strategy formulation processes works most effectively when the communication head has the role of ‘corporate communication strategist’ at the top management level of the organization. The ‘strategist’ gathers, interprets and disseminates strategic intelligence regarding stakeholders and issues among decision-makers, and contributes to the development of the enterprise strategy. It is an influential role.

Corporate communication strategy is guided by the organization’s enterprise strategy (whether it is stated or not) and also delivers inputs into the enterprise strategy.

Very few enterprise-level business decisions don’t require communication

Even if the process of forming strategy at this level is focused on complex financial and/or operational matters, senior communicators attending such meetings can advise on communication actions stemming from the decisions being made, and can also contribute to the decision-making by adding communication implications to the discussion. The fact of being in the executive meeting when business issues are discussed enables the comms head to influence decisions, especially when there is a significant communication component.

However, communication representatives tend to be excluded from many enterprise-level meetings because corporate planners and senior managers often don’t recognize the importance of communication. They don’t consider how communication issues should affect and shape their decisions. Hence the advice from the Director General of a government department:

You have to stick your nose in, ask the questions and get in the loop early when planning takes place and decisions made. Attend as many meetings as possible to get early input on these matters.

Corporate communication is unlikely to be involved at the enterprise/corporate/organizational level where strategy is financially oriented, or on the business-unit level where strategy focuses on the marketplace. However, the corporate comms function should be involved in planning of implementation for the corporate, business and other functional areas – because good communication is vital for effective organizational strategy outcomes.

Developing PR/corporate communication strategy for enterprise/organizational strategy

Diagram: Benita Steyn’s model for developing PR strategy, linked to enterprise strategy.

2. Business-unit strategy

This defines how the organization intends to compete in its chosen market/product/industry segment. In government this would consist of specific services offered to the public. Business strategies usually deal with a single product or group of related products, and vary widely according to the organizations that create them.

The management team of a business unit must translate the statements of direction generated at the corporate level into goals, objectives and strategies for their unit. This includes monitoring the fluctuating business environment, selecting a core strategy and managing resources to produce a sustainable competitive advantage.

At the business-unit level, strategies are often marketing-oriented, focusing on individual tasks as well as the larger business environment, especially economic, technological and regulatory factors. The focus is on helping to achieve the organization’s financial goals and objectives. Most important at this level are customers, as well as all the other stakeholders such as suppliers, distributors, regulators and employees. Corporate communication has a limited role at this level, although there is potential for developing stakeholder relations and media relations activities.

3. Functional-level strategy

Functional strategy supports higher-level strategies, detailing how higher-level strategies can be achieved by the functional areas within a business unit and between business units working together. Strategy at this level is most closely involved with implementation. Functional strategy thus involves what should be done in each key functional area, the amount of emphasis placed on each, and the resources allocated. Each functional area makes its own unique contribution to strategy formulation at different levels.

It is vital for functional managers to understand the importance of linkages and interdependencies with other functions because they are all part of a larger system that depends on them working effectively with each other. Each functional area has its own key stakeholders. For example, marketing focuses on relationships with customers; HR focuses on relationships with employees, labor unions, regulators; and corporate communication focuses on a wide range of stakeholders such as employees, news and social media, government and communities.

Functional strategies are translated into action. Key operating managers and project leaders establish short-term objectives and implementation strategies that contribute to achievement of business and corporate-level goals. At the functional level, major emphasis is on maximizing the productivity of resources by capitalizing on any possible synergies and distinctive competencies within the organization.

Role of communication at the functional-strategy level

Communication strategy provides focus and direction for an organization’s communication with stakeholders, building symbolic and behavioral relationships with its strategic stakeholders. In this way, good communication is vital for effective organizational strategy because it helps strategy to be implemented well at the functional level. The thinking – the logic – behind the corporate communication function’s actions, determines what should be communicated to internal stakeholders rather than how it should be communicated. It is therefore not the same as communication planning, but provides the framework for the communication plans needed to act on the strategy.

Focusing the efforts of the corporate comms function within a functional strategy, linked to the enterprise/organizational strategy, will help to prove its positive contribution to organizational effectiveness – good communication role is vital for effective organizational strategy. In order to formulate corporate communication strategy, we need to understand the business and societal issues that the organization is facing and be expert in using communication including relationship development to help remove barriers to success.

Unfortunately, most focus in the PR process seems to be on operational planning rather than strategy formulation. As noted above, the 2020 CIPR survey found that the PR activities most undertaken by senior operatives was 82% for copywriting and 83% for strategic planning. The two responses seem to contradict each other, especially when only 48% of senior respondents nominated “defining mission/values, corporate governance” as one of the activities most undertaken in current job (although ‘defining’ can be perceived as a confusing term to use; ‘communicating’ would have been easier to interpret because ‘defining’ is more the role of top management rather than comms heads).

Communication goals to be addressed in plans/campaigns should be based on the corporate communication strategy for the strategic issues. The impact of strategic issues on each stakeholder group are identified and become the focus of communication with those stakeholders. These should address the implications of each strategic issue, including capitalizing on potential opportunities.

Attending corporate and business-level planning meetings should be an integral part of the corporate comms function in the strategic planning process. In addition, the comms role includes preparing the outline of a communication strategy, including a budget, for each major project of the organization and business units. One very successful head of a prominent government department will not accept an operational plan unless a detailed communication plan and budget for the project accompanies it.