Why is it that so many organizations isolate communications from customers, the people that ultimately make money for the organization? This has bugged me for years, and now it’s bugging CEOs as well.
The Conference Board just released great study called The C-Suite Challenge 208: Reinventing the Organization for the Digital Age. There are some fascinating nuggets in there…
Let’s start with what keeps CEOs up at night: One third of the 28 geopolitical, social, and internal issues defined by global CEOs are directly related to problems that communications can solve. The top three are listed here in rank order:
#1: Failure to attract/retain talent,
#10: Failure to devise an effective internal performance measurement system for employees, and
#13: Rebuilding public trust in business.
By the way, these “hot button issues” (defined as: “short term events, issues, and situations that CEOs and C-suite executives believe will require special focus in the coming year”) were given higher priority by global CEOs than terrorism, Brexit, health care policy, and tax reform.
Corporate communications certainly knows how to fix these issues, yet we consistently labor with small budgets and a lack of a seat at the table.
The problem: The structure of most organizations
Consider these awkward arrangements:
- Corporate Communications generally takes ownership of “trust,” but, typically, “talent acquisition” is in a silo by itself. Or one it shares with HR, now the pariah of most sex-abuse scandals. Go figure.
- “Measurement” is something that everyone assumes soft and fuzzy corporate communicators can’t do. So it is typically relegated to Finance, which is far too busy reporting quarterly earnings to pay attention to long term evaluation.
The solution: A radical restructuring
It’s in the chart right up there at the top. Now, I know it looks crazy, or perhaps proves my megalomania, but hear me out. (And whatever you do, don’t show this to Legal.)
Without excellent, consistent, and compelling communications, how will you attract talent, customers, or investors? Never mind keep them. Think about it.
Also, there are some of us in communications who have known for years how to measure internal performance, but no one has ever listened. But now it seems that CEOs get it. According to The Conference Board report their priorities include:
- Communicate effectively from all levels, up, down, and across; and
- Communicate consistently and transparently.
But all too frequently those messages get diluted and distorted the farther they get from the CEO’s brain. Which is why you need Comms to be tied at the hip to that brain, not isolated down the hall with Marketing or Operations.
So, take a look at the chart up there. The Reputation Management department would include brand management, pretty much what Corporate Communications is today.
In addition, there are four new groups:
1. The Department of How the Customer Experiences our Communications (and what they do with it), a.k.a. “Customer Experience”
Let’s start with the latest fad in corporate reorgs: the Customer Experience Department. It throws together customer service, UX/IT, customer retention (i.e., market research), and social listening to cook up the stew of customer happiness. The problem is that far too often no one in that mix is trained to understand, never mind measure, concepts like trust or relationships, the basic stock of any customer stew. And as you can see by ClearAction’s graphic over on the right (click on it to see it bigger), Customer Experience typically includes most of the touchpoints in any relationship a company has with its marketplace. The only thing missing from this scenario are the relationship experts that theoretically live in PR and the communications team.
2. The Customer Acquisition Department (formerly known as Marketing and Sales)
Next let’s talk about marketing. The latest data shows that it costs five times more to get a new customer than to keep an existing one. Which makes it unfathomable why marketing always gets to spend five times as much as customer service. The most egregious example is the amount of money spent on building “engagement” these days. The rational is the completely erroneous assumption that engagement is connected to sales. In fact, research has proven that engagement is most likely to happen after a sale is complete.
If communications were in charge, it would be the opposite way around. We would spend twice as much on listening to and half as much on talking at our customers and prospects. In other words, we’d spend resources building and maintaining long-term communal relationships, not short-term exchange ones.
3. The Bean Counters (a.k.a. Finance)
In my new vision Investor Relations reports up to Communications as well. A study by Forrester and Watermark Consulting showed that even during the recession, companies with high customer experience indexes saw far higher gains in stock performance, compared to those who scored low in customer experience. So, IR needs to be thinking less about numbers and much more about what the customer experience feels like.
And since IR of course must report to Finance, Finance would have to report to Communications so they would learn how to communicate the very important things they do, in a language that normal humans can understand. They would also come in very useful when Comms has to speak to the financial press. Also, they’re in general very good at math and we’re not so much, so the synergy would be very useful.
4. Reputation Management
Reputation Management has always been the strong suit of Communications, but too often “brand management” has been parked somewhere else. But ask any customer what the difference is between brand and reputation and they won’t have a clue. So when I rule the world, would include Corporate Social Responsibility as well as Brand Management.
Talent Acquisition doesn’t exist today unless you have a good reputation for CSR, diversity, and all the other things most organizations see as part of their brand. So that needs to report to Reputation Management as well.
5. The Good Excuses Department (a.k.a. Legal and HR)
Now to Legal and HR. Two of the most important ingredients in an organization are its ability to track and keep talent, and its culture and integrity. Most of the responsibility for those aspects have traditionally been isolated in Legal or HR. But those two are the cause of most reputation crises these days. So, rather than bringing in Communications after Legal has messed things up, why not put professional communicators in charge so they get to hear the full story first? Legal can figure out how to finesse it later.
I also suggest renaming the combined Legal and HR group “The Good Excuses Department,” since that seems to be mostly what it does these days. Don’t get me wrong, we need folks that are good at crossing “t”s and dotting “i”s (I believe most computers do that automatically these days, but I digress). The problem is that they both get so caught up in protecting the institution that they forget that what is really at stake isn’t the building or the CEO. It’s the reputation and the brand. Sit them down in a few dozen communications meetings and I bet they’ll come around. And then we’ve eliminated most of the stress and friction communicators feel daily.
There you have it, a re-imagined organizational chart for the digital age. ∞