Business’s struggle to find a receptive audience is taking place in several arenas
With politicians so keen to find the solutions for the fallout from the economic crisis, businesses have often taken the blame. A need to please voters has made demands for higher taxes and more regulation more vocal.
Parliamentary Select Committees have recently taken a tough line against perceived bad business practice. The reform of Select Committees, and the election of their Chairs grant them more influence and higher media profile than ever before. Many Committees are now very eager to call business representatives to give evidence under intense public scrutiny, most notably the Public Accounts Committee’s grillings of corporations and tax advisers.
Indeed Corporation Tax has become a key talking point in Parliament, shown by the fact that in 2011 there were 588 mentions of the Tax and another 507 in 2012, with 574 in 2013.
The 2013 party conference season saw a substantial ratcheting-up of anti-business sentiment, with Ed Miliband finally getting to set the pace by casting himself on the side of the people against energy providers and other ‘vested interests’. The interesting thing was the Government’s response: initially focussed on dismissing the Labour attack as misguided, the coalition soon generated its own counter-proposals that seemed to accept the overall sentiment.
Newspapers and broadcasters are of course businesses themselves, and indeed have sustained their own massive reputational damage in the past few years. Yet their coverage of business has been gleeful in reporting parliamentary criticism, and they are happy to publish and re-publish estimates of tax avoided or whatever the latest scandal is.
In 2007 there were 1,349 articles mentioning corporation tax in the national press; by 2012 this had more doubled to 2,715. In 2013 the number stood at nearly 3,800.
For the popular right-of-centre press, scrutinising corporate tax arrangements has allowed them to chime with public discontent with austerity whilst broadly backing the Government’s policy.
In left-leaning titles, big business and accusations of an out-of-touch government are being combined to encourage perceptions of a class that is actively indifferent to the impact of austerity on families.
Even strongly free market titles such as the Financial Times now carry comment pieces discerning between the legal obligation of companies to pay tax, and the societal norms that they ought to observe.
One of the side effects of the decline in UK regional manufacturing has been the loss of the type of town where the presence of a local employer was felt not just by the employees but by the members of the social club, the supporters of the sports team and the local housing tenants. This relationship created an intrinsic link between the town’s biggest employer and its residents.
Some businesses are still very closely associated with local areas with a long history – think heavy industry in Barrow, Dagenham and Derby – while others represent more recent developments, such as the high-tech and telecoms cluster in the Thames Valley. But as high streets are perceived as becoming less locally distinctive, and the grand patrician experiments of Bournville and Port Sunlight are consigned to history, fewer businesses are immediately identifiable with a particular locality.
The difficulty, though, is this comes at a time when Government policy places localism at the centre of decisions over planning and the development of services. This places businesses under greater scrutiny, and perceptions of their ‘localness’ matter a great deal at pinch points such as planning applications.
Beyond this, though, the lack of a natural constituency or sense of groundedness can affect the overall perception of a business and remove any instinctive sense of support that people might feel.
The challenge for business is to create a compelling story around local engagement, and use that in a way that works beyond the boundaries of that locality.
IN THE TILLS
Numerous ethical consumerism campaigns have sprung up in the past few years, urging boycotts or direct action against businesses. UK Uncut, 38 degrees and others provide a focal point for annoyed citizens, rallying activists to generate more attention for their causes.
These short term campaigns can create moments of crisis for businesses. More seriously, perceptions of business behaviour can affect general buying habits in a quieter and long term way.
Specific data on the commercial impact of consumer issues-led behaviour is difficult to discern, but at the height of Starbucks’ travails over tax, Whitbread (which as owners of Costa were perceived by some to have a more ethical tax strategy) reported a 7.1% uplift in like-for-like sales at Costa.
THE FOUR GEARS OF DIGITAL
Hardly a day now goes by without new evidence of the way social media is driving increased transparency and accountability in the corporate world. It’s a lesson that everyone from the Daily Mail to Asda and Virgin Media have been taught recently.
When the Mail criticised Ed Miliband’s late father, it was the twittersphere which amplified the Labour leader’s angry complaints. The jokey hashtag #myfatherhatedbritain started trending and an Alastair Campbell-inspired online petition got tens of thousands of signatures to put the Mail’s behaviour and culture under the public spotlight. As heated debate about the new press watchdog continued, the Sun’s Jane Moore declared “Twitter is the new regulator”.
When Asda advertised one of its Halloween costumes as “Mental Health Patient”, one tweet sparked an avalanche of protest which prompted the supermarket to pull the product within hours.
Jim Boyden posted a photograph on Facebook of a bill from Virgin Media for his recently deceased father in-law which included a fine for late payment. The post was shared more than 53,000 times, forcing the company to apologise to the family.
Companies like Asda and Virgin Media react quickly, not just because it’s the right thing to do, but because it’s good for business.
In the old world, the PR industry advised businesses to save face, by not telling more than they have to. Now, companies are embracing both transparency and authenticity. Transparent businesses will be more financially successful and valuable; they will innovate and provide better service to their customers, and people who work within these firms will be happier.
The digital age also needs new forms of engagement. We are not just communicating to an audience anymore – but communicating to an audience that has an audience of its own.
It used to be the case that corporate messages went from management to media, via a PR team which used their relationship with individual journalists. Communication could be controlled and audiences segmented. Nowadays, increased transparency means you daren’t try to give one message to shareholders and another to customers or employees.
Nor is communication any longer a one-way street. People expect every organisation to be ready to explain and respond.
More and more, this means that business itself needs to change – culturally and structurally.
As David Jones, author of Who Cares Wins: Why good business is better business puts it “the price of doing well is doing good.”
Consumers increasingly want to spend money with companies they feel are authentic and care about their consumers and their impact on the world. Ignore complaints on social media about poor service, and corporate reputations, sales and share price can be hit. Act badly in one part of the world and you can expect a damaging consumer reaction in markets thousands of miles away.
Reputation matters more than ever before. Protecting it has to be put front and centre of your communication efforts. This requires combining the traditional skills of strategy and messaging with a fresh approach to engagement and transparency.
We at Portland have developed a model called ‘The Four Gears of Digital’ to help you organise your thinking.
It should start with STRATEGY and the development of an overall narrative and message. The approach to digital is to bring the business goals and values to life and then engage around it. Proper strategic thinking comes before tactics which then allow you to use a variety of formats to deliver the message.
People expect every organisation, corporate and government, to ENGAGE around the messaging, to explain and respond. It doesn’t matter whether there’s any legal imperative for an organisation to respond; audiences now expect it.
How do you then DELIVER the message? For this you’ll need an understanding of different formats, different social media platforms, as well as SEO and writing for the web. Socialising of the content is likely to involve an approach to devolved and shared responsibility within the organisation. Underlying all of this is an understanding of which platforms your audience uses and the type of content that engages them.
In this new era of TRANSPARENCY, the notion of corporate and government privacy is dissolving. People expect data, expect to see behind the scenes and expect to hear direct from the CEO. There’s an assumption that a much bigger array of tools will be used to deliver a far more detailed and nuanced picture.