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Driving communications success in the new business context

In a world of hyper-transparency, interconnectivity, and media anarchy, businesses need to learn how to navigate stakeholder issues and conduct reputation management – and communicators need to rise to the challenge of helping them.

Speaking at the recent AGM of Worldcom, a global network of independent PR consultancies, alva’s CEO, Alberto Lopez Valenzuela, discussed the societal shifts during last few years and the
opportunities they represent for communications professionals. Alberto introduced a tool called the issues lifecycle, which can help companies with reputation management.

The essential role corporations can play in improving our society comes when CEOs are truly committed to meeting the needs of all stakeholders,” said Alberto. “It’s about understanding what is driving stakeholders and the interest these stakeholders are likely to have in the business.

Stakeholders are increasingly engaged in a wide range of reputationally-impacting issues which pose challenges and opportunities for businesses. An emerging role of communications functions is to be at the forefront of managing these issues by engaging with stakeholders. The issues lifecycle is key to having a successful issues management strategy.



The new business context

In order to understand the new business environment and the challenges that communications professionals must handle, we first need to understand the context which is changing the business

The rising demand for accountability from stakeholders has forced companies to become more transparent, even if they traditionally shied away from transparency. This marked a shift in the
power balance between companies and stakeholders, with power shifting towards stakeholders.

We also live in an incredibly interconnected world – one in which stakeholders with shared interests and values are able to mobilise quickly on certain issues. There are 50 billion connected devices in the world right now, which makes it easier for individuals to connect on issues they are passionate about.

Finally, the media plays a key role in today’s society. There is a dangerous force in today’s media due to the rise of fake news and artificial intelligence technology seamlessly spreading misinformation and disinformation in real time.

Chaos and stakeholder entropy

The seemingly random, chaotic and unpredictable nature of stakeholders’ engagement with enterprises can produce a challenging business environment – one which Alberto defines as stakeholder entropy.

Stakeholders are demanding accountability, yet they do not have the means to decipher whether companies are being truthful, and as a result feel that they don’t have any control over the world they live in.

This environment undoubtedly presents challenges for companies – but it also presents an opportunity for communicators to be at the forefront; to help clients and their companies to navigate this environment and deliver communications success.

Speaking at the AGM, Alberto spoke about the strategic role that PR and communications needs to play in this business environment. “The value that today’s communications professionals can bring is not only about working on campaigns, but it is about helping organisations understand the context in which the business operates,” said Alberto.

The issues lifecycle

In order for PR professionals to play a strategic role in businesses, they must be able to understand and predict stakeholder issues, and mitigate the impact of these issues. The issues lifecycle is key to managing stakeholder issues successfully.

  • During the potential phase, issues have not captured the mainstream media or public attention and can be described as dormant, even though key stakeholders might be aware of the issue and have the potential to be disruptive. This is exactly when corporates should begin strategising on how to handle the issue to get ahead of the problem.
  • In the emerging phase, potential issues have become a live and present concern for corporates. Keystakeholders are actively involved in the conversation. Media relations is key to this phase.
  • In the amplification phase, the public, influencers, and others recognise the importance of the issue, and the issue becomes an intense point of discussion among multiple stakeholders.
  • In the crisis phase, issues management paves the way for crisis management if the issue has not been mitigated. This is the peak of the issues lifecycle, with increased media attention and commentary from stakeholders across the spectrum.
  • Depending on the severity and scale of the issue, businesses might be subject to new regulation. Government bodies and agencies may consider legislation to enable the organisation and the industry to adopt new rules that will prevent this issue in the future. This is the regulation phase.
  • Once the organisation has implemented the necessary legislative changes and addressed the issue in the court of public opinion, things will largely return to business as usual, in the operationalization phase. However, businesses should remain vigilant as issues should not be viewed as ‘settled’ or ‘resolved’. Continued engagement with stakeholders is essential moving forward.

In Alberto’s words, “the sooner there’s awareness, engagement and intervention to address the issue, the higher the control you will gain over it. The longer an issue remains unattended, the higher the cost of the issue to the organisation”.

Authentic engagement

Communications professionals are indispensable to businesses, especially in the current environment, but they must be able to manage the impact of stakeholder issues.

In his closing remarks during his presentation at Worldcom’s AGM, Alberto stated: “For businesses to succeed, they need stakeholder support. Communications has the key to enable an authentic engagement with stakeholders to gain their support to create both the economic value and social value that future generations will need.

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