Top >> Opinion__Comment Opinion:  Pressure applied to public companies likely to impact on others By Grant Common Editor published March 2004 Grant has 30 years direct experience in public relations and communication in Australia and New Zealand - as well as directing and managing programs in the UK and USA. He has consulted to Governments, publicly listed companies, industry bodies, marketing organisations, multinationals and not-for-profit organisations. He is Managing Director of Sydney-based Network Communications and principal of Comsult Communication Design, a consultancy specialising in the emerging management discipline that focuses on how organisations internally plan, structure and organise their communication. As a Fellow of the Australian Institute of Company Directors (having completed the Company Directors Diploma examination) he is also one of the few PR practitioners to have the perspective of the company director. 2004 has started with a stark reminder of the critical nature of corporate reputation and how important it is in today’s ‘perception economy’ for the leaders of publicly-listed organisations to understand the new imperatives. While the focus is on high-profile, large publicly-listed companies expect fallout to cascade to many more companies. In Australia the CEO of our biggest bank - National Australia Bank - was forced to resign.  Elsewhere in the world the chairman of one of the oldest and most respected oil companies - Royal Dutch Shell - experienced a similar fate. That we really do live in a ‘perception economy’ was reinforced when the financial markets and media described these events as ‘public relations disasters’, not ‘operational or disasters’.   Fundamental to both companies was a perceived failure by the top men to adequately explain or handle what the market saw as business issues. Ironically both men have spent most of their careers at their respective organisations. Both are acknowledged as experts in their own sectors and regarded highly by their peers.  Clearly they worked their way methodically to the top by knowing how to work effectively within their organisations and with their colleagues and peers.  But when exposed to the external spotlight both have been judged as lacking in the way they interact with stakeholders and the external world. The Australian public company scene has had a rude awakening.  The lesson that is being learned is that there’s a world of difference between operational management and public management.  It’s the organisations with the management most capable of dealing with external stakeholders that are winning in the battle for perception that now rules. Many will say this focus on performance and perception has gone too far - and it probably has.  Others will say many of those in the investment market are young, immature with little or no real business experience and their ‘clout ‘ is well beyond what is reasonable - and there is a degree of truth in this. Others will count their blessings that they are out of the public company bull pit and the feeding frenzy it can create.  They will think they are safe - that their environment is different.  That may be a mistake.  It is usual for what happens at the top end of the market to cascade down - it’s largely a question of how it manifests itself at other levels. By far the bulk of Australia’s medium to large business sector is made up of foreign-owned companies and home-grown organisations. These organisations are typically led by operation-focussed senior executives.  In many cases they have little or no experience dealing with perception and reputation issues and engaging with external stakeholders.  And in the case of multi-nationals some of those posted to Australia are not equipped to deal with the often aggressive Australian business environment. The questions most medium to large enterprises, including foreign-operated companies,  should be asking themselves are: do we have local stakeholders for whom perception and how we present ourselves is likely to become just as important as our product and service performance? do we have issues that have the potential to ignite stakeholder concern or spill into the public? how well equipped are our senior people to sell the vision of the organisation and to represent and protect the organisation in public? are we effectively managing our corporate reputation and perceptions of us? A good starting point in this issue of PR Influences is our article on corporate reputation which contains quotes from CEO’s and others showing how important it has become for senior management to be skilled in this area (click here). Grant Common Editor Click here to view past articles: ‘Pressure on CEOs and Directors to meet public expectations’ ‘Reputation Parabola’- a model for tracking the stages that corporate reputation typically follows.

PR Influences Australian Public Relations Newsletter. Article: Corporate image: Pressure applied to public companies likely to impact on others. Information Content: Opinion & Comment