Breaking the Corporate Perception-PR Seen as Cost Centers
May 17, 2011

“The cost of acquiring or enlisting professional PR assistance is minute as compared to the goodwill it brings to the company’s most valuable asset – The Brand.” – Suryanto Gobeawan

It is a cold hard fact that many corporations these days still view PR as a cost center. This phenomenon could be observed throughout the globe, across different cultures. No doubt that internally, PR is not a “daily money-spinner” department which directly deals with dollars and cents; it is literal translation over time, of how much the company’s brand really worth in the eyes of its stakeholder.

Expectations of the C-Suite

According to You Mon Tsang, Founder and VP of Corporate Development Biz 360 Inc, “CFO operates in a world of numbers, but most PR practitioners are, by nature, more comfortable communicating in language, as opposed to numbers. But most executives run their business and make strategic decisions based on data.”

On the other hand, CEOs look for 3 things in a PR counselor:
-judgment based on deep business knowledge rather than political correctness;
-creativity applied to solving business problems rather than creating nifty slogans or dreaming up cheap publicity stunts;
-and the integrity to stand up for what is right, even at high personal cost.

On that hind, many corporations think that an MBA guarantees the holder a credible degree of knowledge in managing corporate reputation. Hence, to effectively manage cost efficiency and staffing in a company, an MBA is perceived to have fulfilled the cutting edge advantage of being versatile in juggling industry and market analysis as well as managing corporate reputation. However, a survey revealed otherwise.

“We were amazed to find that of the top 19 MBA programs as ranked by The Wall Street Journal survey of corporate recruiters, only 7 offered any coursework in the core tools of reputation management – corporate communications and public relations.” said Michael J. Cherenson, APR, VP of The Cherenson Group.

As pointed out by the revelations, many fresh MBA holders’ attempts at managing corporate reputation are undoubtedly questionable in comparison to those with proper background and training in the area of public relations.

It will then bag the question of what are the costs involved in exposing corporate reputation to such risks?

Published in 2004; a survey of 800 CEOs and corporate leaders in the United States and Europe, conducted by Hill & Knowlton; found that 79 percent of CEOs believe that investors and lenders consider reputation to be important or extremely important, and 63 percent said they believe corporate reputation is one of the top 3 factors investors assess before investing in a company. Some 93 percent of the executives surveyed also said they believe that corporate reputation is important or extremely important to consumers and customers.

“As pointed out by the revelations, many fresh MBA holders’ attempts at managing corporate reputation are undoubtedly questionable in comparison to those with proper background and training in the area of public relations.”

It is apparent that all if not most, companies consider one of their greatest assets to be one that hinges on corporate reputation.

A Major Stakeholder

In a statement by Greg Voeller, Director of Employee Communication Practice at Padilla Speer Beardsley, he claimed that experienced PR counselors are able to effectively engage its employees without sacrificing focus on the business pressures at hand. The PR counselor could bring about the real value of an engaged work force characterized by:

Retention – Affiliation and ensuring employee satisfaction are strong indicators that the talent that matters most to the company will stay around to catalyze its continued growth.

Performance – Company’s growth and productivity are vital in realizing the mission of superior customer satisfaction.

Influencing others – Putting forth the desired company’s face and leave a lasting favorable impression on every customer by exemplifying organizational achievement and momentum.

Recommendations – A fact which is frequently overlooked by many corporations; employees are often the first key point of contact for prospective customers, partners, employees, and investors. An engaged work force speaks highly of the organization and helps others in times of potential crisis.

“Experienced PR counselors are able effectively to engage its employees without sacrificing focus on the business pressures at hand and bring about the real value of an engaged work force”

Brand Value & Corporate Reputation

Holding true to the adage “an art is the work of its master”, PR counselor is in the best position to carve an excellent base of communication, in term of crisis or otherwise, and to form an integral part of the business entity in itself.

The PR counselor also works closely with the upper management to pool in the wealth of value and reputation the company has, to translate into dollar worth.  It is then, imperative for a company to accurately communicate its reputation and brand value to its stakeholders as concluded in the survey conducted by Hill & Knowlton in 2004.

Breaking the Perception

Against the initial perception of most corporations that PR is a cost center and that top management executives should be able to perform the role of a PR personnel, Gerry McCusker; a Media Trainer who runs his own PR agency based in Australia – Generation Text; advised otherwise.

In his view, PR should ideally be represented on every executive management team so the PR implications of any decision can be evaluated and planned for.

“PR should ideally be represented on every executive management team so the PR implications of any decision can be evaluated and planned for.”

The following case study proves the point that the lure of self aggrandizement should never supersede the needs of the audience you are communicating with; moreover in the exclusion of the much needed public relations expertise.

Prior to the opening of the newly improved South Eastern Freeway in Melbourne, Australia,  the old road had been dubbed the South Eastern Car Park due to the traffic bottlenecks that regularly built up, particularly around peak hours. The South Eastern Freeway project then became a top priority for the local transport authority, VicRoads, with amounting pressure from motorists demanding improvements.

Following an extensive series of major project works, the new freeway was completed with VicRoads’ management looking to bask in the glory of their splendid work. The project was such a success that the authority’s management decided to handle the media relations effort themselves, dispensing with the need for input from its in-house communications team.

The in-house PR staff saw a PR pile-up in the making when they were informed that the management team had arranged for a media photo-call at 4pm onsite, and thus strongly advised against the idea. Apparently, 4pm was the only time that all the VIPs from the roads authority could agree on to fit into their diaries. Unfortunately, the PR team’s concerns of the pile-up were waived aside.

To create the impression that the roads were clear and uncongested for media purposes, several lanes were closed off so the management team could cut a ribbon at an opening ceremony.  Alas, this caused a traffic snarl-up that far outstripped anything the old South Eastern Car Park had ever been able to generate. Motorists and media alike were quickly up in arms about the lunacy of the self-congratulatory indulgences of the officials involved in declaring the route open.

Talk radio was the first to vent, damning the bungling bureaucrats and totally overlooking the fact that they had successfully completed an impressive piece of civil engineering infrastructure.

As quoted on a PR consultancy website, Beattie Media online, “Nothing is more valuable to a company or organization than its corporate reputation.” VicRoads had clearly tarnished its own reputation by failing to take their in-house PR team’s concerns into consideration. This case scenario had painted a perfect example of how major a role the PR team’s effort plays in sustaining the company’s credibility and reputation whether in-house or outsourced.

Along with its reputation and good corporate image, VicRoads had also flushed away its brand value by sparking the furor – all owing to the arrogance of the top executives and failure of the management to consult the PR team.

Clearly, no companies or organizations are ready to risk their good corporate image and reputation in the eyes of their stakeholder. So then, is PR a department that brings immeasurable goodwill to a company or is it just another cost centre?

About the author:

Suryanto Gobeawan is a Financial and Technological PR Specialist and International Business Strategist with accumulated experience spanning across Asian countries such as Indonesia, Singapore, China, and Australia. He holds a Bachelor Degree in Public Relations and Marketing Communications from Curtin University and a Post Graduate in International Business and Marketing from the National University of Singapore.

He is reachable via email at suryanto_g@hotmail.com.

 

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