The Financial Times’ recently-launched campaign, ‘The New Agenda’, calls for a reset of the principles of capitalism, promoting stronger corporate purpose beyond just shareholder returns.
It is not alone. In August, the chief executives of many leading US corporations signed up to a statement by the US Business Roundtable affirming their commitment to all of their stakeholders, supporting the communities in which they work, respecting the people in their communities and embracing sustainable practices.
This is an evolving agenda rather than a new one. Businesses have moved on considerably since economist Milton Friedman’s assertion in 1970 that their sole purpose is to generate profit for shareholders.
Nowadays many, if not most, corporates will be able to articulate a more worthy purpose than mere profits. While I am highly sceptical of grand vision statements that bear little resemblance to reality, there is no doubt that most businesses already take a much more proactive stance in considering their impact on the customers they serve, the people they employ and the society and environment they operate in. Social value is increasingly important to them.
This broadened focus and commitment to all stakeholders rather than just shareholders has profound implications for how businesses should communicate.
Rather than aiming corporate communications squarely at investors, analysts and business media, it is now vital to communicate the corporate brand to myriad audiences, from business partners to employees, local communities, politicians and customers.
Take climate change as an example – an issue high on the agenda for many corporates.
Yes, businesses still need to communicate their sustainability strategies and actions to investors. Shareholders are becoming more and more influential and focused on the longer-term strategies of the businesses they invest in, with top-tier funds driving sustainable performance. The chief executive of Blackrock, one of the world’s largest asset managers, asked company bosses to think about how they can deliver a social purpose, not just financial performance, in his 2018 annual letter to the CEOs of all the businesses it invests in.
But pressure on companies to take a sustainable path is rising on all sides, not just from above, and they therefore need to communicate effectively in multiple directions.
Many large-scale business partners, such as IKEA, are demanding high environmental standards of all the businesses in their supply chain.
Employees, particularly those in younger generations, are increasingly motivated to work for companies for ethical reasons rather than the career-oriented financial motivations of yester-year.
And – while some high-profile companies still manage to thrive despite not looking after their customers – in other instances consumers have demonstrated an increasing willingness to vote with their feet (and their social media accounts) if they perceive a brand to have poor environmental, social or ethical standards. Just witness the boycott of the Dorchester Collection hotels and ensuing protests earlier this year because of laws introduced by their ultimate owner, the Sultan of Brunei, punishing gay sex and adultery with death by stoning. Or the measurable reduction in air travel by Swedes following the #Istayontheground campaign led by teen activist Greta Thunberg.
In this context, companies must communicate these elements of their corporate brand to a much broader set of stakeholders.
To do so effectively requires an increasingly broad set of skills. Media fragmentation and the development of new technology has given corporate comms teams an expanded set of channels and tactics to grasp.
Senior comms professionals therefore must understand the nuances of communicating to a wide range of audiences and stakeholders. They must understand how a message intended for one audience can quickly reach another that has an entirely different perception of it. They must know how to skilfully manage communications across an ever-increasing and diverse set of channels.
Some communications teams have evolved well. Yet all too often we see companies communicating effectively to one audience while neglecting a wide range of other equally important ones. Siloed teams failing to recognise that a particular communication task they are managing has wider ramifications and a need to be shared more broadly within their organisation. This lack of integrated thinking, which often stems from a failure to adequately invest in communications despite its increasing complexity, inevitably leads to underachievement; a failure to maximise the positive impact that communications can have.
I applaud the aims of “The New Agenda”. Businesses focusing on a broader range of stakeholders than just investors is, of course, a good thing. But a broader stakeholder set must be matched by a broader comms strategy. For companies to promote stronger “corporate purpose”, to bring people with them, to lead and inspire change as many profess to aspire to, they need a “New Communications Agenda” – one that is truly integrated and mindful of its full ecosystem of audiences.