Looking Ahead: 2000 Mergers May Leave PR Execs Shaken, Not Stirred

Mergers swept the communications industry by force in 1999, and if industry forecasters are correct, 2000 will bring more of the same. As PR NEWS went to press on the eve of the so-called-but-not-quite-accurate millennium, crisis guru Jim Lukaszewski wagered that rogue Web sites and other forms of anti-corporate cyber-griping also will dominate the PR radar screen in the coming months. We upped the ante and threw measurement into the ring. "It's the same old same old," Lukaszewski says. Redundant, perhaps. But never boring. Merger Mambo Analysts expect global mergers to continue throughout 2000, with the latest $27 billion handshake between biotech giant Monsanto and Pharmacia/Upjohn setting the pace for this year's buying binge. And the rude cultural awakenings that will inevitably occur inside merging corporations will mean more work for those specializing in "change management" (whereas those specializing in denial will be job hunting). Internal communications continues to be a hot ticket discipline. Last month, a Conference Board survey (PRN, Dec. 13) indicated that most communications executives consider it their responsibility to help fix the dysfunctional corporate cultures that so often result from merger activity. In some industries, however, mega-mergers will also unleash budget cuts inside not-so-giant companies that are struggling to compete. Consider the energy sector, still reeling from the 1999 betrothals of Mobil to Exxon and Amoco to BP. "We are now a much smaller company competing with [three to four dominant] companies with market caps of $150 to $200 billion dollars," says Mike Thatcher, general manager, public relations and communications at energy company Unocal (owners of "76" brand gas stations). "There is a real push in our industry to maintain quality service levels, but reduce costs." This may mean outsourcing certain PR functions, downsizing project budgets, re-evaluating rote strategies and not ruling out layoffs in the future, he says. "To use the euphemism, we have already redeployed several people," says Thatcher. "That's never pleasant." Icons of Global Branding This is not to say life will be cake for communicators inside the newest heavyweight conglomerates. "Corporations have become so huge that their assets rival the economies of nations," says Kenneth Makovsky, CEO of Makovsky & Associates. Today, the billion-dollar question - upon which many corporate communicators' salaries are riding - is how to leverage those assets into global brands. Although General Motors became a multinational in the 1920s with acquisitions in Asia Pacific and Europe, "these were all set up as very independent organizations," says Steve Harris, VP communications at GM. "Only in recent years have we begun to look at the potential [global] power of the GM brand and how that should be handled. One of our main objectives in 2000 is to find out." Look for a greater emphasis this year on corporate reputation and social responsibility as cornerstones of big brands. Business decisions will increasingly hinge on public perception and its influence on bottom line profits (enter PR). "For example, what are the responsibilities of multinational companies investing in developing countries where democracy is either nonexistent or struggling to have a presence?" Thatcher illustrates. "What is the responsibility of the corporation with respect to human rights or women's rights?" "There's a whole conflux of issues that no one has the answers to yet," Thatcher says. But that isn't stopping consumer groups, investors, the media and employees from demanding answers from company representatives. And it certainly won't stop an anticipated surge in anti-corporate activism fueled by the grand soapbox known as the Internet, says Lukaszewski. "A lot of people will be adversely affected by companies bought and sold," he says. Many will turn to Web warfare for vindication. Well-known brands also will be attractive targets for those who generally despise big business. As such, another branding strategy that's likely to be resurrected is what Makovsky calls the "iconizing" of CEOs. There's a need to "distinguish a corporation by giving it an individual, distinctive, human face," he says. Bill Gates, for example, spends 10-15 percent of his time on media relations. Down the road, more and more CEOs will take the Iaccocca road in personifying the corporate brands they represent. Strength in Numbers Despite the race for brand reputation and tech savvy, the biggest challenge for PR in 2000 is still, arguably, self-preservation, with measurement as a key driver. "We're still faced with the usual dilemma of how to tie what we do to the business goals of the organization," says GM's Harris. "How to demonstrate to management that our relationships with various audiences [warrant a certain] allocation of dollars." Kelly Presta, VP of public affairs at VISA International, concurs. "We need to be business people first and communications people second," he says. "What you often see is PR people who are very capable, but allow themselves to be 'marginalists.' [They] define success just by being in the arena" as opposed to assuming some responsibility for shaping strategy. "We think PR and journalism majors need more financial management courses," says Jack Felton, president of the Institute for Public Relations and a professor at University of Florida. CEOs and CFOs speak the language of numbers, and are more likely to value PR if it can be defined in terms of ROI. And where there mergers are concerned, only the strongest will survive. You do the math. (Lukaszewski, 914/681-0000; Harris, 313/667-3437; Thatcher, 310/726-7600; Makovsky, 212/508-9600; VISA, 650/432-7248; Felton, 352/392-0280)

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