One could write dissertations, books - anthologies, even - on the trends that have shaped the business environment over the years. They are innumerable, but their impact on
the communications function is crystal clear: Economic pressures, corporate scandals and advancements in technology have transformed PR executives and communicators from reactive
underlings to proactive decision-makers and contributors to their organization's goals.
Concurrently, these trends have brought CEOs down from their own stratosphere and embedded them directly into day-to-day, strategic business activities, thus giving
communicators even more opportunities to be influencers in their organizations. But, as the global economy rebounds from its turn-of-the-century traumas, the cross-border merger-
and-acquisition trend of late begs for new attention to the PR/communications function and how it relates to C-suite activities.
A number of surveys highlight the explosive growth of mergers and acquisitions (which, of course, can be pinned to globalization and the "world is flat" mentality) and its
implications on integration. A good place to start is with PricewaterhouseCoopers' recently released 10th Annual Global CEO Survey. The results, culled from interviews with and
responses from 1,084 CEOs from 50 countries worldwide, offer a number of revelations directly applicable to communications executives:
- 47% of all CEOs interviewed are actively engaged to some degree in M&A activity;
- Confidence levels of CEOs have nearly doubled since 2001; and
- A small but significant number of CEOs derive competitive advantage from outsourcing activities that were traditionally perceived to be too strategically important to
outsource, including R&D (12%), human resources (11%) and even marketing and sales (9%).
So, this M&A-centric environment has its repercussions on the communications function in terms of challenges, but it presents ample opportunities for practitioners to
shine, and to smooth over transition processes. After all, another survey - conducted by a merger integration expert at Katzenbach Partners - reveals the startling truth that
most-merger integration activities are lacking, to say the least:
- 67% said their companies' efforts to integrate people, processes and systems took anywhere from one to more than five years, while experts say the optimal time for
integration is six to 12 months;
- 63% said their companies' post-merger efforts were "average or below average;" and
- 49% said their companies needed "merger repair," as they were experiences chronic productivity, service and performance problems.
However, most relevant to PR and communications executives is this news: The top-three integration-related areas cited as needing improvement are communications; leadership and
decision-making; and process and results measurement. This finding only reinforces the reality that communications executives must be fully integrated into every function of the
organization, as it can be the solution to a number of challenges presented by this new environment:
- Facilitating a smooth transition, both in terms of messaging, the media's perception and employees' understanding of their new roles and responsibilties;
- Fostering open lines of communication, both internally and externally;
- Assimilating corporate cultures: In the PricewaterhouseCoopers CEO interviews excerpted in the survey, Lenovo Group Chairman Yang Yuanqing said of his company's acquisition
of IBM's notebook business: "We must also identify differences in corporate cultures of the merging companies and establish a new corporate culture that suits the development of
the new company. Which side's culture should be adopted depends on which one is more appropriate for our industry."
- Facilitating smooth internal processes and developing new skill sets and core competencies (through communications' integration with HR and leadership management). Says F.
Bulend Özaydinli, CEO of Turkey-based Koc Holding A.S., "We have had to adjust our organizational culture and internal processes, and acquire new skills to be able to act faster,
go beyond what we consider as our natural markets and develop new competences to replace the ones challenged by the new actors on the scene."
So the argument (the absolute necessity, really) for integrating communications into all business activities is clear; now it's just a matter of knowing how to do it in the
increasingly global, post-M&A environment.
Successful integration efforts begin with an intrinsic business feature: its organizational structure. To whom communicators report is of key importance in making sure
messaging (both internal and external) throughout the organization is consistent, strategic and effective. This is made all the more importance when companies merge, and roles
and responsibilities overlap and collide with one another. (To see where many communications executives currently report, see chart.) But as organizational structures evolve and
adapt to new environments, there are steps practitioners can take to facilitate integration into all business activities:
- Recommend reporting relationships based on the organization's needs, considering centralized, decentralized or matrixed approaches;
- Create informal communications councils, a la The New York Times Company. (Tuck School of Business Professor Paul Argenti quotes Catherine Mathis, the Times Company's VP of
corporate communications as saying, "One of the purposes of The Times' communication council is to ensure that everyone is singing from the same songbook.")
- Create an integration manager position (as Harley Davidson did) to oversee efforts and report progress/problems directly to senior management. This person can be a liaison
between communications executives and the C-suite when it comes to all integration initiatives; and
- Use technology (blogs, social networking sites, RSS feeds, text messaging, podcasts, webinars, etc.) to get your message out across borders and time zones.
These are the initial steps to take when approaching integration (post-merger or not); then the issue becomes one specifically of reporting relationships, which will be discuss
in greater detail in next week's issue. But for now, it's about recognizing the payoffs: preservation of the corporate brand, enhanced reputation, ability to manage/mitigate
crises, the optimization of business results.
The buzzword is integration, and the time to do it was ... well, yesterday.
(For the full Pricewaterhouse Coopers CEO Survey, visit http://www.pwc.com/gx/eng/pubs/ceosurvey/2007/10th_ceo_survey.pdf.)