ceo strategic communications as driver final eng (1)

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CEO Strategic Communications as a Driver of Company Performance

Dec 2011

Crocker Coulson, President

CCG

2


Largest 100 Global Companies

30

13 11

9

5 6

US Germany Japan France UK China

Fortune Global 100

3


Most Valuable 100 Global Companies

39

4 1

6 9

11


Top 100 Public Companies by Market Cap

4


Leading 100 Global Brands

Source: Interbrand Global Branding Consultancy, a division of Omnicom

49

10 7 6 5

0


Top 100 Global Brands

5


Hidden Dragons, Timid Dragons

“China’s national champions are using their advantages as domestic leaders to build global brands. The country’s dedicated exporters are attempting to enter foreign markets on the strength of their economies of scale. “

In October 2003 the Harvard Business Review predicted the rise of a new breed of China global brands –

-- “The Hidden Dragons,” Ming Zeng and Peter J. Williamson

What happened?

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China As Global M&A Player?

0.23 0.19 0.19 0.462

0.9

1.3

0

0.5

1

1.5

2005 2006 2007 2008 2009 2010

China FDI into US (Billions USD)

…and a modest pace of outbound FDI

Mixed track record of success in acquiring brands…

Hits Misses

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China’s Corporate Brand Contradiction

• China now #2 global economic power, on the way to #1

• Chinese government’s Go Out Policy encourages strategic acquisitions to deploy massive ($3 trillion) forex reserves and build global competitiveness

• China’s corporate giants remain “hidden dragons”

• Track record of high profile outbound acquisitions is miniscule despite rich landscape of distressed assets

“In addition to driving market demand, brands also create

value by enhancing the brand owner’s ability to charge premium prices for their products and services.”

-- Interbrand Best China Brands

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Brand as a Manifestation of Values

•

A global brand is the result of a consistent set of principles and actions that infuse the company from the very top

Brand Value Corporate Value

Innovation Fosters creativity

Quality Uncompromising excellence

Trustworthy Transparency and integrity

Global Diversity and global perspective

Inside-out-brand Outside-in-brand

Who I think I am What I want to be

What I offer customers What customers think about me

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CEO as the Brand Ambassador

•

Steve Jobs exemplified the power of obsessive, integrated communications

• PT Barnum of the product launch

• Weekly strategy meeting with marketing and PR team

• Obsessed over every ad campaign and corporate message (“Think Different”)

• Cultivated key reporters

• Major magazine covers with every key product introduction

“Innovation distinguishes between a leader and a follower.”

10


CEO as Change Agent

•

When Lou Gerstner brought back IBM from the brink of bankruptcy he unified all communications around one single

message: e-business

• Agenda for deep strategic and organizational change

• Personal and thoughtful employee communications

• Unified vocabulary to talk about IBM across thousands of global customers

• Set the R&D agenda

“Every senior executive made e-business a part of his or her presentations and speeches. We communicated frequently on the subject to our people so they could understand and then evangelize.”

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What is Public Relations?

Classic public relations seeks to shape the news and use third-party expert opinions to “pull the wires which control the public mind”

Edward Bernays “Father of Public Relations”

• Invented the press release and product tie-in

• Nephew of Sigmund Freud

• Taught women to smoke and made bacon healthy

“This is the age of mass production. In this age, too, there must be a technique for the mass distribution of ideas.”

“The best defense against propaganda: more propaganda.”

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Modern Discipline of Strategic Communications

•

The democratization of information driven by technology, mobility and global linkages has rendered many classic PR techniques obsolete

New Communications Imperatives

• Authenticity

• Radical transparency

• Motivate and align talent

• Market credibility

• Customer fanaticism

New Communications Landscape

• Decentralization of media outlets

• Widespread skepticism regarding political, corporate and media authorities

• Bureaucracy impairs innovation

• Globally networked, engaged customers and public opinion

13


CEO Strategic Communications Toolkit

• Corporate story

• Brand messages

• Core values

• Business strategy

• Customer briefings

• Corporate video

• User conferences

• Product launches

• Press conferences

• Analyst days

• Placed profiles

• Case studies

• Employee letters

• Townhall meetings

• Executive speeches

• Biographies

• Corporate website

• Social media

The best strategic communications synchronizes messages across industry, employee, public, government and investor constituencies

Strategy Execution Reputation

14


Defining Your Corporate Story and Voice

Every company must find the style, profile and communications mix that is effective, authentic and distinctive.

• What are my company’s core values and aspirations?

• What is distinct about our corporate history, management philosophy, and people?

• What is our position within our industry? (Established giant, challenger, iconoclast)

• Do we have a unique view of the future?

• What level of personal exposure am I comfortable with?

At the core, effective communication is always about storytelling

15


Common Challenges for Chinese CEOs

Chinese management is often hamstrung by ingrained habits from effectively getting their message across on a global stage

“For a vast majority of Chinese companies,

marketing is not even on their organizational chart."

– Scott Markman, Monogram Group

• Hierarchical management culture leads to discomfort with debate

• Strengths in low cost, large scale manufacturing and distribution

• Minimal investment or focus on marketing and brand

• Many industry giants are SOEs with strong policy mandates and opaque decision making

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PR Perceptions and Realities

Western media and consumers are likely to respond poorly to a “propaganda approach” to corporate messaging

Perception Reality

Role of Media Media should transmit truth as company sees it

Global media prizes independence and skepticism

News Value

Our company is important so media should cover us

Media needs an angle and broader context

Public Relations It’s all about spin It’s all about credibility

Accuracy Bend the facts to suit the story

Verify the facts since the reporter certainly will

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• New Trends in the social media world:

China’s Social Media Problem

• If trends continue the population of Facebook (approx. 900M) will soon exceed that of the PRC

• China is cut off from major platforms shaping global social and consumer discourse

• Domestic SM platforms (Sina Weibo, TenCent Weibo) provide viral sources of truth and opinion that can decimate corporate reputations

• China is increasingly “talking to itself”

A “Social Media Revolution” is changing the face of business with breathtaking speed

“Learn from the masses and then teach them.”

– Mao Tse-Tung

18


Haier Lenovo

Greenfield Investment: Setting up manufacturing facilities in South Carolina

Office Buildup: Operates its United States offices in the Haier Building at 1356 Broadway, New York City

Gartner Inc. and IDC announced Lenovo replaces Dell to as world's 2nd-largest PC maker on Oct, 13, 2011. Lenovo acquired IBM’s PC division in 2005 and sells Thinkpad under Lenovo Brand Lenovo Chief Executive Yang Yuanqing says will keep pursuing acquisitions to boost growth

Case Study: Steady Progress by Global Brands

CEO Lectures at top business schools Harvard Business school and Wharton generating international media coverage

19


In two press conferences, Alibaba’s Jack Ma asserted that board, including Yahoo! and Softbank, had been informed of and approved of the transfer

Recently, Jack Ma says he is making a potential bid for Yahoo

On May 10, 2011, Yahoo! said that ownership of “Alipay” transferred to 100% ownership by a separate company owned by Alibaba’s CEO, Jack Ma

Case Study: Alipay Dispute Damages Reputation

Previously a highly regarded business figure, Jack Ma now viewed as example of problematic Chinese business ethics and compromised rule of law

How will this impact any future bid for Yahoo!?

20


Case Study: Huawei Fumbles on Acquisitions

Huawei Profile

• #2 global telecom equipment provider

• 110,000 employees, 55,000 overseas

• 185 billion rmb revenues in 2010

• Claims 100% employee owned

Despite leading technology and distribution profile Huawei has abandoned two U.S. acquisitions after meeting political resistance

• Huawei seeks to acquire bankrupt U.S. tech company 3Leaf

• No other viable bidders

• Political firestorm due to alleged ties to PLA and U.S. sensitivity to pervasive Chinese cyber attacks

PR 101 Checklist

Regular management interviews

Comprehensive U.S. website

Community involvement

Proactive government relations

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China at the Crossroads

1) The era of propaganda and classic public relations is over

2) Strategic communications directly impacts brand, public perception and business success

3) China Inc. faces unique challenges in building global brands

4) CEO must be the principal change agent and brand ambassador

5) These issues will be pivotal to China’s efforts to build global champions and achieve balanced economic development

The Revolution is now: How will you transform as a leader and as a company?


Thank You

Dec 2011

Passion - Accountability - Performance

ceo strategic communications as driver final eng (1)

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