Is Your Company Ready to Go Global?

Globalization is reshaping corporate business strategy and with it communication. This is the thesis of a recently completed, two-part report by Best Practices in Corporate Communication, in conjunction with CARMA International [*]. The report examined the effects of this dramatic change on the corporate communicator and developed a series of benchmarks, which can be used to meet the challenge of globalization.

In world-class companies, the communication function leads in supporting the corporation in its globalization effort. In the current era of globalization, corporations are faced with pressure to gain international market share, and activist boards and shareholders have made it increasingly important to keep global sales and stock prices high. To meet these challenges and elevate the corporation's global reputation, corporate communication teams need to be part of designing and implementing the global strategy.

Best-practices companies are balancing the global-local challenge of overall communication -- advertising, branding and media relations. These companies are synchronizing international operations and coordinating these activities in communicating information from local subsidiaries to headquarters. In best-practice companies, corporate business strategies and objectives guide everything. The communicator's role is to support, highlight and reinforce those objectives through every communication medium.

To support the business plan, communication functions must be integrated and aligned with other corporate functions, such as marketing, human resources and customer service, to develop and execute global communication plans. Corporate communication teams are becoming more active in staffing for the global market. They are focused on issues such as integration of global brands and market share.

Globalization has increased the need for clear, consistent and central corporate messages with adaptation at the local level. The global economy is an inter-linked economy and is increasingly a borderless world for business. In the borderless world, it is essential for both corporate communication and corporate managers to seize leadership to spur new growth.

Drastic Changes

Globalization has brought some drastic changes: In one year, the amount of time spent by top communicators on global business has risen 15 percent. The amount of time spent by communicators on global mergers and acquisitions is up 10 percent. This trend is due to the fact that in the past eight years, the number of merger deals jumped from 11,300 to 26,200 worldwide.

With more than 20,000 strategic alliances announced in the past two years, alliances are truly the key to successful global business. Fifty percent of firms involved in alliances market their products globally, vs. 30 percent of companies that are not involved in alliances. Communication must use strategies in alliances similar to those used in mergers. Communication needs to be a part of coordinating the strategies between the members of the alliance to insure clear and consistent messaging.

Global Budgets and Staffing

One very promising trend for communicators is that budgets for global communication are on the rise and have risen an average of 8 percent. The increase in budgets is attributed to the following factors: increased market share overseas that requires increased local communication support; competition that drives up budgets as increased local presence and awareness through special events, branding, and media relations is necessary to outshine the competition; technology costs and its many tools for the communicator; and increased staff costs.

Successful global staffing is critical; a global mix is the best choice. Companies are appointing experienced staff to the international public relations and public affairs functions both at headquarters and in the field. Overseas staff generally includes a mix of U.S. citizens and employees from the host country. Global training is essential. Bestpractices companies provide global training for headquarters and field staff.

Reaching Key Stakeholders, Worldwide

Companies understand the importance of reaching key global stakeholders. In this study, we identified 11 essential stakeholder audiences for a successful global strategy: Customers; Potential Customers; Alliances and Partners; Employees; Stockholders and Investment Community; Distributors; Media; Community; Government; Trade and Professional Constituency; and the General Public.

Executive Communication Focused on Global Markets

Top corporate executives who consider their companies very successful globally spend 40 percent of their time on global issues, compared with 25 percent for executives overall. "Walk-in-their-shoes" companies that view themselves as most successful have a higher percentage of overseas citizens in top management than other multinational companies overall: 20-25 percent vs. 10 percent for all companies. Communication departments in best-practices companies are using their CEO and top executives by having them address key constituencies worldwide and make best use of their time overseas through media availability and meeting with key stakeholders.

Global Employee Communication

Employee communication is a top priority for current communication leaders and CEOs worldwide. This focus is shown by increased percentages of corporate budgets allocated to internal communication and increased teaming and information sharing across positions. It is essential to gain feedback from employees through surveys and focus groups as well as to measure the success of your employee communication programs.

Best Practices in Corporate Communication discovered several global employee communication trends:

* Recognition that international business is the competitive edge and that corporations are making employees or associates champions of the brand and corporate message,

* Increasing focus by employees on business goals, with sensitivity to new markets in country-specific situations or global sales overall,

* Managing employee communication with technology that allows for instant communication without concern for time zones,

* Tying human resources with communication support to recruitment and retention and

* Training and technical assistance to build business knowledge.

Best-practices companies interviewed estimate that 89 percent of their U.S. employees now have Internet/intraner access, with at least 60 percent on a worldwide basis. Virtual communication is necessary in the global environment, allowing corporations to keep in touch. Communication made possible by technology has opened up the world -- for 24-hour-a-day corporate updates. Technology is driving global communication.

New Activism: the New Challenge for Communication

Activism is a reality for communication managers and business executives. Though most corporations want to open up all borders, protectionist elements occur everywhere. The United States has a problem with a growing insular attitude and a need to understand the importance of globalization. A poll from the Pew Research Center taken in late 1999 shows that 43 percent of Americans think that the global economy would help the average citizen in years ahead, yet 52 percent said it would hurt. This skeptical environment means that there is a need for strong leadership from communicators, whose counsel is essential for strategy to affect media and policy makers. Best Practices in Corporate Communication identified five factors that are driving new activism: insecurity, mistrust, policy, priorities and technophobia. We also identified the top six activist movements that affect corporations in the global arena: shareholder activism, Internet activism, employee activism, human rights issues, work-place reform and envir onmentalism.

Integrated Global Messaging

The best-practices companies have integrated global messages into statements and references reflecting their values, and into their mission statements, annual reports, fact sheets and press releases. Best Practices in Corporate Communication projects that only 60 percent of the U.S. multinationals and overseas-based companies with U.S. major subsidiaries have integrated communication messaging using global reference in each part of the company printed material. We believe that this figure will easily move to 80 percent in the next two years.

Global Branding and Measurement

Global branding is the number one issue in global communication, and it demands strategy and measurement. Research is critical for global understanding, and best-practices companies are using research to develop a better understanding of their global constituencies--and communicators must immerse themselves in the research process. Companies are using a variety of research tools: local market and public opinion research, both primary (e.g., surveys, polling) and secondary (e.g., media, trade associations); information from customers, suppliers, partners; media research; data from U.S. institutions (consulates, U.S. Information Agency); and Internet research.

Global Community Relations 

In an international community relations program practiced country by country, corporations must show their commitment and responsibility to communities through a variety of outreach practices. A targeted focus on community relations within each country against the overall framework for the particular marketplace is the key. Successful programs must be consistent with cultural and societal norms and expectations. Best Practices in Corporate Communication estimates a 10 percent increase in budgets and staffing for international community relations.

Investors Become Global

Finance and investor relations--in a world where U.S. $1.5 trillion a day travels across borders as foreign exchange transactions, one of the primary forces tying the world together is the global shareholder. Global equity is redefining capitalism and the new economy in every corner of the planet. Financial markets have become global, investors have become more demanding, and the Internet has reshaped how value is created. To keep up, communicators and investor relations must work together and reflect a more integrated view of the business, a greater understanding of the effect of technology, and an ability to align stakeholders with the organization's objectives.

Corporations most attuned to the forces of global competition will continue to look for new strategic opportunities and new markets as they seek new customers.

Global Media Relations

Corporate communicators are changing media strategy overseas. Analyzing the news media provides a clear understanding of how a company is portrayed to target audiences and also provides intelligence on emerging issues in any given industry. The value of media analysis is not only knowing about your own company and its presence in the media, but also understanding where your company fits into the big picture.

In part two of this report, CARMA International sought to capture the big picture by conducting a competitive, global analysis of 50 leading companies. The goal of part two of this Best Practices report was to quantify what the media were talking about. CARMA researched 3,249 articles from targeted global media, tracked 27 specific news topics that shape media coverage for any company and used a proprietary rating system to indicate the degree to which the media was favorable or unfavorable. Synthesis of the data revealed which companies the media are reporting on, which topics attract accolades and which topics bring unfavorable words from the media.

CARMA found the five topics that the global media reported on most often were products and services, mergers and acquisitions, joint ventures and partnerships, earnings and revenues, and stock performance. The media were less interested in writing stories about the environment, corporate citizenship, advertising and domestic growth.

CARMA also found that there is a strong correlation between corporate reputation and stock price. This finding demonstrated that consistent, focused business strategies must permeate every aspect of the company's communication. Consistency, coupled with solid corporate leadership, can project a strong corporate vision and philosophy that will play well to the media. Good examples are the companies that rated highest in the corporate vision category: AT&T, General Motors, Citigroup, Sears-Roebuck, Pfizer and J.P. Morgan.

To measure global media relations practices, CARMA developed a "media analysis model" that any corporation can use to enhance its measurement practices. The model has four parts: Evaluate corporation-to-media communication to demonstrate return on investment; evaluate media communication to key stakeholders to determine the effect of messages on your most valued audiences; learn what competitors are saying and doing; and gain insight on key and emerging issues that the media are reporting on and use this information for forecasting.

Conclusion

As you can see from this snapshot, globalization is truly reshaping corporate communication. The entire two-part report, "The Global Imperative," examines the effects of this dramatic change on the corporate communicator. In this article, we summarized some of our key findings and gave you background on the new issues that directly affect the communicator. We at Best Practices in Corporate Communication and CARMA International developed a series of benchmarks that can be used to meet the challenge of globalization. For more information on this report or to order a copy, please contact Best Practices in Corporate Communication at 800-476-7044 or visit our website at www.TPAG.com.

Edie Fraser is president of Public Affairs Group, Inc., an international business research, public affairs, and strategic communication firm based in Washington, D.C. She is also the CEO of the Best Practices in Corporate Communication Service (BPCC). Brian Heiss is a director of Best Practices in Corporate Communication.

About Best Practices in Corporate Communication

Best Practices in Corporate Communication provides a series of reports and consulting services on superior business communication methods that substantially improve corporate communication departments and allow companies to continue to excel in the highly competitive business arena. Best Practices identifies communication benchmarks for key components that make up corporate communication and then develops Best Practices, which can be adapted and molded to fit a company's specific needs. Best Practices in Corporate Communication currently serves more than 150 corporations, mostly Fortune 500 companies.

About CARMA International:

CARMA International is a global leader in the industry of media analysis and PR evaluation, with clients in all sectors around the globe.

CARMA International's role in this report:

CARMA International conducted a competitive, global analysis of 50 leading companies, in order to capture the big picture of global media perceptions.

The goal: what are the media talking about? CARMA researched 3,249 articles from targeted global media, tracked 27 specific news topics that shape media coverage for any company, regardless of its industry, and used CARMA's proprietary rating system to indicate the degree to which the media coverage was favorable or unfavorable. Synthesis of the data revealed which companies the media is reporting on, which topics attract accolades, and which topics bring unfavorable words from the media.

Methods

In conducting this report, Best Practices in Corporate Communication surveyed 100 member corporations as well as many leading global corporations from the Fortune Global 500 list. We then selectively interviewed respondents to further evaluate their methods and expand on their thoughts. We also conducted extensive research and analysis of leading business and communication publications and other resources.