Strategic communication: dead or in demand as never before?

At a recent conference (not sponsored by IABC, by the way), I heard a communicators say that he wished he'd never hear the word "strategic" again.

I damn near died.

Just when we have evolved to our highest point, when communicators all over the world are practicing communication strategically, getting measurable results for their organizations, and being recognized and rewarded for it as never before, we hear this. What on earth does he want to replace the practice of strategic communication with? "Yeah, let's quit this 'strategic' madness and get back to just doing communication, without worrying about whether it's relevant to our business or not."

If we abandon strategic communication management, we will set the profession back so far that we will never recover. We'll all be saying in our new careers, "You want some fries with that order, Ma'am?"

To me, the most positive shift in our profession has been the shift to strategic thinking. Strategic (communication) thinking recognizes the cause and effect relationship between our communication activities and the achievement of our organizations' missions. It means that communication programs support successful completion of the organization's strategic activity in a measurable way. Today, senior leaders demand nothing less.

Just look at the resurgence of internal communication. Some say employee communication is our most-in-demand area of practice. This tells me that senior leaders want their employees to be a part of strategic management for positive results, and they know that communication is the bridge. Work issues are life issues. Building a dialogue helps disparate groups come together around a common theme.

With that in mind, will our senior leaders let us turn away from practicing communication strategically? I think not. Have you heard your CEO say that he/she wished all this business strategy stuff would go away? "Yeah, bag this strategic jive. I'm gonna run the company by whim and guesswork."

Imagine a senior leader telling his/her board of directors or governors or trustees that strategic management is a thing of the past. And what about shareholders? Would they allow senior leaders to do away with strategic management? CEO to shareholders at annual meeting: "Your management team has decided to cease strategic management, stop any market research, end our planning process, and throw away all business and operational plans. From now on we are going to follow our hunches, guesses, rumors and unsubstantiated ideas to maximize your shareholder value." Right after your CEO does that, you'll be able to yell back at him/her from the sales counter, saying, "Hurry up with those fries! I've got customers waiting."

I promise you this: I'll stop believing in and practicing communication strategically when MBA programs stop teaching future business leaders strategic planning. All we have to do is look at how future business leaders are trained. That's the information we need to know to gain their respect and trust.

The message is clear: Communicators need to become business managers who specialize in organizational communication. Organizational leaders respect business managers, and view their experience as necessary and relevant. Are we communicators having a business experience, or are business managers having a communication experience? I think we are communicators having a business experience, and it is our responsibility to become business managers, then help other business managers be effective and successful with their communication experience.

We must learn more about strategic management, not less. We must improve our ability to manage communication strategically, not abandon it as a fad. Right now, senior leaders respect us more than they probably ever have, and I believe it is due in large part to our evolution into strategic business communicators. Let's build on that momentum.

Senior organizational leaders frequently rise to the top corporate job from line functions and may not be trained in organizational communication management, typically a staff/administrative function. Senior leaders who come from analytical backgrounds such as accounting, finance, economics or engineering are accustomed to reviewing and approving strategic plans, marketing plans, business plans and operational plans that follow a methodical process. Organizational communication may be devalued in the minds of such senior leaders who may tend to view it as less strategic, scientific, or analytical, and therefore less likely to contribute to the organization's bottom line.

Business schools, and specifically their MBA programs from which many senior leaders come, frequently do not teach organizational communication management - specifically the importance and practice of employee communication - therefore contributing to the devaluation of organizational communication among future leaders.

In researching my MBA thesis earlier this year, I studied the curricula for the 15 top-rated MBA programs by US News & World Report. Of the 15 programs, only nine currently offer communication or public relations courses. This supports my belief that most MBA graduates will not have been exposed to organizational communication or public relations training in their coursework. Therefore, they may tend to devalue it when they become senior leaders.

We can't make anyone value us, if their values are so different from our own. So, we must approach management on their own terms. What does management value, and what must we learn - what behaviors must we adopt - to be valued? Senior leaders value and require results-oriented, strategic management from business managers. Communicators must become business managers adept at strategic communication. To do this most effectively, I believe there are 10 elements of business management communicators should know something about. Following is a very brief overview of the 10.

1. Organizational theory and design

What kind of business is your business? There are compelling reasons to study organizations: Organizations are the underpinning of modern civilization. They are today's action medium, exercising immense power. Microsoft Corporation is a good example. Studying organizations has great practical value, since 90 percent of the population works in them. Organizations are potential agents for economic and social change, playing several public policy roles. For these reasons, the communicator can easily see the practical value of knowing more about organizational theory and design. Studying organizations also leads the communicator to the importance of organizational effectiveness, of strategy and structure, of environmental change and strategic adaptation. Studying organizations teaches you about managing change an innovation, enhancing your decision-making abilities

2. Quantitative analysis 

Quantitative analysis is the scientific approach to managerial decision-making, using research and statistics to make informed decisions. Communicators must understand and be comfortable with the quantitative methods employed by today's organizations. The quantitative analysis approach consists of these seven steps:

1. Defining a problem 2. Developing a model 3. Acquiring input data 4. Developing a solution 5. Testing the solution 6. Analyzing the results 7. Implementing the results

Communicators can add value to each step, plus be a tremendous asset in helping employees understand the results and their relevance in shaping strategic direction.

3. Marketing theory and practice

Simply defined, marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, services, organizations and events to create exchanges that satisfy individual and organizational objectives.

Knowing your markets - anyone who will buy your product or service - is called market segmentation, and it is critical to practicing marketing effectively. It is must-have information for the employee communicator who must translate such information to promote a customer service mindset among employees.

Communicators should know the marketing mix variables:

Product - is it consumer or business?

Price - is it elastic or inelastic?

Distribution [place] - what's your channel strategy?

Promotion - what's the mix?

Marketing is integrated with many other elements of business management, such as statistics/research, the economic environment, organizational/individual behavior, ethics, business law/regulation and finance/accounting.

Communicators also should know something about the selling process, since you will likely support it. Here are seven steps in a logical selling process:

1. Prospecting 2. Approach 3. Presentation 4. Demonstration 5. Handling objections 6. Closing the sale 7. Follow-up

4. Accounting basics

Accounting is score keeping, reporting on the economic aspects of the organization. Accounting is a language system that business managers must know. Communicators can help themselves by becoming familiar with the accounting framework and how it is used in evaluating economic conditions for decision making. You should be familiar with financial statements and accounting reports. More on this in the next section, Finance.

Understanding the power of measurement in coordinating, motivating, and evaluating the activities of employees in modern organizations is a competitive advantage for the communication manager. To manage effectively, you must know your organization's budget process and give the accounting department what it needs.

5. Finance

Finance consists of three interrelated areas: money and capital markets, dealing with securities markets and financial institutions; investments, focusing on the decisions of both individuals and institutions as they choose securities for their investment portfolios; and business finance involving the actual day-to-day management of the firm.

The study of finance helps organizational leaders make sound business decisions and minimize risk. In finance, you will encounter the forms of business organization - corporation, partnership, not-for-profit. These structures are fundamental and reccur throughout the study and practice of business management.

The key to knowing finance is the study of financial statements. Annual reports, for instance, present four basics:

1. Balance sheet - a statement of the firm's financial position at a specific point in time in terms of assets, liabilities and stockholders' equity.

2. Income statement - summarizes the firm's revenues and expenses over an accounting period, usually a quarter or a year.

3. Statement of retained earnings - that portion of the firm's earnings that has been saved rather than paid out as dividends.

4. Statement of cash flows - reports the effect of a firm's operating, investing, and financing activities on cash flows over an accounting period.

The real value of financial statements is that they can be used to help predict a firm's future earnings and dividends. Financial ratios are used to show the relationships between financial statement accounts. There are five kinds of ratios:

1. Liquidity ratios - show the relationship of a firm's cash and other current assets to its current liabilities.

2. Asset management ratios - measure how effectively a firm is managing its assets, such as inventory turnover and days sales outstanding.

3. Debt management ratios - how the firm uses debt financing or financial leverage. Believe it or not, a firm can have too little debt.

4. Profitability ratios - show the combined effects of liquidity, asset management and debt management on operating results. There are three types: profit margin on sales, return on total assets (ROA), and return on common equity (ROE).

5. Market value ratios - relate the firm's stock price to its earnings and book value. Two frequently used ratios include price/earnings ratio and market/book value.

6. Managerial Economics 

Managerial economics is the application of economic theory and the decision science tools to solve managerial decision problems. The study of economics is the study of the bedrock of the capitalistic business system, and therefore is fundamental knowledge for business managers. Any review of economics should include the basics of supply and demand, production and costs, market structure vis-a-vis competition, risk analysis and pricing practices.

7. Ethics

Most organizations have some code of ethics. IABC has an excellent code of ethics that we should all follow. Such codes describe the value system of the organization, tied closely to an organization's mission and vision. Codes of ethics are directly related to the organization's corporate culture. Knowing the code of ethics is most important to the communication manager, since this is key information on how things are done in the organization. The organization's ethics must be communicated clearly and regularly, and, to do their intended job, codes must have some relevance to employees. Of course, violators are usually punished in some way for such infractions as taking kickbacks from a vendor.

8. Business law

I believe communicators should review the basics, such as the general principles of law that affect business, federal and state/province court systems, regulatory environment, employment law, and business organization and structure. You will doubtless work closely with your corporate legal staff at some point on some important issue, so being prepared will help you understand how attorneys approach their work, in turn helping you help them. You add value, and everyone wins.

9. Strategic planning

Planning is designing a desired future and the ways of bringing it about. The planning process provides both the criteria for making day-to-day organizational decisions and a template against which all such decisions can be evaluated. Strategic planning answers three basic questions: Where are we going as an organization? What is the environment we must negotiate to get there? And how do we get there? I believe the more a communicator knows about strategic planning - and the organization's specific plan - the more effective he or she will be.

10. Organizational and individual behavior

Organizational behavior has strong ties to behavioral sciences - psychology, sociology, anthropology - as well as to allied sciences of economics and political science. It's about how people come together to do work effectively and get something meaningful out of it. Communicators play a major role in this phenomenon every day. The more you know, the greater will be your effectiveness.

In summary, we must not abandon strategic thinking and the practice of strategic communication. In fact, we must do more. We must refine the process and become better at it. We must never give up our strategic mindset. And we must - and will - become competent business managers in the process. This will ensure our value and the subsequent demand for our services for a long time to come.

RELATED ARTICLE: WHY AN MBA?

The debate still rages over whether communicators who want on advanced degree should get an MBA or a masters in communication. IABC explored the subject thoroughly in the article, "Which Master's Matters: A Real World Look at the MBA versus M.A.," in the June/July 1997 issue of Communication World.

My undergraduate degree is in communication with a marketing minor. I chose to get on MBA for three reasons:

1. I knew I could learn continuously everything I needed to know about communication management from IABC.

2. I knew that whatever communication skills and knowledge I had would be applied to business. Therefore, I needed to know more about business.

3. I am a strategic planner/communicator and have held senior planner positions with two firms. An MBA is an absolute requirement for a strategic planner and, accordingly, became a part of my professional development goals.

A communicator does not have to get an MBA to be a competent business manager, but it does help. An advanced degree of any type is, however, becoming almost commonplace, therefore expected rather than nice-to-have for serious business managers. You can learn from a variety of other sources. Here are a few:

* Ask your specialist colleagues, for example, an accountant in your organization, for a simple and quick source of learning more about accounting principles. You'll make a friend, and that will help to advance your education and promote future strategic alliances.

* Organizations such as the American Management Association and its European sister organization offer courses such as financial management for non-financial types.

* Classes at local colleges and universities. Pick an area of interest and take a course or two. You don't have to get an advanced degree. Individual courses will prove valuable as well. Continuous learning is the driving force.

* Local business schools, for classes in management, managerial accounting or finance. Same reasons as above.

* In-house training by your employer. Many organizations offer excellent training in-house on many of the subjects discussed here.

* Various seminars and workshops, local, state/province and national.

* College bookstores. Great source of up-to.date books and workbooks on any of these subjects.

* The local library.

* Business publications. Yes, I know you've heard this before: "Read the Wall Street Journal, Harvard Business Review, Fast Company, Forbes and Business Week" (among others). Knowledgeable people say this because it is solid, helpful advice. You can learn much from such publications. Buy them or access them online.

* Your industry's trade publications. Read these to stay current on trends and issues affecting your business.

* Your industry's conferences and seminars. Great source of networking for later contact when there is a need. Great for discussions of relevant issues, and tips, tricks and techniques that work in dealing with those issues.

Les Potter, ABC, helps organizations boost their effectiveness in achieving their mission through strategic communication management. based in Washington, D.C., he is an IABC Fellow and former IABC executive board chairman.