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CEOs view PR issues in '89.

CEOs VIEW PR ISSUES IN '89 Productivity tops the list of internal concerns for CEOs; government regulation dominates the external list.

`Pr people are losing touch with their CEOs."

"We're becoming adroit technicians, not boardroom influencers."

"The status of communication in the corporation is diminishing."

How often have we all read these familiar--and dismal--prophecies on the future of the corporate communication function? For years pundits have clamored that our field is losing prestige with chief executive officers--even as the growing complexity of corporate governance demands our skills and insight more than ever.

It is a familiar refrain. But a new survey suggests that it may be wrong.

The survey, which polled 70 US chief executive officers of Fortune 500 and Inc. 500 companies, contains considerable evidence that leaders of large companies--and smaller, rapidly growing ones--have a sound appreciation of the importance of communication to internal and external publics. It also shows that CEOs realize that communication-related issues will play important roles in the futures of their companies.

The survey was conducted in 1988 by The Goldman Group, a New York-based executive search and management consulting firm, in conjunction with IABC's Executive Forum. The entire study is available from IABC.

The 38 Inc. CEOs and 32 Fortune CEOs who filled out the 34-item questionnaire do not, of course, constitute a sample that can be projected to represent a larger universe. Rather, they can be viewed as a concerned panel of some of the most successful and most pressured people in the business world. Company sales ranged from less than US $5 million to more than US $5 billion (total sales, $148 billion), and numbers of employees ranged from fewer than 500 to more than 100,000.

The study was particularly revealing when we compared the responses of the Fortune group--CEOs of large, successful, relatively mature and stable companies--with those of the Inc. CEOs--companies that are entrepreneurial, rapidly growing and less sophisticated in organization and communication techniques. CEOs GIVE PERCEPTIONS OF COMMUNICATION ROLE Here are a few highlights that indicate the CEOs' perceptions of the importance and effectiveness of the communication function and the people who manage it:

] The senior person in corporate communication reports to the CEO in 40 percent of the Fortune companies surveyed and in 79 percent of the Inc. companies.

] Asked to rank six functional areas according to their "return on investment," both Fortune and Inc. CEOs gave higher rankings to corporate communication than to advertising or legal.

] In both types of companies, more than 80 percent of the CEOs reported that corporate communication was part of the company's strategic plan.

] Seventy-seven percent of the Fortune companies had a formal crisis management policy, while 81 percent of the Inc. companies did not have one.

] Seventy-two percent of the Fortune CEOs said they were "completely confident" or "very confident" in their crisis team's preparedness. Only 13 percent of the Inc. CEOs were "very confident" and none were "completely confident."

] As a further indication of their confidence in the crisis management team, only 10 percent of the Fortune CEOs said they would take a "very active" role in crisis communication, while 58 percent of the Inc. CEOs said they would be "very active."

] As company size increased, the public relations/corporate communication professionals played more important roles on the crisis management team.

You might ponder, as we did, this apparent contradiction found among the Fortune CEOs: while only 40 percent have the senior communication person reporting directly, 72 percent had a high level of confidence in the crisis management team, which has significant communication responsibilities. We think it's possible to surmise that a direct reporting relationship is not as crucial to the communication person as is access and participation. As corporations function with fewer management levels, looser organization tables and team approaches to problem-solving, to whom a communication officer reports may be less significant than what teams he or she plays on. A LOOK AT THE FUTURE CEOs were asked, "What do you project will be the most sensitive issues in the next five years that will have to be addressed by your company's employee communication program?" Many CEOs gave more than one response. Productivity was the leading answer, mentioned by 33 percent of the Fortune CEOs and 15 percent of the Inc. leaders. Not far behind was the process of convincing employees that corporate goals were of value to them, mentioned by 20 percent of the Fortune and 15 percent of the Inc. CEOs.

Some sample quotes, covering a variety of these concerns:

] "Never be like 1945-1980 again, and continual `push and pull' message may become unappreciated by employees."

] "Maintaining an understanding on the part of employees of the company's goals and management's actions to reach them."

] "Get everyone on board with goals."

] "AIDS in the workplace."

] "Benefits and control."

] "Aging work force."

] "Restructuring and relocations as they affect individual employees."

] "Corporate concern about job security, taking specific well-communicated steps to deal with issue."

Similarly, CEOs were asked what they believe will be the most important external issues facing their companies five years from now. There was little consensus, but both groups of CEOs saw government requirements as the leading single issue--although for many different reasons:

Sample quotes covering a variety of external issue concerns:

] "Constraints from government on freedom to act responsively and responsibly to fast-developing issues--because of failure of a few companies to act responsibly."

] "Federal and state tax policy as it affects capital investment."

] "Government mandated benefits"

] "Over-regulation (mainly in benefits, by pending labor laws)."

] "Price controls."

With dramatic changes taking place today, employees are expected to be highly productive and to produce quality work; yet the overall environment is fraught with insecurity. Do CEOs really care about what employees at all levels feel about the company?

We asked, "As CEO, how important is it for you, personally, to be aware of attitudes and perceptions of all levels of your employees regarding company operations, expectations, procedures and plans?"

Of course we expected CEOs to assign a high value to such knowledge. We surmised, however, that CEOs of larger companies would tend to give less importance to such awareness, given the difficulty of achieving it. However, except for the smaller businesses in our sample, the data suggest that the opposite is true: the larger the firm, the more importance a CEO ascribes to personal awareness of employee perceptions.

Our interpretation of this finding is that the common perception of the insulated--and disinterested--CEO is, frankly, out of step with today's realities, at least among our survey sample. It also challenges the traditional view of management communication as a "top down" process.

"Insufficient time" was the leading frustration the CEOs felt about their own participation in internal communication, although both groups, on average, said that they were spending almost the ideal amount of time in that area. The Inc. CEOs said 21 percent was ideal, compared to 19 percent actual, while the Fortune CEO ideal/actual ratio was 14/15 percent.

While there was much in the study to indicate that the CEOs understand and value communication with employees, one question area produced a finding that should keep corporate communicators busy well into the next century.

Asked to "rank order the importance" of a number of factors to employees, both groups of CEOs said that "pay" was first, followed by personal skill development, job security, rewards/recognition, company success and seven other factors.

As most communicators know, this perception is at odds with hundreds of other studies that show that employees never give as high a ranking to pay as they do to factors relating to personal development, self worth and challenge.

The study turned up no easy answers to solving communication problems--for there are none. But the survey does indicate that there is a potentially receptive audience of one who is interested in seeking such answers: it's the person in charge.
COPYRIGHT 1989 International Association of Business Communicators
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Coppolino, Joseph
Publication:Communication World
Date:Jan 1, 1989
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