The year ahead: are you ready?
From discussions with more than 340 experts in diverse fields including business, finance, journalism, the arts, academia and the nonprofit sector, we have identified a set of noteworthy trends for 1999.
There is plenty of good news in the world today. But what will dominate discussions in 1999 are the uncertainties surrounding the Clinton presidency; the political shifts in Europe and the new euro currency; the fragile nature of the global economy; a possible contraction on Wall Street; layoffs and rationalizations resulting from the many mergers and consolidations that have taken and will take place; the continuing problems in Asia; rapid changes in the media; the unprecedented advance of high tech; the millennium; economic dislocation problems in Russia; rising terrorism; and continuing pressures on the ideas and central systems that have shaped modern life.
Indeed, we believe the basic and fundamental shifts that are now well under way, but that will take deeper root in 1999, will create vast changes in the world on a scale similar to that of 1968.
To set the stage, we need to recognize that 1999 will be a bellwether year - one that may well determine the direction of the world for at least the first decade of the new millennium with respect to: 1. the world economy; 2. global political stability; 3. momentum toward democracy vs. retrogression to authoritarian government; and 4. support for, or challenges to, U.S. leadership by regional blocs including the European Union, the Pacific Rim nations (especially Japan, China and India), and the Muslim nations in the Middle East and Southwest Asia.
EVERYTHING DEPENDS ON U.S. LEADERSHIP
There is no doubt that, at present, the United States is the unquestioned world leader in every vital area: economic, military and political. In maintaining global economic growth, containing or resolving dangerous regional conflicts, or setting the international agenda on such issues as the environment, energy policy and trade, the U.S. is clearly expected to take the lead.
But confidence in U.S. leadership is weakening as the decade nears its end because of:
1. the Asian economic crisis and its domino effect on Russia, Brazil and the emerging nations in general
2. a domestic crisis of confidence in President Clinton's leadership in the wake of Whitewater, the Monica Lewinsky scandal, the latest problems with Iraq and impeachment
3. the Clinton administration's inability to win solid support from its NATO allies in dealing with the conflict in Kosovo and from its Arab friends in handling Iraq's Saddam Hussein.
EFFECT OF THE IMPEACHMENT MOVE
(Editor's note; As we go to press, the U.S. Senate is still deliberating the impeachment of U.S. President Clinton. It is possible that this matter will have been resolved by the time you read this: however, we think you'll find the comments interesting, regardless of the outcome.)
To a great extent, U.S. President Clinton's and the country's performance in critical leadership areas in 1999 will depend largely on how the U.S. Senate deals with the impeachment issue. A swift, bipartisan resolution with agreement on a resolution of censure or rebuke as opposed to a prolonged, full-scale trial on the two articles of impeachment approved by the House could set the stage for Clinton and the Congress to agree on a positive agenda and provide a continuation of world leadership by the United States.
But a full-scale impeachment trial by the Senate could not really get under way before mid-January and could drag on for at least several months. The federal government would be gridlocked for the first part of 1999, and whatever the outcome, partisan rancor and bitterness fueled by the trial would ensure deadlock on domestic issues and a dangerous weakening of U.S. influence abroad.
If impeachment goes the full course, the pressure on the global economy will be intense. Chances for a mild recession in the U.S. and a serious worldwide recession could increase. Among other possible aftershocks we could expect from an impeachment are:
* a retreat toward isolationism in the U.S. as the economy deteriorates and the right wing seeks more political power
* a movement toward regionalism and nationalism across the world as nations attempt to cope with recession and the political problems accompanying high unemployment and reduced economic activity
* a movement away from democracy and toward authoritarian government, not only in the developing countries but in certain industrialized nations as well
* an upsurge in regional conflicts in the Middle East, Southwest Asia, the Balkans and Africa
* the possibility of major, economics-driven conflicts such as China vs. Japan and Russia, India vs. Pakistan, Iran vs. Afghanistan, the Arab states vs. Israel
* a serious challenge to the United Nations as a practical institution.
If the Senate aborts a trial and cuts off the impeachment proceedings with a bipartisan censure or rebuke of President Clinton, however, it is possible that forward movement can be made on important issues such as:
* social Security reform
* health care reform
* compromise tax cuts to stimulate the economy
* tax credits for education, public and private
On foreign policy, the U.S. will continue to press the Middle East peace process and to exert leadership to end ethnic conflicts in the Balkans.
Our primary focus will, however, be economic. As long as they remain in office, U.S. Federal Reserve Chairman Alan Greenspan and Treasury Secretary Robert Rubin will continue to support reduced interest rates in the U.S. and the industrialized nations to minimize the effect of a worldwide recession.
The highest foreign affairs priority will be the creation of a new international monetary system to curtail currency speculation and end the "hot money" targeting of developing nations whose currencies come under fire from speculators.
Also expect more pressure on NATO nations to assume greater responsibility for peacekeeping, conflict resolution, and curbing the proliferation of nuclear and other weapons of mass destruction.
What may be causing all this dislocation goes well beyond impeachment and is critically important to understand as you play your particular role in society going forward. That is the core of what this report is designed to explain.
TRENDS AS 1999 UNFOLDS
Here, then, are trends we encourage you to anticipate, prepare for, and accommodate as 1999 unfolds:
1. Time for a Major Movement? Nowhere in the world have large groups of people, not even the Pan-Islamic movement, coalesced behind an ideal as they did during and after World War II. To be sure, plenty of smaller groups are fighting for their beliefs and against those whom they see as their enemy (e.g., the Christian Coalition, Germany's Greens, the remains of Japan's LDP). But no global, or even regional, ideological movement exists today. And certainly no new global leader has come forward and been embraced.
Implication for business: With economic conditions around the world poised to worsen and continued blundering on the political front, the climate may be ripe for a demagogue or a seductive new political idea to emerge and capture the attention of a large bloc of people. In this environment, it is incumbent on business to sell aggressively the benefits of capitalism - to workers, at least - because the system is sure to be attacked if such a leader or idea emerges.
2. The Web - It Is Here in Spades: The following data underscore a powerful contemporary force:
More than a third of adults in the U.S. are online.
That means 70.5 million (34.9 percent) of the 202 million U.S. adults use the Internet.
More than 20 million U.S. Internet users, or more than half the country's Internet users, regularly log on to obtain news of the sort they used to get from print and broadcast outlets.
During the day, more than half (53 percent) use the Internet to get their news, surpassing newspapers (34 percent), cable television (43 percent), radio (48 percent), and magazines (52 percent), and almost equaling broadcast television (59 percent).
During the evening, more than half (51 percent) use the Internet to get their news, surpassing radio (14 percent), newspapers (20 percent), and magazines (46 percent), and approaching broadcast television (57 percent) and cable television (62 percent).
Americans spend as much time today surfing the Net as they do watching rented videos. Indeed, Internet statistics are obsolete by the time they are compiled because of the rapid rate of growth. The Internet gains an estimated new users per day.
The average age of the Internet user is 35.01 years.
The average income is U.S. $69,000.
57 percent have earned a master's degree or higher.
The biggest issue concerning users today is privacy (30.49 percent) followed by censorship (24.18 percent) and navigation (16.65 percent).
By 2000, consumers will spend $2.9 billion on high-tech equipment.
Consumers spent $4.8 billion online in 1998.
There are more than 5 million business sites on the Internet.
2,000 new business sites are created each day.
The number of companies that did business on the Internet is projected to be 435,000 in 1998, up from 135,000 in 1997.
Estimated U.S. advertising spending online for 1997 was $1.1 billion and it is predicted to reach $5 billion by the year 2000. By contrast, non-U.S. advertising spending was estimated at $25 million and will reach $704 million by the year 2000.
Every dollar spent on Internet advertising in 1997 generated $7 in sales, compared with $4 in 1994.
The Department of Telecommunications of India expects to see online users jump from 800,000 to 1.5 million.
A little over a year ago, almost 99 percent of the 13 million servers hooked to the Internet were distributed throughout North America, Western Europe and Asia. Only one percent of all Internet hosts were distributed to the 4 billion inhabitants that make up the rest of the world.
The number of Internet accounts in New Zealand increased 102.2 percent last year, reaching 215,125 served by 55 or more Internet access companies.
Russians now online number 600,000, a 100 percent annual growth rate.
Japan has more than 3.5 million users on the web.
More than 4.5 million people have used the Internet in the United Kingdom.
About 1.9 million Swedes have used the Internet in the past month.
Implication for business: The Internet cannot be ignored any longer. You must become computer literate to compete. But the Internet will not replace original thinking and ideas, and how these are communicated often will have nothing to do with technology.
3. 1999 Is a Time To Be Careful: The final months of 1998 brought with them startling news of profit warnings as well as cutbacks and layoffs from some of the most successful blue- chip companies.
Also in 1998:
Personal bankruptcies in the U.S. exceeded the 1.3 million record of 1997.
Home mortgage debt hit a record in excess of $3.75 trillion.
Consumer debt hit a record in excess of $1.25 trillion.
Employee compensation grew less than one-half of one percent compared to 3 percent in the 1950s and 2 percent in the 1960s, '70s and '80s.
The real median income of men with bachelor's degrees was $44,000 in 1986 and is below $39,000 today.
Of jobs created since 1992, less than 4 percent were in manufacturing.
Implication for business: There is a widespread, giddy, devil-may-care, the-party-will-last-forever attitude in the U.S. today that could be exploited by all types of unscrupulous opportunists and that could easily implode on itself. If it does, the effect on jobs, sales and shareholder value will be extreme and how the upheavals will be communicated by the media may make it worse.
4. We're Almost Past the Millennium: We have less than one year now to endure the endless discussions about 2000 and what it means. Everything from the perils of Y2K to forecasts, lists and predictions of all types confronts us every day. Some of the better thinking about the millennium emerging from this cacophony suggests an approaching rebirth of visionary new ideas and insights for moving the world forward in dozens of areas.
Implication for business: Look for plenty of additional millennium-related discussion and use the data themselves for your own platform. (Why be left out?) But remember - change is usually a glacial proposition requiring patience and constancy.
5. Have We Reached the End of the Tunnel? Although the resiliency of the U.S. economy continues, serious concern is being voiced in many quarters now. The signs calling for caution may be justified (negative savings, profit warnings by the blue chips, significant layoffs, some industries suffering severe setbacks).
Balanced against this concern are early signs that the Asian financial crisis, though far from over, may be receding. South Korea says it will immediately pay back the $3 billion emergency aid it received in 1997. China easily raised $1 billion in a recent bond offering. Indonesia, still a basket case with 80 percent inflation and skyrocketing unemployment, has lowered its projected budget deficit to 6 percent from an earlier forecasted 8.5 percent.
Much of this recovery has been driven by interest rate cuts in the U.S. Other positives: a preemptive support package for Brazil in exchange for fiscal reforms; direct monetary aid from Japan and others to Asia; and a pledge, at least, of global financial reforms to prevent a repeat.
Implication for business: It will take years for Asian economies to recover fully, and there is a major risk that we could have a world recession of some proportion in 1999. But the corner may have been turned. Much depends on Japan's continued ability to improve its economic prospects and on investors maintaining confidence in global markets. Now may be the time to be more aggressive in Asian markets. Communicating in Asia, and about Asia, will afford a new set of challenges.
6. The Challenge to Globalization: A serious school of thought, developing in several sectors, holds that globalization is actually destabilizing to the world. The idea is that globalization destroys what exists as it seeks an ultimate positive outcome. This fear goes far deeper than seeing a McDonald's at every corner of Beijing and Tashkent. It suggests, for example, that in its drive for market deregulation and transparency, the U.S. is actually destroying existing economic institutions and ways of doing business in foreign countries. It emphasizes that globalization has moved America to abandon its ties with Japan and Taiwan, allies for more than 50 years, to forge a link with China, a rival to both in the Far East.
Implication for business: This kind of parochial thinking leads logically to isolationism, an untenable position for any expanding business today. But all business can expect and should be ready for this kind of criticism as the price for progress that will, in the end, prevail over these less desirable ideas and ideologies.
7. Unemployment on the Rise: As the domestic and western economies begin to slow and merger and acquisition activity continues robustly, look for layoffs and unemployment rates to rise significantly in 1999. The world economic turmoil will take its toll on jobs - particularly at factories exporting goods to Asian and Latin American nations mired in slumps.
With sales slipping and competitors keeping a lid on prices, many already slimmed-down companies will slash costs even more by closing plants and handing out pink slips to keep earnings afloat.
Although final 1998 figures are still incomplete, most economists believe the total number of layoffs for the year will eclipse the record for this decade of 615,000 in 1993. In December, results of the three largest mergers led to more than 35,000 layoffs. This trend will accelerate in 1999. At the same time, the job market will remain relatively tight in specific sectors such as technology and retail.
No matter the state of the overall economy, announced and anticipated mergers and acquisitions will trigger major head-count declines throughout 1999.
Implication for business: Plenty of unhappiness and fear. But many will recognize they are fortunate to have their jobs, creating the potential for more employee loyalty if carefully nurtured in individual companies. We could see new advances in work-place communication.
8. Is "Big" Good or Bad? Recent deals have fueled this debate. Reports have actually been issued suggesting that efficiency drops when a company reaches more than $40 billion in sales, and that more than having "16 thinkers" in a decision-making body is counter-productive. Financial services, pharmaceuticals, telecoms and many more are combining. More is ahead.
Most management gurus say large deals, more often than not, produce negative or disappointing results. They suggest that the trend is undesirable if companies are forced to get bigger without reason. Moreover, history shows the biggest combinations - Standard Oil, ITT, Hanson - become undone in time as a result of antitrust actions, inability to manage, or simply the desire to monopolize a valuable asset.
Implication for business: This debate will continue and accelerate as corporate chiefs seek to justify their actions and those who lose wail that the good old days are lost. In either case, the communication challenge to win public opinion will be considerable.
9. Who Are the New Bad Guys? "I hate anything Egyptian," Goethe once said at a dinner party, "and I'm glad. One must always have something to dislike." Well, it's been true throughout history. People always seem to have an enemy. Some argue that it keeps their juices flowing and their energy focused. Hitler, Stalin, Pol Pot, Castro (who is really wearing thin by now) and, of course, Bin Laden (whom few really know about) and, finally, Saddam (whom everyone knows) have dominated modern times. For the future? Perhaps someone from the CIS, another despot from the Islamic world or, more probably, business people and, surely, that omnipresent target, the CEO.
CEOs are laying off thousands today and will probably fire more in 1999. They make big bucks. Most are not superb communicators. The media are frequently after them, not because of who they are personally, but because they symbolize institutional problems. Another unmistakable trend: The rise of corporate villainy in prime time. A study of 863 sitcoms, dramas and TV movies broadcast by ABC, CBS, NBC and Fox found business people, generally CEOs, tend to be portrayed as venal and unscrupulous. They engage in criminal behavior. And, as a group, corporate types commit more murders on TV than any other occupational category - even career criminals. Heroic CEOs, it appears, are in short supply on the tube.
Implication for business: Unless big business goes to the trouble of lobbying Hollywood and other producers of popular entertainment, expect this trend to continue. CEOs need to think very carefully about what they do to create, or sustain, their images. A misstep can cost far more than their own reputations.
10. Action in Check: The world's reaction to war generally, and to the latest bombing of Baghdad in particular, is not one of enthusiasm. No one wants trouble. But Saddam's Iraq, Kim Jong Il's North Korea, Khadaffi's Libya, terrorism, genocidal ethnic conflicts, nuclear weapons in untrustworthy hands, secretly hoarded stockpiles of chemical and biological weapons, disregard for the rule of law - these are big issues that cannot be ignored. To hide them might win short-term calm, but guarantees long-term disruption and still bigger problems. Right now, most look to the U.S. as the world's policeman. The United Nations and various alliances in different parts of the world also come into play. But it is clear that many nations around the world are losing their stomachs for standing up for principle and against despots.
Implication for business: Unless ways are found to ensure peace - and this begins with diplomatic and political processes, but ultimately must involve inclusion - bet on extreme disruption and all that implies: an uncertain future for businesses that are extended around the world.
11. A Risky Moment in Europe: Blair, Schroeder, LaFontaine, Jospin - the number of new players on Europe's political stage requires a scorecard as nations and the continent shift from a previously conservative stance to something left of the middle. No major European country has not recently changed to a measurable degree, and some politicians are borrowing word-for-word from the platforms of those in other countries. What this shift will eventually bring is anyone's guess, but it is certain that the lives of all Europeans are changing and the fortunes of domestic and offshore business will be affected.
Implication for business: Plenty of sorting out needs to be done to understand just how hospitable any new order will be to business. To be sure, the politicians and their disciples need business support badly, but just as certain is that some companies will suffer because those in power will need to find ready targets and early victories.
12. The German Advance: Make no mistake about it, the power of the German economy has been, and will continue to be, unlocked further as the nation begins to play a dominant role, not only in Europe, but also around the globe. Daimler-Chrysler, Bertelsmann and its acquisitions, Hoechst-Celanese, Deutsche Bank, plus the spinning-off of more than a dozen German companies all feed this trend.
Implication for business: Expect much tougher and often harsh competition from German business, further globalization of German business, and a not-so-subtle program by German politicians and thinkers to dominate a new Europe that, in its own way, will play a bigger role in shaping the world. One offset to this trend will be continued pressure from Holocaust-victim advocates.
13. An Asian Cultural Shift? The West is calling on Asians to take measures to deal with their fiscal crises by cleaning up the banking system, better regulation, an end to cronyism, a rooting out of corruption and more transparency. The assumption is that we will see fundamental cultural shifts and all will be well with the world. Don't bet on this happening. Such changes may come, but they will happen slowly simply because what led to Asian fiscal problems in the first instance is a deep-rooted way of life and of government in those nations.
Implication for business: Problems will be cleared up in the next 24 to 36 months, but do not expect basic systems to change for at least a generation and then only if organizations such as the IMF keep up intense pressure.
14. Chinese Domination: China has been quiet of late as it digests Hong Kong and prepares for a possible move on Taiwan and perhaps other parts of Asia. And while there are huge problems - health, employment, training, rule of law and more - to be overcome in China, the nation that holds more than 30 percent of the world's population is on the way to dominating Asia. You are certain to see many subtle efforts from various quarters to destabilize China in 1999 and 2000. The sharpest attack will come against its currency, the renminbi. Some of this action may slow China, but its advance will not stop.
Implication for business: If you are not in yet, you'd better hurry. Beware of the special situation types who claim to have "best friends" in high places who for a few hundred thousand dollars will guarantee you a position in China. Confusion reigns about where China is headed and what it may all mean to the rest of the world.
15. Power of Plaintiff Bar to Grow in 1999: The already awesome political power of trial attorneys is likely to grow significantly in 1999, particularly in the southern U.S. With a razor-thin majority in the House of Representatives, any Republican efforts to bring about significant tort reform are sure to be quashed by another Clinton veto, as they were in 1997. With hundreds of millions of dollars in their pockets from the various state tobacco settlements - and perhaps billions more to come - look for the plaintiff's bar to invest a fair slice of that money to go after other "sin" industries with aggressive class action suits.
Already gun manufacturers have been targeted in New York, New Orleans and Chicago, with additional suits likely in Philadelphia, Los Angeles and San Francisco. Can the alcohol and fast food industries be far behind?
Implication for business: This is a very serious and growing problem for business. Expect more harassment, more headlines and higher legal fees with little or no benefit.
16. The Changing Media: Never have the media been in such a state of change. Fewer people watching the over-the-air TV networks, the continuing rise of specialty magazines, the brevity of reporting, the lack of foreign news, media celebrities as commentators, the power of talk radio, shock journalism, the Internet, and a dozen more phenomena mark the new, and often unusual, channels through which we now receive news and information. Don't expect any of this to stop.
And recognize one remarkable change: Increasingly, the media no longer report on the past. They report on the future. We are learning what is going to happen before it occurs! Many leading media now pride themselves on what they call "curtain-raisers" - letting us know what is going to unfold before it happens. There is much less attention to the "how" and the "why" of what happened - probably because it is boring and introspective and does not get reader/viewer/listener attention.
* 80 percent of Americans say news coverage is determined by how sensational a story is, not its relevance.
* 78 percent say newspapers and TV are biased and unfair.
* 45 percent say a story shouldn't run if it's attributed to anonymous sources.
* 35 percent say they regularly find spelling and grammatical errors in news stories.
Implication for Business: Look for all this to continue and for top business executives to be repeatedly challenged (even to lose their jobs) and for stock prices to gyrate as a totally new paradigm for working with the media emerges. For the short term at least, this change will not be fully understood in the face of the subtle, and not so subtle, shifts cited here.
17. Rise of the Niche: Is the mass market dead? For now, probably. Billions are being spent as virtually everyone searches for the ultimate decision-maker and for who, and what, influences that person. Media outlets, direct mail, magazines, cable television and many more are adjusting to this niche phenomenon. Niche strategies, once billed as providing a special edge, are now commonplace. One major institution has concluded that only four reporters will drive its media coverage. Another institution has identified the 16 media (reporters) "who count." Niche philosophy appears to be dominating politics, finance, entertainment and most other fields.
Implication for business: Find your niche or niches and go after it or them. Think about how your competitors are using this strategy, and reflect on how you shape what used to be mass market appeals and messages.
18. Preaching to the Choir: The multitude of pressures on companies today, and on the people leading them, has led to a recognition that communication is more critical than ever. And communicate they do - often only to those who already agree with them. What we have are a series of viewpoints reinforcing those who hold the same opinions. Reasons often given for this circumstance are that companies want to build a deeper base of support for their views. Rarely do companies reach out to hostile or uninformed constituencies in their efforts to communicate.
Implication for business: The opinions of those who are hostile or indifferent will calcify and be even more difficult to change, but a short-term comfort level will deepen among those who "preach to the choir."
19. Culture: Where Is It Coming From? Popular wisdom has it that the U.S., so powerful in so many ways, dominates the cultural world. Look again.
In major markets around the world, lists of the biggest-grossing films are essentially lists of Hollywood blockbusters. In Europe, the United States claimed 70 percent of the film market in 1996, up from 56 percent in 1987. In Japan, the U.S. now accounts for more than half the film market. "Titanic" has grossed almost $1.8 billion worldwide.
But in rock music, Europe rules. A rock-music poll of 200,000 people aged 9 to 62 reports that seven of the 10 most popular albums are British. As the rock market goes from fragments to niches, from urban rap to techno, it is harder to see global dominance. French groups such as Air and Daft Punk and Swedish groups such as Ace of Base and the Cardigans are in. In Germany, the world's third-largest music market after the United States and Japan, local performers account for 48 percent of sales, double the percentage five years ago. In Spain, 58 percent of total music sales are generated by Spanish and Latin American artists. MTV is making different programs for different regions.
Ibiza is considered the capital of global dance music.
On Broadway, the British increasingly dominate.
In fashion, the great houses of Paris and Milan dominate the high end, and the British are coming on strong.
In publishing and magazines, the best-known magazine editor in the United States, Tina Brown, is British. Non-U.S. companies control half of America's top 20 publishing houses.
The idea that U.S. culture extends to all corners of the globe is a myth.
Implication for business: Like it or not, this is where attitudes of the future are being formed and it is crucial to be aware of, and be part of, what is going on. Also expect parochial quotas and subsidies from many countries in the early part of the 21st century to protect their own cultures.
20. Television - What Happened to Taste? Mainstream television is full of explicit sex, violence, profanity and worse, and reversal does not appear in sight as the ratings for these programs are high and advertiser support is at all-time high levels. In prime time, shows with violent content on the American networks increased 14 percent, to 67 percent of all shows, and shows on cable with violent content increased 10 percent, to 64 percent of shows. Nearly 75 percent of violent scenes on television showed no remorse, criticism or penalty for violence on the scene. "South Park," the most popular show on cable, features four dirty-talking third-graders who poison Granddad, promote a boxing match between Jesus and Satan, and converse with a talking pile of stool called "Mr. Hankey the Christmas Poo." There are still worse examples.
Implication for business: This is not a new trend, and that is, itself, a problem. Expect a lowering of standards in U.S. culture and more violence in a society often out of control.
21. English, Spanish and Chinese - Everyone Is Speaking Them! Right? Maybe not. Approximately 6,500 languages exist in the world today, and experts predict half will become extinct in the 21st century. Roughly half the world speaks one of 10 languages. Mandarin Chinese is spoken by 16 percent of the world's population, followed by English and Spanish at 5 percent each; varieties of Arabic, 4 percent; Hindi, Portuguese, Bengali and Russian, 3 percent each; and French and Japanese, 2 percent each.
Implication for business: For the short term, bet on English. But recognize that had the French colonized the U.S., English would not be so dominant. And know that the change under way in the world, and cited earlier in this report, could easily result in a shift here. Today, if you operate globally, it will be useful to have staff who can communicate in a mother tongue other than English.
In closing, I want to point out, not incidentally, that recent research indicates that the happiest, most fulfilled people are those who are the busiest. And six out of 10 people say they are busier today than they were five years ago - something worth pondering. Consider too, that the same study finds that the greatest stress is felt by young singles who are making the transition from adolescence to adulthood.
Corporate Communication Trends
Distributed in the sidebars on the following pages are summaries of findings from the Best Practices in Corporate Communication and Public Affairs Group, New York, from a recent survey conducted on what's hot and what's not in corporate communication for 1999.
Employee communication and customer service are linked. Communication, using technology and relationship building, is critical to customer service. Communication professionals can assist their CEOs in articulating and leading in customer service. CEOs see customer service as one of the two communication issues that will drive the future (Gallup study).
Marketing and communication are closely aligned to business goals. The functions are being merged, and the marketing and communication alliances should be further explored. The links between the two will grow stronger, even be combined.
If employees are involved in the valuation process, they will become advocates. Employee communication will be an increasing priority with 7.5 communication staff people, on average, per each $1 billion in sales.
Staffing and budgeting - pressures dictate change. Greatest budget increases appear to be in financials, employees, technology, corporate branding and corporate marketing.
Corporate branding has a positive effect on stock price, survival and growth. Branding and communication must be aligned as never before, as branding and communication leaders both have a strategic future. If communication does not take a leadership position in branding, then branding will lead and communication will be left behind.
Globalization is reshaping business strategy and communication practice. The communication function must lead in being active and supporting the corporation in globalization.
Current business trends are reshaping the face of communication relations. As a result of corporate downsizing and the infusion of new technology into business practices, as well as increased competition, companies are forced to re-examine the way they do business, including how they conduct community relations. Sponsorship is the fastest growing medium in the market. When compared to advertising and sales promotion, sponsorship/event marketing expenditures have grown 613 percent over the past 16 years, versus 103 percent and 127 percent respectively for advertising and sales.
Technology drives effective communication: It is the wedge that will continue to increase productivity and access in communication. The Internet is the most effective way to advance a company's story and its mission. Financial information on the web is a primary source of information that will grow; extranets will be used by most corporate communication for media site access; more and more companies are using web sites to provide customer service; audio and video is still in the growth stage, and not being widely used.
Communication and business need to be combined to support growth. Only half the people now in top PR positions come from PR backgrounds. More and more are coming from business backgrounds. The challenge then is to have communication people acting with both business acumen and communication skills. In budgeting, staffing and the overall strategic side of communication, communicators must be able to show they add value and link communication with market Share.
1) Staffs are strategic and can counsel while outsourcing more tactical functions.
2) Financial communication is one of the most important areas as companies focus on IR and finances as never before.
3) Internal/employee communication has never been more important.
4) Technology communication areas: staff and expenses, intranet and extranet, the Internet, e-mail.
5) Integrated communication with marketing, advertising/branding, financial
6) Research and measurement.
7) Marketing communication.
8) Customer service communication and tie to bottom line.
9) Corporate reputation and corporate branding functions
10) Global communication.
WHAT IS STATUS QUO:
1) Media relations.
2) Community relations and philanthropy.
3) Crisis management.
4) Government relations.
5) Executive Communication.
WHAT'S NOT HOT:
Products, publications and production.
Robert L. Dilenschneider is president and CEO of The Dilenschneider Group, New York City.
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|Title Annotation:||business challenges for 1999|
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|Date:||Feb 1, 1999|
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