The communications industry is rightly obsessed with demonstrating the value of its work, but the conversation has typically centred around measurement and metrics. New research, the first of its kind, shows that there is another, crucial issue that must be addressed as a priority.
We interviewed 300 executives in companies with over a thousand employees, and over a third simply did not have a good understanding of what their communications function actually did. And when asked to name the functions they felt provided the strongest value to the business, only 13 per cent of executives put communications in their top five. This lack of understanding has created a gap between communications teams and their most important stakeholders. We call this gap the communications chasm, and as PR gets more sophisticated, and executives get busier, this gap is going to widen.
However, there is light at the end of the tunnel. Of those executives who did have a good understanding of communications, 80 per cent thought it delivered good value. In other words, the greater the understanding of communications, the greater its perceived value.
"The greater the understanding of communications, the greater its perceived value."
This presents a huge opportunity for our industry. In order to truly demonstrate value, we first need to show our most important stakeholders how communications actually works.
What does ‘PR’ stand for?
Starting with the basics, respondents were asked about their knowledge of this oft-used acronym. Almost two in 10 executives either do not know what PR stands for, or think it stands for something incorrect (figure one).
Looking at these results by seniority, 19 per cent of senior managers and 22 per cent of directors did not know what PR stands for. It is slightly better news at the top, although one in 10 CXOs still missed the mark. The stronger performance of CXOs in comparison to more junior executives may be explained by the fact that discussions around the boardroom table demand a working knowledge of all of the business’s functions. Furthermore, directors and senior managers are more likely to be focused on the day-to-day running of their specific teams and less concerned with the nomenclature of other departments.
We then looked at the results by division. Fourteen per cent of respondents in finance do not know what PR stands for, followed by customer-facing and technology at 16 per cent and operations at 17 per cent. Within the production division, an astonishing 30 per cent of executives were either oblivious or incorrect.
Finance teams, who manage procurement and invoicing, are duty bound to have a basic knowledge of the entire organisation. The poor performance of production may be due to their relative lack of day-to-day interaction with the PR team.
Executives’ understanding of communications
We also asked executives what they think their communications team does. It turns out that many simply do not know. When executives were asked to name the business functions they had the strongest understanding of, only 15 per cent put communications in their top five.
As our research shows, most executives have an adequate or greater understanding of PR. However the fact that 37 per cent do not have a good understanding of what their communications team can offer is concerning (figure two).
Again breaking down the results by seniority, we see that understanding increases as you go up the chain of command: only 19 per cent of CXOs do not have a good understanding of PR/communications, compared with 44 per cent of senior managers and 38 per cent of directors.
These results mirror the trend seen when executives were asked what PR stands for, with C-level executives performing better than their more junior counterparts. The fact that so many executives below the C-suite have such a poor understanding of communications may imply that the decisions regarding communications from the very top are informed, but execution of those ideas by subordinates is suboptimal.
Looking at the executives’ understanding of communications by company size (figure three), our research suggests that the larger the company, the lower the understanding.
Thirty-one per cent of respondents working at smaller companies with between 1,000 and 5,000 employees did not have a good understanding of what their PR/communications function does, followed by 39 per cent at companies with 5,0001 to 10,000 employees. In the largest companies, with 10,000 or more employees, 48 per cent of respondents did not have a good understanding of PR/communications function. That’s almost half the entire business!
It makes intuitive sense that communications teams working in smaller organisations would gain more access to executives, which in turn would breed greater understanding. In larger companies, challenges regarding scale (e.g. silos) and geography (e.g. physically separated offices) may inhibit exposure.
We also see that understanding differs across divisions. Customer-facing teams may have a better understanding of what the communications function does because they are on the front lines, where the impact of media coverage can be most keenly felt. The Finance division scored top when asked what PR stands for (86 per cent). But do they feel the need to understand how the communications team does its job? These results suggest not. The Production division, meanwhile, is again trailing, with less than half (48 per cent) of executives having a good understanding of what communications does within their business.
Executives’ perceived value of PR
Next, respondents were probed as to their perceived value of communications; a crucial issue because this is likely to influence budgets, resource, opportunities to collaborate and more.
Shockingly, 40 per cent of executives do not think that their communications function delivers good value to the business. Not only does greater seniority of respondents equal better understanding of communications, it also tends to increase the perceived value of communications. Thirty per cent of CXOs did not think that their PR/communications function delivers good value compared with 40 per cent at director level and 45 per cent at senior manager level. Applying the filter of division, we see that customer-facing teams appreciate the value of communications more than other divisions.
Hardly surprising: often PR’s primary role is to ‘soften the ground’ by promoting the products or services that are being sold. What is concerning, however, is how far behind the rest of the organisation is; clearly, there is plenty of work to do if we are to turn a majority of executives into true advocates.
The direct link between understanding and value
The findings of this survey demonstrate a relationship between an executive’s level of understanding of communications, and the amount of value they feel it provides. Of the executives who responded that they had a good understanding of communications, a vast majority (80 per cent) also thought it delivered good value to the business. Conversely, only eight per cent of respondents who did not have a good understanding of communications said that they thought it provided good value.
As Chris Talago, vice president public relations and communications for JAPAC and EMEA at Oracle told us: “It’s common sense that the greater the understanding our exec stakeholders have, the more they’ll see the value we can deliver. There are two critical elements to this equation 1) effective, meaningful goal setting and measurement based on the Barcelona principals; 2) clear ways to sell back what we do in an easily digestible way for time poor leaders."
For any communications team looking to demonstrate value, helping executives understand communications is the crucial first step.
C-level executives are arguably the most influential and powerful players in any organisation. Despite being relatively small in number, they set the strategic objectives of the business. Our research shows that communications is slightly better understood and valued at this level than further down the chain.
However, executives outside of the C-suite really matter in terms of execution, and within this much larger and more diverse group, communications is faring poorly. Only 60 per cent of directors and 55 per cent of senior managers believe that it adds good value. Therefore, communications teams looking to better demonstrate the value of their work must help executives at all levels understand what they are capable of.
Five tips to better engage executives
The findings of this survey demonstrate a relationship between an executive’s level of understanding of communications, and the amount of value they feel it provides. Here are five ways to traverse the communications chasm:
- Help others. Collaboration breeds understanding. Customer-facing teams would better appreciate PR if they could quickly gain access to fresh, relevant coverage. Our research showed that the production division was particularly unengaged; but what if team members could easily see how the media reacted to the products they had shed blood, sweat and tears to create? If senior stakeholders in Finance better understood how budgets are used, would the relationship between the two functions improve? Communications can win advocates across the organisation by showing how their work benefits everyone.
- Curate coverage. Traditionally, communications teams have demonstrated their worth by pointing a firehose of links, scans and screenshots at busy stakeholders. This simply serves to drown the genuinely valuable work. Instead, we recommend showcasing only the most relevant and impactful pieces, leaving the rest on the cutting room floor. This will ensure that the best work shines, saving time for all parties in the process.
- Add context. Coverage alone is not enough. What is it about the coverage that matters to the business? Has the CEO been quoted in a top tier publication? Is there evidence that perceptions of the business are changing? Has a crisis been averted? Teasing out the relevant aspects of coverage can play a crucial role in helping uneducated audiences to understand why it matters.
- Simplify metrics. If stakeholders can’t easily understand the metrics used by communications to measure the success of their work, it’s difficult for them to value it. With such a plethora of stats to choose from, the urge is to ‘wow’ stakeholders by including as many as possible. Much has been written of advertising value equivalent for example, but the problem in this context is that executives are unlikely to understand what it means. Even metrics like sentiment and share of voice must be explained when shared with uneducated audiences. Our advice is to pick a handful of simple metrics, and explain what they are and why they’re being used.
- Focus on format. Fantastic coverage, carefully curated and supported by clear explanations and metrics will fall on deaf ears if delivered in a cluttered email, bulky PDF or uninspiring PowerPoint. .
To find out more about this research, visit www.releasd.com/execs