As information travels faster, reducing response lead times, the pervading ambition among those leading corporate communications is to flatten and centralize their teams. The 2011 PRWeek/Hill & Knowlton Corporate Survey examines this and other trends. Rose Gordon reports.
Two years ago, Southwest Airlines began a process that would streamline its communications department in terms of reporting structure and job function. Where previously there were three separate communications units – employee communications, PR, and emerging media – there is now just one: communications and strategic outreach. VP Linda Rutherford, who reports to SVP of culture and communications Ginger Hardage, leads the 90-person department, centralized at the airline's Dallas headquarters excepting its locally embedded community affairs and grassroots teams.
The new communications department dedicates teams to particular functions, such as community programs, multimedia, and external relations. But now each of those teams reports to a single director who all report into Rutherford. Instead of having a PR employee who just talks to the news media or writes for the employee magazine, Rutherford says, “Now I've got a group of people that can do many things.”
Turning less into more
A reduction in staff set the reorganization in motion when four people on Southwest's communications team accepted an early retirement program. The change prompted the need to reassess the team dynamic, says Rutherford. Sensing a movement in the PR industry toward breaking up silos within communications departments – and within companies as a whole – as well as a desire to “take on more work with less talent,” she moved to consolidate the teams and create a next-generation communications staff trained in cross-function competency.
“It was a better use of our resources,” Rutherford explains. “We can now do more with the same talent. We really did create project managers.”
This is the revolution taking place among many corporate communications departments now: a flattening and centralizing of teams.
“You're seeing more and more consolidation of responsibilities under one or two people instead of half a dozen,” says Dan Bartlett, US president and CEO of Hill & Knowlton. “If you look at the typical Fortune 500, internal communications reports to HR; IR to the CFO; public affairs, PR, media goes up through corporate communications; and then there's government relations. So you have five different senior people, all with public facing responsibilities. I can't tell you how siloed and non-communicative they are.”
The effect of consolidation is multi-fold: it increases the PR function's ability to move at the same rapid speed with which information now flows, including stamping out and responding to the quick crisis brushfires that emerge and peter out on Twitter, Facebook, and blogs sometimes all within a few hours. It allows teams to do more with less, as Rutherford points out; and, if everything works as promised, it can create a more consistent corporate message.
“I find CEOs are demanding more strategic communications,” adds Bartlett. “Because of the change in communications, every constituency is hearing all your messages. You used to be able to have discreet communications. Employees hear what you're saying to investors. This calls for a lot more coordination internally. It's a much more strategic conversation.”
This all leads to corporate communicators' top pain points, unchanged from 2010, as found in the 2011 PRWeek/Hill & Knowlton Corporate Survey: budget constraints (52%); keeping up with social media innovation (48%); and managing internal silos/departmental divisions (43%).
“With social media, everyone has a microphone,” says Paul Hartwick, SVP of communications for JPMorgan Chase Card Services. “As soon as your organization takes any action whatsoever, you're subject to anyone being able to comment on it, so it's really important that the communications team is involved in decisions, planning, and understanding what actions – good, bad, or otherwise –can be taken so we can be prepared to respond if needed.”
“The speed with which information moves is my major stress,” adds Rutherford.
The Survey Sample
Title: Of the corporate communicators polled, 45% are at the director/manager level, 35% at VP level or above.
Reporting lines: 54% are the most senior PR representative in their company; 25% report directly to the most senior person.
Company focus: An average of 41.2% are b-to-c focused; 56.7% are b-to-b focused.
Company revenue: 40% of respondents work at companies with revenues exceeding $500 million, with 34% of those at organizations with revenues of $1.5 billion or more.
Communications budget: 38% have a PR/communications budget of $1 million or more.
C-suite taking notice
The C-suite, though, has become much more tuned in to the potential lightening-speed reputation takedowns that can happen on social media and elsewhere as a rumor can now spread from tweet to blog to CNN in an hour. Events of the last few years where once venerable brands were torn down amid a global financial crisis have made CEOs all the more aware of the frailty of their reputations, which has sped corporate communications' climb up to the corner office's ear. The survey, which polled nearly 300 corporate communicators, found 89% say they are under pressure to act as the guardian of their company's reputation, while 55% say their C-suite has paid more attention to corporate reputation issues in the last year.
Additionally, 94% of respondents say corporate communications has a seat at the table at the earliest stages for discussions on matters that will eventually require internal or external communications, according to the survey. Moreover, 60% of the top communications pros at organizations report into the CEO, chairman, or president.
Ellen Gonda, SVP of global corporate communications at Hilton Worldwide, is a member of the company's executive board and reports directly to CEO Christopher Nassetta. One of her early mentors in PR counseled her to always be positioned closely to the CEO if she wanted to be an effective communicator.
“It's been a guiding force,” she says. “It allows you to have a seat at the table when planning is going on and to provide strategic input as plans are being developed.”
Hartwick, who reports into both the CCO and the consumer practices group head, counters, “Ultimately it does not matter who you report up to, as long as the function is respected and you have a voice with senior management and the right resources to do your job. You have to be a businessperson first who has expertise in communications.”
“Your working relationship and access is much more important than who you report to on paper,” adds Andy Katell, a 30-year industry veteran who leads communications as SVP at GE Energy Financial Services, GE's energy investing arm. “If you're respected, people will invite you into discussions and when you need access, you'll get it.”
Not only are corporate communications professionals learning to react to this new communications dynamic, but they are also being charged with taking on new responsibilities related to digital media. While respondents listed media relations, crisis/issues management, and executive communications as the top three functions they are most likely to be responsible for, they also added duties in the areas of social networks and applications (47%), blogger relations (30%), online tracking (20%), search marketing (15%), and digital creative/website development (15%).
Rutherford's communications team leads all of the engagement and conversation elements around social media at Southwest, including flight sales on Twitter. They don't execute ad buys, but they do create Facebook campaigns and even source code their Twitter flight promotions, so they can note sales the PR team brought in.
“If you book a flight through that, the tweet gets the credit,” she says. “We report that back to marketing.”
Additionally, the airline has a Social Media Council, which has a co-leadership team among marketing and communications. Rutherford's structure reflects the leading trend in social media, according to the survey.
Leading the social media charge
Twenty-seven percent of survey respondents say corporate communications is spearheading the organization's social media vision and strategy. Another 24% say it is a blended team made up of leaders from a variety of functions, such as HR, marketing, and communications, while another 22% say marketing leads it.
Gonda has a newly hired director of social media on her corporate communications team, but the individual Hilton Worldwide brands, such as the Hilton Garden Inn and DoubleTree, also handle social media at the brand level. In addition, the corporate team recently enlisted a social media adviser to assist the corporate communications group, though Gonda declined to name the firm.
“Because we are a private company, we haven't done as much here, but we're starting to be more engaged,” she adds. “We recognize social media's growing importance. You can't miss out on what's being discussed, so we take it seriously.”
Following Blackstone Group's 2007 acquisition of Hilton Hotels Corp., the company repositioned with a new corporate name and logo in 2009 as Hilton Worldwide. It also moved headquarters from Beverly Hills, CA, to the decidedly non-Hollywood city of McLean, VA. In late 2008 it hired Gonda. All these changes coincided with a companywide mandate to switch from a geographic to a functional reporting line, including in the communications department, in order to create more cohesion among the team.
“It improved our efficacy of communicators because we could take the message and share it amongst ourselves, rather than having disparate messages,” Gonda explains. “The benefit of having all the communicators together is we can share experience – we can train together.”
Many in the financial sector have been slower to adapt to social media marketing, in part due to regulatory concerns. Katell's GE division has its own Twitter feed, though it is infrequently updated. More often, though, it is populating the corporate YouTube page with videos of executives at events for thought-leadership purposes.
“We are a b-to-b business in a niche industry, so if we do use social media, we're not going to use it for broad communications to a broad external audience,” he says.
Katell is considering allocating a slight uptick in his budget to an agency to help with its digital strategy and execution, including a website revamp.
Social media's rise has also led to the need for better coordination between marketing and communications, as well as a sometimes contentious fight over who will get the budget and staff to support the function.
Credit card companies are probably equally known for their voluminous marketing as they are for crisis and reputation issues. Chase's Hartwick says his 12-person PR team is “joined at the hip” with his brand and ad peers.
“We really try to be integrated in everything we do,” he notes. “We've started to form cross-functional teams that work directly with our GMs on our products.”
The teams recently collaborated on a promotion around its Blueprint offering, which provides cardholders new budgeting functionality by allowing them to select certain types of balances on their cards to pay off before others. The brand and ad teams came up with a print campaign targeting lifestyle magazines, particularly bridal and parenting.
The company partnered with Brides on a survey about wedding budgeting. The PR team managed the relationship with the magazine, contributing to the survey development and reader panel, as well as a follow-up interview with its executives regarding the results on outlets such as Fox News.
“The brand, advertising, and communications teams need to be a united front when we're talking about communications with our business leaders,” says Hartwick. “We create integrated plans and we have all the agencies together. We've done that for a couple years.”
At Southwest, a senior leadership team was also formed to create and coordinate the airline's 40th anniversary promotions going on this year. It was made up of a leader from marketing, communications, and the culture group.
“They worked together to decide the themes, activities, the operation budget, and the ways we would engage different stakeholders,” explains Rutherford.
Yet 48% of the respondents say alignment between marketing and communications is an issue. Upon further breakdown of these numbers, there is an upward trend of alignment issues in corporations with revenues exceeding $500 million where additional layers often impede progress. Of the total base, though, 35% say while it is an issue, it “is not a big issue because we are making progress.”
The importance of versatility
Corporate communications has always been a smaller function in terms of people resource and budget in comparison to marketing. In order to grow, it has added new capabilities, including looking to bolster digital expertise.
“I firmly believe in being versatile as a communicator,” says Katell. “These are those that can do it all – write well, handle a crisis, and handle marketing communications with almost a sales mentality. I also do employee communications, so it's important to have those skills and obviously all the digital skills. A well-rounded candidate is what companies will increasingly want because they're leaner. They want people who can move around.”
In continued economic turbulence, though, budget constraints and an unstable economy were cited as the top and number four reasons for job stress, according to survey respondents. Forty-seven percent expect no change in their budget this year, 16% expect a decrease, and 37% an increase. While economic factors were the main motivator for a budget decrease, an increased budget was primarily due to PR's rising priority at the company.
“Despite the economic uncertainty we're facing, PR will fare better in budget pressures because the CEOs are seeing the strategic value of managing their corporation in a more proactive way,” says H&K's Bartlett.
Katell says he experienced a slight budget increase proportional to the rest of the businesses. He expects to be flat or slightly up next year.
In order for corporate communications to convince the C-suite it needs more budget, it has to demonstrate value – a perennial quandary for PR, which is a more imprecise art form than, say, a Super Bowl ad.
As Rutherford says, “A lot of times the success of our efforts is based on what does not happen,” such as in a crisis averted.
“Of all the things I do, it's the least in my control and the least measurable,” says Brad Matson, CMO of Bluefly, an e-commerce fashion site. With a small marketing and PR department that includes a four-person social media team, he relies heavily on his agency roster, which includes People's Revolution for fashion press and ICR for financial and business media. Matson sets goals for the teams, such as two major media placements each year outside of their regular impressions programs.
Communications has employed various measurement models such as ad equivalency, which attempts to compare PR earned media to paid media values. Of the communications executives interviewed for this article none praise ad equivalency, but they did say it has a place among their arsenal of metrics and analysis. Media analysis dashboards and social media analysis tools are also commonplace among those interviewed.
The most commonly deployed tools to measure PR effectiveness are regular media monitoring and clip reports prepared by the in-house teams (53%); website analytics (52%); social media analysis by the in-house team (49%); media analysis by the in-house team (41%); regular monitoring/clip reports prepared by the PR firm (33%); and PR agency-conducted media analysis (21%).
“My own approach is not to even try to rely on just one single metric to determine the success or failure of a communications activity or campaign. Instead we look at a wide variety of them,” says Katell. “The one that's the most quantitative is business leads that we generate through communications activities. My philosophy is to be extremely commercial- oriented in our communications. I am much more interested in helping us make money and be profitable than almost any other goal one could think of in communications.”
Communications is sharing that knowledge – whether it is media sentiment, an angry blog post, or a social media fire put out – with its peers in organizations, which may help to build its profile further in front of the C-suite. Seventy-one percent of corporate communicators share the PR analysis and metrics with others in communications, while 69% share it with the C-suite, and 61% with marketing.
“It's almost thinking of yourself as an intelligence officer, rather than as measurement that proves our ROI,” says Hartwick. “Clearly you have to show you're spending the PR dollars you receive wisely, but if you can help executives act on that intelligence, it will make a big difference.”
The PRWeek/Hill & Knowlton Corporate Survey was conducted by PRWeek and CA Walker. E-mail notification was sent to about 18,000 corporate communications professionals with 293 completing the survey online between May 18 and June 13, 2011. Results were not weighted and are statistically tested at a confidence level of 90%. This article offers only a summary of findings. A premium version of the survey is available for purchase at prweekus.com.