Gideon Fidelzeid: What are the keys to an effective relationship between a big business brand and the media outlets that cover them?
Sujeet Indap: An ongoing open relationship. This might seem obvious, but it doesn’t happen in so many cases. Brands need to avoid arrogance. Once a negative story comes around, a company that has acted with hubris will be the victim of a feeding frenzy.
The ideal brand-media relationship evolves on days when there isn’t a story. As such, it’s truly a partnership.
Fidelzeid: The roundtable tackles the topic of communicating and building value in foreign markets. A well-chronicled recent example is Alibaba’s US IPO. In your view, how has the company done so far in that regard?
Indap: Very well. It’s a very complicated business and the communications challenge is equally complicated. Chinese companies are structured very differently than American ones, so there was pressure to put together a story that made sense for both an American news audience, as well as the investment community.
Alibaba took a very US-centric media approach, which was wise. It used American advisors. Its roadshow worked very well. The IPO process itself is very complex with regulatory restrictions and the like, but it was as open with US media as it could be. Immediately after the listing, Alibaba certainly made its top executives available to our reporters, who made a point of emphasizing how open and direct the management had been. Not surprisingly, the stock soared on its first day of trading and has been doing well since.
Fidelzeid: Another roundtable topic is communications’ role in helping to establish market leadership. Please identify a company that does so well.
Indap: T-Mobile comes to mind. They lagged behind other telecom companies for years, but then hired John Legere as CEO in late 2012. He is very aggressive. He is a prolific tweeter who, unlike most in his role, will say controversial things about other companies. But it as helped T-Mobile be very open, very confident, and very proud of who it is. (Editor’s note: Recent research indicates that Legere’s social media acuity is having a direct business impact.)
Fidelzeid: Perhaps more than anything else, crisis challenges a company’s value on various fronts. It empowers opposition. It impacts stock price. It damages reputation. It hurts sales. It erodes confidence. Communications is obviously on the front lines of dealing with these testing scenarios. Please identify a brand that has done a particularly good job, with a specific focus on its success in maintaining the brand’s value in a situation where it could have been damaged.
Indap: The NBA comes to mind in light of the Donald Sterling episode. Spearheaded by new commissioner Adam Silver, strong leadership was exhibited with an equally strong message that wasn’t muddled. It was delivered quickly, too.
Sterling represents a team owner who said numerous controversial things that went right to the heart of how the NBA interacted with its players and its customers. The league got in front of the story. Silver wasn’t harsh, but he was very clear, direct, and assertive. When thinking of model sports leagues in terms of how they handle communications, the NBA has graduated to the top of the list.
Fidelzeid: On the flip side, is there a recent example that shines a light on the dangers to a brand’s value of not handling a crisis properly?
Indap: Broadly speaking, the recent crises around cyber-security come to mind. Target, of course, had its big data breach last November, just in time for the holiday shopping season. The company didn’t do the best job getting out in front of it.
Cyber-security is a very complicated issue, but it’s a very consumer-facing one, too. Beyond resolving the issue, which is crucial, companies need to communicate their strategy to the public very clearly and as quickly as possible. This goes to the very heart of consumer confidence. It’s also an issue that could impact any company at any time.
Target did noticeably suffer from the incident. Its CEO was forced to step down. There was board turnover. Shares dipped noticeably and Q1 sales suffered. And its reputation for having a top-notch shopping experience was definitely impacted. The breach itself was a factor, of course, but so was how the company communicated in the immediate aftermath. It all speaks to the general sense of the company’s competence.
Fidelzeid: In the course of our conversation thus far, the CEO has come up. While the company’s communications team obviously plays a huge role in how it is perceived by various audiences, the CEO remains the key figure people look to. Please identify a chief executive or two whose communications acuity has helped lift his or her company’s value in terms of the various financial indicators we have been discussing.
Indap: Elon Musk is very interesting. In addition to Tesla, he is also the CEO of SpaceX and the chairman of SolarCity. With all of those companies, being a visionary and, in particular, a disruptor is viewed very positively. He does an exceptional job explaining how his companies’ visions are better for consumers and why the old ways of doing business won’t work anymore.
His thought leadership and vision have lifted the share price of his company. By the sheer strength of who he is, he has made his companies more compelling and, in turn, more publicized.
Looking at a more traditional company, GE and Jeff Immelt come to mind. GE Capital certainly was hit by the financial crisis. The industrial side of the company was certainly imperiled. And just generally, GE is a very complex business because it offers so much in so many sectors.
Immelt has been central to GE’s efforts to reorient the business and devise metrics that will measure how the company does so. So with every corporate action from M&As to earnings, there is always a clear reference to what its strategy is, what its goals are, and how they are being achieved. And the stock has done well.
Fidelzeid: More than ever, risk mitigation and CSR play key roles in how businesses are perceived and valued by a broad range of stakeholders. How can each of these factors truly impact a company’s value?
Indap: The financial services industry has traditionally been risk-averse and not particularly dynamic in projecting strategy in PR efforts. Coming out of the recent economic crisis, all brands in that sector have truly begun to focus on how consumers will bank in the future. They have rolled out new products for people who are not in the traditional banking sector. Prepaid cards and other offerings for those outside the financial mainstream. They are targeting a customer base that was not in their sphere before.
The energy sector is also interesting. A lot of oil and gas companies have found ways to enter clean energy – wind, solar. It’s certainly socially responsible, there was some risk involved, but it’s good for business, too.
Fidelzeid: The Financial Times considers Lex – the column that runs on the back page of the front section every day – to be its agenda-setting column. What agenda is Lex currently setting?
Indap: The Lex column basically features analyses and opinions on the breaking news of the day or a broader story dominating the media at the time. We definitely take a point of view. It’s not straight, hard news. In fact, I consider myself to be a commentator as well as a journalist.
Our editor Lionel Barber has highlighted a few areas that are really important to The Financial Times that he sees our column focusing on in the near future. I’ll highlight three:
One is energy and the shale gas revolution not only in the US, but the world. US innovation is leading this charge and we are seeing prices go down because of it. This is also a global story, as lesser reliance on foreign sources of energy impacts political relationships with other countries.
Second is the banking industry, but in a very specific way. After the financial crisis, regulations changed quite a bit. Banking is much less lucrative than it used to be. At the same time, there are all these new entrants that are trying to disintermediate banks. Entities such as lending clubs, shadow banks, and non-deposit banks are changing the way capital is being distributed.
Third is a focus on how economic recovery looks in the US versus Europe and how that impacts the rest of the world.