Last week, Leeds Business School's Centre for PR Studies published a compelling survey of PR practice at 43 of Britain's most admired companies.
The report, commissioned by corporate PR firm Eloqui, drew from Management Today's Top 200 Most Admired Companies 2003, which included organisations such as confectioner and soft drinks giant Cadbury Schweppes and the support services firm Capita. The survey provides a unique snapshot of what PR means for some of the industry's most-coveted clients after a long and bruising recession.
At first sight the survey's findings suggest that comms may still have a long way to go in finding a truly influential position within the UK's most powerful organisations. Only 43 per cent of the 43 heads of communications interviewed by the researchers were on the executive management team of their companies.
The communications teams of well over half the firms interviewed, it would seem, have yet to exert a direct influence on their organisation.
But executive board representation is not necessarily the only way in which communications departments exert their influence on corporate decision making. Marconi, hardly a company that can afford to ignore the views of the press and analysts, does not give its comms director board representation yet they influence the companies' policies in an arguably more direct way.
Marconi public relations vice-president Joe Kelly says: 'We have an open-door policy so while director of communications David Beck and I may not be on the board of directors, we can talk to the board and members of the executive team whenever we need to.'
IPR president Professor Anne Gregory, who led the team that conducted the survey, also cautions that the figures need to be put into perspective.
Gregory says that the past few years have seen a marked shift in the attitude of top companies to comms.
'These days all FTSE 100 companies have communications division whereas a few years ago there were some that didn't. And (the in-house PROs) are now very much part of the decision-making process,' says Gregory.
The survey also shows that for all the influence that comms departments might have, they have certainly not been immune to the cutbacks of the recent recession. Most respondents expected their budgets to be frozen over 2004 while only 40 per cent had seen their funds increased.
For some organisations this has led to a restructuring that affected the relationships with external agencies.
Abbey (formerly Abbey National) head of media relations Christina Mills says that cost pressures were a key factor behind the reorganisation of the mortgage lender and insurer's comms division (PRWeek, 18 July 2003).
'In common with most FTSE 100 companies, there is an increasing pressure on cost at Abbey. We now have a centralised press office and there is no longer any chance of part of the business going off and hiring its own PR agency,' says Mills.
Abbey's experience is fairly typical of UK corporates. Like Abbey, most organisations (65 per cent) use between two and four external consultancies and usually on a retainer basis. Seventy-three per cent of those interviewed said they have been working with their consultancies for between three and six years.
The grumbles of some agencies that cost-cutting has led to a trend towards project-only work may have been exaggerated, as only 13 of the sample interviewed used agencies on a project basis at all.
Gregory believes that while project work arrangements were used more in the teeth of the recession, it has simply not been practical for larger organisations to chop and change their advisers.
'When things were tough the industry trend was to use agencies on a project basis,' she says. 'But these are quite stable organisations that insist on planning and developing long-term relationships with consultancies.
How can you give strategic input without knowing the organisation?'
Judging the effectiveness of that input and of the efforts of communications departments seems to be a perplexing headache for comms directors and CEOs alike. While feedback from journalists is by far the most popular method of evaluation, with 67 per cent opting for this choice of measurement, many of those that Gregory and her team spoke to used at least two separate methods, with three heads of comms saying that they got their feedback from nine different sources.
Gregory interprets the use of these different methods as an attempt to get a more rounded picture in the inexact science of PR evaluation. Management, she says, may use a 'hard tool' such as share price movement in particular circumstances but, as with other divisions like HR or finance, the effectiveness of a company's communications division is judged more roundly.
Mills says that Abbey is 'moving away from surveys that look for name checks to a deeper kind of assessment' and that management at Abbey is keen to avoid the use of regular reports full of complicated charts and statistics.
Gregory says the survey shows that company management have come to understand that good communications results, like good results from their HR department, cannot be measured by a balance sheet: 'With PR, management does not look for a pound-for-pound indication of how much bang they can get for their buck.'
Communications is increasingly a well-understood and important function for many of the UK's 'most admired' companies. The survey shows a management that is involved with comms and insists on long-term planning. It's results show a recognition of the planning needed to build up a good reputation and the need to avoid the bad communications that can quickly knock that reputation down.
PR practice at the UK's 'most admired' companies
The Leeds Business School Centre for PR Studies interviewed the most senior communications executives from 43 companies. The list was drawn from Management Today's Top 200 Most Admired Companies 2003.The comms directors responded to questionnaires and some took part in follow-up telephone interviews.
Of the 43 heads of comms:
- Forty-three per cent are on their company's executive team
- Ninety-seven per cent said that national print was the most important
- Sixty-seven per cent used journalist feedback to evaluate
- Fifty-two per cent have invested more than £1m a year in PR
- Thirty-three per cent have between two and four staff
- Thirty-three per cent have daily CEO contact.