Last year's IPR/DTI report, 'Unlocking the Potential of Public Relations', renewed interest in measuring the value of PR and recommended more work on establishing return on investment measures of PR's contribution to performance.
But a follow-up study of CEO expectations of PR practice - presented at last month's 11th International Public Relations Research Symposium in Slovenia - has found that the emphasis on ROI measures may be misplaced.
Fourteen CEOs and chairmen were interviewed to explore issues arising from the IPR/DTI study. Those surveyed didn't believe there was a precise formula for measuring PR, but would accept proxy measures of its effectiveness - one even tells his executives that 'PR activities add at least 20 per cent to our share price'.
Six themes emerged from the interviews (see box). These show the growing importance of PR to the senior managers of top organisations - and give pause for thought to all PROs, as CEOs ask more searching questions of the practice than ever before.
Few leaders prioritise ROI
While PR practice seems increasingly focused on the importance of being able to demonstrate ROI, few leaders saw this as a priority. For them, PR is a necessary cost of doing business.
Most instinctively understand the importance of PR and feel that it is too difficult to demonstrate direct cause and effect. All recognised that current measures were at best proxy measures, but most felt that they understood the benefits well enough without having to demonstrate a precise return.
An ability to justify value would enable higher fees. This, one CEO said, 'doesn't matter to the buyer but does matter to the sellers, and has everything to do with the quality of people in the job'. The leaders believed there were too few PROs of sufficient calibre and there was a clear link between perceptions of PR value and the calibre of advisers.
One CEO said: 'Good PR should be a coaching and advisory service to top management. Much depends on the calibre of the PR person in combination with the people in leadership. Together they can create a great strategy.'
However, the practice does not attract the right talent, according to another CEO. All chief executives said reputation was their own responsibility, with supporting roles for boards and chairmen. The CEO can manage the organisation's reputation in several ways. First, by inspiring employees to perform well and deliver results, in turn giving customers a positive experience. Second, by being aware of the consequences of their decisions for a variety of stakeholders, and by making sure that they communicate effectively with those audiences. And third, by appointing the right people in advisory roles at the heart of the organisation to be able to influence decision making.
One chairman said: 'It is the responsibility of the CEO to manage stakeholder expectations of business. I would expect PR to be looking out for risks to our reputation and changes to our business environment. But I also expect PR to formulate the position for us to take on issues of importance.'
Leaders were clear on the role and purpose of PR. One said: 'Good PR is a poor phrase that does the practice harm. It is more about actively managed relationships and the value that brings. However, managing relationships will not de facto give you a good reputation. You must be doing the right things as well.'
Everyone stressed that PR can only enhance what is already there. One interviewee said: 'PR can help to deliver a good reputation and can help to overcome a bad one. But it cannot do it by itself and needs the organisation to perform.'
The head of a major charity said: 'PR activity is important in helping us to build a reputation, but only if it is real in the first place.' The head of a high street chain agreed, suggesting: 'The basic truth is that you have to live the reputation you want to have.'
PROs have to educate management to communicate well and manage relationships.
Their role is changing from simply providing channels of communication to being facilitators of organisation-wide best-practice comms, as well as being a very active conscience at the heart of decision making.
One of the roles is to influence the behaviours of the leadership team.
One CEO explained: 'There is a pivotal link between the chief executive and the reputation of the company. The CEO defines by example the way things work in the business. People need to see the right behaviour from the top and the role of the PR person is to advise on the right behaviour.
Personality traits of the CEO often define the way people see the business.'
Another chief executive said PR's 'value is to be a catalyst for change by exposing realities to the management'. One added: 'The great PR person has to look at why people feel the way they do about themselves and try to gain some measure of control without making people feel they are being controlled. This is why people sometimes think PR is a black art.'
Black art or not, it seems that a pressing - and perhaps formerly neglected - problem for the industry is what appears to be a sceptical view of PROs' abilities among the UK's top managers.
Kevin Murray is chairman of Chime Communications' PR division; Jon White is an associate at Henley Management College's John Madejski Centre for Reputation
SIX THEMES OF THE RESEARCH
- ROI: There's no great need to prove this - CEOs know the value already. Value is an issue for sellers of PR services, not buyers, but more proof could enable more spend
- Calibre of PR people: When CEOs deal with high-calibre advisers, perceptions of the value of PR are higher. But barriers to entry to practice are too low: there are too few high-calibre practitioners
- Ownership of reputation management: CEOs own reputation management, with help from chairmen and boards. PR advisers are facilitators, helping to manage relationships and influence behaviour
- The growing need for PR in an increasingly complex world: CEOs live in challenging times, facing unprecedented demands from a wide variety of sources. They feel the need for early warning radar and intelligence to help them make better decisions
- CEO views of the purpose of PR: CEOs expect PR advisers to be guardians of reputation, anticipating problems and risks, acting as the eyes and ears of the management team. PR practitioners are expected to make CEOs more effective communicators, through coaching and message development
- The growing potential of the role: The best PR practitioners influence strategy and corporate decision making by accurately anticipating and representing stakeholder views. The role is moving from providing channels of communication to being facilitators of organisation-wide best-practice comms and relationship management.