The Evolution of Corporate Communications

THE EVOLUTION OF
CORPORATE
COMMUNICATIONS
Case Studies, Concepts and Debatable Ideas

Kenny Ong
CNI Holdings Berhad

www.myCNI.com.my www.OOBEY.com

Intro: CNI

1. 20 years old
2. Core Business: MLM
3. Others: Contract Manufacturing, F&B Retail,
Export/Trading, eCommerce, Shared Services
4. Malaysia, Singapore, Brunei, Indonesia, India,
China, Hong Kong, Philippines, Italy, Taiwan,
Oman, United States, Vietnam
5. Staff force: ± 500
6. Distributors: 200,000
7. Products: Consumer Goods and Services


Way back in 2004…

• Thomas Cup, Indonesia


Now in 2007…

CNI ‘Beemax’ Factory Visit, China
2. Top Leaders
3. Product Development
4. Media


PR back then…

18th century: press relations,
lobbying and, celebrity campaigning

World War I: U.S. publicity

1920’s: Tobacco Industry

Source: Wikipedia.com

And now…

13th April 2009
•Two Domino’s employees
•YouTube
•Apology from Domino’s after
48 hours
•1 million hits
•Twitter: questions on silence
•LinkedIn: suggestions by users
in forum
BusinessWeek, May 4, 2009

Role Of Corp Comm in the
OLD DAYS?
• helping find or create great stories,
• translating stories into the language that
the right audience can understand,
• using the best tools to reach those
audiences,
• listening the to feedback and echoes the
stories create,
• engaging in the appropriate way, and
• Gatekeeper (unfortunately)


Changed?

• CSR • Stories
• IR • Translation
• Web 2.0 • Reach
• Crisis Comm • Listening
• Branding • Engaging
• Corporate • Gatekeeper
Reputation
• Marketing
• Media Relations

NOT changed?

• CSR • Stories

The ROLE
Reputation
• Marketing
• Media Relations

Changed?

Audience

People Change Story

Tools

What is the Objective?

Ultimate Objective of Marketing:
“Get more people, to buy more
things, more frequently, at higher
prices.”

“Retention and Loyalty useless if No
Conversion is happening.”

Sergio Zyman


Loyalty is Useless…

• Virtual Consumption vs.
Real Consumption



Loyalty is misleading…

• Heavy Consumption ≠ Loyalty
• Loyalty ≠ Heavy Consumption



• Comm = Relationship (something
like Dating)
• Comm ≠ Media glitz
• Comm ≠ ATL/BTL/BwTL/ArTL/FTL
• Comm ≠ CSR
• Comm = Get more people, to buy
more, more frequently, at higher
prices


COMM

Market Research

Internal External
Media Associations
Leaders Distributors
Government Universities
Suppliers Public NGOs
Authorities Investors

Proactive Reactive Proactive Reactive

COMM Tools COMM Tools

Integrated affair

[Internal] [External] [Creative]
S&M CCD MBS

Comm

Conversion

Unchanging Principles of
Corporate Communications
1. Long-term relationship
2. Consistent and Proactive
3. Performance vs. Controllability
4. Aligned with operating/strategy position
5. One message, Different Emphasis
6. Outside-in Intelligence


New Stories, New
Audiences, New Mediums


New Stories – External
impact

Acquisition Crisis CSR-
target related
Strategy
Layoffs
Alignment

Cost
Topics? Politics
Cutting

New
Economics
Mgmt
Treatment
Ecology
of Profits
Consistency

New Stories – Internal
impact

Share-
drop New
Politics
Plans
Financial
M&A
Announcements

Shareholding Events? Competitor
changes Moves

Structure Crisis

Accidents Economic

New Stories - The 6 Sins of
Greenwashing

1. Sin of the Hidden Trade-Off
2. Sin of No Proof
3. Sin of Vagueness
4. Sin of Irrelevance
5. Sin of Fibbing
6. Sin of Lesser of Two Evils

Study by: TerraChoice, December 2007


New Audiences

“Good news for stockholders
can be bad news for other
stakeholders.”
Gregory Miller, Assoc. Prof.,
Harvard Business School.


New Audiences – Good
News? Bad News?

• money saved by tough bargaining
with a union
• announcing a dividend to employees
• announcing a dividend to
environmentalists
• setting up Diversified business

Refer Attachment 1 - Building Trust with One Group Can
Destroy Trust with Another


New Audiences

Institutional
Fund Managers Financial (Loans) Gov VCs

Corporations JV Partners Supply Chain

Sovereign Funds M&A Government

VCs Social VCs PFI

NGOs Holding Co. Competitors

Non-Profit Org HQ (MNC) Franchisees

New Audiences

Individuals

Investors Customers

Employees Distributors*

Shareholders Management


How not to talk to Individuals

“The holder [of a CAB certificate] may continue to
serve regularly any point named herein through the
airport last regularly used by the holder to serve
such point prior to the effective date of the
certificate. Upon compliance with such procedures
relating thereto as may be prescribed by the Board,
the holder may, in addition to the services
hereinabove expressly prescribed, regularly serve a
point named herein through any airport convenient
thereto.”

Civil Aeronautics Board, 1977
Alfred Kahn

How not to talk to Individuals

“It has been determined not to be in the public
interest that United Airlines continue to provide
air transportation services between San Diego
and San Antonio”

“I forbid United Airlines to fly between San Diego
and San Antonio”


New Mediums

Gov./Politics Suppliers
Customer
s Newsletter
Spokesperson
s Analysts
Annual Due
Institutional
Report Diligence
Media
Internet* Economic
s
AGM
Fund
Market Managers
Research NGOs

New Mediums

Gov./Politics Suppliers
Customer
s Newsletter
Spokesperson
s Analysts
Annual Due
Institutional
Report Diligence
Media
Internet Economic
s
AGM
Fund
Market Managers
Research NGOs

New Mediums

Employee Newsletter
Customer
Bloggers Gov./ s Public
Politics Analysts Events
Annua Mgmt
Action Individuals Relatives
l
Report s Pasar
Media Malam
Internet* Economic
s
Ads AGM
Fund
Managers
Employees Friends

New Mediums

Employee Newsletter
Customer
Bloggers Gov./ s Public
Politics Analysts Events
Annual Mgmt
Action Individuals Relatives
Report
s Pasar
Media Malam
Internet Economic
s
Ads AGM
Fund
Managers
Employees Friends

The Right Tools for the Job

Personal
(exp)
Quality/Intensity of
Communication

Personal
(info)
Mass Traditional, In-
home, Out-Of-Home
Impersonal Mass Unconventional
(info)
Mass Online

Refer Individual Mass
Attachment 2
Reach of Communication


Personal
(exp)
Communication

Mass Targeted
Conventional
Personal
Mass Targeted Online
(info)
E.g. Annual Reports,
Analyst Briefings, IR
Roadshows, IR Website
Impersonal
(info)

Attachment 2


Personal Contests
(exp) One-on-One
Communication

Personal Individual Targeted
Conventional
(info)
Individual Targeted
Online

Impersonal
(info)

Attachment 2

New Mediums – additional
info
Refer:
• Attachment 3 - How to use Twitter to mitigate a
crisis
• Attachment 4 - Template For Social Media Press
Release


What has been the Biggest
change expectation?

• The role of Corporate
Communications as
“Value Creator”
But how do we do it?


The new Role:
Value Creation


Problems from the start

1. No money
2. Split Objectives: Sales? Share Price? Image?
3. Independent entity
4. Charity center
5. Industry image nightmares
6. Multi-cultural & Multi-lingual
7. Close Regulatory scrutiny (food act, health act,
Jakim, KPDN)
8. Public Listed


Why is Corp Comm
important to Value?
1. Funds
2. Brand
3. Intelligence
4. Business


Why is Corp Comm
important to Value?
• Funds
• Brand Communication
to bring in the
• Intelligence
Funds
• Business


Why is Corp Comm
important to Value?
• Funds
• Brand Communication
to bring in the
• Intelligence
Sales
• Business


Importance: Funds

This is the most obvious.

The objective is to keep the paymasters
happy so that they will either maintain or
increase their funding.

Crisis Management is one small area that
falls into this objective


Importance: Intelligence

Two types:
Deal with…
CRM Corp
Customer
Intelligence Comm
Sharehol
ders
Deal with…
Public Corp
Manage
Intelligence Comm
ment


CRM Intelligence and
Customer Shareholders

Self Reliant Need Help

Seek
Searchers Collaborators
Change

Seek
Streamliners Delegators
Stability


Public Intelligence: What?

Examples…
2. Record feedback and questions
3. Competitors’ PR communications
4. Top 10 Analysts’ views on Company
5. Top 10 Analysts’ views on Industry


Public Intelligence: Why?

1. Broad view of market
2. Less optimistic/review own assumptions
3. Upgrade IR function to be strategic
4. Feed Management discussions
5. Better and more relevant IR
communications
6. Support (buy-in)


Public Intelligence: Why?
Financial
Revenue Growth Productivity Market Value

Customers

Base Share Gain Positioning Adjacent New
Retention Market Business

Internal
Process
Operational Product Customer Investment
Excellence Leadership Intimacy Strategy

Learning & Growth

Competencies Information Motivation,
Systems empowerment,
alignment

Dangers of Intelligence…

Also known as ‘Beware of Benchmarking’:
2. Big vs. Small company
3. Selective success stories
4. Correlation vs. Causal
5. Survey problems
6. Actionable vs. For-fun


Importance: Brand

Corporate Communications is a key
component of corporate Branding due to
its direct influence on:
2. Multiple parties (Investors)
• These parties are either our Branding
targets or has influence on our branding
targets
4. Brand Story


Components of Branding

Positioning

Execution

Communication


Branding Comm: Integration
and Consistency
Communications

Internal External
Media Associations
Mgmt Distributors
Government Universities
Public NGOs
Suppliers Employees
Authorities Investors

Proactive Reactive Proactive Reactive

COMM Tools COMM Tools

Branding: Feed You, Feed
Me

Feed

Internal External

Feed


Me
Internal External
• Halal Committee • Sponsorship
• Social Education • Donations
(e.g. SCK)
• News clippings
• Umrah trip
• Newspaper Ads
• China Trip
• RBOS • MHI
• CFA/HFA • Awards
• Coffee Van • Corporate Profile
• AGM
• Gov. Celebrity
• Analyst research


Me
Internal External
• Entrepreneur Dev. • Website
• Health products • DSAM
• Health education • Yayasan
• “Made in Malaysia” • Publish Book
• Events • Social Education
• Media Celebrity • Crisis Comm
• Children Education
• National interest
• Analyst BD
connections


What is the Business
Model?

•Google
•Air Asia USP

•Tata Nano

Market
Profit Model
Discipline


What are they really buying?

Product "They are the most innovative"
Leadership "Constantly renewing and creative"
"Always on the leading edge"

Customer
Operational Intimacy
Excellence "Exactly what I need"
"A great deal!" Customized products
Excellent/attractive price Personalized communications
Minimal acquisition cost and "They're very responsive"
hassle Preferential service and
flexibility
Lowest overall cost of Recommends what I need
ownership "I'm very loyal to them"
"A no-hassles firm" Helps us to be a success
Convenience and speed
Reliable product and
service

Market Disciplines

Product Leadership
(best product)

Operational Excellence Customer Intimacy
(low cost producer) (best total solution)

www.myCNI.com.my Leaders, Michael Treacy & Fred Wiersema; 1995
Ref: The Discipline of Market
www.OOBEY.com

Market Disciplines

Operational Product Leadership Customer Intimacy
Excellence
• New, state of the • Management by
• Competitive price art products or Fact
services
• Error free, • Easy to do
reliable • Risk takers business with
• Fast (on • Meet volatile • Have it your way
customer needs
demand) (customization)
• • Fast concept-to-
Simple • Market segments
counter
• of one
Responsive • Never satisfied -
obsolete own and • Proactive,
• Consistent
competitors' flexible
information for
all products • Relationship and
• Transactional • Learning consultative
organization selling
• 'Once and Done'
• Cross selling

The McPlaybook*

Make it easy to eat Make it easy to prepare
• 50% drive-thru • High Turnover
• Meals held in one • Tasks simple to learn
hand & repeat

Make it quick Make what customers want
• “Fast Food” • Prowls market for new
• Tests new products products
for Cooking Times • Monitored field tests
*Adapted from: Businessweek , Februrary 5th 2007


Market Disciplines

Apple powerful Product Leadership
products, premium (best product)
pricing, limited range

Still
Doing
well in HP well-balanced
Acer super lean 2009 portfolio, mass
cost structure,
aggressive pricing customization

Operational Excellence Customer Intimacy
(low cost producer) (best total solution)

www.myCNI.com.my Leaders, Michael Treacy & Fred Wiersema; 1995
Ref: The Discipline of Market
www.OOBEY.com

What is the Business
Model?

USP

Market
Profit Model
Discipline


Summary


The Old-New Role

• CSR • Stories
Reputation
• Marketing
• Media Relations

Evolution

Audience

People Change Story

Tools

“…in the past 18 months, we have heard
that profit is more important than
revenue, quality is more important that
profit, people are more important than
profit, customers are more important than
our people, big customers are more
important than small customers, and that
growth is the key to our success. No
wonder our performance is inconsistent"
CEO, Anonymous

Don’t forget…

“The business of business is
Business, not Corporate
Communications”
(and definitely not about Twitter, Blogs or Facebook)


Thank You.
soft copy of slides:
http://totallyunrelatedrandomanddebatable.
blogspot.com/

The Evolution of Corporate Communications

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