The Evolution of Corporate Communications

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

THE EVOLUTION OF CORPORATE COMMUNICATIONSCase Studies, Concepts and Debatable Ideas

Kenny OngCNI Holdings Berhad

http://www.mycni.com.my/

http://www.oobey.com/


Intro: CNI

1. 20 years old2. Core Business: MLM3. Others: Contract Manufacturing, F&B Retail,

Export/Trading, eCommerce, Shared Services4. Malaysia, Singapore, Brunei, Indonesia, India,

China, Hong Kong, Philippines, Italy, Taiwan, Oman, United States, Vietnam

5. Staff force: ± 5006. Distributors: 200,0007. Products: Consumer Goods and Services




Way back in 2004…

• Thomas Cup, Indonesia




Now in 2007…

CNI ‘Beemax’ Factory Visit, China

1. Top Leaders

2. Product Development

3. 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?

1. helping find or create great stories,

2. translating stories into the language that the right audience can understand,

3. using the best tools to reach those audiences,

4. listening the to feedback and echoes the stories create,

5. engaging in the appropriate way, and

6. Gatekeeper (unfortunately)




Changed?

• CSR

• IR

• Web 2.0

• Crisis Comm

• Branding

• Corporate Reputation

• Marketing

• Media Relations

• Stories

• Translation

• Reach

• Listening

• Engaging

• Gatekeeper




NOT changed?

• CSR

• IR

• Web 2.0

• Crisis Comm

• Branding


• Marketing

• Media Relations

• Stories

• Translation

• Reach

• Listening

• Engaging

• Gatekeeper

The ROLE




Changed?

People

Tools

Story

Audience

Change




What is the Objective?

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

Sergio Zyman

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





Loyalty is Useless…

• Virtual Consumption vs. Real Consumption





Loyalty is misleading…

• Heavy Consumption ≠ Loyalty

• Loyalty ≠ Heavy Consumption





1.Comm = Relationship (something like Dating)

2.Comm ≠ Media glitz 3.Comm ≠ ATL/BTL/BwTL/ArTL/FTL4.Comm ≠ CSR5.Comm = Get more people, to buy

more, more frequently, at higher prices




COMM

Market Research

Internal External

Leaders Distributors

Suppliers

Media

Government

Public

Authorities

Associations

Universities

NGOs

Investors

Proactive Reactive Proactive Reactive

COMM Tools COMM Tools




Integrated affair

Conversion

Comm

S&M MBSCCD

[Internal] [External] [Creative]




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 target

Layoffs

CostCutting

New Mgmt

Treatment of ProfitsConsistency

Ecology

Economics

Politics

Strategy Alignment

CSR-related

Crisis

Topics?




New Stories – External impact

Acquisition target

Layoffs

CostCutting

New Mgmt

Treatment of ProfitsConsistency

Ecology

Economics

Politics

Strategy Alignment

CSR-related

Crisis

Topics?




New Stories – Internal impact

Politics

Financial Announcements

Shareholdingchanges

Structure

AccidentsEconomic

Crisis

CompetitorMoves

M&A

New Plans

Share-drop

Events?




New Stories – Internal impact

Politics

Financial Announcements

Shareholdingchanges

Structure

AccidentsEconomic

Crisis

CompetitorMoves

M&A

New Plans

Share-drop

Events?




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

Corporations

Sovereign Funds

VCs

NGOs

Non-Profit Org

Financial (Loans)

JV Partners

M&A

Social VCs

Holding Co.

HQ (MNC)

Gov VCs

Supply Chain

Government

PFI

Competitors

Franchisees




New Audiences

Individuals

Investors

Employees

Shareholders

Customers

Distributors*

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

Institutional

Gov./PoliticsCustomer

s

Suppliers

EconomicsAGM

Market Research

Internet*

Annual Report

Media

Analysts

Fund Managers

Due Diligence

NGOs

NewsletterSpokespersons




New Mediums

Institutional

Gov./PoliticsCustomer

s

Suppliers

EconomicsAGM

Market Research

Internet

Annual Report

Media

Analysts

Fund Managers

Due Diligence

NGOs

NewsletterSpokespersons




New Mediums

Individuals

Gov./ Politics

Customers Public

Events

EconomicsAGMAds

Internet*

Annual Report

Media

Analysts

Fund Managers

Relatives

Friends

Pasar Malam

Employees

Employee Bloggers

Mgmt Action

s

Newsletter




New Mediums

Individuals

Gov./ Politics

Customers Public

Events

EconomicsAGMAds

Internet

Annual Report

Media

Analysts

Fund Managers

Relatives

Friends

Pasar Malam

Employees

Employee Bloggers

Mgmt Actions

Newsletter




The Right Tools for the Job

Reach of Communication

Qua

lity/

Inte

nsity

of

Com

mun

icat

ion

Personal (exp)

Personal (info)

Impersonal (info)

Individual Mass

Mass Traditional, In-home, Out-Of-Home

Mass Unconventional

Mass Online

Refer Attachment 2






Qua

lity/

Inte

nsity

of

Com

mun

icat

ion

Personal (exp)

Personal (info)

Impersonal (info)

Individual Mass

Mass Targeted Conventional

Mass Targeted Online

E.g. Annual Reports, Analyst Briefings, IR Roadshows, IR Website

Refer Attachment 2






Qua

lity/

Inte

nsity

of

Com

mun

icat

ion

Personal (exp)

Personal (info)

Impersonal (info)

Individual Mass

Individual Targeted Conventional

Individual Targeted Online

Contests

One-on-One

Refer 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





1. Funds

2. Brand

3. Intelligence

4. Business

Communication to bring in the Funds





1. Funds

2. Brand

3. Intelligence

4. Business

Communication to bring in the Sales




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:

Corp Comm

Customer Sharehol

ders

CRM Intelligence

Deal with…

Corp Comm

Management

Public Intelligence

Deal with…




CRM Intelligence and Customer Shareholders

Self Reliant Need Help

Seek Change

Seek Stability

Searchers Collaborators

Streamliners Delegators




Public Intelligence: What?

Examples…

1. Record feedback and questions

2. Competitors’ PR communications

3. Top 10 Analysts’ views on Company

4. 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)




Revenue Growth

Base Retention

Share Gain Positioning Adjacent Market

New Business

Operational Excellence

Product Leadership

Customer Intimacy

Competencies Information Systems

Motivation, empowerment,

alignment

Financial

Learning & Growth

Internal Process

Customers

Investment Strategy

Productivity Market Value

Public Intelligence: Why?




Dangers of Intelligence…

Also known as ‘Beware of Benchmarking’:

1. Big vs. Small company

2. Selective success stories

3. Correlation vs. Causal

4. Survey problems

5. Actionable vs. For-fun




Importance: Brand

Corporate Communications is a key component of corporate Branding due to its direct influence on:

1. Multiple parties (Investors)

• These parties are either our Branding targets or has influence on our branding targets

1. Brand Story




Components of Branding

Positioning

Execution

Communication




Branding Comm: Integration and Consistency

Communications

Internal External

Mgmt Distributors

Suppliers

Media

Government

Public

Authorities

Associations

Universities

NGOs

Investors

Proactive Reactive Proactive Reactive

COMM Tools COMM Tools

Employees




Branding: Feed You, Feed Me

Internal External

Feed

Feed





Internal• Halal Committee• Social Education

(e.g. SCK)• Umrah trip• China Trip• RBOS• CFA/HFA• Coffee Van

External• Sponsorship• Donations• News clippings• Newspaper Ads• MHI• Awards• Corporate Profile• AGM• Gov. Celebrity• Analyst research





Internal• Entrepreneur Dev.• Health products• Health education• “Made in Malaysia”• Events• Media Celebrity

External• Website• DSAM• Yayasan• Publish Book• Social Education• Crisis Comm• Children Education• National interest• Analyst BD

connections




What is the Business Model?

USP

Market Discipline

Profit Model

•Google

•Air Asia

•Tata Nano




What are they really buying?

"They are the most innovative"

"Constantly renewing and creative"

"Always on the leading edge"

"A great deal!"

Excellent/attractive price

Minimal acquisition cost and hassle

Lowest overall cost of ownership

"A no-hassles firm"

Convenience and speed

Reliable product and service

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

Product Leadership

OperationalExcellence

CustomerIntimacy




Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Market Disciplines








Market Disciplines








Market Disciplines





• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'


• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Market Disciplines




The McPlaybook*

Make it easy to eat• 50% drive-thru• Meals held in one

hand

Make it easy to prepare• High Turnover• Tasks simple to learn

& repeat

Make it quick• “Fast Food”• Tests new products

for Cooking Times

Make what customers want• Prowls market for new

products• Monitored field tests

*Adapted from: Businessweek , Februrary 5th 2007








Market Disciplines








Market Disciplines

HP well-balanced portfolio, mass customization

Acer super lean cost structure, aggressive pricing

Apple powerful products, premium

pricing, limited range

Still Doing well in 2009




What is the Business Model?

USP

Market Discipline

Profit Model




Summary




The Old-New Role

• CSR

• IR

• Web 2.0

• Crisis Comm

• Branding


• Marketing

• Media Relations

• Stories

• Translation

• Reach

• Listening

• Engaging

• Gatekeeper




Evolution

People

Tools

Story

Audience

Change




“…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/