Business Acumen for Strategic Communicators

A Primer

Matthew W. Ragas, Ron Culp

• Publisher: Emerald Publishing Limited
• Year: 2021
• ISBN:
  9781838676612
• Topic: Business
• Subtopic: Decision Making
• Index: Business

Business acumen has emerged as a critical competency for communicators. But if you're a public relations, advertising or communication professional that didn't go to business school, how can you make sure you have the abilities and skills to evolve along with your role?
Business Acumen for Strategic Communicators is the book for you. Offering a critical primer for the world of business, Ragas and Culp equip you with the must-have business know-how needed to understand everything from the language and thinking of C-suites and boardrooms, to organizational agility, business models, rules and regulations, the money and the numbers, and even how to read financial statements and reports.
Written for communicators by communicators, the concepts in each chapter are illustrated by expert insight essays written by a diverse group of senior communications leaders, and packed full of case studies, interviews, key terms and cutting-edge research. Brands profiled include Aflac, Costco, CVS Health, Levi Strauss, Mayo Clinic, Southwest Airlines, Target and YMCA of America. With these critical business literacy skills in hand, you will be set to serve with success as strategic counselors to the organizational leaders that are your colleagues, clients, and business partners.

PART I

INTRODUCTION

1

Strategic Communication and Business Acumen

Actions (often) speak louder than words.

This timeless phrase has perhaps never been more salient or relevant. With the rise of social and digital media, the world is more transparent, and organizations are being held more accountable. By itself, talk is cheap. Stakeholders and society today support organizations that don’t just “talk the talk” but “walk the walk.” Even better, the walking helps drive the talking. Such a societal bias for action provides strategic communications professionals with a unique opportunity to not just craft messages on behalf of organizations and clients, but also to advise these organizations and their leaders in the C-suite on values-driven policies and behaviors.

At times, the past can be instructive for the future (Kerrigan, 2020; Miller, 2017; Weindruch, 2016). Arthur Page was a corporate public relations (PR) and communications pioneer. He was one of the first communications executives to serve on the boards of directors and trustees of major corporations and non-profit organizations (Block, 2019). For example, from 1931 to 1948, Page served on the board of AT&T, then one of the world’s largest and most powerful companies. He also advised a host of US presidents from Teddy Roosevelt to Dwight Eisenhower (Block, 2019). Page’s approach to communications and business is memorialized in The Page Principles, which were developed by the founders of the Arthur W. Page Society (2019b), a professional organization for senior communications leaders. The first Page Principle is “always tell the truth.” The second Page Principle is “prove it with action.” Page was quoted many times during his life as saying that ­effective ­corporate communication is 90% doing and just 10% talking about it (Block, 2019).

As memorialized in a song from the hit Broadway musical Hamilton, everyone wants to get inside “The Room Where It Happens.” Arthur Page was one of the first corporate communicators to get to do so. AT&T was one of the first large corporations to recognize the value and untapped potential of communications beyond simply managing publicity (Miller, 2017; Weindruch, 2016). In the 1980s, PR executive Marilyn Laurie became the first woman in the top policymaking councils of AT&T, then a Fortune 10 company (D. Martin, 2020). Today many corporations and chief executive officers (CEOs) are recognizing how effective strategic communication can help make or break an enterprise (Weindruch, 2016). In some ways, the C-suite has issued the communications profession a license to lead (Ragas & Culp, 2018a).

It is now up to the communication field to take full advantage of this opportunity and demonstrate that it deserves to contribute to strategic decision making – advising on organizational actions and not just words (Berger, 2019; Berger & Meng, 2014).

Evolution of PR and Strategic Communications

The late Harold Burson, a father of corporate PR and a founder of what is now BCW Global, succinctly argued that the PR and communications field has progressed through three stages (Burson, 2017; Christian, 1997). Communicators used to be asked by business leaders simply, “how do I say it?” – to announce business decisions after they had already been made. Over time, communicators began being asked, “what do I say?” Decisions were still often made in another room, but communications professionals were gaining greater respect and influence within organizations. Today, more C-suites are asking communications professionals, “what do I do?” – thereby giving communicators a voice beyond message crafting and into strategic decision making. While the level of influence varies by organization (APCO Worldwide, 2016), more senior communicators are being asked to advise and counsel those “in the room where it happens” (Arthur W. Page Society, 2016b, 2017, 2019a; Bolton, Stacks, & Mizrachi, 2018; Neill, 2015; Ragas & Culp, 2018a, 2018b). With the rise of the chief communications officer (CCO), the senior communicator in some organizations is now sitting at the leadership table as a member of the executive committee and/or the C-suite (Bolton et al., 2018; Harrison & Mühlberg, 2015).

Given this evolution, to be most effective and best prepared to live up to the strategic part of strategic communications, communications leaders and their teams, as well as their agency partners, need to have a stronger business IQ (Feldman, 2016; Penning & Bain, 2018; Ragas & Culp, 2014a, 2018b). The Arthur W. Page Society, whose membership is made up of senior communications leaders from around the world, has conducted an extensive research program into the opportunities and challenges facing today’s CCO and communications departments. This includes interviews with 20 CEOs of large corporations about the roles and expectations of the CCO and the corporate communication function. Page’s (2017) research finds that total business knowledge by the CCO and senior communications leaders is now “table stakes” (p. 4).

More specifically, this C-suite research (Arthur W. Page Society, 2017) concludes that:

In years past, CEOs have expressed hope that their CCO would know all about their enterprise’s business in order to more strategically apply communications to advance its goals. Now, many CEOs require their CCO to be knowledgeable about the business – from strategy to operations – so they are able to provide strategic input on issues that span business functions. This is especially true at enterprises with communications departments that are well established and have a broad mandate. (p. 4)

Former CCO Charlene Wheeless, the 2020–2021 chair of the Page Society, says that it is important to understand how the company you work for makes money and to learn the business of business (personal communication, July 12, 2020). “This is the holy grail of every company,” says Wheeless, a strategic communications consultant to senior executives and previously the vice president of global corporate affairs for Bechtel Corporation, one of the world’s largest engineering, procurement, and construction companies. “When you know how a company makes money (and loses it), you are much more likely to make better decisions, and much less likely to appear as the tone deaf communications person.”

“The CEOs we work with are looking for communications leaders who can articulate the business case for every recommendation they make,” says Jean Allen, a Page Society member and a partner and head of the global communications practice for Heidrick & Struggles, an executive search firm (personal communication, September 12, 2019). “Gone are the days when a program would fly without a clear connection to the strategic goals of the enterprise.”

When strategic communicators become trusted business advisors and counselors to the C-suite, the results for business, stakeholders, and society can be significant. For example, NIKE has been both lauded and criticized for its 2018 decision to feature former NFL quarterback turned civil rights activist Colin Kaepernick in its 30th anniversary campaign for “Just Do It” (Youn, 2019). In 2016, Kaepernick gained international attention after he began “taking a knee” during the national anthem before NFL games to protest racial inequality and police brutality against Black people in the US Kaepernick and the San Francisco 49ers parted ways in March 2017. He has remained unsigned and in retirement since (L. Thomas, 2020).

Despite some initial backlash, the “Dream Crazy” anniversary campaign featuring Kaepernick and other athletes who have overcome the odds to be successful, not only racked up awards, but NIKE credits the campaign with driving positive business results (Youn, 2019). Yet, this campaign reportedly almost didn’t happen. According to a published report (Creswell, Draper, & Maheshwari, 2018), NIKE had considered just the year before dropping the controversial Kaepernick as a spokesperson. Nigel Powell, the head of communications for NIKE, vocally opposed the possible move and argued this would have been viewed very negatively by younger consumers. NIKE decided to keep Kaepernick. Later, NIKE’s ad agency partner, Wieden & Kennedy, persuaded the company to feature Kaepernick as the face of its anniversary campaign.

In 2020, NIKE doubled down on its commitment to social justice. Following the brutal death of George Floyd, which galvanized Black Lives Matter (BLM) protests around the United States, NIKE unveiled several days later a “For Once, Don’t Do It” anti-racism video (Ebrahimji, 2020). NIKE then announced a $40 million commitment over four years to supporting organizations focused on racial inequality, social justice, and greater access to education (L. Thomas, 2020). NIKE subsidiary Jordan Brands and basketball Hall of Famer Michael Jordan separately announced plans to donate $100 million over 10 years to these causes. Finally, NIKE CEO John Donahoe reportedly recommitted to the firm getting its “own house in order” by growing a company culture “where diversity, inclusion and belonging is valued and is real” (L. Thomas, 2020, para. 5).

Strategic Management Function and Business Acumen

Not so surprisingly, business acumen is increasingly acknowledged as a critical competency for communications professionals, particularly in contributing to strategic decision making and organizational leadership matters (Berger, 2019; Neill & Schauster, 2015; Penning & Bain, 2018; Roush, 2006). However, senior communications leaders indicate that young professionals often do not receive enough training in this area. For example, a survey of senior leaders (all members of the Page Society) found that roughly 8 out of 10 respondents (85%) placed very high importance on “business 101” coursework as part of a communication education, but almost as high of a percentage (81%) felt that college and university communications programs were not placing sufficient curricular emphasis on this area (Ragas, Uysal, & Culp, 2015).

More educators are getting the message. Many of the top textbooks within PR and strategic communications now highlight the importance of business literacy as part of the development of communications graduates into future leaders (e.g., Bowen, Rawlins, & Martin, 2019; Kelleher, 2020; Page & Parnell, 2019; Swann, 2014; Wilcox, Cameron, & Reber, 2015). For example, Wilcox et al. (2015) highlight in their popular introductory textbook, Public Relations: Strategies and Tactics, the following essential career skills: (1) writing skills, (2) research ability, (3) planning expertise, (4) problem solving ability, (5) business/economics competence, and (6) expertise in social media. These educators explain that “the increasing emphasis on public relations as a management function calls for public relations students to learn the ‘nuts and bolts’ of business and economics” (Wilcox et al., 2015, p. 27). Swann (2014) also highlights the need for graduates to develop business acumen, writing in Cases in Public Relations Management, another major textbook, that “one factor preventing some public relations practitioners from entering the ranks of management is a lack of understanding of basic business principles, management strategies, and number-crunching” (p. 5).

In its 2018 report on undergraduate PR education, the Commission on Public Relations Education (2018) recommended business literacy as a new, additional recommended area of study. The Commission, which is a joint effort of academics and professionals from a wide range of communication organizations, recommended five new areas of study in total: business literacy, content creation, data analytics, digital technology, and measurement and evaluation. These areas are in addition to a recommended now six-course minimum sequence for PR majors: introduction/principles of PR, research methods, writing, campaigns and case studies, supervised work experience or internships, and ethics. The Commission on Public Relations Education (2018) defines business literacy as “providing students with a working knowledge of the fundamentals of corporate accounting and finance, economic thinking, capitalism, markets and financial communications” (p. 63).

A large industry-wide survey of PR and communications professionals found that possessing business acumen was rated as one of the 12 most important skills/areas of expertise for the next generation of communicators (Krishna, Wright, & Kotcher, 2020). More specifically, the most important skills/areas of expertise in rank order, out of 32 items, were as follows: (1) writing; (2) listening; (3) research/measurement skills; (4) creative thinking; ability to deal with online reputation crises; ability to communicate effectively in today’s environment of disinformation (all tied); (5) creativity; (6) ability to build a modern crisis response plan; (7) digital storytelling; and (8) possessing business acumen; and social listening (tied). Notably, further analysis found that top/senior management (e.g., CCOs) in this survey rated possessing business acumen as significantly more important than middle managers (Krishna et al., 2020). The authors of this study believe that “senior executives’ experience and broader worldview of the business world contributed to this difference” and conclude that “business literacy then needs to be built into basic curricula by public relations faculty so future generations are well-versed in the language of business, as recommended by senior managers” (Krishna et al., 2020, p. 50).

In Mastering Business for Strategic Communicators, more than 20 current or former CCOs provided career advice on serving as trusted advisors/counselors to business leaders across the enterprise (Ragas & Culp, 2018b). In reviewing the chapter contributions, Ragas and Culp (2018b) note that these senior leaders often defined themselves as businesspeople with an expertise in communication. When discussing business acumen, several contributors invoked Stephen Covey’s (2004) famous phrase: “seek first ...