Kanika Datta: Reputation is not about strong PR

SWOT

In 1945, when the British sought to re-establish their empire in Asia after the defeat of Japan, the local military authority in Malaya set up a public relations department.

The PR department's job involved spin-doctoring the BMA's efforts to restore British rule in the crescent and, as part of this, monitoring the local press.

Unsurprisingly, perhaps, the BMA's PR machinery proved a spectacular failure on both counts.

The re-imposition of British rule proved both inept and venal. Officially known as the British Military Administration (BMA) it was unofficially referred to as the Black Market Administration.

As a colonial military dictatorship "" despite (or perhaps because of) its paternalistic outlook "" the BMA generated considerable bad publicity as it did hardship for locals desperate for respite from the brutality of Japanese occupation.

Much of the suffering "" food shortages, rampant disease, absent public services, a currency collapse "" found expression in local-language newspapers and magazines that blossomed when censorship was lifted. It was the job of the PR department to translate these publications for BMA consumption.

Expectedly, most of the content enraged the military but attracted only cheeky rejoinders such as the following: "We are surprised at your Honours being offended by our remark that your Honour is oppressive, cruel, unjust and insincere, and we hope your Honour will forgive our ignorance."

Now, the PR department reported to the BMA top brass and had access to wide-ranging powers courtesy its masters. Yet it clearly failed to burnish the reputation of the British in post-war Malaya simply because it had little to work with.

This example came to mind after reading the results of a somewhat self-serving survey conducted by SpencerStuart, an executive search firm, and Weber Shandwick, a public relations firm that is part of the giant chain The Interpublic Group.

The survey, titled "Rising CCO", was conducted among 141 top corporate communications executives in Fortune 500 companies in Europe and the US. It showed, to quote the press release, "a strong correlation between a company's corporate communications organization and the company's ranking on Fortune magazine's 'World's Most Admired Companies' list".

The perhaps unintended subtext to this survey seems to be that companies that have strong corporate communications departments with CCOs in prominent positions "" i.e. they report to the CEO, attend the occasional board meeting and so on "" have a better ability to make a positive impact on a company's reputation.

A table delineates how CCOs in Fortune's Most Admired Companies list have longer tenures than those in "contender companies" (those ranked in the industry's bottom half) and how more of them report to CEOs, have prior PR agency experience and fewer inter-departmental rivals.

"Our research identifies how the corporate communications function can be a critical force in driving a company's reputation in good times and bad," said Dr Leslie Gaines-Ross, Chief Reputation Strategist at Weber Shandwick.

Gaines-Ross, formerly with the WPP major Burson-Marsteller, is a veteran of such studies. In the past she anchored one that showed a strong co-relation between companies with strong corporate communications organisations and shareholder returns.

Her book CEO Capital*, which established a clear link between CEO reputation and a company's reputation, is well-researched and cogently argued. In a sense, it partly negates the findings of this and other studies that highlight the CCO's criticality in corporate reputation.

Indeed, the reason I have juxtaposed the historical example of the BMA with a 21st-century one is to show that corporate communication machinery can be everything this survey suggests "" big, powerful, protected. But it need not necessarily have the ability to positively influence public perceptions of corporate or institutional reputation.

That is, and always will be, a function of how the company performs and, increasingly, how it conducts itself in public. And this, as Ms Gaines-Ross's book "" a highly recommended read, by the way "" suggests, is also inextricably linked with CEO conduct. (It should be clarified that we are talking about markets in which information flows are relatively free "" though even Goebbels and Stalin had limited results in spin-doctoring their governments' "achievements".)

Corporate communications has become a huge and powerful industry in the West. Few global CEOs, unless they are of the Jack Welch variety, care to make public utterances without running their statements past their PR advisors. And it is quite common for the CCO to change when a new CEO takes charge.

This much is expected given the demands on corporate executives' time from a booming and hungry media. The problem arises when corporations see public relations as publicity relations. At best, a strong corporate communications department can enhance the reputation of a company that is ethical, honest, non-polluting and so on. It cannot make a bad company look good.

Fortune's Most Admired Companies have built their reputations on solid foundations in the first place. That they happen to have strong corporate communications organisations is not the cause of this admiration. In the growing competition for image management, corporations and their communications departments should not lose sight of this basic reality.

*(John Wiley, 2003)