Keep it real

In Asia Pacific, recent research has shown that business tangibles rule corporate/stakeholder relationships.

In a region where business history is dominated by the concepts of 'relationships' and 'connections', it should stand to reason that the chief role of corporate communicators and their advisors would be the development, enhancement and management of relationships that enable positive business outcomes. This is not necessarily so.

In this era of non-performing loans, shaky markets, uncertain economies and political and social change, corporate communicators are largely focused on positioning for their organizations products, services and performance and not on examining the more finite strength of relationships with key stakeholders. The premise here is not one of mutual exclusivity, but rather one of symbiosis where relationships with stakeholders provide the focus for communications strategy.

The key today in using communications as an enabler of business outcomes is adopting a view that places the imperative for information-rich, highly-relevant, open and interactive relationships over the execution of routine, ad hoc business communications, or indeed, even over campaign-driven communications.

In a recently completed, 8-market study of stakeholder groups in Asia Pacific, Edelman and its research partner, Wirthlin Worldwide, started with the premise that relationships with key stakeholder groups are critical to driving business outcomes. Within that, the study examined the current communications environment for corporations, the drivers of stakeholder perceptions and opinions of corporations and how social factors play into relationships.

The study covered 330 government officials, senior business executives, NGOs, up-scale consumers and media across Korea, China, Hong Kong, Taiwan, India, Malaysia, Singapore and Australia.

The Communications Environment

On the heels of six years of economic chaos and uncertainty, our stakeholder groups are today finding reason for optimism. Nearly 75% of the stakeholders participating in the study said they felt that both the economies of the region and the corporations operating within them are 'on the right track'.

The key indicators cited for that optimism were in order: Corporate profitability (18%), improved economy/higher GDP/better lifestyles (16%) and solid corporate management/good corporate strategic planning (15%).

As a backdrop for managing stakeholder relationships, we believe that the environmental indicators should breed an air of confidence for corporate communicators. We believe that corporations, generally, are communicating in an environment which finds stakeholders predisposed to support them.

At the same time, however, we note that there is still nearly 25% of our survey group - across all stakeholder audiences - that believe the direction of corporations is 'off track'. Driving the negative view are 32% of the group that feel corporations are either over emphasizing profit-making or taking short-term views of the markets. These views - perhaps not surprisingly - are driven by NGOs and governments.

While it would be easy to draw a conclusion here that both NGOs and Governments are looking for corporations to have a greater focus on social factors (vs. profit-making), we instead feel that this is a resultant hangover from the region's prolonged economic downturn (with the notable exception of China).

Driving Stakeholder Opinions

In an increasingly stable business and communications environment in Asia Pacific, we find tangible business indicators - much more than the notions of Corporate Social Responsibility (CSR) and corporate giving - driving stakeholder opinions and views of corporations.

The top five drivers of stakeholders' views of corporations across the region are: management/leadership (26%), brand/product quality (25%), profitability (14%), corporate image/reputation/lack of scandal (13%) and active promotion/advertising (10%).

We believe, therefore, that in managing relationships with critical stakeholders, the drivers of management/leadership and brand/product quality need to lead all interactions. This is a vote for active and visible management in driving corporate/stakeholder relationships, as well as ensuring a focus on brand/product quality in driving business-relevant dialogues.

In fact, a closer look helps to illustrate the point. When asked what they are most likely to investigate to convince them that a corporation is meeting their expectations, the stakeholder sample listed the following as their top three factors: Quality of products/services; financial performance/management team; and, how the corporation deals with customers.

Our stakeholder sample was nearly twice as likely to investigate the driver of quality products/services as they were to investigate attention to CSR/role in society when deciding if a corporation is doing its job well.

It is important to note here, however, that we are not suggesting a de-emphasis on the activities defined as CSR. In fact, we are suggesting the need for maintenance or an increase in this activity for the benefit of long-term relationship building and for an extension of a corporation's 'social contract' to operate. The key to this emerging area in the Asia Pacific region is business relevance and an understanding of how stakeholders define 'responsible' corporations across the markets.

Responsible: A Focus on Business Tangibles

In developing opinions about what makes corporations 'responsible' in the eight markets we surveyed, stakeholders' views focused on areas directly related to core business attributes and/or core competencies.

Examining attributes that more than half of the respondents ranked as important attributes for a 'good and responsible' corporation (a ranking of seven or higher on a 10-point scale with 10 being absolutely essential), characteristics related to products and services, management, business performance and employee development were dominant. Conversely, half or fewer of the respondents believe more socially-driven factors, such as communicating openly with employees, corporate citizenship, and community welfare were strongly important.

A closer look at the data reveals that the business-driven characteristics of 'offers top quality products/services' and 'stands behind products/services when something goes wrong' were nearly three times as likely to be important to our stakeholders than the more socially-driven attributes of 'concerned about/active in doing something about community welfare' and 'sponsors educational events'.

Our broad conclusion on the topic of responsibility in Asia Pacific, is that tangible business factors are much more important in creating and managing stakeholder relationships than are more generic, socially-minded factors. At the heart of social factors driving stakeholder relationships is ensuring business and/or organizational relevance.

Donating money or employee time to causes that have no discernible link to a corporation's core competencies are not likely to make lasting impacts to strengthening stakeholder relationships. However, efforts that are linked to putting a corporation's products, services or competencies against meaningful and measurable social causes can likely lead to long-term and result-bearing relationships with key stakeholders.

"What are the Characteristics of a Responsible Corporation in Asia Pacific?"  
Offers top quality products/services 82%
Stands behind its products/services when something goes wrong 76%
Listens to customer attitudes and opinions on satisfaction 65%
Makes products that really impress other people 58%
Provides profits for its owners and / or shareholders 58%
Provides senior leadership that can be trusted 55%
Provides good training and development for staff 54%
Operates in an open and transparent fashion 50%
Communicates frequently and openly with employees 41%
Works hard at communicating good corporate citizenship 39%
Educates customers about the impact of its products and services on society 36%
Concerned about/active in doing something about community welfare 29%
Sponsors educational events 15%

Where From Here?

The results of this Asia-Pacific regional stakeholder study leave us with three imperatives as we consider corporate communications:

  1. Start with a focus on relationship outcomes, not on driving a communications message. Relationships - their creation, enhancement and management - should be at the heart of communications strategy.
  2. Building relationships with key stakeholders means understanding their priorities and what factors they use when forming opinions about corporations. While in direct dialogue with many stakeholder groups, softer and less tangible topics such as 'commitment to community' will likely come up; however, tangibles regarding corporate performance and the impact that has upon markets/stakeholder groups will drive relationships.
  3. Expectations of responsible behaviors start with factors driven by a corporation's core competencies. Societal alignment and corporate responsibility in Asia Pacific need to be driven by visible and active managers and should be anchored by quality products and services and appropriate support of these should something go wrong.

Based in Hong Kong, Alan VanderMolen is the President of Edelman's Asia Pacific region. He oversees Edelman's ten offices in six countries. In his 15-year career, VanderMolen has focused on corporate reputation management in the United States, Asia Pacific and Europe. VanderMolen has spent the last 12 years living and working in Taiwan, Malaysia, Singapore, Hong Kong, Warsaw, and Brussels.

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