Understanding the language of numbers
Communication Those responsible for marketing and corporate communication must also be financially savvy.
Communication Those responsible for marketing and corporate communication must also be financially savvy.
It is well known that some management teams do not prioritize strategic communication. They are satisfied with communicative home cooking - a well-behaved appearance, positive press clips and a pleasing annual report. Communication as a "nice to have", which can also be shortened if necessary. After all, we all know the saying about the money thrown away on advertising, even if it is unclear which half.the language of managementBut communications people should no longer be fooled by this. Benefit considerations are familiar and important to every manager. Especially where a culture of controlling already exists, i.e. where targets, criteria and measurement processes are managed and (integrated) communication is seen as an investment. Here, it is important to speak the right language and, as communication specialists, to approach the matter in an interdisciplinary manner with controllers. After all, the often-cited professionalization of the communications profession is increasingly taking place beyond the - still important - technical level: in the competence around effort, impact and return, facts and figures.
Fundamental trendsA specialist event organized by the German PR Society in November 2004 (the Swedish PR Society, also represented, had already launched a corresponding project in 2003) outlined the underlying reasons why the topic of value contribution is gaining such momentum in the industry. Developments in the capital markets and the associated widespread introduction of so-called value-based management systems in companies result in the requirement to also quantify the qualitative, "soft" factors for corporate success and to manage them with the instruments of corporate controlling.
New approaches to corporate management and strategic controlling, such as the Balanced Scorecard and Beyond Budgeting, have made management even more aware of the relevance of soft factors for the future success of the company. As is well known, these are now more valuable than tangible assets in many companies and form - see brand - the most important competitive advantages. The new requirements of corporate governance and the international accounting standard IFRS 3 also have a reinforcing effect.
A tradition of measurement and controlEfforts to measure the efficiency and demonstrable business benefits of communication are not, however, the invention of cost-cutting accountants or followers of value-based management today. Even the communication managers of the early years, at the American railroads at the beginning of the 20th century, for example, kept detailed records of the success of their media work and the effects on business success, according to tradition. In brand management, marketing and advertising in particular, quantitative and qualitative strategic and operational measurement, evaluation and control procedures have long been established. And the BSW has been awarding the Effie Prize, for example, for over 20 years. However, a study by the Swiss Marketing Club SMC in 2002 found that "at least 48 percent of marketing investments are pure luck" and that only 27 percent of companies achieve their goals with their communication work. "Linking the benefits of communication with the balance sheet and income statement," says Daniel Rentsch, Head of the HWZ Center for Accounting & Controlling, "is also an enormous challenge from the perspective of our discipline. But it is clear to everyone that we have to work on it."
Communicators in the fogIf you want to measure the success of your communication, you need basics that often cause red heads: the corporate vision, mission and strategy. Communication must be aligned with these and contribute to their implementation and success. Notorious are the examples where such foundations were or are missing, requiring communications people to operate in a kind of fog, even in a delicate environment of contradictions. By definition, strategic communication is not possible - at best, it can be professional, which is important but not sufficient.
Moreover, fog and contradictions in communications controlling are by no means limited to the basics: Anyone looking for procedures and key figures that are suitable for everyday use, let alone simple, has not yet found them. In the meantime, the hope of being able to show the added value of communication precisely in francs and centimes has been dashed. And promising newer approaches, such as those based on value-based management, frighten many practitioners because of their complexity.
Nevertheless, some communications managers have successfully established controlling instruments in their day-to-day business. Due to its special transparency and professionalism requirements, Swiss Post is a leader in the use of communications controlling and will be taking a close look at its books at the symposium.
The right approachMore important than finding the "best" approach - this is a largely undisputed principle - is finding the right approach: the one that best suits your own company and its structures, processes and culture. For example, if a company already uses the European quality management model EFQM, the communications team would be well advised to work with this tried and tested approach. Many of the approaches are similar; brand-oriented approaches exist alongside stakeholder-oriented and reputation-oriented approaches. The table below "Methods and indicators of communication controlling" provides a good insight; all are described in the summary mentioned on the DPRG website (www.dprg.de). Lars-Christian Cords, partner at fischerAppelt Kommunikation in Düsseldorf, formulated the following rules:
- Adapting terminology to customer thinking
- No representation of the scientific discourse
- Demand only arises if there is practical relevance
- Focus on concrete benefits
Are we doing the right thing with our communication? And are we doing it as efficiently as possible? Or are we wasting our resources? Are we as good as the best? Such important questions can at least be provided with plausible, clear answers using an approach such as the Communications Scorecard.
"What gets measured, gets managed" is a well-known management maxim. However, it is precisely in the highly emotional area of communication that a particularly critical approach should be taken: Which metrics are valid? Which evaluations make sense? Which context is relevant? Which interpretations are conclusive? What does it really mean, for example, if we have evaluated so and so many clippings? Especially as communications controlling causes considerable effort and therefore means costs in itself.
And the moment should not come too late when the communication people look around: What exactly does our company know about the efficiency and value contribution of the controllers, the research department and the CEO?
Cyril Meier (53) is Director of the Center for Communications at the HWZ Hochschule für Wirtschaft Zürich.
Literature & Links:
BSW/Effie Prize:
www.bsw.ch/de/awards/74.asp German PR Association:
www.dprg-online.de/wert/wert.html (Contributions to value creation through communication)Jörg Pfannenberg/Ansgar Zerfass
, "Value creation through communication", Frankfurter Allgemeine Buch, 2005Manfred Piwinger/Victor Porak
, "Kommunikations-Controlling", Gabler, 2005
It is well known that some management teams do not prioritize strategic communication. They are satisfied with communicative home cooking - a well-behaved appearance, positive press clips and a pleasing annual report. Communication as a "nice to have", which can also be shortened if necessary. After all, we all know the saying about the money thrown away on advertising, even if it is unclear which half.the language of managementBut communications people should no longer be fooled by this. Benefit considerations are familiar and important to every manager. Especially where a culture of controlling already exists, i.e. where targets, criteria and measurement processes are managed and (integrated) communication is seen as an investment. Here, it is important to speak the right language and, as communication specialists, to approach the matter in an interdisciplinary manner with controllers. After all, the often-cited professionalization of the communications profession is increasingly taking place beyond the - still important - technical level: in the competence around effort, impact and return, facts and figures.
Fundamental trendsA specialist event organized by the German PR Society in November 2004 (the Swedish PR Society, also represented, had already launched a corresponding project in 2003) outlined the underlying reasons why the topic of value contribution is gaining such momentum in the industry. Developments in the capital markets and the associated widespread introduction of so-called value-based management systems in companies result in the requirement to also quantify the qualitative, "soft" factors for corporate success and to manage them with the instruments of corporate controlling.
New approaches to corporate management and strategic controlling, such as the Balanced Scorecard and Beyond Budgeting, have made management even more aware of the relevance of soft factors for the future success of the company. As is well known, these are now more valuable than tangible assets in many companies and form - see brand - the most important competitive advantages. The new requirements of corporate governance and the international accounting standard IFRS 3 also have a reinforcing effect.
A tradition of measurement and controlEfforts to measure the efficiency and demonstrable business benefits of communication are not, however, the invention of cost-cutting accountants or followers of value-based management today. Even the communication managers of the early years, at the American railroads at the beginning of the 20th century, for example, kept detailed records of the success of their media work and the effects on business success, according to tradition. In brand management, marketing and advertising in particular, quantitative and qualitative strategic and operational measurement, evaluation and control procedures have long been established. And the BSW has been awarding the Effie Prize, for example, for over 20 years. However, a study by the Swiss Marketing Club SMC in 2002 found that "at least 48 percent of marketing investments are pure luck" and that only 27 percent of companies achieve their goals with their communication work. "Linking the benefits of communication with the balance sheet and income statement," says Daniel Rentsch, Head of the HWZ Center for Accounting & Controlling, "is also an enormous challenge from the perspective of our discipline. But it is clear to everyone that we have to work on it."
Communicators in the fogIf you want to measure the success of your communication, you need basics that often cause red heads: the corporate vision, mission and strategy. Communication must be aligned with these and contribute to their implementation and success. Notorious are the examples where such foundations were or are missing, requiring communications people to operate in a kind of fog, even in a delicate environment of contradictions. By definition, strategic communication is not possible - at best, it can be professional, which is important but not sufficient.
Moreover, fog and contradictions in communications controlling are by no means limited to the basics: Anyone looking for procedures and key figures that are suitable for everyday use, let alone simple, has not yet found them. In the meantime, the hope of being able to show the added value of communication precisely in francs and centimes has been dashed. And promising newer approaches, such as those based on value-based management, frighten many practitioners because of their complexity.
Nevertheless, some communications managers have successfully established controlling instruments in their day-to-day business. Due to its special transparency and professionalism requirements, Swiss Post is a leader in the use of communications controlling and will be taking a close look at its books at the symposium.
The right approachMore important than finding the "best" approach - this is a largely undisputed principle - is finding the right approach: the one that best suits your own company and its structures, processes and culture. For example, if a company already uses the European quality management model EFQM, the communications team would be well advised to work with this tried and tested approach. Many of the approaches are similar; brand-oriented approaches exist alongside stakeholder-oriented and reputation-oriented approaches. The table below "Methods and indicators of communication controlling" provides a good insight; all are described in the summary mentioned on the DPRG website (www.dprg.de). Lars-Christian Cords, partner at fischerAppelt Kommunikation in Düsseldorf, formulated the following rules:
- Adapting terminology to customer thinking
- No representation of the scientific discourse
- Demand only arises if there is practical relevance
- Focus on concrete benefits
Are we doing the right thing with our communication? And are we doing it as efficiently as possible? Or are we wasting our resources? Are we as good as the best? Such important questions can at least be provided with plausible, clear answers using an approach such as the Communications Scorecard.
"What gets measured, gets managed" is a well-known management maxim. However, it is precisely in the highly emotional area of communication that a particularly critical approach should be taken: Which metrics are valid? Which evaluations make sense? Which context is relevant? Which interpretations are conclusive? What does it really mean, for example, if we have evaluated so and so many clippings? Especially as communications controlling causes considerable effort and therefore means costs in itself.
And the moment should not come too late when the communication people look around: What exactly does our company know about the efficiency and value contribution of the controllers, the research department and the CEO?
Cyril Meier (53) is Director of the Center for Communications at the HWZ Hochschule für Wirtschaft Zürich.
Literature & Links:
BSW/Effie Prize:
www.bsw.ch/de/awards/74.asp German PR Association:
www.dprg-online.de/wert/wert.html (Contributions to value creation through communication)Jörg Pfannenberg/Ansgar Zerfass
, "Value creation through communication", Frankfurter Allgemeine Buch, 2005Manfred Piwinger/Victor Porak
, "Kommunikations-Controlling", Gabler, 2005
Calculating for successThe first symposium "Calculating for success" will take place on Thursday, May 31, 2007, from 1 to 7 p.m. in the auditorium of the HWZ, Lagerstrasse 5 in Zurich. Renowned speakers will present the basic requirements of communication controlling: Prof. Daniel Rentsch, Center for Accounting & Finance HWZ; Dr. Mark-Steffen Buchele, University of Leipzig; Rudolf Blankschön, Head of Executive Communications, Swiss Post; Prof. Marco Casanova and Max Meister, Branding Institute, Bern
Panel discussion chaired by Cyril Meier.
Price Fr. 380.- incl. aperitif and
Documentation. Subscribers to Werbewoche pay CHF 280.
Registration at: www.fhhwz.ch
