Is Your Company Ready to Go Global?

Communication World, August, 2000 by Brian Heiss, Edie Fraser

Globalization is reshaping corporate business strategy and with it communication. This is the thesis of a recently completed, two-part report by Best Practices in Corporate Communication, in conjunction with CARMA International [*]. The report examined the effects of this dramatic change on the corporate communicator and developed a series of benchmarks, which can be used to meet the challenge of globalization.

In world-class companies, the communication function leads in supporting the corporation in its globalization effort. In the current era of globalization, corporations are faced with pressure to gain international market share, and activist boards and shareholders have made it increasingly important to keep global sales and stock prices high. To meet these challenges and elevate the corporation's global reputation, corporate communication teams need to be part of designing and implementing the global strategy.

Best-practices companies are balancing the global-local challenge of overall communication -- advertising, branding and media relations. These companies are synchronizing international operations and coordinating these activities in communicating information from local subsidiaries to headquarters. In best-practice companies, corporate business strategies and objectives guide everything. The communicator's role is to support, highlight and reinforce those objectives through every communication medium.

To support the business plan, communication functions must be integrated and aligned with other corporate functions, such as marketing, human resources and customer service, to develop and execute global communication plans. Corporate communication teams are becoming more active in staffing for the global market. They are focused on issues such as integration of global brands and market share.

Globalization has increased the need for clear, consistent and central corporate messages with adaptation at the local level. The global economy is an inter-linked economy and is increasingly a borderless world for business. In the borderless world, it is essential for both corporate communication and corporate managers to seize leadership to spur new growth.

Drastic Changes

Globalization has brought some drastic changes: In one year, the amount of time spent by top communicators on global business has risen 15 percent. The amount of time spent by communicators on global mergers and acquisitions is up 10 percent. This trend is due to the fact that in the past eight years, the number of merger deals jumped from 11,300 to 26,200 worldwide.

With more than 20,000 strategic alliances announced in the past two years, alliances are truly the key to successful global business. Fifty percent of firms involved in alliances market their products globally, vs. 30 percent of companies that are not involved in alliances. Communication must use strategies in alliances similar to those used in mergers. Communication needs to be a part of coordinating the strategies between the members of the alliance to insure clear and consistent messaging.

Global Budgets and Staffing

One very promising trend for communicators is that budgets for global communication are on the rise and have risen an average of 8 percent. The increase in budgets is attributed to the following factors: increased market share overseas that requires increased local communication support; competition that drives up budgets as increased local presence and awareness through special events, branding, and media relations is necessary to outshine the competition; technology costs and its many tools for the communicator; and increased staff costs.

Successful global staffing is critical; a global mix is the best choice. Companies are appointing experienced staff to the international public relations and public affairs functions both at headquarters and in the field. Overseas staff generally includes a mix of U.S. citizens and employees from the host country. Global training is essential. Bestpractices companies provide global training for headquarters and field staff.

Reaching Key Stakeholders, Worldwide

Companies understand the importance of reaching key global stakeholders. In this study, we identified 11 essential stakeholder audiences for a successful global strategy: Customers; Potential Customers; Alliances and Partners; Employees; Stockholders and Investment Community; Distributors; Media; Community; Government; Trade and Professional Constituency; and the General Public.

Executive Communication Focused on Global Markets

Top corporate executives who consider their companies very successful globally spend 40 percent of their time on global issues, compared with 25 percent for executives overall. "Walk-in-their-shoes" companies that view themselves as most successful have a higher percentage of overseas citizens in top management than other multinational companies overall: 20-25 percent vs. 10 percent for all companies. Communication departments in best-practices companies are using their CEO and top executives by having them address key constituencies worldwide and make best use of their time overseas through media availability and meeting with key stakeholders.