Blogger: Stella Harbilas, APR, Gainesville Chapter
As PR practitioners, perhaps financial reports are not the highlight of our day. But you can bet they are a frequent topic of conversation in the C-suite, where senior executives are making those important business decisions that affect how we do our jobs. Too often, the PR department is brought in after the fact and told, “Here is what we have decided to do. Go and communicate that to our audiences.” If our goal is to be invited in as trusted advisors, we might need to get out of our comfort zone a little bit.
“You don’t have to be an accountant…”
“You don’t have to be an accountant,” says Lawrence J. Parnell, associate professor and director of the George Washington University Master’s in Strategic Public Relations program, “but you have to be able to understand what accountants do and how what you do affects them.”
- treat your corporate officers as you would any client that you are getting to know. Find out and understand what is important to them, and build your business IQ.
- report regularly on how your PR efforts are positively impacting the company in terms that speak to the way they measure success (KPI-key performance indicators). Media hits are not enough; you need to show something more tangible.
- for those in publicly traded companies, never to take credit for a rise in stock prices, based on a news release you sent out. Not only is that a tough correlation to make, but you do not want to be blamed if the stock values then decrease.
Tips on building your business IQ:
- Find out what CEOs read, watch and talk about:
- Read a business periodical, such as the Wall Street Journal, regularly
- Read local business news and key trade publications
- Watch business television (CNBC, Bloomberg)
- If your organization is publicly traded, listen to a company earnings call
- Look up terms you do not understand
- How would you handle the questions that come up?
- Build your personal finance expertise
- Take a class in business, economics, finance or accounting
- Take a seminar or workshop on financial planning
- Role play along with companies in the news—what would you recommend?
- Get comfortable with the terms and topics that are important to corporate executives. Pick a company you like and read the financial information on their website. “It’s simple,” says Parnell. “You can figure it out.” Terms might include:
- Key performance indicators (KPI)
- Raising capital
- Managing headcount/growing the business
- Publicly owned company dynamics
- Working with investors
- Key financial statements
- Income statement
- How much did you make and spend over time?
- Revenue-expenses = net income (profit or loss)
- Balance Sheet (demonstrates the ability of a company to manage cash flow)
- What do you own, and owe?
- Expenses: payroll, taxes and interest
- Cash flow sheet (good indicator of the health of a business)
- How are funds used?
- How do funds enter and exit your organization?
- Income statement
- Ask questions that go beyond just communications to show that you are paying attention to the business as whole:
- “How will this drive growth?”
- “What are our financial goals?”
- “What will these changes mean to individual employees?”
Parnell and attendees addressed the following issues during Q&A
Q: What if your operations people do not want to make changes, but are asking for more PR fluff?
A: This is where it becomes important to understand various aspects of your business. For example: You might be able to point to an inefficiency in operations and offer a communications approach that could solve it.
Q: What if you have not been adequately reporting all along and now the PR department is facing financial cuts?
A: Go ahead and pull the information together to show return on investment (ROI) of communications efforts relative to the KPI that have already been established. And then nurture the process to report direct outcomes on a regular basis.
Q: Outside of social media analytics, what kind of data sources are good to use?
A: When proposing a new idea, your manager likely will ask “Who else is doing this?” Tracking peers who are successful in communications, can be included in your reports and become aspirational for your management.
Q: I was in PR and now I am a CEO. How can I defend PR when the financial department wants to make cuts?
A: Relay stories of the good things that employees are doing. Get to know your board members and speak their language. What industries do they come from? What motivates them? What companies do they think do a good job with communications? It could help them see your PR department in a fresh light.
Q: When we get a good article in the paper, is there an easy equation to show how much it is worth?
A: Be careful with circulation figures, AVE’s (advertising value equivalents), and online impressions. These stats can be overinflated. If it is a good article, post it on your website and/or social media and track it. How many visitors saw the article, shared it, etc.?
Q: I work for a municipality and my job is to translate government finance for our citizens. How can I further my education?
A: Ask your finance department for help interpreting a spreadsheet or answering a list of citizens’ frequently asked questions that you have compiled.
Look to professional organizations, such as 3CMA (City-County Communications and Marketing Association) for help.
Effective communications play a vital role in the success of any organization. According to Parnell, “You make everyone better at what they do by showing what you bring to the table. Finance is not a foreign language; the responsibility is up to you to show that they [those in the C-suite] can come to you for advice.”
Larry J. Parnell, M.B.A.
Associate Professor and Program Director, Masters in Strategic PR