Perception Management

Head Table Guests

Bart Mindszenthy, APR, Partner, Mindszenthy & Roberts Communications Counsel and a Director, The Empire Club of Canada; Daniel Plouffe, President, Firstcom Cato Johnson; Gail Morrell, Vice-President, Corporate Communications, CTV Television Network Ltd.; Garry Payne, Executive Vice-President, Young & Rubicam; Sheila Wells Rathke, CEO, Burson-Marsteller Canada; Marcia McClung, President, Applause Communications and a Director, The Empire Club of Canada; The Rev. Kim Beard, Rector, St. Bede and St. Chrispin Anglican Churches; and W. Wesley DeShane, Vice-President, Chief Financial Officer and Secretary, Canada Malting.

Introduction by John Campion

Marshall McCluhan Takes Up Photo Engraving

Toward the end of the 1820s, the world moved a decisive stage nearer to the democratic age. This was not a result of one drama--the storming of The Bastille. It was brought about by a combination of forces and factors--the growth of literacy, the huge increase in the number and circulation of newspapers, the rise in population and incomes, the spread of technology and industry and the diffusion of competing ideas. By this time, organised society had existed for 8,000 years: democracy had been a form of government in some places for some time, but by 1820, the entrance of every man and within 100 years, every man and every woman, onto the public stage of Western society and later the world, was unmistakable; culminating in democracy being the way in which modern society would be ordered.

Over the intervening 175 years, the forces which shaped the democratic age in the beginning have become even more pervasive and powerful. Let me deal with two of those forces.

The first was photo engraving at the turn of the century. It began the graphic revolution. That revolution, starting with photo engraving, moving to motion pictures, television and finally to the electronic age, has, as Marshall McCluhan has said, seduced us from the literate and private point of view to the complex and inclusive world of the group icon. Instead of presenting a private argument, the graphic revolution offers a way of life that is for everybody or nobody.

The second of these forces is consumerism which has, in our Western society, not only made mass consumption a spectacular force, but has spawned the vast industry of advertising and later, public relations.

Public relations has now reached beyond the mere sale of products to the development and control of perceptions in all aspects of our political, social and economic life. The work of the advertising and public relations industry has been a motor force in the extraordinary material well-being of Western society, yet it carries with it a determined uneasiness.

Public relations, in its most pervasive form, seems to aim, in the democratic age; again, in Marshall McCluhan's words, at the goal of a programmed harmony among all human impulses, aspirations and endeavors. Its goal is to measure our collective opinions and desires, to create unconscious messages, to render those opinions and desires universal, and to cause every person to act accordingly.

We can appreciate superficially the power of public relations; we like its benefits; but we resent its intrusion on our individual and critical judgment, rendering, we fear, our uniqueness at best irrelevant or worse, the subject of a deep and insidious manipulation.

Media, advertising and persuasion through the manipulation and measurement of public opinion pervade our democratic society. Whether it is for good or evil, such tools are now part of our everyday life and will remain an integral part of the political and economic life of the Western world.

Barbara Smith is currently Executive Vice-President of Burson-Marsteller, headquartered in Paris, and a member of the Board of Directors of that company's international group. She is one of the architects of perception management for her company and has led the strategic development work for some of the leading companies in the United States and Europe.

Ms Smith has been retained by the French Ministry of Trade, British Telecom and Citibank, among many other clients. She has a Bachelor of Arts degree in speech education and theatre arts and a Master of Arts degree in communications. Please welcome Barbara Smith.

Barbara Smith

Thank you, John. Thank you, all of you. I am delighted to be here. I apologise for Harold's absence. I have had the pleasure of working for Harold for over 20 years, so I feel very close to understanding him regarding the development of our Company and our business. Because of that, I'm very proud to be able to represent him here today. I have to warn you, however, that I will probably be more controversial or more shocking than Harold might have been, because I take a slightly different view of where we are today and where we are going within our business, although Harold would no doubt agree with many of the things I am going to talk about. I think I present them in a slightly more provocative way. In fact, I am going to say something fairly shocking, for somebody who's been in the business of public relations and communications for over 20 years: I believe that more money and time are wasted on communications than on any other function in the business world.

Nearly all companies have some form of communications, whether advertising or public relations or some other form of getting their messages out. But I think an awful lot of it is wasted. They have communications departments with vague objectives such as improved corporate image. They hire agencies like mine and they ask them to increase public awareness or communicate a certain position. Most of that money is wasted. So what I am thinking about is that communications programmes with such objectives--the indefinite objectives of increasing awareness and building public opinion--really don't reach audiences. And if they do, they don't influence the thinking or the actions of those audiences.

There is of course a lot of feel-good communications--people who are talking because somebody wants to feel good. Usually the people who are feeling good are the communicators or the managers of communications, not the target audiences. Success is too often measured in terms of media coverage or clips, or the attractiveness of the corporate annual report, but in reality those clips and the report just enter into the general cacophony, but really signify nothing.

The trends of the past several years tell us that it is time to get back to basics; to stop wasting money. Every business must improve its performance and every business activity must pay off in some way. Communications must be held up to the same clear and exacting standard. It must create business results.

Let's really go back to basics, and start by asking: "Why do we communicate at all?" It gets down to the role of perception, in creating or blocking business success. You all know that perceptions can be more powerful than reality. Think about branding in marketing terms. The power of a brand is the power of perceptions. Perceptions differentiate a product and make it relevant to the consumer, allowing for higher prices and higher margins. In the financial marketplace, the value of a stock can be driven up or down by expectations for the future. So is it a powerful idea that drives the company, or is it the perception of a powerful idea that drives the company? In government relations and public affairs, companies often try to change the minds of government officials about an issue or a proposal. The argument is seldom won on its own merits. It is usually won by creating the perception that the decision-maker's own self interest is best served by one particular outcome.

Perceptions, then, are real. They create or diminish value. They generate or solve problems. They're an essential component in the operation of a business and its success. Business success requires changes in people's behaviour--to buy the product, to recommend the stock, to work efficiently, to pass or block a regulation--and people's perceptions of their own needs govern their behaviour. One must shape and understand those perceptions in order to get the behaviour desired and required in order to be successful in business. And communication then becomes the business manager's primary tool for managing perceptions to motivate the right behaviours in the right audiences.

In a sense, this is understood very well in marketing. If you want the target audience to buy something, you must create a need and manage the audience's perception so that they feel that need and believe that the product will fulfill it. There's a difference here between manipulation (creating something that people really don't need and creating an impression in their minds that they need it) and giving people both the opportunity to express a need and the best way to fulfill that need through products, services or political opinions. So it is very clearly to the benefit of the consumer, as well as to the benefit of the business, to have perceptions managed more effectively.

Such disciplined thinking has long been absent in the public relations field, unfortunately. What happens all too often in public relations and in other areas of communications is that the objectives of a programme to enhance an image, increase awareness or inform and educate an audience about some issue or product become unfocussed and very misleading. They take the eye off the real need to change perceptions which will motivate behaviours and ultimately achieve specific business results. Politicians do this by instinct, particularly when the desired behaviour is a vote. They know that every outcome requires someone somewhere to do something. Communications are there to manage that person's perception so that they behave in the desired way. Communications which are not linked to a specific business result are probably a waste of money.

This conflict of communications has become even more critical in recent years because of several important trends. First of all, as you are all too aware, business has never been more competitive. All businesses, whether product or service, are facing greater competition: global competition, competition from niche players who fill needs that you never thought people would express before. In such an environment one cannot waste resources. Everything must create business value by lowering costs, increasing sales, improving the value of the stock price, or gaining greater productivity from employees. And when no one can afford to waste money on wasteful communications, no one can afford to waste the power of communications either. Gone are the days when anyone dared to think that communications is a secondary function--something that anyone can do; something that we don't really bother to do unless of course we have something that we want to say. Communications is the means to manage perceptions, to create behaviours and to create business success.

When you see it this way, it is remarkable that companies don't have a specific function for perception management. We manage monetary assets, people assets and technological assets with systems and precision. We are rigorous about measuring the results of our efforts in those areas, and yet we fail to have a specific function that manages the perceptual assets of a company or a product. As if perceptions don't have any value! Ask any executive to analyse the value of his company's shares. In almost every case, the logical explanation which includes price earnings, ratios, dividend policies and returns on investments only makes up about 60 to 70 per cent of the market valuation. The rest has to do with perceptions: perceptions of management quality, perceptions of industry outlook, perceptions of the quality of a company's strategy, perceptions of brand value. And yet those perceptions are seldom systematically managed.

They may be managed by an investor relations person or function, a role which often tends to be reactive and fact-driven. This is not a criticism of people who are included in investor relations, but of the way it has always been practised. Seldom is the investor relations responsibility approached in perception management terms. Who is the audience? What is the current mind-set? What do they think now about this company or this product? Who has the greatest influence over these people and what is the best selling proposition? What is the best message that I can offer to help them understand my point of view? And finally, how do I reach them with the power and the impact that gets them to want to buy or to recommend buying my stock? How do I increase the perceptual asset which is critical to the valuation of the share? In this day and age, companies cannot afford not to manage perceptions of these critical audiences. It should be part of their competitive strategies. It should be part of their business strategies. I'm not talking about communicating. I'm talking about perception management--using systematic tools and approaches to ensure that the perceptions of critical audiences are influenced in precise and powerful ways.

There's another important trend that is driving this view of communications and that's technology. Technology has changed, is changing, and will continue to change what people hear and see, and the styles and messages to which they respond. Changing perceptions require powerful combinations of messages, messengers and media. The continuous barrage of sights and sounds which make up today's communications environment is deafening. Audiences are electronically bombarded with a multitude of increasingly personalised, individualised, interactive and actually very impressive messages. And television has created a communications environment of great intimacy. People expect to be there at every event. They see everything close-up these days. Television has the force to change how we communicate. People want information in quick digestible bits and bites of information, rather than long analytical explanations. We know that around the corner is even more change--more intimacy, more interactivity and more impact, all in one.

Persuading people today, and managing their perceptions, requires an understanding of this technology. We must alter the media we use to reach key audiences. Even our traditional media, the newspapers, television and magazines are changing how they operate. Technology has changed the world of media and news.

All of this relates to the third trend that I am going to talk about which is also driving this more results-oriented view of communications. The cacophony I mentioned before is causing a massive tuning-out of audiences. They are more cynical and are resisting traditional ideas from traditional sources. So credibility becomes critical. Impact becomes critical. The truth becomes extremely critical. Psychology tells us that if you want to influence people's behaviour, you have to think in terms of their emotions, not just their reason. It's not just what you say, but who says it and how they say it. Tunes and symbols can be more important than substance. Or, as the scientists say, reason persuades but emotion motivates. In today's world, one must create motivating communications which have emotional relevance to the listeners one wants to reach.

The job of the public relations professional is tougher than ever because of this. Effectiveness can no longer be measured on the basis of the number of clips we are able to deliver or the number of minutes of television or radio time that have carried our message. We must be measured on our ability to make an impact. Good communications can no longer be process-oriented. It must be outcome-oriented.

What perception and what audience must change? That by itself requires a level of sophistication, strategy and execution which is rare in the field of communications. But it doesn't have to be rare. There is a lot of good science available about how perceptions are created, how they influence behaviour and how one could change them. There is some good experience too. Good professional communicators have understood and have been influencing perceptions for years.

The critical need now is to start to hold the communicators and the communications accountable for specific results, for influencing behaviour of targetted audiences and not just for making someone feel good. Communications can no longer exist in a vacuum in a company. It must become perception management and be seen to be a critical aspect of business success. Otherwise, it is just a waste of money.

These ideas from my profession are extremely challenging. They both frighten and excite us. It's frightening to think that we too must become accountable, like other functions within the business enterprise. We have to become outcome-oriented, define in advance the business result to be achieved and make sure that we achieve it. These ideas excite my company particularly. We can see that the change from communicators to managers of perceptions requires that we become more systematic in our work, more reliant on the science and experience of perceptual change and that we act more professionally towards our clients and their business interests. The evolution of communications towards perception management will make us more precise in what we do, and, we hope and believe, more valuable to our clients. It also starts to put the communications function where it belongs--at the heart of business management.

The power and importance of perceptions can no longer be ignored by managers who seek success in this competitive and noisy world. Perceptions are critical. They must be managed. This understanding can finally change communications from a necessary cost of doing business into a truly valuable asset. I hope some of you will have the chance afterwards to take the time to share with me your thoughts about your perceptions of this change and where we are going. If there are questions I would be happy to answer them later. I thank you for your attention and your interest in this subject.

The appreciation of the meeting was expressed by Bart Mindszenthy, APR, Partner, Mindszenthy & Roberts Communications Counsel and a Director, The Empire Club of Canada.