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Which corporate communications?
There has been a lot of speculation in recent years about how changes in technology or social and economic factors might drive alternative models to the conventional joint-stock company as we've known it for the last 100 years or so. The evidence is so far unclear. In particular it is not yet obvious whether there is a single set of influences all leading in the same direction; or whether the future may see simply a more pluralistic corporate environment. Such issues are important to explore, because they may change the nature of business relationships (e.g. between companies, employees, suppliers, contractors); and because in so doing, they have the potential to cause fundamental change in the nature of the communication which sustains those relationships. Many aspects of corporate communication seem to be increasingly complex. Both inside and outside the company, audiences are becoming more difficult to segment. Their expectations are more demanding. All corporate communication tends to be treated with greater cynicism. We believe that at least some of the reasons for this reflect the same tensions in the conventional model of corporate organisation. Four main trends appear capable of leading to significant change: Outsourcing
Large companies are increasingly outsourcing activities which traditionally they have carried out in house. A lot of this is driven by a philosophy of 'sticking to the knitting', 'focus on the core business' etc. As a consequence, peripheral services (especially things like IT and facilities management) are being hived off to specialist providers. Increasingly, though, apparently core functions (e.g. manufacturing and distribution, or HQ functions like HR and finance) are also being outsourced. The implications for business relationships are complex. Individuals who were previously employees suddenly become employees of a different company. But they cannot be transferred from the 'insider' to the 'outsider' category equally suddenly. Very often, they continue to work on the original premises, and often do so alongside their former colleagues. How should corporate communications now be positioned with this constituency - and how does the entry of an outsourcing company into the picture affect matters? An outsourced service supplier is not just another supplier. Changes in the employer/employee relationship
The traditional model of lifelong employment with a single employer is dead. The 'average' employee probably already faces 3 or 4 major changes of employment in his/her working life. In the US, the figure is already probably nearer 10. Temporary, fixed-term and project-based employment contracts are increasingly common. Subcontracting relationships with independent self-employed workers are also widespread, and in sectors such as parts of IT are probably already in the majority. How - if at all - should a company distinguish between permanent, temporary, subcontract and self-employed 'employees'? How far will changes in contractual relationships drive changes in communication channels and content? Demerger
The conglomerate corporate model of the 1970s and 1980s, based on the concept of economies of scale, is almost wholly out of favour. Large corporate HQs are seen as destroying more value than they add. Companies are splitting themselves up, separating into more efficient operations, where necessary trading products and services through commercial contracts. Some of this is undoubtedly just the swing of the pendulum. But the arguments in favour of both vertical and horizontal integration are much weaker than they were. What messages should companies send to their stakeholder constituencies if they are liable to split themselves into pieces? What is the nature of the brand? the shareholder relationship? the employment relationship? Where does consistency of message rest in an inconsistent corporate environment? Communications technology
A primary factor facilitating all of these trends is IT. IT can make communication effectively instant. It can destroy the need for co-location of different corporate activities. Many classes of 'employee' can now work at a distance from 'head office'. IT can enable effectively instant processing of the large quantities of data necessary in handling complexes of contractual relationships. But the availability of communication channels does nothing to resolve the problem of communication content. An increasingly atomised and fragmented corporate world will have multiple overlapping networks of 'employees', suppliers, partners. As a result, value will come to rest less in the nodes which traditional economic entities represent, but in the networks which join them. Managing the communication which sustains those networks will be critical to value creation. Conclusion
Individually, these 4 trends may represent just secondary adjustments to the way companies always have and always will go about the business of business. Some may even counteract or oppose each other. But if these trends gather pace - and reinforce each other - the consequences could be quite profound. Already, companies are asking themselves what their core business is, and what advantage (if any) they gain from retaining either their capital resources (factories, head offices etc) or their human resources ('employees') under their own management. In the medium term, a really major change in the nature of employment and corporate structure is at least possible: the replacement of contracts of corporate ownership and employment with a much larger number of complex networks of contractual relationships between separate economic entities. Paradoxically, though, the 'virtual company' will have to rely more heavily on real communication to thrive and add value. |