robertodevido

16 Feb, 2025

Insights

A Man’s Got to Know His Limitations

The other day I had a conversation with the founders of a software company that is interested in devoting some resources to communications.

Since its founding five years ago, the business has grown through word of mouth; in their marketplace their reputation for cost-effectiveness and reliability has earned them a handful of lucrative deals with large organizations. But now they want to scale their business, and they are thinking also about a financial exit for themselves; they want to position to company for acquisition within 18-24 months.

No one in the company has any communications or marketing experience. One founder is a software engineer and the other is a software salesman. Both are in the middle-to-late stages of successful careers and at this point, they know what they don’t know, so they’re looking for professional help.

Not every business founder or executive has the same self-awareness.

In my experience, most bankers think problems can be solved with money. And most engineers think problems can be solved with better engineering, i.e. building a better product.

Indeed, the software engineer partner of the company I spoke with the other day said as much to me: “We’ve got a great product, and it can save companies 60 percent on their system migration costs.”

I politely disagreed that “a great product” is a requirement for business success.

Yes, it’s important to be able to “walk the walk”, but don’t make the mistake of thinking that “if you build it, they will come.”

Around 30 percent of the budget of the average Hollywood film is spent on marketing. Why? Because if you don’t spend money on marketing, no one will know you made a movie. No one will know it stars The Rock. No one will know it’s a “laugh-out-loud” comedy or a “heart-warming” drama.

And no one will buy a ticket. They won’t even know you’re selling tickets.

I’ve spent much of my career as an entrepreneur, founding and building small- and medium-sized companies, and helping others do the same, either as an investor or advisor. As an entrepreneur, I’ve been responsible for every aspect of my businesses, from sales to operations management to human resources to communications.

I’ve had some good people working for and with me, but as the boss, I’ve been the one making the decisions, and driving the business.

If I have not been selling, my client/customer base has likely been shrinking, through natural attrition. If I haven’t been keeping an eye on costs, they’ve likely been creeping higher than they should have been (how many people spend their company’s money as if it were their own?). And every manager knows that human resources – dealing with your employees’ work and personal issues occupies a whole lot of time.

At the same time, I have my strengths and I have my weaknesses. There have been areas within my businesses in which I was wholly unqualified to “get shit done”. Chinese-language content production, for example!

Over the years I’ve worked with a lot of companies, both as a consultant and in-house, and something that has astonished me is how many executives have very little understanding of how their organization works.

As an example, recently I had the opportunity to work with a company in transition: after the purchase of the firm from its previous owners, there was a period of several months during which no one was in charge. Eventually a new CEO was appointed, but surprisingly to me (and several others in the senior management team), he asked very few (or no) questions of anyone who had been in the business before the ownership change.

It turned out that the CEO (who had no previous experience in the industry, and almost no experience as a CEO) knew almost nothing about human resources, communications, finance and sales. He was an engineer, and had spent his entire career – almost all of it inside an enormous global company – figuring out operational processes. He had been a factory manager, then a business unit head, and when I met him had just been named CEO of a much smaller company in a different industry.

I realized, speaking (and working) with this CEO over several months, that he had little understanding of human resources, communications, finance and sales because in his decades-long career with the large multinational, those activities had been taken care of – invisibly to him – by departments employing hundreds or thousands of people.

Back in 2002, U.S. Secretary of Defense Donald Rumsfeld said, “Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.”

At the time, some ridiculed Rumsfeld for his comment, which appeared nonsensical to casual observers, but the concept of “known unknowns” had been in regular use by defense and intelligence analysts, as well as NASA scientists, for decades.

Many people found companies because they are passionate about an idea, and have expertise relevant to the realization of their entrepreneurial dream. But unfortunately, many business founders don’t know what they don’t know, and as a result they don’t value operational processes that can be crucial to success.

I see this all the time with companies I work with, companies that for example don’t know how to market themselves, don’t know how to set up and support international distribution networks, or don’t know how to conduct due diligence on suppliers, business partners or acquisition targets.

Surprisingly rare are the company founders who know what they don’t know, and solicit support. In my experience, these executives are almost always surprised at how much they don’t know, and excited about the possibilities for improving their business performance by professionalizing a previously neglected area of business operations.

After my call last week with the software company, one of the founders emailed me to set up a follow-up call, and said, “You really got my partner thinking!”

Thinking, of course, is a good first step, but I was tempted to quote Bruce Lee back to him: “If you spend too much time thinking about a thing, you’ll never get it done.”

robertodevido

6 Feb, 2025

Insights

Community and Government Relations Can Make or Break You

A few years ago I was in charge of communications for a company that owned dozens of renewable energy facilities around the Asia-Pacific region. I had been hired to rebrand all the company’s (locally branded) assets in preparation for a sale, but throughout the sale process, the company continued with business as usual, developing and commissioning new projects in an effort to increase the value of the transaction (a significant portion of the sale price was expected to be based on projects in the pipeline).

And so, while my main job was to drive the rebranding process as fast as possible, I also had to manage day-to-day communications at both the group and operating company levels. In theory, anyway. In practice there was not time to do everything that needed to be done, and some triage was necessary.

Each country had its own managing director who was responsible for operations and development, and the differing maturity levels of each market (as well as the scale of our operations in each market) meant the company’s activities were different everywhere. In Japan we had nearly a dozen operating power plants that were generating revenue, plus another two dozen projects that were in various stages of development. In Thailand there were a handful of operating solar projects, but no development, because market conditions were not commercially attractive. In Indonesia there were a handful of solar and wind projects under construction, and the Philippines was home to several large projects and uncertain development prospects. Every market was different, due to commercial and political risk considerations.

My company was newly established in Taiwan, and while we had built several small solar projects, the pot of gold at the end of the rainbow was offshore wind. At the time, the Taiwanese government was preparing to auction 5.5GW of offshore wind generation capacity, and like every other major renewable energy player, we were hoping to win a portion of the business.

At the time, my mandate was to urgently rebrand all our assets around the region in preparation for their eventual sale, so the relationship between our Taiwan subsidiary and the residents of small towns in coastal Taiwan was not on my radar (and no one put it on my radar), but around 10 days before the auction bids were due to be filed with Taiwan’s central government, our country manager phoned me to say there was a problem.

It seemed some residents opposed our bid, and offshore wind in general, for the usual reasons: their sea views would be affected, fishing waters might be affected, etc. And unfortunately, our Taiwan country manager (who was not Taiwanese, by the way, and not plugged in to Taiwanese politics) had not made any efforts to help the locals understand the potential benefits (environmental, financial) of the project. As a result, in the region in which we had hoped to win offshore development rights, offshore wind had become a political hot potato (never a good thing) for government officials at every level.

How can companies building hundreds of millions of dollars worth of infrastructure fail to understand the importance of government and community relations? The engineer/project manager view often is: our numbers are solid so we should win the tender. Yet not every community wants to host a wind farm, bioenergy plant or hydroelectric project. And not every community understands the potential benefits to them. What benefits? A greener environment, more reliable energy supply, local jobs, and (very probably) lower energy prices.

I wrote about this also not long ago when a friend asked me for emergency help with her own offshore wind tender that was gong off the rails due to community opposition.

Anyway, in Taiwan time was very, very short, so I was not optimistic, but I told our country manager I would do my best and I called on a friend at a global public relations agency to ask if he could introduce me to his Taiwanese colleagues. He did and I rang them up immediately and they agreed it was very, very late in the day, but that they would try to help.

A few days later, I met them in Taipei and they were extremely well-prepared, and extremely knowledgeable about the issues. Why? They told me they had spend the last several years managing community relations for several of our competitors.

The agency head said to me, “You see the problem: your competitors have been working with local residents for years; you have a week.”

“I see the problem,” I replied.

Long story short, we did our best, but were not awarded any offshore wind contracts.

And I went back to my day job rebranding the asset portfolio, which six months later a large global infrastructure fund purchased for $5 billion.

My guess is that if we had won the Taiwan offshore wind auction, the purchase price would have been $1 billion higher (from not only the value of the first tranche of wind allocations, but also the value of having been able to establish ourselves as a trusted developer and operator of offshore wind projects, as well as a trusted supporter of the government’s energy strategy).

A few years ago McKinsey & Co published a report quantifying the value of government relations (with which I will bundle community relations).

McKinsey wrote: “Since there’s so much money on the table, you might assume that companies would organize government relations as carefully as they do other business functions. Surely, for example, companies have people in place to understand the relevant economics, structures, and processes to drive this understanding into important business activities, and regulatory-affairs professionals who work in a collaborative and integrated fashion with business-unit leaders to capture value.

“Yet the reality is quite different. In our most recent annual survey, fewer than 30 percent of the executives responding said that their external-affairs groups had the organizational setup and talent necessary to succeed. Only about 20 percent of executives reported frequent success at influencing government policy and regulatory decisions—a proportion that has not increased in the four years we’ve conducted the survey.”

How can organizations minimize the potential negative impact of politics on their operations?

By integrating communications into the management process, including into the strategic planning process. A good communications team helps the CEO and management team look at business issues in the larger context, considering the perspective of every stakeholder (employee, customer, partner, supplier, local community, host country government, home country government, home country general public). A good communications team will ask “What if?” A good communications team looks at every issue from the stakeholder perspective, and works to (gently) remind the management team that by definition, a stakeholder wants to know “What’s in it for me?”

If you can’t explain to stakeholders what’s in it for them, and if those stakeholders have the ability to derail your plans (e.g. by setting up a Facebook group and organizing a protest movement), well … you see the problem.

robertodevido

6 Feb, 2025

Insights

What Journalists (and Business Executives) Don’t Understand About Public Relations

“A company’s aim is to frame the narrative in a favourable manner. Any firm wants to be seen not as a money-grubbing corporation that pollutes the environment and exploits its workers but as an innovative pioneer with sustainable operations and a social conscience.”

So wrote Philip Coggan in a “Bartleby” column for The Economist a few years ago. Coggan is a Cambridge-educated British journalist who has worked for the Financial Times and The Economist for almost 40 years, and the remainder of his column was a condemnation of the public relations industry and its practitioners (whom he terms “parasites”).

Coggan has spent his career mostly covering the financial sector, from London, so I grant that his experience of the public relations world may be different from mine, but he misunderstands the purpose and practice of public relations (a phrase I use here to encompass all of communications, which can include government/community relations, investor relations, internal communications, crisis communications and more).

Who cares what a grizzled financial journalist thinks?

Well, what struck me about Coggan’s views is that they are shared by many business executives, few of whom really understand the purpose of public relations (communications) and how it can/should support organizational strategy.

Coggan was not wrong when he wrote, “A company’s aim is to frame the narrative in a favourable manner.” But the job is also to create the narrative. Only very large businesses have the luxury of assuming customers and other stakeholders have any interest at all in their activities. Public relations is storytelling: “Who are we, what do we do, and – most importantly, why should you care?” And seen from the stakeholder perspective: “What can you do for me?”

Coggan correctly observes that many companies (this starts at the executive level, and trickles down to the junior PR people they hire because they don’t understand the importance of the function) believe public relations is simply the process of getting coverage for product releases. Which, yes, could involve simply pestering (Coggan’s word) reporters until they beg for mercy. Indeed, this sub-specialty of communications is called “media relations” and many executives believe this is all that is required.

But what about government relations and community relations? I don’t know how it works in London, but Wall Street (i.e. U.S. financial institutions) spent $2 billion during the 2017-2018 election cycle to try to influence decision-making in Washington.

And several years ago, McKinsey & Company estimated the business value from government and regulatory intervention at about 30% of earnings for companies in most industries, and at over 50% for companies in the banking sector. According to McKinsey, one European utility found that the ongoing value at stake from regulation of its business was €1.5 billion, or about €30 million for every employee involved in handling the company’s regulatory affairs. Another large global company estimated that in a major acquisition, value at stake from regulation amounted to over €500 million a year over a decade.

At the same time, McKinsey’s consultants wrote: “Since there’s so much money on the table, you might assume that companies would organize government relations as carefully as they do other business functions. Yet the reality is quite different. In our most recent annual survey, fewer than 30% of the executives responding said that their external-affairs groups had the organizational setup and talent necessary to succeed. Only about 20% of executives reported frequent success at influencing government policy and regulatory decisions—a proportion that has not increased in the four years we’ve conducted the survey.”

Classic McKinsey – getting paid to tell business executives what they already know: that they don’t understand how communications, or how to build a communications function that supports business strategy.

If your communications department comprises a handful of 20-somethings who sit around writing and rewriting press releases, then “pestering” journalists to publish them, you’re doing it wrong.

You want a communications function that is integrated into the management process, including into the strategic planning process.

You want a communications team that can help the CEO and management team look at business issues in the larger context, considering the perspective of every stakeholder (employee, customer, partner, supplier, local community, host country government, home country government, home country general public).

You want a communications team that develops and delivers consistently outstanding content that engages stakeholders and prompts them to action in support of organizational goals.

You want a communications team that will ask “What if?” A communications team that looks at every issue from the stakeholder perspective, and works to (gently) remind the management team that by definition, a stakeholder wants to know “What’s in it for me?”

Philip Coggan wants a communications team that will “supply useful facts about the company when asked, give an accurate steer on whether market rumours are true, and arrange an interview with the chief executive when required.”

That’s what he wants, but it’s not what you want. You want a communications team that has over time (ideally, the lifetime of the company) comprehensively built your brand – built your reputation – to the point that your stakeholders trust you. You’re not going to get that from a handful of product press releases.

What was most interesting to me in reading Coggan’s column was how oblivious he apparently is to the work that thousands of public relations professionals have done to shape his perceptions of the hundreds of brands he interacts with every day.

If Coggan is like 91 percent of his British compatriots, he believes that “the way a company behaves towards its customers and communities is influential when making a purchase.” And he may be one of the many travelers who is willing to pay $18 more for a plane ticket for every one-point increase in airline reputation.

As a financial journalist he must be aware of the value of reputation in IPOs and mergers and acquisitions, and that shareholders perceive a company with a solid reputation to be less risky than companies with equivalent financial performance, but whose reputation is less well established.

Perhaps Coggan believes – like many business managers – that a good reputation materializes from thin air because a company’s products and services are excellent. Yes, quality is important, but very few businesses rely on word of mouth alone for growth.

Indeed, when Coggan wrote his column, The Economist was looking to hire a Senior Vice President of Communications. Someone “who will be responsible for defining and executing comprehensive, multi-platform internal and external communications strategies to build awareness and equity for the Group.” Someone who “will serve as integral part of the marketing leadership team and will be responsible for developing and implementing the firm’s overall communication strategy, including the implementation of communication plans, initiatives, and programs and will lead all strategic and operational aspects of the global corporate communications function including focused messages to external and internal audiences, crisis communications management, and executive communications.”

In other words, someone who will do quite a bit more than “pester” journalists to publish The Economist’s press releases. Just sayin’.

robertodevido

6 Feb, 2025

Insights

Public Speaking Pro Tip: Be Prepared

Surprisingly for someone who has the word “Speaker” in her job title, former U.S. Speaker of the House of Representatives Nancy Pelosi – who is obviously very good at the power broker aspects of her job – is not particularly good at public speaking.

Four years ago, I tuned in to watch her live-streamed press conference in the aftermath of the U.S. Capitol invasion, interested to hear what actions she and her caucus planned to take. There were no real surprises in her remarks, but what did surprise me was that Pelosi’s staff did not seem to have prepared her well for the event.

Granted, she must have been exhausted, having had to flee the Capitol invaders, spend the afternoon barricaded into a guarded safe room, then return to the House chamber to complete the certification of Electoral College votes for President, but … if I had been her Communications Director, I would have prepared her very differently.

First of all, that press conference had a very simple agenda: condemn the attacks, recap the events of the preceding 24 hours, and outline next steps.

The first two items are easy enough to write up. The media and everyone who tuned in to the livestream was really there for item three: what’s next? And that’s where Pelosi’s communications team (admittedly probably as tired or more tired than the Speaker herself after the events of the preceding 24 hours) let her down.

I have prepped countless clients for important speeches and meetings, and the first step is to walk around the table and figure out what the audience will want/need to know. This is true for any communication – a public speech, a meeting with government officials or community representatives, an internal town hall, or the announcement of a new product or a crisis response.

In this case, what we the audience wanted to know was “What will Democratic Congressional Representatives do in response to the attack on Capitol Hill, apparent incitement of the attack by the President, and apparent complicity of some Republican lawmakers?”

Pelosi was reasonably clear on her next steps, if not particularly succinct as she outlined them (and again, this may have been in large part the result of her recent ordeal).

Where I felt her communications team let her down, however, was in providing 1) an explanation of exactly what those next steps would entail legally, and 2) a timeline of her planned actions, taking into account various possible outcomes, e.g. Vice President Pence refuses to invoke the 25th Amendment.

The delivery of this information could and should have been almost in bullet point format, easy to explain and easy to understand. For example, “This afternoon Senator Schumer and I will call Vice President Pence to ask him to petition a majority of Cabinet members to invoke the 25th Amendment. If he agrees, and if a majority of Cabinet officers agree, he will issue a written declaration that the president is ‘unable to discharge the powers and duties’ of his office. Immediately upon such a declaration being sent, the Vice President becomes acting President while the President remains in office, albeit temporarily divested of authority. If we go down that road, the President will then be able to respond … blah blah blah. If the Vice President is unwilling to invoke the 25th Amendment, the House of Representatives will initiate impeachment proceedings first thing Monday morning. The process of full impeachment could take months, almost certainly running through the end of the President’s term in office, but that would not affect the outcome of the proceedings.”

And so on. Plain-English explanations of what will happen, and a clear timeline, taking into account the various possible outcomes.

All of this could/should have been gamed out beforehand by the Speaker’s communications staff, with the support of her legislative affairs team, explaining the relevant provisions of Constitutional law. It could/should have been provided to the media as handouts, with digital versions available immediately to allow media to post at least a timeline within minutes (because that’s how fast the news moves during a crisis of this magnitude).

My goal in preparing a client for an important speech is to pre-empt questions. I want my client to deliver his/her message so clearly, so succinctly, that when it’s time to ask for questions, there really aren’t any, except from the people who were tweeting instead of listening. An important (perhaps the most important) aspect of preparation is brainstorming expected questions; what are people likely to want/need to know, and how should we answer? And again, this is true of internal communications, for meetings with government officials or community representatives, and in product announcements or in crisis communications.

Not everyone is a brilliant orator (indeed, Barack Obama admits he was very far from a good orator when he started out in politics). But everyone can deliver information effectively. The key is preparation.

robertodevido

6 Feb, 2025

Insights

Adventures in Branding (or Rebranding) a Company

Fun with coffee and donuts and whiteboards!

The other day I had lunch with a friend who runs a software company and he mentioned that due to a kerfuffle with investors, he’d recently had to rename a product. He told me the new product name and I said, “That was available?!?” My friend laughed and said, “Yes, believe it or not, the only previous trademark registration was by a skateboard company.” The product name was so simple, so good, I couldn’t believe it had not been snapped up years ago.

If you’ve ever founded a company, or tried to name a product, you know what I’m talking about. I’ve named a handful of companies I’ve founded, and on a few more occasions I’ve been hired by much, much larger companies to direct their rebranding.

Sounds fun, right? Bring in a tray of coffees and a box of donuts, sit down in a conference room with an exposed brick wall and a couple of white boards and brainstorm some cool new names. Then later, crack open a few beers and continue to throw names at the white boards until something sticks, Something like … “Google”! Or “Netflix”! But probably not “Accenture”.

The fun quotient in any renaming process is mostly dictated by two factors: one, how many people have a say in the final decision (the fewer the better) and two, whether or not the domain name is available.

Whenever I start a renaming process I joke to my colleagues that, “All the good domain names have been gone since 1998.”

Seriously.

In the mid-to-late 1990s domain squatters grabbed every interesting combination of nouns and verbs and adjectives in mostly English but other languages as well and almost without exception have been paying renewal fees ever since, in the hope that you’ll decide you absolutely need to own www.donutholedigger.com (actually, it’s available, go for it) and will be willing to pay thousands (or tens of thousands) for the privilege.

True, the World Intellectual Property Organization (WIPO) maintains an arbitration system allowing trademark holders to try to claim domains that have been registered or are being used “in bad faith” by parties that have no “legitimate interests” in the domain name, but even the arbitration system is relatively expensive and time-consuming, and in any event, you probably don’t yet have a trademark for the business you’re naming or renaming.

I’ll give you an example. A few years ago I led a renaming/rebranding process for a renewable energy company with headquarters in Singapore and operations all around Asia. As part of the sale purchase agreement, the new owners (who had paid $5 billion) were required to rename the company. The owners were an investment fund, so they weren’t going to suck the company into a conglomerate that had an existing brand; we had to come up with something new.

Leading the effort, I put together a small in-house team of creative brains, and we did the coffee and donuts and white boards thing for several weeks, pulling together a list of possibilities we would then present to the owners.

Our goal was to come up with a name that embodied the company’s business, communicating what it did and where it operated. In our case, the main parameters were “renewable energy” and “Asia-Pacific”.

We also wanted to find a name that did not mean “penis” in any language on earth, and especially not in any of the countries in which we had operations.

The first issue is one I have mentioned already: over 20 years ago domain squatters took pretty much every English-language combination of words. And the really low-hanging fruit (e.g. www.pacificenergy.com) are in use by real businesses (Pacific Energy is actually owned by the company that bought Pacific Energy Partners so the domain redirects to the parent company’s website).

Another issue we had when we thought about moving beyond English-language words was politics. As a regional company, realistically we could not use a Chinese or Japanese or Malay or Indonesian or Hindi or Thai word or words; that not only would have pigeonholed us as a company local to one particular country, but also very probably would have offended 80 percent of our employees and customers, thanks to all the geopolitical grudges that have been nursed in Asia for decades or centuries.

Latin was a language we could use, because no one speaks Latin anymore, and we ended up using a Latin word as part of the name that was finally selected. But the link between that word and the company’s business was extremely tenuous, and honestly, the name that was selected by the owners was not in my top 10.

That’s the thing, though. The guy who wrote the check for $5 billion had the deciding vote, and I never met or spoke with him. His input came via a laborious game of Chinese telephone that meant there were at least two people between him and our group of name generators (including, at one point, an expensive external consultant the owners hired in desperation, but whose suggested names were all rejected by them).

Also, Mr. Big was so busy managing tens of billions of investor dollars that I suspect he never had time for even the most rudimentary briefing about our process, and when at one point he came back to us with his suggestions, I laughed out loud. It’s been a few years and no longer have the email, but I’m pretty sure that “Pacific Energy” was one of his ideas. Er, yes, that occurred to me as well, but … what about the (unavailable) domain name? His other suggestions made it equally clear he had spent less than five minutes on the process.

That rebranding was frustrating for me because although I was leading the effort, I didn’t have agency. The guy who wrote the check for $5 billion had the only vote, and because he didn’t understand the process and its challenges, he probably thought we on the creative team were idiots, and at the same time we were unable to get a sense of what sort of name he was hoping for.

Was he happy with the name that was finally selected? I doubt it. I think he either got bored or decided his time would be better spent on his day job: managing those tens of billions of investor dollars.

Believe it or not, as a postscript to the process, several days after we announced the new name and began rebranding the company across eight Asia-Pacific markets, someone on the management team (who had not been a part of the creative process) circulated a shred of Internet minutiae suggesting that “vena” – which means “blood vessel” in Latin, and which we had used to suggest the distribution of energy, and energy as a life force for society (I told you it wasn’t in my top 10) – means “penis”. Yes, seriously.

It doesn’t, though, unless you’re an ultra-Freudian.