Public relations is pretty much considered a must for businesses these days, even for smaller, non-listed ones. But many family businesses often neglect corporate communications, believing the success of their business is good enough to do the talking for them. But this might not be a wise approach – and here’s why.
Just how much family businesses often downplay the importance of corporate communications was illustrated recently in a case linked to a Belgian company called Lotus Bakeries. The listed family business, which has a stock market value of more than €1.5 billion – so it’s big – has recently been involved in a sensational story involving its CEO Jan Boone, the company’s finance director, and the finance director’s husband. The story was told in the financial daily De Tijd (in Dutch).
Beyond the recent events involving the Lotus CEO, the De Tijd journalists highlighted the lack of corporate communications at the company to deal with the issue. And the journalists went on to ask the question – do family businesses often neglect corporate communications?
They quoted one source saying (translated from the Dutch): “Many family businesses are very cost conscious. Often, for example, the CEO, or chief finance officer, will handle communications for the company. This is the case even it the firm is listed and has made many acquisitions. I have my doubts if this is a smart strategy. I know of one CEO who spends 30% of his time attending analyst meetings.”
But then the same source went on to ask the question of whether Lotus needs an effective communications strategy given how well it has been performing in recent years. If everything is going swimmingly well and all stakeholders are happy, why spend money on corporate communications? So the thinking goes.
But Chris Salt, CEO of the corporate communications group Headland, who has worked with many family owners, reckons that they might be making the wrong judgments when it comes to public relations.
“Many family companies think only of product or consumer PR as part of the marketing mix. Few see the need for corporate PR. They are focused on reducing expenses and often see corporate PR as a cost, not an investment,” he says.
Whilst that might be understandable, says Salt, there are times when family businesses should consider investing in corporate PR. “Too often family companies think corporate PR is just profiling the CEO. That’s a mistake. What first should be worked through is the corporate narrative and how the story is relevant to keys stakeholders. Whilst the CEO is often the chief storyteller, the narrative guides everyone in the firm to tell a consistent story which will strengthen the corporate profile.”
He adds: “Family companies, like all enterprises, succeed when they are better understood. That is the objective of smart and appropriate investment in corporate PR.”
But those arguments might not be enough to convince Alexander Hoare, who works for his family business, the London-based bank C.Hoare & Co. Founded in 1672, C. Hoare & Co has survived wars, depressions, and other crises much better than pretty much any other financial institution around today. So it knows a thing or two about what is good for its continuing success.
“We don’t have to impress analysts nor fund managers, so why would we worry about financial PR?,” says Alexander. “We do have to impress shareholders, but we let our results speak for themselves!”
Of course, no two family businesses are alike, and some need corporate PR more than C. Hoare might. But when the CEO, or another senior manager, is spending a good piece of their time on communications it’s probably time to find the money for a better corporate PR strategy. You never know when it might pay off.