Let’s be honest. Few consumers trust global companies to operate in the best interest of society. And yet, most consumers expect them to be part of the solution. This is where government regulations typically come into play.
Above and beyond securing the support of external stakeholders like consumers and governments, global companies must simultaneously satisfy internal stakeholders as well. This can be done through community outreach programs, issues campaigns and by shaping public policy.
How does public policy impact your bottom line?
Among other things, public policy – or regulatory load – can affect product design, cost, and availability, as well as customer purchase decisions. It’s only inevitable then for corporate leaders to ask, “How effective is the company in influencing public policy or regulations?” That can be a tough but vital question for public affairs teams to answer. Framing this answer in monetary terms can be even trickier.
Boréalis was recently approached by a global furniture company that had built a lot of consumer goodwill over the years by democratizing furniture all while promoting a strong commitment to social and environmental responsibility. Knowing that this hard-earned image could be directly strengthened or weakened by public policy, the company wanted to adopt a more structured approach to its public affairs team to achieve three key objectives:
- Establish long term relationships with public policy makers
- Influence public policy from a customer-centric perspective
- Reinforce its brand by being a trustworthy partner in the public dialogue
The client also wanted to overhaul its approach to managing its interactions with global stakeholders. This information was being stored only locally, making it unevenly distributed, unevenly unmaintained and unevenly accessible. The company was looking for an IT tool to enable its Public Affairs team to work more efficiently and deliver more quality to the organization. Just as importantly, it wanted to be able to clearly measure the reach and impact of its activities.
Our Boréalis public affairs management software provided the Public Affairs team a single platform for doing all this and more – including being able to report the right data to the right stakeholders in real time.
Just as importantly, Boréalis software gives the team easy access to the raw data it needs to demonstrate how it is helping to achieve corporate financial goals – in monetary terms.
Yes, “soft” activities can be monetized
Before you argue that translating “soft” activities – such as working with NGOs, forming a community advisory board or creating a grassroots campaign – into hard numbers is an exercise in futility, consider this: Some of the hottest topics at the State & Local Government Relations Conference we attended this past September in Washington centered on the importance of demonstrating the impact of public affairs in financial terms.
Even though the art of quantifying the financial impacts of public affairs is still in its early stages, more and more companies are successfully demonstrating the value of public affairs in dollars and cents. Now, when a regulatory change is proposed at any level of government, these teams can answer the following tough questions:
- What would our total costs (or savings) be?
- When would the change go into effect and how quickly would we feel the impact?
- How would it affect our competitors?
- What would be the total costs (or savings) for the entire industry?
- What are we doing to ensure savings or prevent additional costs?
- Do we have the necessary resources to make an impact?
To respond effectively to these questions, public affairs departments must have the capacity to quantify the impact of public policy. This obviously requires working closely with the finance department and other business units, as well as having a clear process for costing out proposed regulations. But first and foremost, it requires having access to the right raw data. Without a standardized tool for centralizing, managing, and tracking issues for public reporting requirements surrounding lobbying and government relations, such costing exercises would be extremely difficult.
An emerging best practice
Quantifying public affairs may still be a relatively new concept, but it is quickly becoming a best practice – and rightfully so. Fortunately, the tools needed to make this a feasible process already exist and are being used by companies around the world with profitable results.
Keep in mind that, as with all new emerging best practices, direction today is better than perfection tomorrow. Your ability to demonstrate ROI will improve each year. In the meantime, your ability to answer questions like those listed above – and being able to use that analysis to guide priority-setting and strategy development – will make your public affairs function much more valuable to the organization.
Having credible, well-researched numbers will also be useful in justifying higher levels of resources to support advocacy and grassroots programs, as well as for making a compelling economic argument for or against proposed regulatory change.
Our team is experienced in helping public affairs departments transition smoothly to a structured process for governing public affairs. Schedule a customized a demo to see just how much more value you could be bringing – and demonstrating – to your organization.
In an upcoming article, we’ll look at some of the specific steps involved in measuring the financial impact of public affairs.