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“Strategy is the only right way” new text in “Novi Magazin”
Posted by Aleksandra Hristov on January 10th, 2019 under Events | No Comments »
The author of this text, Aleksandra Hristov the owner and director of Hristov Consalting, has published this article in January 2019 issue of weekly magazine “Novi Magazin” under the title “Strategy is Still the Only Real Way”. In the text, Alaksandra noted the importance of creating and implementing communication strategies, as well as the reputation risk factor, which has become extremely important for the business enterprises, but also for institutions, organizations and individuals.
Belgrade – January 10th 2019.
Strategy is Still the Only Real Way
The companies, institutions, organizations, and individuals usually have no awareness of the need to build and maintain their own reputation until they suffer the real damage, and when it becomes too late for any form of the preventive action.
When it comes to companies, they become aware of the damage only when they try to expand their business, enter the international market or sell their corporation. Then they start having difficulties doing business with their partners or with the commercial banks and funds that refuse to grant them the loans. At such moments they, as usual, seek the help of the economists and lawyers, thinking that their problem is a financial or legal. Often they become surprised when, despite all “legal papers”, good business results, credit bureau reports, or perfectly matched business plans, they still cannot do the job. Not because of the poor monetary solvency or lack of capital, but because of the reputational risk.
Due to their lack of such awareness, instead of creating a proactive strategic communication approach, organizations and companies seek help only when they get into financial difficulties, or when they are already deeply in crisis. Unfortunately, they become aware of it much later, when they feel the real pain.
At such moments lawyers and economists may provide some help, but it is often not enough. It is common that inadequate lawyer and PR negotiations take place, personal arrangements with the usual types of conflicts that are typical for the courtrooms. The local media space has now been expanded to unexpected borders, and locally as elsewhere around the world in recent years, other rules and procedures have to be applied. The resulting damage to reputation (from various possible initiatives) has recently gone beyond the ability of the short-term old-fashioned medicine in the form of PR spinning and relying on personal acquaintances and connections in the media to achieve a short-term result, which is then quickly forgotten, and when new opponent attacks, these instantly achieved results become obsolete.
Key factors
The reputation factor is more than ever considered very important anywhere in the world, and even crucial when it comes to investing in some specific markets. This also applies to credit support to countries or companies from those specific markets. In the international financial institutions such as the World Bank or the EBRD, as well as at the large commercial banks, there are the entire sectors or departments dealing with these emerging markets. Their job is all about constantly considering the reputational risk of investing.
In addition to doing the observed company’s due diligence, the entire teams of consultants are engaged in analyzing the position of an organization or firm by using the publicly available data, including the traditional media and the Internet. At the same time, they deal with the issues of possible exposure to litigation, as well as with the question of individuals and firms (working for the one whose business is being analyzed), which in themselves may represent a special political-legal-security risk to the fund lending bank or institution.
Moreover, the European Commission has a legislative and political influence on the banks, insurance companies and investment funds, and regularly warning them not to cooperate with, or not to support those institutions or companies that have problems with the reputation factor. Furthermore, the development of the Internet has led to the unprecedented increase in the transparency of any activity and operation, therefore increasing also the risk of abuse, especially in the media sphere.
It should be emphasized what the reputation itself is, and how important it is for all the aspects of any company’s endeavors, (and also equally important for the functioning of the countries, institutions, organizations and individuals) – that is basically, the assessment of your environment about you. The consequences of a particular reputation are reflected on institutions, organizations, people and their behavior towards anyone, so accordingly they support or they do not support something or someone. Representation, loyalty and cooperation are the key consequences of a positive reputation.
Survival or real success
In the last few decades much has changed in the world, and is obviously going to change even more in the future. Globalization has created new conditions of doing business. The development of the Internet is already profoundly affecting the whole world, including the socio-economic relations and the functioning of institutions, organizations, and states. The Internet revolution is now considered to be even bigger than the industrial revolution, with incalculable consequences to anyone who is still unaware of it.
Previously, doing business was exclusively an economic category, where several elements were important – price and product quality, employee selection, product quality and the use of resources. With the development of the global market and global changes, the business has become a truly multifunctional entity where more than just economic factors are needed for the success. These include constant research into market dynamics, increasing expectations of the so-called “Stakeholders”, (who in addition to the partners, suppliers, clients/customers, may include the governments, institutions, organizations, associations, individuals, etc.), and methods depending on the particular business activity. If you are a company that intends to expand the business to, or is already present in the transition markets (with its own extraordinary dynamics of change, turbulent economic and political environment and constant normative activity in the form of new laws and regulations), it is by no means easy to manage the work and succeed in the times of fast change initiated by technology.
It is said that in the transition, those who have the best physical and mental stamina are successful (which is certainly true), provided that in everything they do there is a strategic approach, and understood that they will not resort to a generally common model in our local environment, i.e. corruptive activities, in order to get to new clients.
Channels change, goals do not
In addition to all the transformations in the wider world and locally, the strategic approach is certainly the only constant. It involves defining a business strategy including the development of a communication strategy towards stakeholders or the specific segment of the public. The channels of communication to be selected should always be adjusted to the dynamics of the change that is happening. Depending if you communicate with the targeted public segment through the social networks, traditional media, or by creating and carrying out marketing actions and desired publicity stunts, writing letters, or through an internal magazine, intranets – the selected communication tools and methods are always going to change, provided you first must define what your goals are.
In order to have the answer on how to get to any of the targets mentioned, you will have to start responding to crisis only after defining your own vision, mission and organizational culture, in addition to the value system of the organization in which you operate. This foundation is the hardest thing to create, but that work needs to be started early, as only in this way the reputation necessary for achieving the goals can be built upon.
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