Local relevance is climbing the corporate agenda for global businesses and reputation management has a vital role to play in getting the global versus local balance right.
Globalisation and the growth of the digital economy make it increasingly important for businesses to understand cultural norms, customer expectations and regulatory views across every market.
Conversely, as the media, political pressure groups, and investors have become global, local incidents can now quickly escalate into global reputation crises.
Reputation Council members are clear that the balance between local market needs and global strategy requires experimentation and analysis, as well as evidence-based trust.
In 1983 Theodore Levitt published his classic treatise ‘The Globalisation of Markets’ in Harvard Business Review. His central contention was that advances in communications and technology were leading to a more homogenous world, indeed, a world where uniformity in consumer tastes would increase and global brands would flourish by delivering the same proposition and experience – regardless of location.
Reality seemed to support Levitt’s contention as companies such as McDonalds, Levi’s, Toyota and Panasonic exported standardised products (and marketing campaigns) around the world. The concept of the ‘global consumer’ was in the ascendancy and businesses aligned their organisational structures accordingly. Decision-making became centralised with the focus on global business units rather than individual countries.
Perhaps not surprisingly, the same principles permeated global reputation management: The idea that an organisation and what it stands for should be consistently expressed regardless of the location and cultural context. Ideas such as vision, purpose and core values were seen as essential truths that underpinned the corporate reason for being. They needed little in the way of adaptation to local needs or sensitivities and were at their best when unadulterated.
This doctrine held true for a number of years but became increasingly questioned with the emergence of fast-growing economies such as China and India, which spawned increasingly powerful local competitors. Consumers no longer needed to default to global brands as local companies were producing products and services that were catching up in quality and brand appeal. It became apparent that local relevance was climbing the corporate agenda for global businesses and that reputation management had a vital role to play in getting the global versus local balance right.
It’s in this context that we decided to ask our Reputation Council members from around the world to share their thinking with us in this area. Our findings fell under a number of clear themes: authenticity; measurement; autonomy; and digital and social media.
In an environment of increased scrutiny of global corporates in domestic markets, corporate communicators report the growing importance of translating global strategy into authentic localised outputs.
To do this effectively, corporate communicators must have a deep and evidence-based understanding of both the role of localism in driving reputation in the domestic market and local stakeholders’ expectations of the corporate entity, and then be empowered to turn broad global strategies into effective domestic communication plans, backed up by meaningful practical demonstrations of the entity’s commitment to the local market.
In addressing this challenge, many Council members referred to one of the bedrocks of good reputation management: authenticity. It emerged that if an organisation has done the groundwork in developing and embedding a strong corporate brand strategy internally, it will be well positioned to apply a specific market or stakeholder lens to this strategy to develop and tailor external communications that are authentic. That is, they’re true to the master strategy and relevant to specific markets or stakeholder groups, and will not put the business in a position where it is communicating in one market or with one stakeholder group in a way that compromises it with another.
of Council members working in multinational companies analyse perceptions of their sector or business across different countries.
As barriers to global business continue to diminish and the world becomes smaller, many businesses find themselves in new markets and new regions, managing different cultural norms, customer expectations and regulations. It’s normal in these situations to wonder why a company’s reputation varies by market, much as a reputation may vary by stakeholder audience. The majority of Council members we spoke with recognise this complex environment and understand that it’s nearly impossible to have a consistent, unified reputation across markets.
Within this context, most global communicators and marketers aim to develop a consistent global positioning strategy and framework that has the flexibility to be tailored to local markets, and also strive to demonstrate a long-term commitment to the local markets where they operate.
Additionally, this localisation of messaging and communications within the broader global context requires strong teams and partners on the ground.
Nearly all the Council members interviewed indicate that they evaluate their company’s reputation globally to provide the insight necessary to tailor their strategies and understand how to prioritise messaging and communications to local markets and various stakeholders. In many instances, this reputation measurement informs everything these companies do – programme prioritisation, partnerships, key messaging, stakeholder prioritisation, resource allocation, etc.
Reputation measurement plays a critical role in the long-term strategy for local markets, and in the words of one of our Council members:
Our research suggests that tailoring corporate communication to local markets has become more important in recent years. Council respondents point out that it is vital to find a balance between local market needs and corporate-level strategy. The alignment builds on continuous exchange and relationships of trust.
The paradox is that the media, political pressure groups and investors have become global, but it is precisely this global perspective that has made local reputation problems more urgent. Today, a local reputation issue has the potential to grow into a global reputation crisis. On the flipside, communication tools on hand today have also made it easier to tailor global strategies to local particularities.
Mixing global and local communication strategies brings different points of view to the table. The way businesses talk to clients or organise a campaign and the images they use to build a corporate brand differ greatly between Saudi Arabia, China and Sweden. What matters depends on local cultural values, including religion. It is this broader context that needs to be considered when building communication strategies. Blending local and global communication can be a source of refreshing innovation.
Council members agree that the balance between global communication objectives and local needs has got to be right. Companies experimented with a spectrum ranging from totally autonomous local to totally centralised global communication strategies. There is no one-size-fits-all solution.
Whilst global narratives set the broad framework of a strategy, alignment with local needs is important. Both ought to be interlocked. Continuous exchange with local communication experts is necessary to achieve this. Local communicators should have a degree of autonomy, because they are the ones with robust knowledge of their local communication landscape. This autonomy presupposes trust in the vernacular expertise of communication teams on the ground.
Digital and social media
For global businesses, digital and social media have dramatically increased public scrutiny of local operations. What may once have been considered local incidents can now quickly escalate into global reputation crises. At the same time, connecting with local consumers and stakeholders increasingly requires tailored engagement at a local level.
The challenge for global businesses is therefore a simple, if paradoxical, one: to build a reputation that is globally consistent and at the same time locally relevant.
In last year’s Reputation Council report, we discussed how equity flows between corporate and product brands, offering both opportunities and threats to corporate communicators. The same principle applies to reputational equity flow between regions. And this flow has been accelerated by the growth of digital media, which has collapsed the barriers to information flowing between regions. In this environment, inconsistency of positioning or behaviour between regions becomes a threat to global businesses.
Reputation Council members stress the importance, therefore, of establishing a principle or framework that anchors corporate behaviour and messaging globally. This is the role of the corporate brand. As described in Ipsos’s white paper, ‘Brand Purpose: What’s the point of you?’, part of the purpose of brand positioning is to act as the “guardrails for communication.”
It’s clear that the world has indeed changed since Theodore Levitt mused on the role of the global brand over 35 years ago. Global marketing and communications are no longer homogenous; we now live in a world where brands and reputations are seen through the prism of local market needs and expectations.
Council members clearly recognise this change and are working with CEOs and other members of the senior leadership team to implement communication and business strategies that achieve the right balance between globally consistent and locally relevant messaging.
However, given the rise of connected and savvy stakeholders, it is imperative that such strategies are built on the pillars of:
- Authenticity – behaviour is aligned to communications
- Autonomy – power is devolved wherever possible
- Digital and social media – understanding their role in breaking down barriers
- Measurement – objective assessment of progress
Methodology: 154 interviews conducted with Reputation Council members between 25th June and 12th November 2018.