A $1 million privately owned software company with double digit sales growth and an active new product pipeline is blindsided when its largest customer abruptly switches to an emerging competitor; company revenues drop 20% and private funding for next expansion is at risk.
A $500 million diversified industrial company is successfully executing against its strategy to drive growth via acquisition and is surprised when several top sales performers abruptly leave the company because they are disconnected from the corporate strategy and vision; core business takes a hit.
A $1 billion publicly listed technology company with four consecutive beat-and-raise quarters and growing sales is caught off guard when an activist investor establishes a position with top shareholder support; CEO pressured to resign.
As the age-old adage goes, perception is reality. As these examples demonstrate, not having your pulse on the perceptions of your key stakeholders, including investors, shareholders, customers, suppliers and employees, can have huge implications for a company whether big or small, private or public.
How can companies avoid these situations? One important preventative step is to take the time before an issue arises to understand and respond to the perceptions of your key stakeholders. A formal Perception Study (or Perception Audit as they are sometimes called) is an effective and proven way to achieve this.
Through a Perception Study, you gain critical insights that will help to identify misperceptions and risk areas, inform your strategic business decisions, and refine your communication strategy. More specifically, a Perception Study can help you understand:
- How is your company perceived on an absolute basis and relative to industry peers and competitors?
- How are investors (public markets or private funding) evaluating your company as an investment? What are the key metrics and benchmarks you are being judged against?
- Is your strategy resonating with your employees, shareholders and customers?
- How are customers viewing your current and future product offerings?
- How aligned is your workforce with your corporate strategy and values?
Using insights gained from a Perception Study, actionable strategies can then be developed to:
- Differentiate your Company as an investment opportunity for the public and private markets
- Unite your workforce around your vision and improve company morale and the overall culture
- Clearly articulate your strategy and value proposition to all key constituents including employees, customers and investors
- Adjust your sales and product development strategy to meet customer demands today and into the future
In our more than three decades of providing strategic business communication counsel to corporations of all shapes and sizes, we can attest that to be most effective, a Perception Study should meet three key criteria:
- Perception Studies should be conducted by an unbiased, independent third party. No matter how good of a relationship you have with your customers, employees and shareholders, you will not gain the same unfiltered, eye-opening insights as those that will come in through a third party.
- Perception Studies should capture a 360-degree view by including stakeholder groups from both inside and outside of the company (e.g. a cross section of employees, investors, analysts, customers, suppliers). Even if your motivation for conducting a Perception Study is with a singular audience in mind (for example, better communicating to Wall Street to improve the valuation of your company,) considering the perceptions of other audiences both inside and outside of the company will provide an important holistic view of how your company is perceived. This 360-degree approach can potentially unearth some risks and areas for improvement that may not have been on your radar.
- Perception Studies must include defined, actionable and realistic recommendations. Insights are powerful but on their own will have little impact. A quality Perception Study must include a focused set of actionable recommendations that address the key findings. This may range from tactical changes to adjustments to your core business strategy and modifications to your strategic communications plan.
The bottom line is this: No matter how big or small your company is, whether you are public or private, or how certain or uncertain you are about how you are viewed by key stakeholders, a Perception Study is an invaluable tool to enable any organization to make informed decisions and identify risks.
Ryan Flaim is a Vice President at Sharon Merrill Associates. She has served as a trusted advisor to C-suite executives and in-house communications teams across a variety of industries. She counsels clients on a range of strategic communications areas, including messaging, internal communications, M&A communications and corporate governance.