BLUE in Lloyd’s List: Shipping must communicate now

Following on from BLUE’s question time debate on the professionalisation of communications within the marine, energy and environment sectors, BLUE’s executive director, Nick Blythe, talks in leading publication…

Following on from BLUE’s question time debate on the professionalisation of communications within the marine, energy and environment sectors, BLUE’s executive director, Nick Blythe, talks in leading publication Lloyds List about the importance of brand and reputation in delivering enterprise value.

Lloyd’s List
Shipping must communicate now
Thursday 13 October 2011, 17:49

Protection of brand value and a strong communication ethos can make a company attractive to public and private equity ENGAGE in conversation with someone from the shipping industry on ‘communications’, and they may expect you to be talking about onboard broadband, or some system for communicating from the bridge of a vessel. The concept of ‘brand’ and crafting a communications strategy that focuses on building, managing and protecting reputation has, in the main, not been seen as a key priority for the industry.

That is set to change. Pressures with shipping to manage communications and for brand protection come from a number of areas. New regulation – particularly environmental, but also around port fees, piracy and myriad other issues – has led to an increase in legislative and indeed consumer scrutiny. Moreover, communicating at a regulatory level to influence impending regulations so that the outcome may have as positive an impact as possible on their organisations. In general, communicating on environmental and social responsibility has become a key part of corporate governance.

More companies see a need to play for a ‘leadership’ position within their specific sectors. There are not many ways to do this shrouded in silence. Companies that succeed get out on the front foot and communicate their views and opinions on the key issues that are driving the market. They capture the intellectual high ground. They demonstrate to their customers and other important stakeholders that they understand the challenges that they face, and in doing so, build better relationships as well as create context for their products and solutions, driving sales.

Developing and implementing a communications strategy is not just for the big players. Of course the likes of Maersk Line have significantly upped the ante. From the launch of the Triple-E concept and the new Daily Maersk Asia-Europe service to its recent announcement of investment in infrastructure in Indonesia, Maersk is the embodiment of its ‘Constant Care’ brand positioning. But small to medium sized enterprises make up over 90% of the shipping industry, a term that must include the plethora of companies that supply to the shipping sector.

Every company’s brand and reputation is vital to its ongoing success, no matter how big or small. These are good reasons to take communications seriously. We live in a world where brand is the single biggest driver of enterprise value, with goodwill accounting for the large majority of that value over tangible assets. Brand is the core differentiator of every business, the DNA from which a business grows, the promise it makes to market and the value and codes by which it defines itself. Reputation is the external perception of the brand, and utopia is where the brand and reputation align, i.e. what you stand for is the same as what people think of you. Communications is central to delivering this, whether your company is large or small.

If you have got a company with handful of full-time people, and you operate a small fleet, communications should still play a critical role in supporting and delivering your business strategy.

Owning and operating a comparatively small business does not reduce the value of communicating with your customers to build your relationships with them, so that they might sign longer contracts or buy more products and services. Your company is as vulnerable to changes in legislation as the big players. In fact, the big players have cost advantages to regulatory compliance garnered from economies of scale that smaller operators can never muster. In this sense, you are more vulnerable. And your opinion at a regulatory level does count, particularly when small players band together in common cause.

Just as employees in large shipping companies want to work for a company with a clearly articulated vision and business strategy, so do small companies require this. Likewise, small company employees prefer to work within a set of values and a code of conduct worth their investment of labour and time. Companies large and small have a similar need to communicate effectively in a crisis situation.

Communication can be viewed as a daunting exercise. Shipping businesses have no shortage of stakeholders to communicate with. Communications channels are many: direct and face to face, through the media, and through an increasing range of digital avenues. For those that have no communications strategy, it does not mean that all of a sudden you have to start taking controversial stands, or ‘tweeting’ every five minutes. You should be doing something that is relevant and pertinent to your business and the growth strategy that has been set, and to the stakeholders that are right for your business.

The progressives within the industry are doing just that. And in an industry that is facing seismic transition, they are effectively positioning and differentiating their businesses and brands so that they can reap the inevitable rewards that change always brings. These few, unfortunately, can be counted on two hands at most. AP-Moller Maersk has thoughtful and attentive brand management and communications strategies that range across its many businesses and cover corporate social responsibility, environmental performance and crucial industry-wide issues. The major Japanese lines have communicated their vision and efforts in environmental performance as well, and have actively and visibly taken part in many tsunami recovery efforts. There are other good examples, but there is much more to be done.

Given the commercial pressures bearing down on shipping right now, communication and brand building may seem a costly and time consuming sideshow. But reputation can drive fortunes, particularly in an era when a consolidation is imminent. One way this can happen is when shipping companies look for capital outside the traditional bank avenues, which have been drying up for some time. Protection of brand value and a strong internal communication ethos will almost certainly make a company more attractive to both public and private equity.

Nick Blythe is Executive Director at BLUE Communications, a leading public relations and public affairs consultancy.

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