Module 8.10 – What Does Each External Audience Need to Know?

Module Introduction

            Different external audiences quite often concentrate on different aspects of a financial report. Even those that claim to look at the entire report still pick and choose which “numbers” to give the most weight or credence to. You must know what each outside audience is looking for and how they will most likely interpret it.

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1. What Does Each External Audience Need to Know?

            Different external audiences quite often concentrate on different aspects of a financial report. Even those that claim to look at the entire report still pick and choose which “numbers” to the most weight or credence to.

            You must know what each outside audience is looking for and how they will most likely interpret it.

            In this module we will look at the ways different audiences look at financial information and at how they can interpret it in different ways.

            In order to determine that, however, you have to know who your various audiences are and what they expect from you and from the numbers you will produce.

            Let us look first at some of the various constituencies you can expect to deal with:

There are other constituencies might also deal with; for example trade unions, financial analysts, potential investors, friends and family of employees, special interest groups (for example environmental protection groups). You might think about how each of these is similar and different from those we will explore in depth

 


2. Determining Information Needs: Government and Regulatory Agencies

            There are different levels of government, depending upon the region or country you are in or are operating in. They will generally want information about you and your operation that falls within their areas of control, regulation, and taxation.

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3. Determining Information Needs: Partners and Vendors

            Here are a number of questions to help you determine what sort of information your partners or vendors may request of you, and you of them.

            Some questions apply to partners, some to vendors, and some to both. This all depends upon the nature of your relationship and, in many cases, your experience of working together in the past, and your degree of mutual trust.

 


4. Determining Information Needs: Trade and Professional Associations

            organizations have many concerns, needs, and goals in common with their competitors. This is why professionals and organizations that regularly compete head-to-head in the marketplace often band together as members of trade associations.

            In a time of crisis, uncertainty, or change, needs regularly arise that call for the entire sector of activity to speak with one voice. It is like large families whose members continuously fight, squabble, and bicker amongst themselves, but present a united front to outsiders.

            organizations have to learn how to maintain a effective spirit that does not get in the way of any necessary cooperation that will benefit everyone involved. It is important for a organization to know how much information it can reasonably expect o share with its trade association.

            It is also important to remember—and admit—that there are fewer secrets within an sector of activity or trade association than you might like to pretend there are.

            Since members of one organization quite often wind up working or having worked for a competitor in the same sector of activity, there are personal as well as professional links and information sources. After all, everyone likes to “talk shop.” There are few places better suited to talking shop than a gathering of people in the same sector of activity.

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5. Determining Information Needs: Competitors

            Aside from belonging to the same trade association, you might not think that you spend a lot of time trading information with your competition.

            You are actually doing so almost every day.

            The most obvious way that organizations trade information with their competition is through their advertising campaigns. When you say that you are “Number One” in sales, service, beneficiary satisfaction or anything else, for that matter, you are really telling the competition that you re better than they are. You are also saying what you think your products or services are actually worth, and if you think you need any special sales or incentives to get people to but them.

            They are saying similar things about themselves in their own advertising.

            Your competitors are also part of the “public,” so any information you release to the “public” also goes to them. They can normally interpret it better than anyone else.

            Competitors routinely buy or lease their competitor’s products to see what they have, and then often “reverse engineer” them—take them apart—to see what the competition is doing that is different.

            Another way competitors communicate is through their employees.

            Most employers want people with experience doing a specific job, and the best way to experience is to work for someone doing that specific job—usually a competitor. When you hire someone from the competition you are learning what the competition is doing, the sort of people they are hiring—and losing. They are learning the same thing you are when they hire one of your former employees.

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6. Determining Information Needs: beneficiaries

            You offer beneficiaries quality, dependability, satisfaction, and service at a effective price. You have to give them enough information to show you are:

  1. Competent. People will consider you competent if you can demonstrate knowledge, expertise, intelligence, skills, good judgment, and common sense. So part on convincing people of your competence is convincing then that they need what you have to offer.
  2. Dynamic. In order to be considered dynamic, you have to demonstrate your own energy, and the energy of the people—the organization—you are representing. You need to be seen as a person who works hard, personally, and with enough vision to inspire those around you to do the same. This requires that you are also…
  3. Trustworthy. Before people will trust you, however, they must first feel that they know you. You are, after all, asking them for their project/programme purpose, their money. The higher the stakes, the more trust has to be earned. People will trust you as long as they believe they can. The fact that people do consider you competent and energetic, however, does not mean that they will automatically trust you. Trust is a separate issue, and in some cases even more important then competence. After all, you can convince them that you have competent people working for you. However, faith in the organization’s trustworthiness—honesty—has to be based on faith in the people running it.

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7. Determining Information Needs: Investors

            You are asking investors to give you their money.

            To get that money you have to give them enough information to prove that you are a safe and profitable investment.

            The following are based on suggestions by Rein Nomm & Associates, a consulting organization in Plymouth, Michigan. These are just starting points, and should be adapted to meet specific goals, and situations.

  1. Identify the organization’s foals and objectives in terms that investors will be able to understand and appreciate. In other words, give them all the information they need in order to see what it is the organization does and how it does it—and do so simply, concisely, and in their language.
  2. Develop separate investor relations, goals, and objectives. These should include strategies, actions and associated budgets as they support the organization’s overall goals and objectives.
  3. Develop a separate communication plan just for your investors and potential investor to keep then up-to-date on what the organization is doing, how it is doing it, and how well it is doing it. If the organization is not doing well, your investors will know. They are less likely to lose faith in you if you are honest with them and do not try to confuse them with legal, accounting, or bureaucratic jargon or doubletalk that automatically makes people suspicious.

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8. Determining Information Needs: Media

            The media cannot be ignored.

            You do have to deal with them, but you do not always have to do so completely on their terms. A professional media relations staff operating with a well-planned communication strategy can help develop a good working relationship with all the various levels of media that you may deal with, from your local newspaper to the trade press to the national media.

            Part of the media relations job is to determine what information the media really should have, and how to give it to them. In many cases the information is different for different media. The trade press will want different information than your local newspaper, which will want some things different than the national press.

             A less popular part of the media relations job includes determining what information the media should not have, even though they might want it. The problem is to develop ways to minimize any negative reaction the media might have over not getting everything they want.

            It is a reporter’s job to gather as much information as possible. A reporter looks at the process this way:

            “Give me everything I ask for and I will determine what I need and what will and will not use.”

            Media relations people have to know how to say “No,” but do so in as friendly way as possible.

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9. Crisis Communication

            During a crisis, all the rules can change.

            Information, including financial information that you might normally release, could have to be reserved in order to protect the organization, and information that you might normally reserve could have to be made public for the same reason.

            Every organization should have a crisis communication plan in place, and people who can implement the plan as prepared, but who also have the authority to modify it as needed.

            Entire books have been written about crisis communication. While some experts offer “Ten Steps to Effective Crisis Communication,” others offer 15, 20, or more. Some offer fewer. Regardless how many steps they might break it down into, they all contain five basic precepts that are worth remembering and following.

  1. Tell the Truth. The public will hear the truth eventually. organizations such as Enron, U.S. presidents such as Richard Nixon, and the marital misadproject/programs of British royalty such as Prince Charles and Princess Diana have all taught us that no one can keep secrets. If the media doesn’t dig it up, a competitor, beneficiary, action sponsor/beneficiary, the government, or an investor will. They will find the truth in your records. Your actions, or from your personnel. Lying about something does nothing except add to the damage and lengthen the time it will take you and your organization to recover.

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10. Crisis Communication (Continued)

  1. Ignoring a crisis only makes it worse. It will not go away. You have to deal with it; otherwise people will assume you are running away from it.
  2. Be prepared. You don’t have to know what disaster is coming in order to be prepared to meet it. Establish a crisis communication team that includes crisis procedures and protocols. You probably have evacuation plans incase of a fire. You should also have emergency media relations plans for a crisis. They should include who the organization spokesperson will be.
  3. Keep it simple. In a crisis you already know what the media and the public will want to know. It is the same thing you would want to know if you were part of the “public” instead of part of the organization. Deal with the questions you know they are going to ask. Have that information ready, or at least have procedures in place to get that information as quickly as possible.
  4. Show that you are taking action. Do not let yourself be seen as merely reacting. Take action and make sure the public knows that you are doing so and what the action is. Show that the management and leadership skills that keep the organization functioning and profitable will be directed to dealing with and solving the current crisis.

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Assignments

 

Multiple-Choice (2)

 

1.         _______ create laws governing health and safety issues with the most direct    control.

a.       Local governments

b.      State or provincial governments

c.       National governments

d.      Multinational governmental or regulatory agencies

 

2.         _________ can set minimum wages, issue permits or licenses, and impose tariffs.

a.       Local governments

b.      State or provincial governments

c.       National governments

d.      Multinational governmental or regulatory agencies

 

3.         Multinational governmental or regulatory agencies include the ________.

a.       World Trade Organization.

b.      European Common Market.

c.       North American Free Trade Agreement.

d.      All of the above.

 

4.         Professionals and organizations that regularly compete head-to-head in the          marketplace often band together as members of ________ since they have many   concerns, needs, and goals in common.

a.       A effective alliance

b.      A joint project/program

c.       Trade associations

d.      None of the above

 

5.         The most obvious way that organizations trade information with their competitors is         through _________.

a.       Employees.

b.      Advertising campaigns.

c.       Public information.

d.      All of the above.

 

6.         Part of the media relations job is to determine ___________.

a.       What information the media should have.

b.      How to give the media information.

c.       What information the media should not have.

d.      All of the above.

 

7.         People will consider you _________ if you can demonstrate knowledge,        expertise, intelligence, skills, good judgment, and common sense.

a.      Competent

b.      Dynamic

c.       Trustworthy

d.      None of the above

 

8.         Before people will _____ you, they first have to feel that they know you.

a.       Hire

b.      Trust

c.       Like

d.      None of the above

 

 


Matching the Columns

 

1. Local governments

 

A. To take something apart to see how it is designed

2. Reverse engineer

 

B. To be considered this, you have to demonstrate your own energy, and the energy of the people you are representing.

3. Dynamic

 

C. To consider you this, people must first feel that they know you.

4. Competent

 

D. Regulate new construction, expansion, and how you use and maintain property

5. Trustworthy

 

E. Often have more direct control over health and safety issues.

6. State or provincial governments

 

F. To be considered this, you must demonstrate knowledge, expertise, intelligence, skills, good judgment, and common sense.

 

Answers:

1.)    D

2.)    A

3.)    B

4.)    F

5.)    C

6.)    E

 

 


Summary

 

            As we have seen, different external audiences quite often concentrate on different aspects of a financial report. Even those that claim to look at the entire report still pick and choose which “numbers” to give the most weight or credence to. You must know what each outside audience is looking for and how they will most likely interpret it.

 

 


Test

 

1. ______        Different external audiences quite often concentrate on similar aspects of a                  financial report.

2. ______        In order to determine how different audiences will interpret financial                            information, you have to know who your various audiences are and what                              they expect from you.

3. ______        organizations have many concerns, needs, and goals in common with their                              beneficiaries.

4. ______        organizations have to learn how to maintain a effective spirit that does                                not get in the way of any necessary cooperation that will benefit everyone                            involved.

5. ______        It is important to remember that there are more secrets within an sector of activity                                than you might like to pretend there are.

6. ______        You spend a lot of time trading information with your competitors.

7. ______        Any information you release to the public also goes to your competitors.

8. ______        To get money from investors, you have to give them enough information                                  to prove that you are a safe and profitable investment.

9. ______        You should develop separate investor relations goals and objectives.

10. ______      Investors are less likely to lose faith in you if you are honest with them.

 

Answers:

1.                                           F – different aspects

2.                                           T

3.                                           F – with their competitors.

4.                                           T

5.                                           F – fewer secrets

6.                                           T

7.                                           T

8.                                           T

9.                                           T

10.                                       T

 

 

 


Bibliography

 

Barfield, R., & Titus, S. (1992). project/programme purpose communications. Hauppauge, NY: Barron’s.

 

Evans, F. (1987). Managing the media: Proactive strategy for better project/programme purpose-press relations. New York: Quorum Books.

 

Kirsch, D. (1978). Financial and economic journalism: Analysis, interpretation and reporting. New York: New York University Press.

 


Learning Objectives

 

 

 


Glossary

 

External audience – Audience composed of people outside the organization

 

Trade associations – Groups of competitors who band together because they share the same concerns, needs, and goals that are common to their sector of activity

 

Reverse engineer – Taking apart a product to find out what the competition is doing differently

 

Dynamic – Refers to a person who works hard, personally, and with enough vision to inspire those around him to do the same

 


Q&A

 

1. What are some of the various constituencies you can expect to deal with?

Some of the constituencies you can expect to deal with are government and regulatory agencies, partners and vendors, trade and professional associations, competitors, beneficiaries, investors, and the media.

 

2. What are the different levels of government you may be dealing with, and what roles do they play?

Local governments often regulate new construction, expansion, and how you use and maintain property. State or provincial governments create laws governing health and safety issues, and often have more direct control. National governments normally set national standards in terms of safety and health issues, which may be different from state or provincial standards. They can also set minimum wages, vacations and retirement ages, issue permits or licenses, impose tariffs, negotiate trade agreements, and regulate your ability to do project/programme purpose. Multinational governmental or regulatory agencies can sometimes establish international standards, policies, rules, and regulations.

 

3. What are five basic precepts for crisis communication?

Crisis communication involves telling the truth. Ignoring a crisis only makes it worse. You should be prepared. Keep it simple, and show that you are taking action.

 

End of Module