It is evident that trade and tariffs are the new political football for communicators. Multinational companies are in the invidious position of needing to show loyalty to home country while attempting to play as equals in overseas markets. Thus far, the communications have been oriented to financial markets, for example, by acknowledging the need for price hikes in the event of the imposition of tariffs. That is only the beginning of what will be necessary.
In the past week, I have spoken with executives in the UK who have acknowledged that they are now planning in the worst case for a hard Brexit. This could mean taking manufacturing onto the Continent. In addition, I have met with other companies that rely on a supply chain based in China. They are now beginning to move production to other countries, but this could take five years.
Among the possible scenarios are consumer boycotts instigated by government, inability to recruit best local talent, distortions in social media, investigations by government and favoritism to local brands by regulators. Here are a few recommendations for CCOs:
- Fight Back Against Distortion — A few years ago we worked with a company that endured a consumer boycott in China. There was a false allegation about product quality started in national media, then carried on in social. The company opted to put its head down and ride out the storm, saying nothing. Its market share plummeted. The better course of action would have been to find a local expert, pair that person with a top official from the company and get the company’s story out first to the employees, then to media and consumers.
- Emphasize Local Roots — Make the government aware of the full economic impact of your supply chain, from direct employment to multiplier effect on suppliers, especially small ones such as local retailers. Be an advocate and supporter for education, health and other social causes.
- Give More Leeway to Local Management — There needs to be an agreed set of messages with corporate center that allows speed of response and flexibility of action. Simulation training is urgent. But most of all there should be a greater responsibility placed on the local manager to communicate and act in ways that improve local society.
- Win the Battle of Influencers — There must be an array of experts, from university professors to cultural figures, who understand the company and are prepared to come to your defense.
- Tell Your Employees the Truth About Plant Location — If you are forced to move production in order to avoid tariffs, tell your work force first. Give them sufficient funds for training for the next job.
- Consider an Outside-In Approach — Be sure to speak with local, national and global media. While local and national media may have a specific POV on trade issues, global outlets can help make a more balanced case, especially when it comes to reaching government officials and business executives with influence on policy.
In the next phase, multinational companies will have to become multi-local. Populism wants an enemy; the global company using local resources and taking profits back to the home market is an ideal target. Communications is now for offense, building a sturdy reputation and ready response.
Richard Edelman is president and CEO.