I read a LinkedIn post recently about how a Nigerian real estate company turned its business around. According to the writer, the biggest challenge real estate companies face in Nigeria is distrust. This distrust results from using prospective homeowners’ funds to build properties and missing delivery deadlines. After realising this, the company decided to diversify its funding approach. They raised funds by issuing commercial paper, following which they opened up their books to financial scrutiny by a reputable audit firm and became a publicly listed company.
The writer noted that many real estate companies ‘have PR systems to manage narratives and protect their reputation. But few embrace deeper external scrutiny,’ concluding that ‘Trust is earned, and even harder to sustain.’
You may be reading this and wondering what the above events have to do with public relations. Everything.
That is because many CEOs and business leaders misconstrue PR as media relations. The entire process employed by the real estate is PR in action. Firstly, they identified the problem as a lack of trust. Secondly, they set an objective: build trust; then they devised a strategy: enhance business reputation not based on noise but transparency, stakeholder engagement, systems and processes.
This is public relations in its purest form, although many CEOs might not recognise it as such.
Securing news stories or interviews in newspapers, television, or radio; that is publicity, not public relations. And publicity may very well be achieved through advertising. Publicity creates awareness, but public relations builds trust. This misunderstanding of public relations has remained pervasive because of the reduction of the discipline in most organisations to ‘communication’. But in my view, communication is only one tool in the PR arsenal.
By my definition, ‘Public relations is a strategic management function that employs positive actions and communication to build mutually beneficial relationships, foster understanding, earn credibility and generate goodwill. At its core, it encompasses relationship and reputation management, with the long-term goal of influencing an organisation or brand’s publics to achieve favourable outcomes.’
The scope of PR becomes clearer when you consider the breadth of stakeholders the function manages. These groups include those known as foundational stakeholders, such as investors, shareholders, employees, communities, suppliers, distributors, and consumers, as well as secondary stakeholders such as government, media, industry and pressure groups.
Consider this scenario: a man decides to launch a real estate company. After he conceives the idea, if the government does not grant him a licence to operate, the idea remains an idea. If there is no investor, there cannot be a business. For the idea to be transformed into properties, the company’s founder needs to work with people – employees and suppliers. If, in the course of building, the community becomes hostile, business is disrupted. To take the houses to the market, the company relies on employees and agents. To inform prospective homeowners about the properties, the company may rely on the media. And if customers refuse to patronise the company, it is doomed to fail.
That’s why, in delivering their functions, PR practitioners analyse the various groups that an organisation interacts with to understand their interests, motivations, and the extent to which their interaction with or indifference to the organisation can impact its operations.
Once stakeholders are identified, the PR professional devises a plan to build a mutually beneficial relationship with them. These relationships might be established through outreaches to the media, consistent communication with employees and periodic surveys to understand what the company can do to make them productive, preservation of host communities, and keeping shareholders updated through annual general meetings. The ultimate goal is to drive favourable outcomes.
So, while many CEOs are particular about the popularity they gain from media appearances, the real test of the image they’ve built is how well they can influence stakeholders. This is where a much-overlooked responsibility of public relations or corporate communications managers comes into play: counselling the organisation’s leadership.
As such, while marketing may want to go big with a half-baked product and may have management’s support, PR will resist it, knowing that a crack in any of the aforementioned relationships can trigger a crisis and result in reputational damage, which can have far-reaching implications for business sustainability.
Media relations may be the most visible PR function, but true public relations practice involves stakeholder engagement, communication, reputation management and more. Until CEOs start treating PR as a strategic management function, rather than a publicity machine, they’ll be building organisations which may not stand the test of time. You can achieve visibility quickly, but trust secures longevity.
