The New Influence Playbook
The New Influence Playbook
The New Influence Playbook
Playbook
Ellora-Julie Parekh, Director of ESG and
Regulatory Strategy Practice - McKinsey &
Company
External
The spotlight is on external affairs. Affairs
60% of CEOs’ rank better stakeholder engagement as a top 3 Data
priority. Yet only 7% frequently align their organizations and the
stakeholders interests. - McKinsey &Co., 20/5/20 Survey.
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5x more likely to use technology
and metrics. Low 7 5x Expert comments
04 Recoding External Affairs Leading organisation are now embracing the concept of a digital nerve centre
A digital nerve centre allows agile methods to be introduced across the team(s)
Rethinking influence
05 Stakeholder science
Organisational stakeholder mapping is a 2-step process
Segment your stakeholders like a marketeer
Manage your stakeholders like key accounts – relationship management
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Move from hindsight to insight to foresight
07 Towards data driven metrics The 3 measures that matter
Aligning the dashboard to the business 3
01
Model thinking
• The value of proactive vs reactive issue management
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• Focus on 3 high value indicators
4
01 Model thinking: the value of proactive vs
reactive issue management
External affairs functions are often
stuck in ‘fire fighting’ mode, dealing
with too many issues, too late to
provide real value The Big Issue Model: External Issue Life Cycle
Key take-aways: The big issue model is Proactive issue Reactive issue management
a powerful way of explaining your value management (High value) (High cost)
to the business and generating buy-in.
Issue stage
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Best practice tip: white board this to
other functions and show trending
issues in system
*TSC analysis of F100 client base. TSC/ Oxford University project 5
01 Model thinking: focus on 3 high value
indicators
The long lag time in EA effort to result/
outcome can reduce the functions
perceived value.
The Big Issue Model: the 3 high value indicators
Key take-aways: Keep the discussion Proactive issue Reactive issue management
simple and laser focused on outcomes management (High value) (High cost)
(competitive advantage gained, issue
impact and risk/ loss avoided.
❶Competitive advantage
Degree you continue to have impact vs. competitors
1 2 3 4
Best practice tip: set up a Latent/ emerging issue Public issue Politicized issue Legislative/ Regulatory issue
dashboard landing page for your
key focus areas Issue stage
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❷ Velocity of issue
Degree you can alter, shape or reduce the speed of the issue
Sentiment and issue trends
per market and over time
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02
Horizon scanning
• Develop a strategic blueprint of the external environment (risk + opportunity)
• Ensure all key corporate reputation drivers map to your focus areas
• Consider the post-Covid reputational agenda
• Build in real-time listening capability
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Illustrative Big Ag issue radar taxonomy
02 Horizon scanning: Develop a strategic blueprint
3. And sub-issues
of the external environment (risk + opportunity)
Systematic and scientific breakdown
of the issue environment requires a 2. The related issues
wide mapping of the business.
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Best practice tip: Workshop a draft
toolbox of key themes and related
issues into a taxonomy radar
8
02 Horizon scanning: Ensure all key corporate
reputation drivers map to your focus areas
Practitioners should then focus on a few key
areas where they can provide high value. Key reputational drivers can be modelled and then prioritised into a short list for
focus by thematic or by ESG criteria
“Live and breath corporate purpose. As the most Climate change and carbon practices
management
Human rights
employees
✔ Tax
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Respect
Economic contribution Safety and wellbeing
Best practice tip: Ensure all
priority areas are mapped to ✔ Diversity & inclusiveness
“All SDGs are not equal. Local residents may focus on #2 &3.
Norwegian sovereign fund may focus on #10-13. These
models need to recognize space and time.” – Philip
“As we enter the New Normal, the world wants to hear our
stories like never before. We must drive “License to Engage”
agendas across the organization.” - Paul
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potential ESG/ SDG impact to the
business by mapping these to your
key issue radar. Maintain a close
watch on competitor initiatives.
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02 Horizon scanning: build in real-time listening capability
The only way to get ahead of an issue is to be aware of it early. This
provides a window of opportunity to build a robust response strategy.
Key take-aways: Practitioners will benefit from a general Each segment contains 100’s of key
words
grasp of best-of-breed technology options available
Develop a Real-time scanning
infrastructure Search Algos launch each 60 minutes
Challenges: ‘We don’t use tech in EA’
to review content channels (Web,
Sub-issues
social, media, academic, Gov’t)
“Most PA dept’s think social media ‘listening’ and scraping tools Social
are enough and that + their legacy, personal networks should be
enough to convince the CEO that they are on top of things.
Wrong! - Peter Related issues News
“Human intel sourcing and testing remains a weak link” – Philip
Themes Expert data
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Stage Basic Common Current best New leapfrog Regulatory
state technology filings
Data Press Mainstream + Web, print, TV, radio and + custom built
clippings social media external info aggregators databases, client
APIs
(e.g. Twitter) (e.g. LexisNexis, Factiva, CRM data,
etc.), human led polling legislative data, 11
data etc.), REST APIs
03
Decoding External Affairs 101
• It’s not rocket science
• Unpacking the 5 main challenges in external affairs
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• Run an external affairs maturity assessment
12
03 Decoding External Affairs 101 (It’s not rocket science)
Like any function, EA is a structure with a set of processes.
Understanding these enables strong optimization.
Key take-aways:
The typical external affairs organisation is set up in 4 ways, to Best practice tip: Focus on strong process
manage 7 processes. design and optimisation across the
function
“I would not say “it’s not rocket science” – as it is quite complex, esp given
current geopolitical climate”.- Julie
Companies tend to structure external affairs units in 1 of 4 ways And manages 7 core processes
+
Corporate function – e.g., Virtual team – e.g. Anatomy of an external affairs system
utility operating in 1 country conglomerate
• Single unit in corporate center • Small unit in corporate center
Concentration of stakeholders
shared by all business units, forms virtual teams to manage 1 Horizon scanning/ monitoring
regions, or both cross-functional efforts on
• Reports to CEO or CEO minus project basis (e.g. involving
1 finance, country and R&D 2 Issue trend modelling/ tracking
experts)
• Central unit reports to CEO or 3 Stakeholder Mapping / profiling
CEO minus 1
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global stakeholders (reports to CEO minus 1
CEO or CEO minus 1 • Local operations have both
• Regional teams ‘own’ local regional and product specific units;
engagements and report to regional unit coordinates locally to
country head, central unit or ensure the company speaks with
7 Collaborate, learn,
- both. one voice orchestrate
- +
Complexity of product/ service portfolio 13
Source: McKinsey & Co. Organizing the government affairs function for impact (link) Source: TSC analysis of Fortune500
03 Decoding External Affairs: unpacking the 5 main challenges in external affairs
Most team time is always spent internally (7), which makes efficient,
optimized and preferably automated management of other
processes (1-6) a critical priority.
The 5 main process challenges in external affairs (and Best practice tips*)
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❺ Lack common, shared data, knowledge and insights.
Tip: Manager insists all reports are
presented in system Tip: get the time down to ~40% with plans, projects,
Best practice tip: Poll your team strategies presented live from system
on estimated time (or % of day)
taken per each process
*for ATIUM system
14
users
03 Decoding External Affairs: run an external affairs
maturity assessment
Retooling the function and mindset
for future success requires cross team
buy-in and strong leadership.
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Best practice tip: Run an EA
Maturity Assessment
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04
Recoding External Affairs
• Leading organisations are now embracing the concept of a digital nerve centre
© 2020 www.tsc.ai
• These allows agile methods to be introduced across the team(s)
16
04 Recoding External Affairs: Leading organisation are now embracing the concept
of a digital nerve centre
High performing organisations are 5x more likely to use technology and metrics.
Using digital tools
High performing 35
Low 7 5x Agile design leads to agenda shaping capability to get ahead of issues
McKinsey &Co., 20/5/20 Survey.
dialogues networks
Team, Geo, Data & Skills, activity,
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Pgm silos knowledge compliance
Best practice tip: Leaders – insist on islands gaps strategy
all briefings through a central
dashboard, 1 single source of truth
Source: TSC anatomy model. 2020
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Source: McKinsey & Co. 2019
04 Recoding External Affairs: A digital nerve centre allows agile methods to be
introduced across the team(s)
View agenda shaping capability as a combination of 4 key levers,
though it may take time to introduce (and be able to pull) all 4.
networks
dialogues
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Best practice tip: Give cross functional
access to your data. Run a 10 min
daily stand-up with the team or 30 Lever 4: Leadership visibility strategy
mins at the start of each week. enables strong direction and fast
action 18
05
Stakeholder science
• Rethinking influence
• Organisational stakeholder mapping is a 2-step process
• Segment your stakeholders like a marketeer
© 2020 www.tsc.ai
• Manage your stakeholders like key accounts – relationship management
19
05 Stakeholder science: rethinking influence
Think of your message as an infectious idea. How many connected
networks can it be spread across.
“EA dept’s are typically operated by people whose value to the organisation (and -
v protectively-to themselves) is in their perceived black book /personal networks.
It’s hard to change this legacy thinking.” – Philip
External affairs is now in the business of wide influence As a multitude of stakeholders now influence each issue
Issues intersect
To new school
Complex networks &
❑ Analysts clusters of
❑ Investors Issue 3 stakeholders
From old school influence each issue
❑ Customers
❑ KOLs
With 10’s
❑ NGOS
to100’s of
❑ Regulators ❑ Media actors in each
❑ Governments ❑ Academia cluster
❑ Agencies ❑ Suppliers Issue
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❑ IGOs ❑ Trade groups 1 Issue 2
❑ Advocacy groups
❑ Unions
❑ Competitors
… 20
05 Stakeholder science: organisational stakeholder
mapping is a 2-step process
Meeting the usual suspects or people who are easy to meet no longer cuts it.
Challenge the team with a rigorous process to identify stakeholders who can
shift the issue agenda.
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Smart mining / 3.0 3.4 3.0 2.6 1.8 … Media / NGOs
productivity
Transparency & ▪ Governments ▪ … ▪ … ▪ …
integrity ▪ Communities
…
Human rights 4.0 4.0 3.8 4.7 4.5
▪ Media / NGOs
1. Prioritise stakeholders by Tier 1-3 2. Fix Engagement 3. Decide 4. Match Key Activities to
(considering reach, position, influence, ability to engage, etc.) Goal Strategy resource capability
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Aircover to inform Broad Online, newsletters, trade shows, LinkedIn
❸ influencers of the influencers of my target 1000’s and educate outreach plan campaigns, roadshows, mailings
Challenges: “But…
…my relationships are highly sensitive”
… my meetings are confidential”
… etc.
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Tip: CEO, chairman, board members and top
Best practice tip: Set primary and back up management need to own relationships with
relationship ownership to ensure aligned, prominent stakeholders
“coherent” communication.
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06
New engagement strategy
• Enlarge your ‘influence-from-home’ toolkit
• Embrace old foes and ‘frenemies’ (or why you can’t ignore activists and NGOs)
• Crisis detection and response @ light speed
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• Track your competitors in real time
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06 New engagement strategy: enlarge your ‘influence-from-home’ toolkit
An unconventional business environment requires unconventional tactics.
Your future will be increasingly virtual and digital will be a key lever.
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Best practice tip: Track Expert witness • Public opinion polls
social automatically. • Position papers • Online civic engagement tools
• Technical reports
Set alerts for key • 3rd party lobbying/ coalition building
• Contributions
target social activity. • Paid travel
With focus on visual storytelling
(animated videos, infographics and data
visualization) 25
Source: fredericgonzalo.com
06 New engagement strategy: embrace old foes and ‘frenemies’
(or why you can’t ignore activists and NGOs)
Agreeing to disagree and focusing on opportunities for collaboration is possible
and a necessary first step. This model allows both parties to ‘park’ their embedded
differences and engage in a productive discussion.
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zone
Tactics ✔ Run environmental study
Best practice tip: Ensure all NGO and activist ✔ Protect wild bird colony
groups are mapped as key stakeholders. ✔ Agreed ‘no-drill’ zones
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06 New engagement strategy: crisis detection and response @ light speed
The language of crisis and of activism can be mapped and tracked which
enables rapid, proactive strategy and intervention.
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admission, testament, testimony, show, manifestation, demo, Robin Hood,
police, outcry, anger, refuse, outrage, baulk, reject, stand, disagree, resist,
hold out, fend, withstand, balk, take issue, dissent, jib, stand firm, defy,
refuse, shut-down, differ, disagree, refuse, reject, declare, resist,
complain, objection, dissent,
withstand, proclaim, defy, outcry,
denounce, join, truth 27
07
Towards data driven metrics
• Move from hindsight to insight to foresight
• The 3 measures that matter
• Aligning the dashboard to the business
© 2020 www.tsc.ai
28
07 Towards data driven metrics: moving from hindsight
to insight to foresight
The core tech to monitor, rank, measure issue
heat, trends and scenarios is evolving rapidly. The External Affairs Analytics Maturity Curve
Key take-aways:
There are 4 types of EA analytics ranging from Trending
hindsight (pain) to foresight (competitive influencers
advantage). Real time
Scaled issue issue
tracking radars
The core technology and data is rapidly
developing towards real-time assessment, but 4. Prescriptive Analytics
human judgement remains key. How and who can
Dashboards (by make it happen?
Challenges: Assessing why something did or did trend, sentiment and Prescriptive Analytics
not happen can be very difficult which means emerging issue) 3. Predictive
we must focus on proxy indicators and Analytics
Difficulty
Predictive Modelling
extrapolations. What will happen?
Forecasting
“The organization must develop as well moving from Data 2. Diagnostic
collection, Information synthesis, Analysis for Statistical analysis
Analytics
understanding, Foresight for anticipation. Else the toolbox
Why did it happen?Alerts
may threaten the team’s existence” – Philip
Dashboards Sentiment (by
1. Descriptive Geo, issue, time)
Ad-hoc reports
Analytics
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What happened? Standard reports
Custom
Best practice tip: Set a custom reports
dashboard to show the 4 types of
analytics where possible. 29
Hindsight Insight Foresight
07 Towards data driven metrics: The 3 measures that matter
Data driven discussions drive relevance across
functions and to leadership. EA can be measured!
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• Legislative/ policy: heatmap
Changes in positions, wins, • Media coverage: (++ / --)
Best practice tip: run a metrics workshop shifts in perception • Third-party: # endorsements
with TSC to ensure these are built into your • Civil society/NGO: feedback
dashboards • Public sentiment / over time
30
07 Towards data driven metrics (Cont.):
Aligning the dashboard to the business
“The division of quantitative and qualitative is a bit tricky in this 2-dimensional format,
The key outcomes should then be mapped to KPIs linked because it almost implies one is “better” than the other.” – Miro
to the business.
“Adapting balanced scorecards to EA KPI’s is an alternative.” – Rodrigo
Quantitative
invite key
stakeholders to impact to business
attend related
events KPI# 2: Government
approval of investment
deal by certain
timeline
KPI# 3: Endorsement by
consumers and local
Qualitative
governments of CSR
program
KPI# 4: Reduce
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regulation on X,Y & Z
products
Activities Outcomes
SOURCE: McKinsey's Reputation and Regulatory Strategy Practice
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Thank you! “We can't solve problems by using the
same kind of thinking that we used
when we created them. - Albert
Einstein
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