It’s time to take a broader perspective on strategy

GDPR, new reporting standards, residents opposing the expansion of a factory, an accidental pollution, a clinical trial gone wrong, an investment product turned sour … CEOs consistently rank regulatory requirements and reputation issues among the top three business challenges. But few companies handle them strategically, on a par with commercial and business issues. With Strategy Beyond Markets, an elective for MBA and Masters students that was introduced this academic year, professor Leonardo Meeus seeks to turn the tide.

What’s in a name?

“Corporate communications, public relations, public affairs, regulatory affairs, and so on, all mean different things to different people,” says researcher Luísa Fernandez Vanoni, who works alongside Leonardo, assisting in the further development and delivery of the course. “In practice these functions or professions tend to overlap, although their focus may slightly differ. Public affairs, for example, concentrates on political and regulatory issues, while public relations addresses public perception and reputation with customers and the media. Most companies have teams dealing with one or more of these functions. However, there is a trend for these professions to converge under the umbrella of corporate affairs.”

Strategic thinking

“Corporate affairs is typically associated with problems, unpleasant issues detached from the business,” Leonardo says. “Its stakeholders, e.g. the government, regulators, NGOs, or the media, are not treated as strategic actors, whereas they should be.” He is adamant: “Your business strategy should not only focus on the market for your products or services, and your customers and suppliers. It should include all your stakeholders, i.e. market as well as non-market players.”

And he continues: “Companies that have mastered this ‘beyond the market strategic thinking’ are typically companies that learned the hard way. They ran into regulatory difficulties or suffered reputation damage, but somehow, they managed to survive the crisis. These companies know it’s better to be prepared, so they’ve devised a strategy to anticipate and deal with issues like these.”

More important than ever

A strategic approach to corporate affairs is more important than ever, as Luísa explains: “It’s all about exposure. The internet and social media have changed the rules of the game. Before, it was easier to keep any regulatory issues or claims under the wraps. But news travels fast these days and literally everyone can have their say. Before you know it, you find yourself the subject of a Twitter storm, or being dragged through the mud by the media and public. You simply can no longer afford to not manage your corporate affairs strategically, because bad publicity or scandals will have an impact on your bottom line. And CEOs have started to realise that.” She pauses and smiles: “Mind you, not only CEOs, there’s a growing awareness and an eagerness to be strategically involved.”

Leonardo nods: “Corporate affairs used to be peripheral to the business. To put it bluntly, it served to clean up the mess. But, I can’t stress it enough, corporate affairs shouldn’t be an afterthought, it should be part of your business strategy. Things are changing, but eagerness is not enough. Corporate affairs professionals need to think strategically, which is exactly what our course teaches them. Now, everyone in the organisation should engage in this non-market strategic thinking. And that’s why the course isn’t called Corporate Affairs, but Strategy Beyond Markets. We want to attract all sorts of profiles.”

Mapping the issues

In this elective, students learn why a non-market strategy is important and how to create a successful one.

Luísa: “We explore what kind of issues companies are exposed to, e.g. regulatory compliance disputes or reputation damage, and teach them how to identify these issues. But also, how to anticipate the degree of public outcry a particular issue is likely to cause, and who the various actors are that can be mobilised on the issue. As to these actors: we encourage them to also consider the unusual suspects, which is important for issues you’re not dealing with on a daily basis.”

Frame, arenas, alliances

Leonardo: “When creating a non-market strategy, you should think strategically about three aspects. First, there is framing, i.e. the way you communicate about the issue. Students learn that there is no such thing as neutral communication. What you say and how you say it is a strategic choice and one that should be made carefully. Second, you should think about the most appropriate arena to deal with the issue – media, court, public meetings and hearings, open days and so on. And finally, you must decide which alliances to form. Not only your commercial strategy hinges on strategic alliances, you’ll also have to work together with partners as part of your non-market strategy. It’s important to try and be innovative about these aspects. That’s why we also analyse case studies from companies that managed to think outside the box.”

“But there’s more. To support the process of analysing and creating a non-market strategy, we’ve developed a tool, turned into a game – a box complete with a board and cards, like Monopoly.” He grins: “We’ve even had students asking if they could have the box, maybe we should think about a small-scale production.”

Brussels, where else?

Other business schools have also started to include non-market strategy in their curriculum, but Leonardo explains why Vlerick is ideally placed to deliver this course: “It ties in with our strategic focus on financial serviceshealthcare and energy – three industries that, more than any other, recognise the importance of corporate affairs or non-market strategy. Our focus on digital transformation also provides a perfect fit. It’s precisely data technology companies that have found themselves in the eye of the storm recently, with several data abuse scandals having led to more stringent policies and regulations of which GDPR is only the beginning.”

Need more convincing? He adds: “Our Brussels campus is located in the capital of the EU, the heart of the public and corporate affairs scene, so what better place to organise this course?”

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