23 May What’s your Narrative Gap?
No one understands us
If there is one plaintive cry I have heard from clients more than any other, it’s that that their organisations are not properly understood.
Time and again I hear the frustration. If only our business model was better understood; if only commentators acknowledged the complexities of our operating environment; if only the quality of our people was properly appreciated; if only our scale advantages were better known … then the world would be a better place.
When I’m asked to crystallise what it is that PR people do, I no longer talk about communications or managing perceptions or stakeholder engagement, or any of those good things. Because increasingly I see these as tactics which serve a higher purpose, which is to improve understanding.
Certainly, that’s how we talk about Powerscourt now – we exist to help our clients be better understood.
What is the Narrative Gap?
There’s plenty of anecdotal evidence to suggest that businesses feel misunderstood. But there’s not much quantitative evidence. That’s why we set out to quantify what we call the Narrative Gap – the disparity between the story businesses want to tell and the story that is heard, or indeed simply not heard at all.
Working with Kantar Millward Brown we interviewed members of executive committees in 100 different businesses drawn from the FTSE 350 as well as privately held businesses with an annual turnover of more than £100m. Our aim was to find out how well understood, or otherwise, they perceived their organisations to be.
We identified seven dimensions of understanding. For each one we asked respondents how well understood they believe their organisations to be by the most relevant audiences.
So, for example, when considering ‘the context and dynamics of your market’, respondents were asked to think about analysts, industry commentators, sector media and so on.
The results are in
The results were emphatic. British business does not perceive itself to be well understood. Even the best understood dimension – the features and benefits of products & services – is thought to be well understood only by 35 per cent of listed entities and 30 per cent of privately held entities.
But the biggest surprise was the proportion of respondents in listed businesses who felt their equity growth story to be well understood. Just 13 per cent. The Narrative Gap, it seems, is more of a narrative chasm.
Why should this matter?
Who cares if your story is not properly understood? It may be frustrating; it may be a source of irritation, but does it have an impact on sales, on recruitment and retention, or on licence to operate?
Well, let’s consider one critical dimension; valuation. When businesses are backed heavily by investors, fund managers and equity analysts I’d contend that it’s almost always the case that their reading of the company’s market position, competitive advantages and growth prospects are broadly aligned with those of the company’s management team and board.
In other words, there is little or no gap between the corporate narrative and the investor’s or analyst’s version of that narrative. The wider the gap, the bigger the likely impact on valuation.
What causes the Narrative Gap?
We wanted to understand what causes low levels of understanding. Are there particular barriers which explain our findings?
Many explanations were offered up, from an overly over-cautious approach to communication, to the malignant impact of special interest groups, to outdated but deeply entrenched views.
But the most often cited reason was none of these. It was complexity. We operate in a highly technical and complex environment, said more than a quarter of our sample. And it’s this complexity which, for all but the most informed stakeholders, undermines understanding according to the businesses we spoke to.
This certainly resonates with our experience. If there is one challenge which stretches communications advisors, it’s making sense of complexity, whether it’s the complexity of clients’ operating environments; or their organisational complexity; or the complexity of the subject matter.
Of course, some people may take the view that businesses are much better understood than they suppose; it’s just that the audiences in question don’t buy into their narratives and have formed their own.
There may well be some truth in that. Our research can’t say. But what it does tell us emphatically is that there is a significant gap between the story businesses want to tell and the one which is heard.
Our research presents a snapshot of what corporate Britain believes. But it doesn’t tell us what the Narrative Gap looks like at the organisational level. That’s why we have developed a methodology, again in partnership with Kantar Millward Brown, to map out in detail the Narrative Gap for individual businesses, showing which aspects of the corporate story are understood by audiences.
To find out more, contact Steve at firstname.lastname@example.org or on 020 3328 9369.