A business model for communication departments
Why should corporate communications be concerned with business models? Isn’t it just something for start-ups or business developers? During our Science Update 2023 sessions at Siemens Healthineers, Ines Schurin and Ansgar Zerfass explained why applying the business model concept to communications departments will help identify weaknesses and lead to improvements. It will also help Chief Communication Officers present their contribution to business success in the language of top management. With increasing demands on corporate communications and limited (financial) resources, this is more important than ever.
Explaining the USPs of communications departments
Probably every Chief Communication Officer has been asked by top management: “What is the contribution of corporate communications? What’s your USP?” CCOs often struggle and talk about communication activities or cite KPIs for specific campaigns or channels. However, CEOs and top managers are usually more interested in the overall value created by the ressources provided for the communication departments.
Communications leaders and their teams need to consistently explain what their departments do and how they add value to the organisation – whether it’s to top managers, peers at other departments, team members or suppliers. And the more they speak the language of the C-suite, the better.
Learning from start-ups
Think of an elevator pitch. Start-ups can explain their business model to investors in a short and concise way. “Why shouldn’t we, as communicators, learn from their example?” says Ansgar Zerfass, Professor of Strategic Communication at Leipzig University. He proposes to apply the business model approach to corporate communications to explain its impact. The business model approach is a well-known management concept that ensures compatibility with initiatives in other functions and with management thinking.
Ansgar Zerfass, Leipzig University
“We use the business model approach to provide a ‘big picture’ of communications departments.”
The Communication Business Model
In a nutshell, the Communication Business Model (CBM) is a management tool that enables communication leaders and top management to analyse, describe, and innovate in-house communication departments in a comprehensive and easy-to-understand way.
The CBM describes the rationale for
- how and with what resources the communications department operates
- what services it provides
- how it creates value for the organisation
- and how that value is captured.
The CBM will help the communications team to…
- analyse current set-ups and practices
- identify gaps
- prioritise activities (e.g., when taking on a new leadership role)
- and drive continuous improvement by future-proofing their departments (e.g. to cope with budget cuts or new responsibilities).
Putting the business model to the test – the example of REWE Group
When Ines Schurin took over as Director of Corporate Communications at REWE Group in 2022, she was faced with a wide variety of communications activities and processes. At the same time, her CEO expected communications to become more integrated and efficient.
To achieve ”next level communication”, she started the transformation journey with two questions: “How are our resources allocated? And how do we see ourselves as a communications team? With no easy answers, Ines Schurin came across the Communication Business Model. “I was sceptical at first,” she admits. However, a workshop with a management consultancy that co-inventend the CBM approach showed that the model helped her team and herself to gain a common understanding of the difficulties they were facing.
Ines Schurin, REWE Group
“Communication had been rather reactive. We focused on distributing information and communicating the company through specific channels. In the future, we want to be more proactive and flexible, focus on value creation and organize the company’s communication rather than ‘just’ communicating it.”
Recommendations for successfully transforming a comms team
The transformation process at REWE Group is still underway, but the goals are clear. Reflecting on what it takes to be successful, Ines Schurin gave four pieces of advice:
- Understanding: Do we understand the factors that contribute to the success of your business? Corporate communications must fully understand the organisation’s business model.
- Relationship: Are we aware of our role in relation to top management? It is essential to have a seat at the table and to shape the business strategy, not just to communicate it.
- Explanation: Have we explained well enough why corporate communications is a value creator for the business and articulated our mission statement effectively? It’s helpful to define an official mandate for corporate comms and ask top management to endorse it.
- Open to change: Are we really ready to break with convention and experiment with innovative ways of working together? Gaining the support of the team is often the hardest part, as people often are not ready to give up established routines.
If you would like to review the Communication Business Model for your department, you can start by answering the following five questions. This will help you to gain a better understanding of your work and potential gaps.
- Operations: How is your communications unit set up and how does it work?
- Activities & products: What specific activities and products does communications deliver and to whom? What does it achieve?
- Value creation: How does communication contribute to the success of the organisation? What value is created for whom?
- Resources: What is the mandate of the communications unit? Who provides what resources?
- Revenues: How do the communications unit and its members benefit from the success of their work for the organisation?
For more information, check out the following articles on the Communication Business Model:
- Ansgar Zerfass & Jeanne Link (2023): Business models for communication departments: a comprehensive approach to analyzing, explaining and innovating communication management in organizations (English)
- PR-Magazin (06/2022): Business-Modelle für die Unternehmenskommunikation – Grundlagen und Erfahrungen aus einem Pilotprojekt (German)