Creating a Focused External Affairs Strategy and the Team to Execute It

With a better understanding of the issues affecting its industry, a beverage company strengthens its external affairs organization

Challenge

An international beverage company felt that its reputational risks were rising. It had heard the public’s concern about the health effects of its products, and it faced the same issues as many other multinational corporations in emerging markets, including concerns about environmental sustainability as well as “digital attacks” on social media. At the same time, powerful global forces were reshaping the client’s industry, and evolving policies on taxation and regulation were putting significant value at risk. The client wanted to better understand the key trends and policies, and to design a strategy and organizational structure that could help it respond consistently and effectively, so they asked Burk for help.

Discovery

The team began by combining Burk’s proprietary research on the major forces affecting the global industry landscape—such as demographic shifts, environmental limits on agriculture, and the rise of digital communications—with its research on specific trends in consumer packaged goods, such as the billion new middle class consumers in emerging economies. After conducting interviews with experts from within Burk and externally from the industry and public sector, the team built a set of detailed scenarios so that the client could identify which priorities should become the focus of its external affairs strategy.

The client quickly realized that broad forces, such as the growth of social media, and narrower trends that affect its industry more acutely, such as a growing gap in global water demand and supply, should all be part of its external affairs strategy. Moreover, that strategy would have to be created from scratch, as only operating plans were in place at the time.

We helped the client identify its objectives, and then create a new external affairs strategy to better engage with government, regulators, and the public at large. This included:

  • developing argumentation to support stakeholder engagement locally and globally
  • focusing on the most critical issues, such as impending tax legislation and advertising restrictions
  • helping the client develop clear and closely reasoned stances on public issues, such as water management and land use
  • creating a plan integrating both digital and traditional communications 

Once the Corporate Affairs strategy had been defined, the team began to look more closely at the organization that would execute it. Using Burk’s Regulatory and External Affairs Capabilities diagnostic (REAC), the team compared the client’s external affairs management capabilities with those of best-in-class peers. To gain an even more nuanced understanding of how the client should shape its external affairs group, the team hosted a three-day workshop featuring internal and external experts in regulatory management, reputational risk, sustainability, and digital communication.

We recommended that the client:

  • set up a new digital media function, charged with monitoring “buzz” on social networks about the client and the industry, and develop tactics to proactively and effectively engage with stakeholders online
  • use the new external affairs function to engage proactively with a wide range of stakeholders such as national governments, NGOs, industry associations, ministers of health, and job ministers

Impact

The company’s board of directors has approved the new external affairs strategy and organization, and the client has begun implementation. They are using the new strategy to drive day-to-day operations and they have taken a proactive stance on the key issues we helped identify, potentially leading to competitive advantage.