I have been meaning to write about this topic for a long time, and the impetus finally came when I read a recent comment by Securities Commission executive chairman Datuk Mohammad Faiz Azmi.
Following a recent review by the market regulator of the country’s 88 largest listed companies, which revealed that at least six companies did not have dedicated investor relations units (investor relations is a sub-function of public relations), while four were not covered by any research analyst, Mohammad Faiz was quoted as saying: “How do you expect people to buy your shares if you don’t talk to analysts?”
Such shortcomings, he noted, have limited investor interest, particularly among foreign investors.
This absence of stakeholder engagement is even more prevalent in the small and medium-sized enterprise (SME) sector. There is no official census tracking the precise number of Malaysian SMEs that engage external public relations services. However, industry data indicates that fewer than 20 per cent to 25 per cent of local SMEs use dedicated PR or professional marketing agencies.
I would also venture that the bulk of that 20 per cent to 25 per cent is spent on marketing rather than PR and its sub-functions, such as corporate communication, stakeholder engagement, employee relations and community relations.
To their detriment, many companies still do not understand, and therefore do not value, the role of PR in business. They continue to view it as an expense rather than an investment.
My background is in marketing and business development, and I’ve always worked in, or with, marketing-oriented organisations and clients. Such companies look outward, conducting research to understand consumer needs and developing products tailored to those needs to foster long-term loyalty.
The marketing mindset focuses on long-term strategy, building brand awareness and “pulling” target audiences towards a business. That mindset is what steered me towards a career in PR more than 26 years ago.
After several years of research and observation, I came to a simple conclusion: the difference between a good company and a great company often lies in its use of PR.
Sadly, because of a lack of understanding, some believe PR is expensive and that only very large companies, such as multinational corporations and government-linked companies, can afford it.
To begin with, the word “expensive” is relative. If PR is viewed as an expense – a cost required to maintain current operations and keep things running – then perhaps it could be considered expensive.
However, if it is viewed as an investment – an expenditure made with the expectation of generating future value, growth or a return on capital – then it becomes mission-critical, much like essential operational software, secure financial systems, compliance capabilities and strategic management tools.
The Malaysian SME sector, comprising micro, small and medium enterprises, is the backbone of the country’s economy. It contributes RM652.4 billion, representing 39.5 per cent of national GDP, and employs nearly half the nation’s workforce. SMEs are widely acknowledged as the engine of the economy.
Imagine the opportunities available if more of these businesses were able to expand their reach and capture international markets.
The concept of a borderless world gained widespread attention in the 1990s, largely driven by management theorist Kenichi Ohmae and the acceleration of globalisation. Yet many SMEs have not fully capitalised on the opportunities that global connectivity presents, potentially missing out on significant growth, revenue and profits.
Sadly, many Malaysian SMEs do not realise that PR is an investment that can contribute significantly to business growth.
In a borderless world, and with the emergence of numerous open communication platforms in recent years, PR has become a highly cost-effective strategic communication tool for SMEs.
Given their expertise across a wide range of communication channels, PR practitioners are well placed to advise companies on the most effective mix of platforms to achieve their business objectives within budget.
If you’re an SME, consider these two points:
- PR is an investment. It cultivates long-term goodwill, credibility and trust.
- The difference between a good company and a great one often lies in how effectively it uses PR.
The views expressed here are the personal opinion of the writer and do not represent that of Twentytwo13.
