Greentarget

Greentarget

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As Western law firms that spent years growing their footprints in China either exit or retrench, the reason global firm Dentons cited for doing so stands out for its directness.

In a memo to clients, Dentons said it ended its tie-up with Beijing Dacheng Law Offices “in response to an evolving regulatory environment for Chinese law firms in China—including new mandates and requirements relating to data privacy, cybersecurity, capital control and governance.”

As conditions in China become increasingly challenging, how a firm communicates a decision to withdraw need not be left to the last minute – indeed, firms should have plans in place now, especially as the prospect of greater conflict in the region looms. The unlawful Russian invasion of Ukraine and Hamas’ more recent incursions into Israel signal the importance of having risk management and corresponding communications plans in hand before the next geopolitical crisis, which many believe will be Chinese President Xi Jinping’s inevitable attempt to take Taiwan.

The pullback among foreign law firms is the latest evidence that the Chinese government’s heightened focus on national security and related geopolitical tensions is impacting the ability of professional services firms to do business there. The Big Four auditing giants have also shut down legal affiliations with local firms in China, according to Law.com. Meanwhile, Chinese authorities earlier this year probed operations at China offices consulting firms Bain & Company and Mintz Group, and detentions of foreign executives are adding further chill to the business climate.

As one anonymous Dentons partner told The American Lawyer, “It wasn’t really a corrosion of our relationship [with Dacheng]. It’s more that it’s become impossible to serve our clients properly, those that have China links.”

Worsening Economic and Geopolitical Conditions Raise the Communications Stakes

The changes global law firms made to their Chinese platforms in 2023 are part of a longer-term trend. The number of foreign law firm offices in China has been in decline for five consecutive years, falling by 16% to 205 as of the end of 2022, according to Chinese Ministry of Justice data, with U.S.-based firms leading the withdrawal. More firms will likely be queueing up behind Dentons and others heading for the exits as China’s economic downturn deepens, limiting business opportunities while trade tensions slow cross-border investments.

These developments come as heightened tensions between China and Taiwan once again fan speculation around a possible Chinese invasion. Affluent Taiwanese are transferring wealth abroad or shifting money into portable assets. Multinational companies are taking force majeure clauses one step further and inserting provisions into contracts specifically tied to China-Taiwan tensions. Meanwhile, America’s military and political leadership are discussing deterrence and timelines of a possible Chinese invasion amid growing economic and diplomatic pressure.

Coupling these conditions with the increasingly aggressive Chinese regulatory stance toward foreign firms, leaders of professional services organizations must consider the possibility that a conflict in Taiwan could further compromise their business and compel them to communicate their position on Chinese aggression – operationally and philosophically – with clients, employees, regulators, and the public.

Recall the weeks following Russia’s invasion of Ukraine. Hundreds of global companies shut down Russian operations within a few days. Professional services firms were slower to react than other organizations and their responses varied widely—from resigning clients based in Russia to taking no action at all, perhaps reflecting the difficulty of giving up work when it can be done from anywhere. 

Given the difference in the size of the Chinese and Russian economies and levels of foreign direct investment, we would expect even greater difficulty unwinding from China than from Russia despite China’s lackluster economic outlook. The International Monetary Fund last year ranked China the third most prominent destination for foreign direct investment, totaling $3.6 trillion in 2021. (This doesn’t count Hong Kong, which received another $1.9 trillion.) Russia isn’t even in the top 10.

As we saw after the invasion of Ukraine, intensifying Chinese aggression toward Taiwan would likely be followed by swift international condemnation and calls for Western firms to withdraw or to limit activities that could be said to support the regime. Other complications, from head-butting between the Chinese and U.S. militaries to stepped-up regulatory actions against foreign firms operating in China, could elicit similar responses, highlighting the need for firm leaders to be prepared for such eventualities.

In a Volatile World, Organizations Need a Proactive Communications Strategy

It is critical that firms have a clear framework for whether and how to respond to such crises, beyond the compulsory need to communicate regarding local staff who may be in harm’s way.  As a starting point, we recommend the process we developed to help leaders decide whether and how to respond to social and political issues since the murder of George Floyd. 

The Conference Board is aligned with our process. It recommends considering the issue’s alignment with the following:

  • Your organization’s core values
  • The requirements and expectations of internal and stakeholders
  • The connection between the issue and business
  • The significance of the issue to society
  • The incremental impact your organization may have

Firms should choose how prominent a leadership role they wish to play and be transparent with stakeholders about the criteria and process they employed in deciding whether and how to respond. (Firms structured as vereins, with members and affiliates in different parts of the world, should take note of this last point.)

And as consulting giant McKinsey points out, you should also consider adjusting your corporate narrative with an eye to shifting geopolitical risks. If you have an early handle on how you would respond if a specific crisis occurred, consider whether that is aligned with how the firm talks about itself today. If that narrative conflicts with your anticipated position, shifting your narrative early can avoid confusion among internal and external stakeholders down the road. 

Engaging with us in a rigorous scenario planning process can bring significant clarity. That’s especially the case if the process is conducted before the crisis occurs and urgency overtakes the opportunity to be thoughtful. We’ve helped clients navigate the invasion of Ukraine, the repeal of Roe v Wade, and the Oct. 7 attacks on Israel. Reach out if we can help you, too.

About the Executive Positioning Practice Exemplifying Greentarget’s commitment to being a trusted advisor to clients, Greentarget’s Executive Positioning team provides c-suite executives (managing partners, CEOs, executive committees, and boards) with insights to anticipate, understand and respond to important global and social developments, analyzing key issues that can impact reputation and compel leaders to communicate.

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According to a study by LinkedIn and Coalition Greenwich, institutional investors research potential partnerships and investment managers by looking for useful, authoritative content online — particularly on LinkedIn. In fact, 79% of institutional investors use LinkedIn weekly, and 90% take action at least once a month after viewing a wealth manager’s content. 

Are you creating the kind of content these potential clients and strategic partners are looking for?

These findings came as no surprise to us. That’s because Greentarget collaborates with the Zeughauser Group to produce the annual State of Digital and Content Marketing Report, which tracks the content consumption and decision-making habits of general counsel and C-suite executives. And though our research hasn’t touched directly on the financial services sector, our findings are in line with what LinkedIn/Coalition Greenwich’s Investing in the Digital Age report shows. 

Put simply, well-educated professionals — regardless of industry — behave similarly online and are attracted to the same types of content. And because we know what those buyers are searching for, we can help you tell your institutional story in a way that will secure new business and drive your firm’s growth. 

3 Insights Into How Institutional Investors Consume Content

So what does the research say about the types of content your audience is hungry for? 

When it comes to information that decision-makers value most, our survey of 200 executives found that the clients of professional services firms still look to traditional media and other trusted, editorial-filtered sources. But the pandemic also accelerated the digital shift =, as COVID-19 disrupted in-person networking events and pushed more interactions online. 

We took a side-by-side look at the LinkedIn/Greenwich report and our 2022 State of Digital Report and uncovered three commonalities that should inform your owned media marketing strategy.

1. LinkedIn Is a Highly Trusted Source of Content 

Many professional services firms allocate the majority of their PR and communication spend on working to obtain earned media coverage. And that’s undoubtedly important — 79% percent of the executives we surveyed for the State of Digital Report said traditional media is still the information source they value most. 

But LinkedIn wasn’t far behind, with 69% of participants saying they value the platform highly. In fact, LinkedIn’s popularity has surged among  executive decision-makers.. Leaders are also increasingly visiting websites and blogs and maintaining heightened interest in webinars and other types of virtual events, a trend many expect to continue.

That means your firm as a whole and your individual wealth managers in particular should be active on LinkedIn while also maintaining an intentional role in authoring content for your firm’s blog, website, and other owned media channels. Sharing self-published content that highlights your expertise and unique positions of authority plays a critical role in reaching institutional investors and compelling them toward action. 

2. Personalization and Relevance Are Essential To Cut Through the Digital Noise 

Although institutional investors respect LinkedIn over other social media platforms, that doesn’t mean they value every piece of content equally. They want deep subject matter education from experts who provide timely, personalized insights.

Institutional investors decide which asset managers’ content to consume based on the following factors:

  • Personalization. Investors and executives prefer to read content written by an individual rather than a company or organization.
  • Novelty. Your subject matter experts should add to the conversations that matter to your audience, not merely repeat what everyone already knows. Often, the smaller and narrower the angle, the greater the potential to find something novel to say. 
  • Relevance. C-level executives want research that is in-depth in scope and technical in nature. But an interesting perspective isn’t enough. It should also provide actionable advice leaders can put into practice.
  • Timely topics. Although providing evergreen advice is important, institutional investors and C-suite executives want expert authorities to provide their unique insights on the topics that matter most in the world. In fact, 67% of investors reported they chose content based on a news-driven topic. 
  • Length. When it comes to establishing authority, longer content wins out over short items, and articles are the preferred content type.

Post-pandemic, 23% of investors report being willing to spend 30 minutes or more to consume a piece of content if it’s useful and relevant to them — up from just 9% in 2018. Fifty-seven percent will spend between 15 and 30 minutes. And when it comes to absorbing complex subject matter, investors prefer digital formats. 

3. Your Firm’s Authority Is The Ultimate Factor Driving Buying Decisions

Building your firm’s overall brand — or, in our lexicon, developing your ultimate position as an authority — is the most critical factor in attracting institutional investors and driving growth. Investors look at where content comes from — and who authored it — when deciding what to act on.

That’s why building your unique positions of authority through a strategic owned media program is so important. Showcasing your team’s credentials and regularly publishing your experts’ best thinking is a vital part of convincing executives and investors to engage your firm. 

But remember: the more your experts spark conversation and invite feedback — especially on platforms like LinkedIn — the better. That’s because true authorities don’t just disseminate their expertise. They skillfully participate in uncontrolled situations and allow others to iterate on their ideas. This involves soliciting a response, considering opposing points of view, and being willing to adapt and pivot a viewpoint when needed. 

Let’s Create a Smarter Content Strategy at Your Financial Services Firm

Even in a cluttered digital landscape, reaching the institutional investors your firm wants to attract is possible. But to do so, you need a savvy owned media and content strategy that uncovers and showcases your experts’ unique points of view. 

Greentarget has been studying the digital content landscape for more than a decade. We know what types of content your audience wants to consume. But even better, we know how to work with your team to create that content and publish or share it in all the right places. 
We’d love to help your asset management firm skillfully blend your knowledge with the accuracy and storytelling methods of traditional journalism. Together, we can match your business goals with your audience’s needs. So when you’re ready to start directing a smarter conversation at your firm, let’s talk.

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In times of economic uncertainty, client retention is of paramount importance. After all, when there’s less new business to be had, focusing on retention protects crucial month-to-month revenue and becomes a strong foundation on which future growth is built. 

Of course, focusing on client service will also yield valuable dividends no matter the economic circumstances. That’s why at Greentarget, we’ve spent several years defining the brand promise we deliver to clients. As a result, “The Greentarget Way” has become an integral part of our team culture. Every employee knows what it takes to live out our ideals when working and collaborating with clients.

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ChatGPT can’t replace the kind of thought leadership that true authorities are capable of producing. Its prose is still too wooden, unoriginal, and full of jargon to meaningfully convey your expertise. 

But as a marketing leader at a professional services firm, reading the output ChatGPT generates should make you wonder: Is my firm’s marketing content truly any better? Are we saying something new and insightful? And are our subject matter experts providing content that’s genuinely useful to our audience?

AI can help you strengthen your content strategy and reach your audience more effectively — if you learn how to make it work for you. ChatGPT might not be able to write your content for you. But you can use it to spin up user-focused topic ideas, see what others have said about an issue to uncover a unique POV, and discover what your firm can add to the conversation.

Check out our ChatGPT Article Roundup to discover more ways to make AI the useful tool it has the potential to be.

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This past May, Ernst & Young announced that Project Everest, the firm’s plan to split its auditing and consulting operations, was officially dead. “People familiar with the matter” had been leaking details of infighting and pushback to The Wall Street Journal as early as March. And as the plan circled the drain, $600 million in sunk costs and 3,000 jobs went down with it.

Leaks happen during transformational moments and other periods of disquiet within a partnership, and they can be destabilizing for a leadership team. It doesn’t really matter why people leak information – whether it’s to blow the whistle, toot their own horn, exert influence over a firm’s direction, or grind an ax – damage may be done regardless. 

Leaks can harm your firm’s reputation, sow doubt among key stakeholders, and complicate lucrative, transformative plans, from mergers to operational overhauls. So if your firm’s sensitive information makes its way to the press, don’t shrug it off as a mere annoyance. Treat the event like the PR crisis it is. 

As we’ve advised our own clients who’ve been victims of leaks, you can’t unring this bell. But you can mitigate and lessen the impact of unwanted exposure by responding in the following ways.  

1. Talk to the Reporter When Approached About a Leak

When reporters reach out to ask your firm for a comment about something they’ve been told, it’s only natural to want to respond with a curt “no comment.” That’s a mistake.

True, you may not be able to answer specific questions about rumors and speculation, especially if you’re in confidential M&A talks. And any on-the-record response should be carefully calibrated to address the concerns of stakeholders and avoid provoking additional questions. 

But you can talk to reporters “on background” to provide additional information that allows them to contextualize what they’ve heard and write more nuanced, balanced pieces. 

Understanding “On Background” Conversations

“Background” can be a fuzzy concept. Everyone who’s seen All the President’s Men thinks they know what it means, but news outlets rarely treat such conversations exactly the same way. So before you dive in, make sure you and the reporter are on the same page as to what you’re agreeing to, and to whom the information you provide may be attributed.

Here’s how The New York Times describes “on background” and “on deep background,” and the guardrails you should establish with a reporter before the conversation starts: 

Can a source be quoted by name? Can we use the information if we leave out the name? Can we at least describe the source’s job?…

Generally, “on background” is understood to mean that the information can be published, but only under conditions agreed upon with the source… A reporter might negotiate with those sources to at least describe their jobs in broad strokes, to give a reader proper context: “a federal worker who shared the material,” “a government official with access to the information.” 

Deep background… is where establishing ground rules is particularly important, since many journalists and sources have competing definitions. For some, there is no practical distinction between “background” and “deep background”… Others interpret it to mean that information can be used only for the reporter’s context and understanding, with no attribution of any kind.

If you agree to provide background for a story, be crystal clear about what you mean and confirm whether or not the information you provide can be attributed to you in any way, and if not to you directly, then how the attribution should be framed..

The Value of “On Background” Conversations

Clients we’ve helped go on background are generally happier with the outcome of unexpected press coverage than clients who refrain from speaking to reporters at all. Talking to a reporter on background enables you to contextualize a leak and can help the reporter see the situation more completely. Credible journalists want to provide accurate, well-rounded information, so going on background can alter the way they frame the report.

True, you’re unlikely to ever be entirely happy with the press coverage your firm receives as a result of a leak. But even so, the only way to influence the outcome is to talk to the reporter as much as you reasonably can. Doing so also helps build relationships with the press – if the news is consequential enough, this may not be the last story they write on the subject.

2. Anticipate the External Impact of Internal Messages

When you need to communicate with internal stakeholders about difficult PR situations, craft your internal messages as if they’re public statements 

You should always be as transparent and upfront with employees as is prudent. That’s true on any given day, and it’s true in times of crisis. Even so, it’s important to bear in mind that every memo, email, text message, and video you share also has the potential to be leaked. 

Partners and employees can easily share internal communications with a journalist or take matters into their own hands and share them with sites like Above the Law, Fishbowl, and Reddit. Parse your messages carefully to avoid adding fodder to an already tricky situation. 

3. Consider Multiple Stakeholders

Leaked information always has a ripple effect. So as soon as you can, think about who will be impacted by the story once it hits — and do what you can to get ahead of it. 
The faster you can release a statement to those in your audience likely to be impacted by press reports on previously confidential information, the better. Why? It’s always preferable for your stakeholders to hear news from you before they hear it elsewhere. Breaking the news first allows you to explain the matter, paint a more complete picture, and provide context that a reporter may or may not include. 

The Right Way to Communicate With Stakeholders in a PR Crisis

Be clear, direct, and transparent – in internal and external communications alike. Don’t hide behind vague corporate language. It’s ok to correct misinformation and falsehoods, but you should also take responsibility if your firm misstepped in any way.

Give careful thought to:

  • How you communicate. Which channel will allow you to reach your various stakeholder groups most effectively? Should you call high-value clients personally? Hold a town hall meeting for employees? Send a mass email to your larger client list?
  • Who delivers the message. Who should be the spokesperson to each stakeholder group? Your CEO may not be the right person for every member of your audience. Depending on the situation, it might be wise to select another senior leader, a mid-level manager, or even a trusted community partner to make your case with various groups and help your firm retain trust. 
  • When you communicate. If it’s not possible to get ahead of the story, be sure to follow it up in a timely manner. Let your stakeholders know that you’re aware of the press coverage and offer as much information as you can about your firm’s position.

Remember: The world is not your audience. Your employees, clients, business partners, and in some cases your peers, industry and affinity groups are the people you need to worry about. Provide the information they need to understand what is happening. And monitor your firm’s two-way communication channels for stakeholder feedback so you can respond to questions and concerns as they arise.

An Ounce of Prevention: Take Steps to Strengthen Your Firm’s Culture 

Information leaks can be professionally damaging and personally disheartening for leaders in professional service firms. In the heat of the moment, the only thing you can do is respond to the crisis at hand. 

Stepping back, it is worth contemplating the cypherpunk construct that information wants to be free. Considering the human compulsion to share information with one another sociably, the rationalization humans are capable of when told they can’t do something, like share information, and the rapid decentralization of organizational design, executives may be forgiven for believing that leaks are an inevitability. If secrecy is mission critical to your organization, communication prohibitions may be put in place and steps taken to strengthen compliance and reduce the likelihood of employee backlash and resistance. (for more, see Sussman, Harvard Business Review, 2008.) 

Short of that, it’s also worth contemplating that firms with positive, transparent, and collaborative cultures tend to experience fewer leaks than those operating in a top-down, opaque fashion. So once your PR crisis is over, it can be helpful to identify the steps you can take to foster a healthier internal climate. These should include reshaping how you communicate going forward. Clear, consistent and appropriate internal messaging about leadership aims and decisions can foster an atmosphere of trust that will limit future leaks.

At the end of the day, protecting your firm’s reputation requires you to be both reactive and proactive. Respond swiftly when leaks happen. Talk to the reporter, and talk to your stakeholders. But along the way, don’t neglect the long-term work of creating an environment where partners and employees have zero desire to divulge sensitive information in the first place.

No matter what you’re facing, Greentarget would love to help you position your firm for immediate and long-term success. So let’s talk.

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