How to construct a strategic communications plan
Once you identify your target audience, you need to construct a strategic communication plan that targets your audience in order to achieve the intended objectives.
While financial communication requirements could vary from one jurisdiction to another, you could leverage the following principles—published by the International Accounting Standards Board (IASB)—to effectively communicate insights and customise your communication to the target audience:
| Entity-specific | Tailoring information to a company’s own circumstances. |
| Simple and direct | Using simple descriptions and sentence structures without omitting useful information. |
| Better organised | Ranking pieces of information to help users of financial statements understand their importance. |
| Better linked | Linking information to help users of financial statements understand the relationships between pieces of information. |
| Better formatted | Select a suitable format for the type of information companies provide. |
| Free of duplication | Avoid unnecessary duplication that obscures communication. |
| Enhanced comparability | Disclosing information in a way that enhances comparability among companies and across reporting periods without compromising its usefulness. |
Source: IASB
McKinsey recommends the following approach to build and execute an integrated communications approach.
Source: McKinsey
Step 1: Identify the key stakeholders or the target audience
We have already discussed the different types of stakeholders and their objectives/interests in the previous topic.
Step 2: Identify the major milestones and trigger events
An effective communication plan should identify key milestones and trigger events. A key milestone would be financial year-end and the reporting of financial results of the organisation.
A key trigger event could be the merger with another organisation and reporting of financials post-merger.
Step 3: Set up governance and resourcing
Sufficient resources and funding should be available to fund projects. In addition to resourcing, a proper governance and compliance structure should be put in place to cater to different audiences.
Financial information is heavily regulated and should comply with the relevant accounting standards and regulations. Such information should support informed judgements about an organisation’s financial performance and position.
In addition, there should be a process for approving and disseminating financial communications.
Step 4: Develop core messages
Core messages such as profitability, cash flow position, and financing of growth strategies would appeal to different target audiences.
Hence, developing core messages based on financial reports and their associated insights would make financial communication more appealing and relevant.
Step 5: Develop a step-by-step communication plan
Your detailed communication plan should address the following questions:
- Who is the target audience?
- What is the key message(s)?
- How frequent should financial communication be?
- Why is the organisation communicating this information?
- Where would this information be available?
- How would such financial information be communicated to the target audience?
Step 6: Establish two-way communications
Two-way communication helps to address information gaps. In most situations, feedback is either not collected or no action is taken based on the feedback collected.
If there is feedback from external investment banks and organisations (who review a business’s financial information) to include, for example, commentary on projects, then you should provide such information in a structured manner so as to close any potential information gaps.
If you’d like to learn more about business performance, check out the full online course, from FutureLearn, below.
Financial Analysis for Business Performance: Reporting and Stakeholder Management
Financial Analysis for Business Performance: Reporting and Stakeholder Management
