Purpose and Goals of the Chapter

This chapter introduces financial communication, which was traditionally managed by the investor relations function within companies. Financial communication is an important link between the organization and those who invest in the organization as the cases in this chapter demonstrate.

Outline of Key Chapter Themes

• Financial communication is a rapidly changing aspect of public relations as the lack of confidence in major institutions is at an all-time high, and stakeholders and regulators are demanding greater corporate accountability and transparency.
• The Tax Amnesty 2015 campaign used positive messages to persuade eligible taxpayers to participate in Tax Amnesty 2015 by paying their past due taxes.
• VantagePoint established itself as the leading voice in modernizing the world’s infrastructure by appealing to key audiences, including entrepreneurs developing clean technology products and solutions, existing and potential investors, and elected government officials who could enact policy to support the emerging clean technology industry.
• The Alcatel–Lucent Shift Plan developed clear and transparent restructuring plans to better position the company for the future by fostering employee accountability and, externally, improving the organization’s financial reputation as a sound investment.

Chapter Outline

Tax Amnesty 2015: Act Now. Get Right. Move Forward

Situation
Research
Action Planning
Communication
Evaluation

Building Brand Equity to Attract Investment Dollars in Clean Technology

Situation
Research
Action Planning
Communication
Evaluation

The Alcatel–Lucent Shift Plan: A Financial Turnaround Bolstered by Communications

Situation
Research
Action Planning
Communication
Evaluation

Case Summaries

Tax Amnesty 2015: Act Now. Get Right. Move Forward

House Enrolled Act (HEA) 1001 was signed by Indiana Governor Mike Pence in May 2015. The legislation required the department to establish a tax amnesty program and stated the program would last eight business weeks. Indiana offered its first amnesty program in 2005, collecting more than $244 million from $1.3 billion in outstanding liabilities, exceeding its originally anticipated $65 million. The Tax Amnesty 2015 campaign relied heavily on available data from that earlier campaign, analyzing media coverage, taxpayer letters, website statistics, and program reports.

With a budget of $13.4 million, the campaign’s goal was, over 4 months, to persuade eligible taxpayers to participate in Tax Amnesty 2015 by paying their past due taxes. To reach taxpayers through local, trusted sources, the department partnered with community and business organizations and Indiana legislators to host more than 60 Tax Amnesty 2015 informational seminars. More than 81,000 taxpayers participated in Tax Amnesty 2015 by paying in full or establishing a payment plan. As of December 31, 2015, the program had collected $168.75 million, exceeding the $110 million collection goal. Final program collections would total approximately $188 million.

Building Brand Equity to Attract Investment Dollars in Clean Technology

VantagePoint Capital Partners (VP) is a Silicon Valley venture capital investment firm founded in 1996 with a mission to identify and invest in companies looking to revolutionize industries and change the world. In 2007, the crumbling global infrastructure and increased dependence on fossil fuels created a unique opportunity to shift the firm’s investment focus in information technology (IT), digital media, health care, and financial technology toward focusing primarily on companies making breakthroughs in energy innovation and efficiency, known as clean technology (cleantech). Primary research for the public relations campaign came in the form of acquiring knowledge from holding investor pitch meetings and media interviews (through which we could track firsthand some media coverage trends on cleantech/green issues), monitoring the emergence of cleantech-focused conferences, and gleaning insights through conversations with the industry, government leaders, and entrepreneurs.

The overall goal for this public relations campaign in 2010–2011 was to establish VantagePoint as the leading voice in modernizing the world’s infrastructure. Media relations activities included developing and distributing press releases around substantial firm announcements concerning its network of advisers and portfolio companies. Early portfolio company success, highlighted by the IPOs (initial public offerings) from Tesla, provided evidence of the firm’s ability to invest in companies who were making significant impacts in the world and were yielding positive financial returns.

The Alcatel–Lucent Shift Plan: A Financial Turnaround Bolstered by Communications

When Alcatel and Lucent Technologies merged in April 2006, the $34 billion consolidation created one of the world’s biggest global communications equipment providers. Just 2 years later, the merger was already considered an enormous failure. Culture differences, inability to agree on strategy because of a complex management structure, a consolidated customer base, and price pressure by aggressive competitors had taken its toll. The research conducted by the team at Alcatel–Lucent consisted of a mix of conducting internal audits and perception surveys with investors (the key audience), and CEO Combes and his team holding hundreds of meetings with stakeholders, including employees, customers, and investors.

On June 19, 2013, when Combes had been in the job just over 2 months, he publicly announced a new branded transformation plan--called the Shift Plan--that set a clear company course for the next 3 years. The goals for the Shift Plan were to better position the company for the future by fostering employee accountability and, externally, improving the organization’s financial reputation as a sound investment. The team created a specific shareholder program defined with a particular focus on regions that were underrepresented in the current shareholding structure. The program also focused on attracting investors with a long-term investment approach. The main goal of the Shift Plan--a return to positive free cash flow in 2015--was largely exceeded.