In the past 4 years I have had the opportunity to work closely with government affairs professionals and government affairs heads of companies of all shapes and sizes.
From large Indian conglomerates, to multinationals, and startups in India, I have seen a peculiar misinterpretation of the government affairs function - which is, that it is essentially a sales function with some elements of marketing and very little branding. This is getting it precisely wrong. In fact, government affairs is essentially a branding function, slightly a marketing function, with very little elements of sales.
The distinctions are important here:
Branding: Branding is the process of creating and managing a distinct identity and perception of a product, service, or company in the minds of consumers. It involves defining the brand's values, mission, and unique selling proposition (USP). Branding focuses on building recognition, trust, and loyalty among the target audience. It encompasses various elements, such as brand name, logo, visual identity, messaging, and customer experience. The goal of branding is to differentiate the brand from competitors and establish a positive and memorable association with customers.
Marketing: Marketing encompasses a broad range of activities aimed at promoting and selling products or services. It involves strategic planning, market research, product development, pricing, distribution, advertising, public relations, and more. Marketing is the process of identifying and understanding customer needs and preferences, and then designing and implementing strategies to fulfill those needs effectively. It aims to create awareness, generate interest, and persuade potential customers to consider and purchase the offerings. Marketing encompasses both the strategic planning and the tactical execution of various promotional activities.
Sales: Sales refer to the actual process of converting potential customers into paying customers. It involves personal interactions, negotiations, and transactions between sales representatives and prospective buyers. Sales professionals use various techniques to build relationships, address customer needs, provide information, overcome objections, and close deals. The primary focus of sales is on achieving revenue targets, meeting quotas, and driving actual sales volume. Sales activities can include prospecting, lead generation, lead qualification, product demonstrations, negotiations, and post-sales support.
In many organisations in India, government affairs professionals have bottom line targets related to sales or they face continual pressure justifying their presence to the top management, or explaining how their work has led to business growth. I recently met a head of a large medical equipment firm and asked how their role has contributed to the company (I ask these questions to tease out a response and get a sense of the company culture). Not to my surprise, nevertheless unfortunately, he replied only in sales numbers. As to how his function is let to hundreds of crores of sales. Nothing wrong with it. But the response shows how the management (the owners being diamond merchants from Gujarat) perceives the function to be.
There are many problems in the mental models that lead to this misinterpretation. First of all, the problem is that government affairs professionals eventually play a dual role - that of facilitating business growth, and of preventing disasters through risk management - and this is not recognised in its entirety. Secondly, this mindset of looking at Government Affairs as sales stalls long term business growth. Thirdly, it prevents businesses (especially in industries where products are comparable and there is price competition) to be swept away by the latest market disruptor.
Most business heads overlook the times when government affairs professionals prevent a crisis situation from even taking shape. And the early detection barely gets rewarded. Further they fail to recognise that, in their role of facilitating business growth, government affairs professionals cannot do so directly. Just as a brand manger cannot increase sales directly but musters evidence that their contributes to growth in the long run (and that evidence becomes apparent over a long period of time, not immediately); similarly, a government affairs person works the ecosystem in a manner that the operating ground for the company becomes more fertile.
Dwarfed growth is a big problem in India. Our companies grow quickly but they never really grow massively compared to companies on an international level (a concern that a recent Chief Economic Advisor expressed to a small group in 2019, of which I was a part). I suspect that the reason is that businesses, especially smaller ones, are short term focused and look for additive effects and not multiplier effects.
If Pepsi, Coke, Apple etc. had overlooked their branding functions, it would be easy to say that their sales teams could not have achieved much. Because at the end of the day any purchase, even government procurement is an irrational process which some rational elements sprinkled over it or rationality serving as a convenient vineer. Companies that are more trusted do give a perception of higher quality and are even able to advice on the structuring of procurement needs. The latter is the marketing function, one step above sales and one step below branding.
While branding itself does not directly lead to sales, it creates a strong foundation and influences consumer behavior, ultimately driving sales. By building recognition, trust, emotional connections, and market advantage, branding establishes a favorable environment for sales to occur. When supported by effective marketing and sales strategies, branding can contribute to increased sales, customer loyalty, and long-term business success. It is a multiplier function not an additive function.
Finally, the risk of sacrificing branding for sales is that it leads to the eventual downfall of the business as soon as a new competitor enters the market offering more features, cheaper costs, better service etc. Branding needs all of those but it makes the benefits of a company’s products more pronounced and well entrenched into the minds of a consumer thereby making that company’s brand more sticky, and therefore more resilient to external pressures.
Therefore the metrics by which government affairs professionals must be judged is by answering the question (and deriving indeed quantitative indicators for it) that: “whether our business is now better positioned to tap into opportunities and avert risks?”. Assuming that the business has selling capacity (a strong sales team), the branding should lead to softening the ground for the sales person.
In systems thinking it is said that cause and effects may not be neighbors on a timeline. Linear thinking does not recognise this nuance of reality.
Beyond resource constraints and market pressures, it is the lack of strategic foresight and the lack of second or third order thinking, that leads business heads/owners and CEOs to perceive government affairs a function that deals with sales.
Focus is a great thing but linear thinking is not. When focus is confused with linear logics (which give a semblance of clarity) disaster takes place eventually. For instance, imagine a company that is focused on increasing its market share. While focus is necessary, if the company adopts a strictly linear thinking approach, it may overlook emerging trends, changes in customer preferences, or disruptive technologies. By narrowly focusing on incremental growth without considering broader market shifts, the company risks falling behind competitors and missing out on new opportunities.
Further, imagine a technology company that is focused on developing a new product. They believe that putting all their resources into the product's technical features and functionalities will guarantee its success in the market. They adopt a linear thinking approach by assuming that if they build a technically superior product, customers will automatically flock to it. However, they overlook the importance of understanding customer needs, market trends, and competitive dynamics. While technical excellence is crucial, it is equally important to consider factors such as user experience, pricing, branding, and effective marketing strategies. As a result, the company may face a disaster in the form of poor market reception and low sales. Despite having a technically advanced product, if it does not resonate with customer needs, lacks proper positioning, or faces strong competition, it may struggle to gain market traction.
In a world where competition, sales pressures and macro economic pressures are high, trust, a clear understanding of a product’s USP, and emotional connection and customer loyalty are essential for companies to survive.
There are businesses who will read the importance of branding but still will insist on getting government affairs professionals to work on sales in practice. This is because of a number of reasons - first is habits of the mind (this is a hard wired default option/way of working). Second is the “availability bias”a cognitive bias where people rely heavily on immediate and easily accessible information when making decisions. In this case, the decision-makers may have a bias towards sales-oriented roles for government affairs professionals because sales metrics and outcomes are more readily visible and tangible compared to the indirect and long-term impact of branding efforts. They may prioritize short-term results over the longer-term benefits of branding. Thirdly and perhaps most commonly, overconfidence - decision-makers may be overconfident in their understanding of the roles and functions of government affairs and branding. They may believe that government affairs professionals can handle or should handle sales-related tasks without fully comprehending the nuances and complexities of each function. Neither gets done.
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