In a recent survey of 20 state Government Affairs leaders, Iron Peak uncovered powerful insights about the nature of confidence and communication between the function and headquarters executives. Nearly half of the respondents each advocate for their organizations in 25 states or more.
The discipline of Issue Management helps to focus energy on the most important topics:
· 60% of respondents use an issue management approach for most or all issues
· 55% are tracking over 100 issues
· 60% are satisfied with their Issue Management process
Yet, only 50% of respondents say their executives are satisfied with the ability of the function to demonstrate its value.
Two attributes were tied as the most important for creating a good perception of value by the C-suite:
1. Readiness to present the most current information on the status of any issue
2. Measuring profit and loss (P&L) impact
Surprisingly, 70% of respondents do not aggregate P&L impacts across all issues to show value. Almost all effort is devoted to being a reliable, up-to-date source of information. The other equally important topic, as identified by respondents, is largely being ignored.
Each organization has allocated a budget for Government Affairs to work on a portfolio of issues, but they are not valuing their portfolio. This is akin to dissecting each trade with your broker, but not learning about the size of your nest egg.
While this survey has limited sample size, the results demonstrate that proving the ROI of the function continues to top the list of challenges for Government Affairs.
It is notable that we have not made progress over time, and life will not get any easier. As data becomes more available through automation, the C-suite’s expectation will increase for the effective use of data. Further, as risk management and sustainability programs expand, this information becomes increasingly relevant to other corporate functions.
C-suite readers, think about what proof you need that your annual budget allocation to Government Affairs is appropriate. You need a sense of scale, and numbers provide that. Unfortunately, quantification is not a natural strength of a function that was built for public policy, politics, and communication.
To make Government Affairs more focused on business value, you need to dial in Finance and Operations input. This will require a coordinated effort and strong leadership. The best practice companies all claim a strong working relationship between Government Affairs and Finance as critical to a reliable capability for estimating the P&L impact of the organization’s issue portfolio.
Government Affairs readers, think about how providing face-to-face, newsletter, and phone updates do not represent the full equation for demonstrating business value. Reach out to Finance and you might be surprised how they can help show off your value!
For more information, including our Financial Impact Scoring Tool (FIST) and related support: www.ironpeakalliance.com