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Why every business needs to make more friends

9th October 2013


Picture the scene: Ed Miliband and advisers are preparing for his conference speech. A team of academics explain the history of, and theory behind, energy pricing in Britain since privatisation. The debate continues long into the night, going over the effects a possible price freeze will have on energy firms and the wider economy. Miliband finally makes his judgement: on balance, he says he has a duty to the British people and is confident this policy will not adversely affect energy suppliers in the medium term. Finding it hard to imagine? That's because it won't have happened. Far more likely is that a clever young policy adviser came up with the idea and sold it on to a senior politician or strategist who could see the effects it might have on Labour's standing in the polls. The policy will have been tested to destruction - but only to ascertain whether it could withstand immediate scrutiny by the media, and whether it would be popular. Miliband will have seen it for what it was - a chance to score points with the public and give his conference speech a much-needed boost. Crucially, Labour will have finally made the decision to go with the price freeze policy not just because of its likely high poll ratings, but because they knew that nobody would stand up to fight for the energy industry. They would know, of course, that industry executives would make their views known. And they would also know that the free-market wing of the media would criticise the move. But they would have judged that no independent, credible outsiders, and certainly no members of the public, would come to the industry's defence. In other words, they knew the energy industry has no friends. How did energy firms become so friendless? Two big reasons stand out. Firstly, and most importantly, the industry has made no real efforts to explain pricing to the public and the effects that Government taxation and other demands have on it. While the oil industry has drilled into the public mind that petrol is expensive because of politicians' taxes, not their profiteering, the consumer-facing energy providers have made no similar impact. This is particularly surprising given these same firms are actually directly mailing the public each month. These days, with the growth of the web, and above all social media, ordinary members of the public have the ability to make their views known on a range of issues. A political party taking such serious action against an industry would expect to see significant hostile, or at least sceptical, comments if any type of public understanding or sympathy existed. This time, there was nothing. The energy industry's inability to speak to the public over the last few years has been a huge problem. The second reason that stands out is the energy industry's inability to secure allies from other parts of the business community. It is perhaps unfair to single out the energy industry for not doing more to explain its case to other businesses and to encourage them to speak out on their behalf. Few businesses really evangelise within the wider business world. But the business community are part of the energy industry's customer base - and these are people who are likely to understand and sympathise with the sorts of supply and price pressures energy firms face. Businesses need to take a close look at what has happened to the energy industry in the last few weeks and learn from their experience. Along with much greater networking within the general business community, all businesses, but particularly those that are public facing and in high-regulation sectors, need to do far more to explain their case directly to the public. They should be looking endlessly to engage ordinary people in conversation online and elsewhere so that they can mobilise public opinion on their side when necessary, or at least persuade the public to inject some much-needed context into policy debate. What does that mean in practice? It depends on the nature of the business and its challenges, but there are a huge number of options: for example, web campaigns to mobilise support against high taxes; consumer-friendly "policy" pages with briefings and infomercials; targeted web ads; and direct mail and email campaigns to people who politicians take seriously (like their own political activists). And all of this can and should be run in conjunction with more aggressive campaigns in the media to speak to ordinary people. Some businesses and some industries have done this very well. The drinks industry - a major target for politicians from 2007 - mobilised public support against higher taxes and more regulation very successfully. Car-maker Porsche also did so when faced with the prospect of a new charge on higher-CO2-emitting vehicles back in 2008. And Greggs recently did so to combat the Government's so-called "pasty tax". On each occasion, they showed politicians that attacking them risked damaging their own reputation - and in all cases, politicians backed off. Discreet and elite lobbying has its place - as a small, niche operation to enable experts in Government and outside to understand details of business life that they could never see for themselves. But, increasingly, the most important determinant of political decision-taking is public opinion. Businesses should be pouring resources into working out how to influence and mobilise the public. The reality is, in this world, everyone needs friends. James Frayne is a former Director of Communications in Government and is author of Meet the People, a guide to public persuasion and influence. 

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