Privately held companies have come a long way in their communications efforts—even to the point of becoming stars on YouTube.
Well, maybe not stars, but you can now find leaders of privately held companies on YouTube and LinkedIn being interviewed about corporate growth or a hot sector. One private-equity firm has even filmed its executives walking and talking in the office about relevant issues, positioning leaders as a human face of the brand. It’s all part of an evolving—some say mounting—effort by private firms to both recognize and leverage the new reputational landscape in ways their publicly held counterparts have been doing for decades. But they’re putting their own twists on things.
From private equity to massive family-owned firms in the food or manufacturing sectors, these outlets used to fly under the radar, making no public comments on developments in the news cycle, good or bad. Some even prided themselves on remaining silent and avoiding the press leaks that have brought so many leaders down. For their part, investors found this approach appealing: It gave firms an aura of exclusivity and elusiveness the public sector lacked.
But bit by bit, this world has grown larger in dollars and scope. It has also drawn increasing media attention for many firms’ impacts on, say, Wall Street. Equally important, investors have decided it’s in their interest to track privately held companies more closely, if only to safeguard their money. Along with regulatory pressure, communications can no longer be treated as an afterthought by most of today’s private sector.
To be sure, some of these firms aren’t new to working in the public arena. More than a decade ago, some private-equity firms started building large external communications staffs for just this very purpose. And they didn’t really have much of a choice: Private equity has moved from what formerly were its core investments to headline-grabbing areas like healthcare and real estate. Meanwhile, more than 80 percent of all US firms with revenues over $100 million are privately held. If bad news strikes, these firms can now tell their story, owning their message and filling the void so others won’t. In short, they can control the narrative and play offense in a strategic way.
Still, unlike many other businesses, the private sector has to manage two very different types of communication. The first is their communication with the limited partners who provide capital to the firm. Say an investment or business partnership goes sour: To avoid raising questions about the quality of their due diligence, the private shops need to contact those partners fast. That takes strong internal messaging and a solid partnership with Investor Relations.
The second communication type is with the broader public, which can be even trickier. A private-equity firm, for example, could come under scrutiny merely because of guilt by association with a bad development in a portfolio company or investment. Smart communicators in PE work to stay ahead of the messaging without broadcasting it.
As their communications grow, privately held firms face many of the same large-scale communications issues as public companies: How should we merge this effort with marketing? Should marketing and corporate affairs be separate units, or combined? Which areas are more important, and how do we keep up with new tools such as AI? And then there is the question of whether to build internal staff or work closely with outside agencies. In all cases, firms are evolving in their thinking, applying a level of sophistication that has been missing for so long.
In the end, most are finding the message is fairly simple: Leveraging good communications can be an advantage in a world that once ignored it. Putting forward a public face, or several public faces, can help firms provide a human perspective and a better understanding of what they do.
