From The Art of War To The Art of Strategic Communication

How Strategic Communication Can Help International Commodity Bodies Regain Relevancies

Le Han (Oliver)

New York University School of Professional Studies

MS in Public Relations and Corporate Communications December 2014

Advisor: Professor Helio Fred Garcia

Abstract ............................................................................................................................... 4  Introduction ......................................................................................................................... 6  Methodology ....................................................................................................................... 8  

In-depth Interviews ......................................................................................................... 9  Question Framework ................................................................................................. 10  

Ishikawa Diagram ......................................................................................................... 10  Literature Review .............................................................................................................. 12  

The History of International Commodity Bodies ......................................................... 16  International Commodity Market and International Commodity Agreements ......... 16  The Formation of International Commodity Bodies ................................................. 17  Economic Provisions and Market Intervention ......................................................... 19  

The Change In The Geopolitical Environment ............................................................. 20  Free Market Economy ............................................................................................... 20  Lift of Economic Provisions and Diminishing ICBs Position in the World ............. 21  

Case Studies of Coffee, Cocoa and Sugar Organizations ............................................. 22  Introduction of International Cocoa Organization (ICCO) ....................................... 22  Introduction of International Coffee Organization (ICO) ......................................... 25  Introduction of International Sugar Organization (ISO) ........................................... 26  

Diminishing Relevancy and Value Propositions: Crisis Faced by ICCO, ICO and ISO....................................................................................................................................... 28  Demand for Strategic Development: Challenges for ICO, ICCO and ISO .................. 29  The Art Of War And The Art of Strategic Communication .......................................... 30  

Discussion ......................................................................................................................... 32  Overview ....................................................................................................................... 32  The Demand for Relevancy and The Need of Strategic Communication .................... 36  Seize The Soul of An Organization .............................................................................. 38  Analyze You and Everything around You .................................................................... 40  Fully Prepared, Forecast Changes: The Future Is in Your Pocket ................................ 45  Evaluation and Review: For A Brighter Future ............................................................ 49  Time Matters: Do It Fast Or Do It Right? ..................................................................... 51  Be Adaptable, Be Invincible ......................................................................................... 54  Objectives Are Gold ..................................................................................................... 56  

Conclusion ........................................................................................................................ 59  References: ........................................................................................................................ 62  Appendix I – Abbreviations .............................................................................................. 66  Appendix II: Research Instrument .................................................................................... 67  

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Abstract

In the 1960s and 1970s, under the auspices of the United Nations, international

commodity bodies (ICBs) were formed as international organizations. They are all

regulated by their respective International Commodity Agreements, which have been

renegotiated throughout the years. Their primary role, when first formed, was to

strengthen the economies in the producing world using market regulation mechanisms.

They also served as “gate keepers” for project financing provided by the Common Fund

for Commodities (CFC). Since the 70s, many changes have taken place in the global

environment, including the broad global acceptance of a free market economy. Further,

the CFC no longer relies on or requires the commodity bodies to recommend projects for

financing. As a result, the ICBs are facing a crisis of diminishing relevancy and a waning

of their respective value proposition(s). Through a literature review and in-depth

interviews with senior officers, consultant, and executives, this study explores the current

state of ICBs and suggests a role communication strategy can play related to regaining

relevancy and strengthening the overall value perception.

To be more focused and pertinent, this capstone targets three ICBs: International Cocoa

Organization (ICCO), International Coffee Organization (ICO) and International Sugar

Organization (ISO). In-depth interviews as well as the employment of an Ishikawa

Diagram and the essence of The Art of War contribute to the identification of the exact

communications challenges these organizations have been facing related to their over

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arching goal of communicating up-to-date value and relevancy to their respective

stakeholders. In the latter part of the capstone, constructive communication practices are

raised in terms of advising these organizations on strategically communicating their

respective value propositions. The purpose of this capstone is to provide reasonable and

actionable strategic communication advice to International Commodity Bodies to

improve both communication and business performance.

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Introduction

The mandates of individual International Commodity Bodies are different, but the fate of

all International Commodity Bodies is the same.

After the Second World War, the discussions over commodity markets had been heated.

In order to strengthen the economies in the producing world and moderate the divergence

over commodity prices between producing countries and consuming countries, the

International Commodity Bodies (ICBs) were established with the permission and

sponsorship of the United Nations (UN). The commodity bodies were also founded to

administer corresponding International Commodity Agreements (ICAs) with economic

provisions, which were designed to artificially prop up prices and minimize price

fluctuation. However, the economic provisions were removed from the ICAs during the

late 1980s and early 1990s due to a shift in political will and a general adherence to a free

market economy. Since then, the ICBs have been going through slow transformation and

grappling with relevancy and redefining their value proposition(s).

Under the terms of the revised /current day commodity agreements, ICBs mainly focus

on providing industry insight and forums for interaction amongst their members.

Compared to their former role in the commodity world, ICBs today are less visible and

challenged in communicating their true value proposition(s) and relevancy.

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In the business world, an organization’s relevancy is the reason for its existence, which

includes the need for the organization, its influence and the contribution it makes to its

stakeholders. Relevancy alone is not enough, however; an organization also needs to take

advantage of strategic communication to create an institutionalized, two-way channel

between the organization and its audience for the purpose of strengthening value and

relevancy and communicating the same. In other words, the art of strategic

communication both contributes to the building of value and relevancy and to the

communication of that value and relevancy.

After the removal of economic provisions, ICBs have been struggling with reconstructing

their relevancy to the world, notwithstanding that they have revised their respective

agreements a number of times. The communications challenge for ICBs is, in large part,

due to a lack of solid organizational strategies on which to base comprehensive

communication strategies. In fact, ICBs lack clarity about their respective stakeholders

and vision, and, as a result, have vague organizational and communication objectives.

Based on a thorough literature review and in-depth interviews with ICB executives,

senior staff and a private sector consultant, this study sets forth the current state of ICBs

and their challenge of remaining relevant, and explores the relationship between their

business challenges and lack of strategic communication.

With the help of in-depth interviews and an Ishikawa Diagram, the study explores the

possible reasons for the erosion of ICB relevancy, including the lack of comprehensive

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communication strategy and sound organizational strategy on which to base a

communication strategy. Further, the study discusses potential communication practice

strategies in the light of western communication theories and Sun-Tzu’s philosophies

(The Art of War).

The study concludes that a good communication strategy can help ICBs develop and

define their value proposition(s), and also improve on their overall business performance,

provided they take a strategic approach going forward.

Methodology

This capstone is based on primary and secondary research. The secondary research

consisted of an extensive review of literature available on the formation and current state

of commodity bodies. In addition, authoritative literature on organizational life cycles

and strategy were reviewed. Primary research, in the form of interviews, was also

conducted. Interviews were executed with International Commodity Body executives,

senior staff, and a private sector consultant. Finally, an Ishikawa Diagram was employed

to assist with the identification of the root problem(s) causing the diminished value

proposition(s) and relevancy vacuum experienced by ICBs.

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In-depth Interviews

This capstone is aimed at analyzing the possible reasons for the reduced relevancy and

value of international commodity organizations, specifically the International Coffee

Organization, International Cocoa Organizations and International Sugar Organization.

As such, in-depth interviews with industry insiders were employed to obtain the latest

and the most profound understanding, for the purpose of providing on-target advice and

suggestions.

In-depth interviews with the organizations’ professionals and industry experts were

conducted in October of 2014. Even though the organizations are all focusing on global

issues, the interviewees were based in London.

A former senior executive of a national trade association with global reach, now engaged

as a consultant, was also included in the study. As a major stakeholder of international

commodity organizations, national trade associations, representing the private sector,

continuously work together with ICBs on international commodity issues. It is helpful

and more constructive to build up this capstone with the viewpoints from the private

sector. And, the inclusion of private sector executive knowledge provides for more

balanced perspective.

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Question Framework

Interviews focused on current ICB performance related to aspects of business and

communications; the strengths and weaknesses of ICBs; stakeholder identification; core

value propositions of ICBs; the changing role of ICBs after economic provisions were

removed in late 1980s and early 1990s; communication strategies and practices;

communication challenges for ICBs; and ICBs’ relevancy and communication of

relevancy. All the questions were open-ended, in order to discover deeper understanding

as the conversations progressed.

Ishikawa Diagram

Einstein once made a famous statement on the importance of problem identification - “if I

had an hour to solve a problem and my life depended on the solution, I would spend the

first 55 minutes determining the proper question to ask, for once I know the proper

question, I could solve the problem in less than five minutes.” Consistent with this

premise, an Ishikawa Diagram is introduced to explore the nature of the problem(s)

confronted by ICBs, for the purpose of gaining a fuller understanding of the nature of the

root problem(s) on which to base strategic communication recommendations. Indeed, the

nature of strategy guides an organization or leader from point X to point Y. If point X is

where an organization is facing a problem and point Y is where an organization solving a

problem, problem identification will be the bridge between the two points (Nelson,

2014). Unfortunately, most organizations or leaders do not realize the importance of

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investing in root problem identification. When they are struggling with a problem or a

challenge, they often are simply trying hard to develop a strategy instead of figuring out

what the challenge is and why the challenge surfaced. Therefore, in the capstone, another

part of the methodology is the use of problem identification skills to help ICBs explore

the reasons for facing current challenges.

The Ishikawa Diagram, also known as fishbone diagram (See Figure 1 as an example), is

a diagram used to determine the causal relationship behind a problem (Best, M., &

Neuhauser, D., 2008). The diagram was originally created by Kaoru Ishikawa to help him

explore the causes of a specific event (Nelson, 2014). Till now, the Ishikawa Diagram is

one of the most important and widely used methods for organizations to identify potential

factors causing one specific phenomenon (Stefanovic et al. 2014)

(Figure 1)

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As it seems, the Ishikawa Diagram looks like a fish skeleton, with the initial problem

being the head and possible root cause categories represented by the rib bones, under

which root causes are listed (Nelson, 2014).

In the capstone, this problem identification method is used to help ICBs explore the core

reasons for diminishing relevancy.

Literature Review

International commodity bodies (ICBs) are international organizations, based on United

Nations sponsorship, that have historically provided research, data, expertise and project

funding related to the respective commodity within their mandate. ICBs are formed by

the implementation of International Commodity Agreements (ICAs) to deal with

commodity issues of importance to consumer and producer nations. There are currently

13 specialized commodity bodies (Burger, 2011), including international commodity

organizations and international study groups (ISGs). They are:

� International Cotton Advisory Committee (ICAC), 1939

� International Rubber Study Group (IRSG), 1944

� International Wheat Council (IWC), 1949

� International Lead and Zinc Study Group (ILZSG), 1959

� International Olive Council* (IOC), 1959

� International Coffee Organization (ICO), 1966 * Formerly the International Olive and Oil Council (IOOC).

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� International Cocoa Organization, 1973

� International Tropical Timber Organization (ITTO), 1986

� International Nickel Study Group (INSG), 1990

� International Sugar Organization (ISO), 1992†

� International Copper Study Group (ICSG), 1992

� International Network for Bamboo and Rattan (INBAR), 1993

� International Jute Study Group (IJSG), replacing the International Jute

Organization established in 1984, 2002

Also, the Food and Agriculture Organization of United Nations (FAO) provides a forum

as an intergovernmental group to conduct discussions about other commodities, such as

bananas, tropical fruits, citrus fruit, grains, oils and fats, hard fibers and meat and dairy

products, etc. (Burger, 2011).

Generally, these organizations undertake work along the following four major

responsibilities:

� Providing a forum for discussions by conducting meetings and seminars

� Collecting and publishing data for commodity markets

� Garnering market information and conducting respective studies

� Contributing to improvements of the commodity through the dissemination of

information

† Note: the first International Sugar Organization (ISO) was established as International Sugar Council in 1937 based on International Sugar Agreement (ISA) 1937. Under the agreement of 1968, the International Sugar Council was replaced by ISO (Osmańczyk, 2003). Currently, the ISO has been administering the agreement of 1992.

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The agricultural International Commodity Bodies (ICBs)‡, consisting of

ICO [International Coffee Organization], ICCO [International Cocoa

Organization], IGC [International Grain Council], ISO [International

Sugar Organization and IRSG [International Rubber Study Group] in

London, and IJSG [International Jute Study Group], INBAR International

Network for Bamboo and Raton], ITTO [International Tropical Timer

Association], ICAC [International Cotton Advisory Committee] and IOOC

[International Olive Council, Previously International Olive and Oil

Council] elsewhere, jointly have 136 countries (Inc. the European

Commission) as members. Of these countries, 33 are members of just one

ICB and the membership of 2, 3 or 4 ICBs is held by around 27 countries.

Only two are members of eight of the ICBs, namely the European

Community and India. Three countries are members of seven of these

ICBs, namely Switzerland, Côte d'Ivoire and Cameroon. Of the major

other countries, USA and Russia are member of 5 ICBs, Japan of 4 ICBs

and China of 2 ICBs.

Their representatives serve in the Councils of the organizations, and in the

executive committees of half of these. These Committees and the councils

are often helped by other targeted committees, typically focusing on

economic issues (5 ICBs), Finance (4), Statistics (3) or Promotion (3).

‡ See Appendix I for complete listing of abbreviations

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The independent ICBs have in most cases a special forum for contacts

with the private sector. Seven of the ten ICBs have this, with IGC, ISO

and INBAR doing so without such special committee. They do have a

council, consisting of all member countries. Their Council meetings are

held once every two years; the independent ICBs meet at least once, and

some (ICO, ICCO, IGC, ITTO and IOOC) twice a year.

The goals of the ICBs are formulated in their respective agreements. The

newer agreements have many objectives, the older organizations do with a

lower number. Major objectives are to provide a forum for consultations;

collect and disseminate market information; promote trade, transfer of

technology and sustainability.

In the light of these objectives, the ICBs hold their council meetings.

These are mostly bi-annual occasions where the commodity community

can meet. They also devote substantial efforts to the collection and

dissemination of statistics and market information. Many ICBs organize

workshops and conferences. And they engage in projects aiming at

research & development, transfer of technology, and market development.

Their human resources, totaling 212 persons, range from 7 to 45 persons

per ICB, with IOOC being the largest, followed by ITTO and ICO with 33

persons. IRSG has the smallest in number of staff.

The ICBs appear to have found their own niches regarding statistics and

market information. The IGC and the ISO have a particular focus on very

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short-term (price) data, which obviously serves the traders among their

clientele. They and most other ICBs publish statistics with a less short-

term perspective, such as monthly or quarterly data. The same holds for

the other market information. Few ICBs, notably IJSG and until recently

INBAR, do not publish statistics.

The ICBs are to a varying degree engaged in projects. The IGC has none

at the moment, while the ITTO distinguishes more than 100 projects.

INBAR runs many projects too. Typically, the other ICBs have a few

projects. Most of the ICBs rely on the CFC for funding of their projects,

with INBAR and ITTO as exceptions. These ICBs have other sponsors for

their many projects that frequently have an environmental focus (Burger et

al. 2007).

The History of International Commodity Bodies

International Commodity Market and International Commodity Agreements

If the issue of international trading system was a heated discussion, the price negotiation

between nations would be the sharpest noise. The instability of the world commodity

market has been a major issue in international conversation for almost three quarters of a

century, the reason for which is based on the inconsistent price fluctuations.

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After a few decades of debate, international commodity market professionals and

government officials concluded that the best option for confronting market fluctuation

concerns was the creation of commodity agreements that contained economic clauses.

Before and during World War II, the noted economist, John Maynard Keynes had

suggested that the UK treasury set up a series of buffer stock arrangements to contribute

to reducing the trade cycle and to promote orderly marketing (Herrmann, Burger and

Smit, 1993). Unfortunately, his thoughts did not become popular, but the raw interest in

commodity agreements was shown to the world, as it was mentioned in the Havana

Charter of 1948. In the Charter, the initial concept of international commodity

agreements was formed, and international agreements were allowed to aim for price

stabilization and the elimination of burdensome surpluses (Herrmann, et. al., 1993).

The Havana Charter envisaged the creation of a United Nations Conference on Trade and

Employment, and it saw the negotiation of sugar and tin stabilization agreements in 1954

(Gilbert, 1987). Subsequent agreements with “economic clauses” were the International

Coffee Agreement (ICA) in 1962, the International Cocoa Agreement (ICCA) in 1972

and the International Natural Rubber Agreement (INRA) in 1980 (Gilbert, 1996).

The Formation of International Commodity Bodies

Most efforts related to the development of international commodity agreements occurred

under the auspices of the United Nations. The establishment of the United Nations

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Conference on Trade and Development (UNCTAD) in Geneva in 1964 and the periodic

sessions of the Conference contributed greatly to the discussion and future formation of

the commodity body concept. The Conference was initiated to provide a forum where the

developing countries could discuss the issues relating to their economic development

(UNCTAD, 2014). And, International Commodity Agreements, till now, are a main

policy issue of UNCTAD.

For the purpose of administering international commodity agreements, the auspices of the

UN empowered the formation of commodity organizations. Their respective

memberships are made up of consuming and producing countries. The organizations’

primary role was initially to strengthen the economies in the producing world using

market regulation mechanisms.

In 1974, the General Assembly of the United Nations recognized the need for an

Integrated Program for Commodities (IPC). In terms of the IPC, UNCTAD accepted the

intention to “create stable conditions in commodity trade and to protect developing

countries from commodity trade” at its Forth Session in Nairobi in 1976. Also, UNCTAD

agreed on the need for creating a financial institution, which was the framework of

Common Fund for Commodity (CFC), to support the IPC (Hermann, et al. 1993). The

Agreement establishing the Common Fund for Commodities was negotiated from 1976 to

1980 and became effective in 1989. With the CFC coming into force, the commodity

organizations were designated International Commodity Bodies (ICBs). The designation,

as Schechter (2014) mentioned, added a new function for the ICBs: to process project

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funding applications for commodity-related projects submitted by their members.

Normally, members submitted funding applications to ICBs, and the ICBs would review

the projects to decide whether or not to recommend project approval to CFC. It should be

noted, that until recently, CFC would not provide funding unless initial project approval

was granted by on of the international commodity bodies.

Economic Provisions and Market Intervention

The economic provisions were the essence of International Commodity Agreements.

These provisions were used by the International Commodity Bodies to regulate supply

and demand, therefore moderate price fluctuations.

When the international commodity bodies were initially formed, their prime objective

was stabilizing commodity prices through market intervention. Up to the end of Second

World War, the world of commodities was filled by the prospects of excess production

and low prices. Therefore, the commodity markets longed for government intervention.

When the commodity agreements were finally agreed upon after numerous international

discussions, the concept of supply management was unsurprisingly included through the

official economic provisions contained in the agreements. And, supply management

became the principal implement of the ICAs.

Theoretically, supply management, which includes export controls and buffer stock

intervention, is the ability of government to control either production or exports. In the

commodity world, a large number of small producers are typically responsible for

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production, and governments can step in to control production via quotas (livestock and

dairy products), acreage controls (crops) or dredger capacity, although yield variability

can translate into substantial output variability for crop commodities. Therefore,

governments have found it more effective to control exports than production. Based on

such understanding, the economic provisions in terms of supply management were

permissibly written in the commodity agreements. In coffee, cocoa and sugar agreements,

the interventions were always implemented by monopsony-monopoly marketing boards

(a feature of many ex- British colonies) or caisses de stabilisation (standard in many ex-

French colonies) (Gilbert, 2011).

The Change In The Geopolitical Environment

Free Market Economy

The term “free market economy” has been in the economic lexicon for a long time.

Primarily, the free market is a market that can freely perform trading under good

competitive market conditions – the buyers and sellers are fully responsible for the

decisions they make without the intervention of the governments or governmental

institutions. To some extent, the free market delegates the complete privilege of prices to

determine the distribution and allocation of products and services. The theory of free

market economy is implemented throughout the commodity markets and the production-

wise markets. Dr. Kepoglu (2013) explains that the free market economy is “a structure

in which the vast majority of the decisions that will affect the economic activities and

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transactions are made by the actors encountered in the relationship between supply and

demand in the market rather than the state.”

Lift of Economic Provisions and Diminishing ICBs Position in the World

As mentioned, the ICAs, with the “economic clauses,” were negotiated by countries,

especially exporting countries, to push the price stabilization issue forward. However, the

economic clauses go against the essence of the theory of free market economy in terms of

price and production distribution. As the negotiations amongst commodity markets were

increasingly politicized, rather than driven out of commercial / economic concerns,

through the latter half of the nineteen seventies and into the eighties, the ICAs started

facing a crisis:

(1) According to the research of Gilbert (1987), the International Sugar

Agreement (ISA) had never successfully overcome the trading issues between

United States and Cuba, then the largest sugar-exporting country, raised

in1962. Thus, the market intervention clauses were finally removed when the

forth ISA was terminated in 1984.

(2) Also based on the research from Gilbert (1987, 1996), the market intervention

clauses in ICCA were implemented through unspecified production

management measures instead of official buffer stock. And, the ICCA “never

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had either the financing or the country coverage to be able to have more than a

small effect of the cocoa market.”

(3) Anderson and Gilbert (1988) mention in their research that the International

Tin Agreement did not work out and finally abolished in October of 1985 for

defending an unrealistic floor price with insufficient finance.

(4) With a the long-existing serious disagreement on quota systems and lack of

flexibility of market share, the member nations of the International Coffee

Organization found it impossible to negotiate a new agreement, which led to

the suspension of the economic provisions in July of 1989.

As the economic provisions in almost all of the ICAs were discharged one after another

through the late 1980s and early 1990s, the era of market intervention for ICAs also

tended to recede. As a result, the ICBs that administrate respective agreements started

losing their quota management power. With this key role gone, the commodity bodies

have been frustrated by their diminishing value and relevancy to the world.

Case Studies of Coffee, Cocoa and Sugar Organizations

Introduction of International Cocoa Organization (ICCO)

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The International Cocoa Organization (ICCO) was established in 1973 to administer the

first International Cocoa Agreement (ICCA, 2010), which was negotiated in Geneva at a

United Nations International Cocoa Conference. There have been seven agreements since

the first one was generated. The Seventh International Cocoa Agreement, negotiated in

2010 in Geneva, came into force provisionally in October 2012. As of March of 2014,

ICCO had 47 member countries. Dr. Jean-Marc Anga is the current executive director

(ICCO, 2014).

ICCO’s main principle, especially in more recent agreements without economic

provisions that provided for market regulation for the purpose of moderating price

fluctuations, focuses on promoting the development of the world cocoa economy as well

as contributing to cocoa market stabilization (ICCO, 2014).

As specified in the latest ICCA (2010), ICCO’s objectives are:

� To promote international cooperation in the world cocoa economy;

� To provide an appropriate framework for discussion on all cocoa matters among

governments, and with the private sector;

� To contribute to the strengthening of the national cocoa economies of Member

countries, through the preparation, development and evaluation of appropriate

projects to be submitted to the relevant institutions for financing and

implementation and seeking finance for projects that benefit Members and the

world cocoa economy;

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� To strive towards obtaining fair prices leading to equitable economic returns to

both producers and consumers in the cocoa value chain, and to contribute to a

balanced development of the world cocoa economy in the interest of all Members

� To promote a sustainable cocoa economy in economic, social and environmental

terms;

� To encourage research and the implementation of its findings through the

promotion of training and information programs leading to the transfer to

Members of technologies suitable for cocoa;

� To promote transparency in the world cocoa economy, and in particular in the

cocoa trade, through the collection, analysis and dissemination of relevant

statistics and the undertaking of appropriate studies, as well as to promote the

elimination of trade barriers;

� To promote and to encourage consumption of chocolate and cocoa-based products

in order to increase demand for cocoa, inter alia through the promotion of the

positive attributes of cocoa, including health benefits, in close cooperation with

the private sector;

� To encourage Members to promote cocoa quality and to develop appropriate food

safety procedures in the cocoa sector;

� To encourage Members to develop and implement strategies to enhance the

capacity of local communities and small-scale farmers to benefit from cocoa

production and thereby contribute to poverty alleviation;

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� To facilitate the availability of information on financial tools and services that can

assist cocoa producers, including access to credit and approaches to managing

risk.

Introduction of International Coffee Organization (ICO)

The International Coffee Organization (ICO), in collaboration with United Nations (UN),

was established in 1963 to enhance cooperation between nations that consume, distribute

and produce coffee. The first International Coffee Agreement (ICA) was a five-year

agreement, signed into force in 1962 at the UN in New York. The Agreement was

renegotiated in 1968, 1976, 1983, 1994 and 2007 at the ICO in London.

As of 2014, its 45 members (72 nations) consist of 39 exporting nations, 5 importing

nations and 1 importing community (the European Union, 28 nations). Its Member

governments represent 94% of world coffee production and over 75% of world

consumption. Its current Executive Director is the Brazilian Robério Oliveira Silva.

The ICO’s mission (ICO, 2014) is to strengthen the global coffee sector and promote its

sustainable expansion in a market-based environment for the betterment of all

participants in the coffee sector. ICO also, according to its latest agreement (ICA, 2007),

makes contribution to the development of a sustainable world coffee sector and to

reducing poverty in developing countries by:

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� Enabling governments and the private sector to exchange views on coffee matters,

market conditions and trends, and coordinate policies at high-level meetings;

� Developing and seeking finance for projects that benefit the world coffee

economy;

� Promoting coffee quality through a Coffee Quality-Improvement Program;

� Promoting market transparency by providing a wide range of statistics on the

world coffee sector;

� Developing coffee consumption and markets for coffee through innovative market

development activities;

� Encouraging the development of strategies to enhance the capacity of local

communities and small-scale farmers;

� Promoting training and information programs to assist the transfer of technology

relevant to coffee;

� Facilitating information on financial tools and services to assist producers;

� Providing objective and comprehensive economic, technical and scientific

information on the world coffee sector.

Introduction of International Sugar Organization (ISO)

The International Sugar Organization (ISO) has been headquartered in London since it

was founded as the body responsible for administering the International Sugar

Agreement. It has 88 members and according to its 2012 data, its member states represent

86% of world sugar production, 69% of world consumption, 95% of world exports and

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41% of world imports. It is the body responsible for the implementation of the

International Sugar Agreement (ISA), 1992. According to the ISA (1992), ISO is charged

with contributing to the world sugar sector by the achievement of the following

objectives:

� To ensure enhanced international cooperation in connection with world sugar

matters and related issues;

� To provide a forum for intergovernmental consultations on sugar and on ways to

improve the world sugar economy;

� To facilitate trade by collecting and providing information on the world sugar

market and other sweeteners;

� To encourage increased demand for sugar, particularly for non-traditional uses.

In accordance with its Agreement (ISA, 1992) objectives, the ISO contributes

significantly to improve market transparency through its long established and widely

recognized statistical and analytical activities. The Market Evaluation, Consumption &

Statistics Committee (MECAS), which meets twice a year, allows a serious and in depth

debate of the short term market perspective based on the ISO Secretariat's independent

view, longer term perspectives and studies carried out by the Secretariat and others of

issues and problems of common interest to members (ISA, 1992).

Finally, ISO is tackling issues like sugar and health, sugar and the environment,

fortification of sugar with Vitamin A, Organic Sugar and the promotion of sugar (ISO,

2014).

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Diminishing Relevancy and Value Propositions: Crisis Faced by ICCO, ICO and ISO

Since the economic provisions were successively removed from the Agreements of the

three commodity bodies, ICCO, ICO and ISO have been struggling with how to remain

relevant and deliver value to the world. As discussed before, the ICAs and their

respective ICBs were initially formed with the intent to avoid price fluctuations. Now that

the central principle of market intervention is gone, the ICBs have transformed into

platforms for member nations to negotiate non-price issues in the commodity world;

however, the attention and spotlight that the bodies now get are apparently less than

previously experienced.

Another potential reason for ICBs, including ICCO, ICO and ISO, facing fading

relevancy and diminished value propositions are related to the Common Fund for

Commodities (CFC). When the ICBs were originally formed, they acted in conjunction

with CFC to fund commodity projects submitted by member nations. Theoretically, the

CFC only approved project-funding applications from member nations for their

respective commodity projects after the projects were submitted to and received initial

approval and a funding recommendation from the respective commodity body so that

CFC could make sure that the projects were applicable. CFC no longer requires an

International Commodity Body approval or recommendation. Recently, CFC has started

giving member nations low-interest loans directly to support their projects, instead of

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requiring approvals / recommendations from ICBs, Undoubtedly, the CFC’s new funding

process has reduced ICB value proposition and relevancy to the world.

Demand for Strategic Development: Challenges for ICO, ICCO and ISO

According to nonprofit organization experts, Judith Sharken Simon and J. Terence

Donovan (2001), five factors, which are “age, size, growth rate of the industry, external

environment and primary leader characteristics,” influence where an organization is at in

its life cycle. Alike human beings, an organization’s life cycle can be viewed as: birth to

infancy [stage one], childhood [stage two], adolescence [stage three], adulthood [stage

four], and senior to death (dying) [stage five]. Moreover, the characteristics of each stage

can be defined by seven factors, which are “governance, staff leadership, financing,

administrative systems, products and services, staffing and marketing. (Simon &

Donovan, 2001)”

One might think that ICO, ICCO and ISO, which have been in existence and influential

in the world for decades, would be categorized as the organizations in their “middle-age”

[stage four], where organizations are productive, well established and secure in their

structure and services. However, the performance of the three organizations does not

match this expected life stage; this has been especially so after the economic provisions

were removed from their respective Agreements. In reality, the organizations are facing a

crisis of relevancy and are in the “dying” stage; they have lost their vitality and have

become stagnant. During the past two decades, the three organizations have struggled

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with relevancy and value proposition loss, unclear objectives and strategy deficiency. On

one hand, they are the organizations with a long history of being influential in the world;

on the other hand, they are currently in great need of developing comprehensive

organizational strategies, which are needed to then develop sound communication

strategies.

The Art Of War And The Art of Strategic Communication

Often, people tend to make a comparison between building an organization and a battle.

Luke Johnson (2012) once mentioned in an article that “for those hardy characters

engaged in building an enterprise, life can often feel like a constant battle.” Having

considered that, there are some similarities between the business world and the military

world, for instance the importance of being strategic. In fact, military strategy principles

have historically underpinned corporate strategy theory. Likewise, military strategy

theory can be used to shape the art of strategic communication.

One of the most respected military strategists is Sun Tzu. An ancient Chinese military

sage, Sun Tzu certainly thought highly of the necessity of strategy. He believes that

strategy is the soul of a troop and defines whether or not one will win a battle. Although

not diminishing the importance of developing sound strategy, he also emphasized the

importance of properly executing strategy. Such insights can be found from his

masterpiece, The Art of War.

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The Art of War (Sun-tzu Ping-fa) is ancient Chinese military protocol attributed to Sun

Tzu, an ancient Chinese strategist. The 13-chapter work was completed between 515

A.D. and 512 A.D. and it has been one of the most famous and influential military

masterpieces since then (Sawyer, 2007).

Like New York University Professor Helio Fred Garcia (2012) mentioned in his book

The Power of Communication, military treatises always focus on building up goal-

oriented strategies to make armed forces more effective during wars; this can be applied

to the leadership discipline of public communication. In fact, it is also the major reason

why The Art of War has remained a prominent resource to the world - not only the world

of military arts, but also the world of business and politics. Many leaders with

international influence, such as Mao Zedong, Japanese industrialist Konosuke Matsushita

and General Douglas MacArthur, have found inspiration from the work (Ames, 2010).

Alike these leaders, this capstone can benefit from the essences of The Art of War,

because it is not only a work of war arts, but also a work of strategies and tactics, which

is the connection between war and communication. In ancient Greek, the word strategos,

which is the origin of the word strategy in English, was developed from the words:

stratos (army) and agein (to lead) (Garcia, 2012). Today, the “art of war” is the “art of

strategy.”

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Discussion

Overview

“Our organization works, [as] you can see from our mission on the website, as a

forum for our members, which is our main value proposition; for enhancing the

stability and transparency of the industry, encouraging the development and

promoting the sustainability of sector. And, we are going to keep following the

mission strictly.”

– An ICB senior operations director, October 20, 2014

The commodity world has been constantly changing since the Second World War. As the

global discussions and negotiations have evolved, the role of the ICBs has been tailored

correspondingly. As mentioned previously, “ensuring price stabilization” was the major

reason for establishing ICBs by the United Nations, and their fundamental objective. As

stabilizing commodity prices is no longer the prime principle, since the economic

provisions were removed from the ICAs, the mandates of ICO, ICCO, ISO and other

commodity organizations have subsequently shifted. Hence, most commodity

organizations, including ICO, ICCO and ISO have started to reshape their objectives.

Although the interviewees are from different commodity bodies representing different

sectors, they seemed to reach common agreement, although unilaterally, on the new

objectives of the ICBs – a forum for members to negotiate commodity issues; enhancing

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the stability and transparency of the industry; providing latest research and data;

encouraging the sustainability of the sector, etc. It appears as though ICBs have found a

brand new path for themselves after the removal of the economic provisions. Today, an

ICB can be characterized by a number of objectives; paradoxically, the voices and

perceptions of ICBs remain weak. As a matter of fact, on one hand, declining relevancy

has progressed since ICBs stopped controlling price fluctuation; on the other hand, the

new objectives do not have any clear hierarchy (Burger, Daviron & Alby-Flores, 2007),

which is problematic for both managing and evaluating an ICB’s activities.

Could any other reasons be involved in ICBs’ diminishing relevancy issue? Based on the

Ishikawa Diagram technique and the content of the interviews, the potential reasons for

diminished relevancy are analyzed below (Figure 2):

(Figure 2)

Strategy

Non-member Stakeholders Member Nations

Lack of Effective engagement / communication with the ICBs

Retailers, consumers: lack of awareness of ICBs role / value in

world

Farmers: often poorly-educated with lower social status, multilingual

Private Sector and other organizations: Lack of effective cooperation, lack of effective input mechanisms

Organizational: Lack of sound organizational strategy;

Objectives: Unclear communications objective(s)

Secretariat

Failure To Communicate Relevancy And

Value Staffing structure and working efficiency: dedication of adequately trained staff

Ill-defined stakeholders

Priority Setting: communications not seen as a high priority focus

View of communications as a strategic priority

Mechanism for broad and consistent input into ICBs, actively used

Coordinated communications efforts

Communications: Lack of supportive Communication strategy;

lack of effective evaluation and measurement

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Using a systems approach, underpinned by an analysis of interview responses, the

application of Toyoda’s 5 Whys concept and consideration of Sun Tzu’s work, the

application of an Ishikawa Diagram, reveals four root cause categories behind ICB failure

to communicate their respective relevancy and value proposition(s): secretariat, member

nations, non-member stakeholders and strategy.

Staffing structure and capacity play an important role in an organization’s ability to

develop and execute strategy. Generally, the ICBs have relatively small staffs, which

challenges their ability to dedicate adequately trained staff to engaging in the design and

development of sound strategy. For example, they lack the internal capacity to engage in

comprehensive stakeholder analysis. Further, the heavy workload combined with limited

staff resources causes priorities to shift to the most pressing issue of the day and away

from longer-term strategic thinking. Finally, it appears as though communications is not

positioned as a high priority focus.

Although select member nations engage regularly and constructively with the

organizations, many members don’t, which puts the organizations at a disadvantage for

developing solid strategy. Although mechanisms are present for members to provide

input, they are often not used. When they are used, the input is rarely strategic in nature

and often pertains to short-term tactics, exasperating staff attempts to remain strategically

focused. Over all it appears that members may not have a strategic mindset when

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engaging with the ICO, therefore making it difficult for the organizations to maintain

organizational and communication strategy development as a high priority.

Non-member stakeholder engagement and characteristics also contribute to ICCO, ICO

and ISO challenges in creating value and communicating relevancy. At the heart of this,

in some cases, is a failure to recognize the importance of engaging with non-member

stakeholders and the failure to undertake comprehensive stakeholder analyses. Even more

basic is the reality that some ICBs view stakeholders from a very narrow lens and don’t

consider all entities that they can impact and those that can impact them as stakeholders;

for instance, farmers, and private sector entities throughout the supply chain should be

considered as ICBs’ stakeholders, but often the organizations don’t identify them as such.

Finally, the widely disparate characteristics and needs of ICB stakeholders challenge the

ability of ICBs to develop sound strategy. Also, ICBs should take advantage of

consultations from private sectors

As far as strategy is concerned, ICO, ICCO and ISO are at a serious disadvantage in the

development of sound communication strategy because they don’t have sound

organizational strategies on which to base a succinct and powerful communication

strategy. Furthermore, the three organizations need to redefine their strategic objectives

and evaluation systems in order to create a healthy and well-running communication

system.

36

The Demand for Relevancy and The Need of Strategic Communication

“The ICBs are facing a quite critical yet awkward situation – on one hand, they

are trying their best to play the role of being a forum for their member countries;

on the other hand, they are losing their relevancy to both their member countries

and the whole respective commodity sectors.”

– A former executive of a trade association of the United States of

America

For ICO, ICCO, ISO and other commodity bodies, strengthening relevancy is crucial,

because relevancy is related to demand, which is the basis for an organization’s

existence. Therefore, being relevant, no matter if it is a for-profit or not-for-profit

organization, is a basic factor for developing one’s business. Before the economic

provisions were removed, the relevancy for ICO, ISO and ICCO was clear; it was to

stabilize commodity prices. In the world of commodities, price is important, so nations

joined ICBs as members and negotiated price controls and other issues. When these needs

were raised, the importance of ICBs was lifted. Furthermore, as member organizations,

the main source of revenue for ICO, ICCO and ISO is member dues, making relevancy

even more important.

In order to reach their business goals, the three organizations, as well as other ICBs, need

a comprehensive, strategic communications program that supports those goals, as

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indicated by Garcia (2012). More so, the ICBs are in need of engaging in a

comprehensive strategy development process to artfully develop strategic initiatives

designed to enhance their respective value propositions and relevancy.

“……故上兵伐谋……

… the best military policy is to attack strategies… (Ames, 2010)”

– Sun-Tzu (Chapter 3: Planning The Attack, The Art of War)

Thousands years ago, this ancient Chinese strategist already realized the importance of

strategies in war fighting – strategies are the soul of the military. If attacking strategies

can help troops win a war, developing solid communication strategies can help an

organization win its business. Being a strategic communicator has become one of the

most important executive / management skills (Nelson, 2014). Garcia (2012) also

mentioned that communication is a powerful tool for an organization or a leader, and it

needs to be used effectively and strategically.

“We are the only organization in the world providing useful information on the

global sector. We are very important to our members and the industry, and this is

our core value to the world.”

– An Chief Executive Officer of an ICB, Oct. 23, 2014

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However, the misunderstanding of the role of communications and the lack of a solid

communications strategy create real challenges for the ICBs. For instance, one of the

interviewees, an executive of an ICB, emphasized the organization’s relevancy to his

organization’s members during the interview by mentioning what it can offer. It is

important for a leader to know what an organization has in the first place, but merely

telling what it has is not strategic communication. As for communicating an ICB’s

relevancy strategically, the leader also needs to take other factors into consideration, such

as the external challenge or opportunity, the goal that one wants to accomplish, who the

stakeholders are, how to connect with one’s stakeholders, and so on.

Seize The Soul of An Organization

“All the actions we are taking and all the decisions that our organization has

made are based on the latest agreement. We follow the agreement strictly, but

speaking of a written strategy, no, we don’t have one.”

– A Chief Executive Officer of an ICB, Oct. 23, 2014

“Speaking of strategy, our organization, accordingly, plays the role of forum to

represent our members, enhances the sustainability of the market, provides the

latest research and report on commodity data and price, and ensure the benefits

for farmers, and so on. You can find the details from the latest agreement on our

website. ”

– A Senior Information Officer of an ICB, Oct. 22, 2014

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Some leaders misunderstand the concept of strategy. As it is for the leaders of ICBs,

some of them do not realize the difference between the commodity agreements and an

organization’s strategy. Like Sun-Tzu indicated, strategies can be as crucial as the soul of

an army, and so are they for organizations. Regarding the ICBs, the commodity

agreements were hammered out through considerations and discussions amongst

countries, which made the major roles and missions. However, an organization’s strategy

is not its mission and pointing out the role that it should play to the world is not strategic

communication. Strategy is a process of ordered thinking (Garcia, 2012) -- of taking all

aspects into consideration. Glassman, Zell and Duron (2005) expressed that the process

of strategy making should be rational and step-by-step to reach consensus decision,

which needs to include (a) the assessment of the organization’s internal and external

environments, (b) the mission, core value propositions and goals, (c) target audience, and

(d) corresponding tactics to implement.

With the many aspects needing consideration, a comprehensive strategy development

process would help ICBs define and deliver on their missions. The process of strategy

making is also the process of defining who the ICBs are and where ICBs are going.

Furthermore, the process can also help ICBs interact with the external environment and

stakeholders to reconstruct their value proposition.

“I think the answers to most of your questions can be found on our website.”

– Senior Information and Media Officer of an ICB, Oct. 22, 2014

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Another reason why strategy is the soul of an organization is that strategy can re-develop

an organization’s message. In the case of ICBs, the absence of solid organizational

strategy has made them “lazy;” the overlapping substance between the International

Commodity Agreements and most commodity bodies’ “strategy” obstructs efforts to

develop powerfully impactful messages to the world, since the missions, objectives and

the roles of most ICBs are extracted from respective agreements and not crafted from

sound strategy. Therefore, it is hard for ICO, ICCO, ISO and other commodity bodies to

speak out loud to the world strategically, which is why their voices have remained weak.

Analyze You and Everything around You

“故曰：知彼知⼰己，百战不殆；不知彼⽽而知⼰己，⼀一胜⼀一负；不知彼不知⼰己，

每战必殆。

Thus it is said:

He who knows the enemy and himself, will never in a hundred battles be at risk;

he who does not know the enemy but knows himself, will sometimes win and

sometimes lose; he who knows neither the enemy nor himself, will be at risk in

every battle. (Ames, 2010)”

– Sun-Tzu (Chapter 3: Planning The Attack, The Art of War)

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A significant factor in the process of strategy making is rigorously appraising the

organization’s internal and external environments. Regarding the business of an ICB,

both internal and external environments can impact their performance, and profound

understanding of the organization and its environment is the key to influencing its

relevancy to the world. For ICBs, it appears as though they fail to engage in rigorous

environmental scanning, including comprehensive SWOT (strength-weakness-

opportunity-threat) analysis, let alone engage in comprehensive environmental scanning

to detect trends. As presented in The Art of War, Sun-Tzu believes that a clear

understanding of both internal and external environment can help a troop obtain greater

advantage and increase the probability of winning in battle. His framework also makes

the point clear that ICB’s limited analysis of the environment puts their success at risk.

“…The strength of our organization is, I think, [that] we are the only

organization to provide all the statistics, research and data to the world, 75% of

consuming countries are currently our members, and the market is keeps growing

and the demand is growing all over the world. Speaking of the weakness, I think,

we are dealing with the slowness in terms of organization development, because

of, you know, the nature of politics and organization…”

– Senior Operation Officer of an ICB, Oct. 20, 2014

Theoretically, strengths are attributes that an organization holds and abilities that one has

developed, which can be used to dedicate to its performance; while weaknesses are

characteristics and abilities in which an organization is deficient, which can potentially

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prevent an organization from developing sustainable and competitive performance.

Strengths and weaknesses are assessments of the internal environment.

During the interviews, all of the interviewees from ICBs were requested to clarify the

strengths and weaknesses of their organizations; their answers, however, did not

demonstrate that they completely understood the meanings of strengths and weaknesses

in terms of an organization. Similar to the interview quotation above, most of

interviewees mixed strengths and weaknesses with opportunities and threats (elements of

the external environment). Environmental analysis inaccuracy can disturb an

organization’s development from both short-term and long-term perspectives and

certainly can be a fatal blow to an international organization’s efforts to strategically

reshape its business in a manner that ensures relevancy. Environmental scanning is

equally important component for the development of sound communication strategy.

“The members are our stakeholders, and that is all…

But other groups and organizations also have potential impact on our

organization’s performance, such as producers, farmers, facilitators,

coordinators, other national trade associations, private sectors, etc.”

– Executive of an ICB, Oct. 23, 2014

Stakeholder analysis, which begins with identifying stakeholders, is another area in

which ICBs are struggling. For organizations like the ICBs, “stakeholders are defined as

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anyone or any organization that could be impacted by one’s organization and anyone or

any organization that could impact or influence an organization or its outcomes.” (Nelson,

2014) The theory of stakeholder analysis is an important factor in strategic management:

it helps an organization define who matters and to whom an organization’s message

should targeted. Furthermore, understanding stakeholders helps an organization

determine what the organization needs its stakeholders “to think, feel, know, or do in

order to accomplish [its] goal,” and figure out what one’s stakeholders “need to see one

do, hear one say, or hear others say about one to think, feel, know, and do what one wants

them to (Garcia, 2012).”

Reflecting on the stakeholder issue at ICBs, most interviewees from ICBs did not succeed

in clarifying the structure of the stakeholders in their organizations. Since the members

are the major source of funding for ICBs, the interviewees emphasized the role of

members to every organization. Although some of ICBs officers did mention other

groups and institutions as stakeholders, the understandings of their organization’s

stakeholders’ structures were still not apparent. With a lack of clarity around stakeholders

and audience, ICBs will find it hard to understand their audiences’ needs, and to tailor

their messages, so as to meet whose needs, which will drag ICBs even farther from

achieving their business goals..

“[ICB] has a relatively small office in London but carries very important

international responsibility, so we ask all of our employees to be very excellent in

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our sector. I think they are very experienced and wonderful at work, since we only

have 20 people; all employees are always multitasking on different projects. ”

– Executive Officer of an ICB, Oct. 23, 2014

The third component for ICBs to analyze is the secretariat.

Employees are to an organization are as important as soldiers are to an army. If strategy

is the soul of an organization, employees should be the flesh and bones of an organization

– they are in charge of implementation of strategy and somewhat defining the direction of

an organization.

Hiring experienced and masterful employees is crucial for an organization, even more so

for ICBs, due to the responsibilities of handling international commodity issues as well as

contributing to building up relevancy. According to the interviews, ICO, ICCO and ISO

all have limited staffing volumes§, which requires most employees to often work as

generalists outside of their field of expertise. However, the truth is that multitasking is not

good for an organization’s development in both short term and long term. The nature of

the ICO, ICCO and ISO’s work mandates that their projects are highly exclusive and

expertise-related, and multi-tasking will result in ineffectively carrying out the

organization’s work. In the cases of ICO, ICCO and ISO, in fact, multi-tasking might be

harmful for them and hinder their ability to develop strategies to ensure their respective

relevancy. This being said, the dilemma these organizations face, is that without a

§ Note: during the interviews, writer did not ask the situation of hiring volunteers for projects.

45

comprehensive, sound organizational strategy it is difficult, if not near impossible, to

create an ideal staffing structure.

Another reason why employees are important to ICBs is because they play multiple roles

in the organizations – task-takers, stakeholders, spokespersons and so on. Therefore, not

only do the leaders of ICBs need to assign work to them, but also need to work for them.

It is important to figure out both short-term and long-term needs. Organizations always

need to put their employees front and center, however the ICO, ICCO, ISO and other

ICBs must pay particular attention to this as they face the critical challenges on relevancy

construction; confidence and caring from the leaders is crucial at this time to keep

employees focused and self-driven on projects.

Fully Prepared, Forecast Changes: The Future Is in Your Pocket

“夫未战⽽而庙算胜者，得算多也

It is by scoring many points that one wins the war beforehand in the temple

rehearsal of the battle…(Ames, 2010)”

– Sun-Tzu (Chapter 1: On Assessments, The Art of War)

In ancient China, generals or leaders always had temple rehearsals before wars. On one

hand, they believed that the higher spiritual power in temples would bring fortunes to

them and help them foresee the results; on the other hand, the rehearsals were meant to

46

pre-examine the strategies and tactics. Normally, ancient leaders would go through a few

rounds of rehearsal with different possible situations, so that they could also be prepared

for the potential changes during the real war fighting. In Western countries, temple

rehearsal has evolved into Sand Table Exercise (s) that are still being used for many

contemporary armies and war fighting.

The point that Sun-Tzu emphasizes here is that the changes and results can be forecasted

based on being fully prepared and having a strategic plan based on the rational and

objective estimation of the internal and external environments. In the first chapter of the

Art of War, Sun-Tzu clarifies the importance of completely understanding the internal

and external situations. He mentions that the temple rehearsal is based on the comparison

with one’s enemy on objective possessions, which are way (tao), climate, terrain,

command and regulation; while the forecast during the war is dependent on

implementation of strategies, which is why he believes that “if one can anticipate the

place and the day of battle, he can march a thousand li** to join the battle.” (Ames, 2010)

In terms of ICBs, the current relevancy loss is related to their response or lack of

response to predictable changes in the past. As mentioned previously, ICBs were

established based on corresponding commodity agreements to mainly handle price

fluctuation issues. Their focus on price instability, as we look back from now, was a

double-edged sword. The agreements provided privileges and references for ICBs to

settle price issues and other negotiations amongst the sector, which made ICBs

** Note: Li is an ancient Chinese measurement noun for length. 1 li≈ 70 meters.

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accustomed to the role of being a forum for negotiations. Unfortunately and possibly due

to a lack of an institutionalized strategy development processes, when the disagreements

over commodity price management systems between consuming and producing countries

surfaced in 1970s to 1980s, most ICBs did not realize the potential collapse on economic

provisions, let alone prepare for the drastic change.

Showing great foresight has always been one of the most wanted characteristics in

business world, and now it becomes even more so. In fact, ICBs had opportunity to

regain their relevancy two decades ago had they started to realize the power of being

fully prepared; now it is time for the leaders to save their organizations’ lives.

Spencer Johnson (2002) has told leaders how to manage current benefits and potential

changes in his bestseller Who Moved My Cheese. Regarding ICBs, they once possessed

the right to influence international price rates, which can be treated as the “cheese” by

them. As their major value proposition and relevancy creator, the economic provisions

were too important to the ICBs to lose, just like Spencer (2002) mentioned “the more

important your ‘cheese’ is to you, the more you want to hold on to it.” However, ICBs

neglected the underlying changes when they started dealing with divergence between

nations, which means they ignored the prime time to get prepared for the changes. In

Spencer’s story, he mentioned that one should know when the “cheese” is getting old if

one smells it often (Johnson, 2002). In relation to Sun-Tzu’s philosophy, an

organization’s possession will not last forever; on the contrary, the possession should

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keep the organization’s leaders informed with the small changes in order to “adapt to the

bigger changes that are to come.” (Johnson, 2002)

“The change in CFC’s funding project is definitely affecting our organization,

and I think a lot of commodity bodies. So we are going to discuss the issue next

March.”

– Chief Operations Officer, an ICB, Oct. 20, 2014

As mentioned, CFC no longer relies on ICB pre-approval and recommendations for

project funding decisions. Instead, they directly offer low interest loans to nations to fund

national commodity projects all over the world, which worsens the current situation for

ICBs regarding the value they previously provided as gatekeepers to funding. Likewise,

their relevancy is further diminished. During the interviews, most ICB interviewees

expressed their concern about CFC’s new policy, yet they have not developed any

strategies or plans to react such change. According to the interviews, corresponding

negotiations and discussions about respective agreement revisions will take place next

year. It has been more than 20 years since the economic clauses were removed, which

means ICBs have had enough time to work on organization strategy reconstruction or

getting prepared for potential modifications.

In conclusion, forecasting change is necessary for an organization in order to be ready for

underlying challenges. The forecast for an organization is based on thorough

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understanding and analysis of internal possession and external environment, which also

helps an organization build confidence and competency to react to crises or challenges.

Evaluation and Review: For A Brighter Future

“夫战胜攻取，⽽而不修其功者，凶，命曰费留

To be victorious in battle and win the spoils, and yet fail to exploit your

achievement, is disastrous. The name for it is wasting resources. (Ames, 2010)”

– Sun-Tzu (Chapter 12: Incendiary Attack, the Art of War)

In Sun-Tzu’s point of view, the victory against an enemy during war fighting is not the

final victory. How to take advantage of the opportunities after wars defines whether the

victory is long lasting and far-reaching. In ancient China, at every beginning of dynasty

change, management was always the best, because the new emperor had experienced the

hardship of taking over the power from the previous dynasty, but they also knew the

reasons why the previous management failed and learned the lessons from such failure.

Therefore, they kept exploiting the victory, consolidating the management and strategy,

etc.

In the modern business world, an organization can still learn from Sun-Tzu’s principle.

For an organization with good performance, after the success of implementing strategy,

one should review the success and determine the reasons and advantage, and then keep

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developing accordingly; while for an organization with decent /poor performance, the

“exploitation” needs to be immediate and constantly examined, reviewed and evaluated

to determine performance shortcomings, and revise one’s strategy to avoid the

shortcomings.

For ICBs, the performance review and evaluation can be treated as a “rewind”

opportunity for them, since the organizations can take advantage their successes and learn

from their failures. However, ICBs are not doing well when it comes to evaluating past

performance for the purpose of crafting future strategy. In fact, it appears as though most

ICB managers don’t have systematic review processes in place that measure key

performance indicators.

“We’ve just opened the communication department last year, everything is still

under further development, so currently we haven’t figured out the post-

performance evaluation. At least we don’t have a systematic evaluation system for

corresponding performances.”

– Chief Operation Officer, ICB, Oct. 20, 2014

There is sometimes a misunderstanding by some managers, that post-performance review

or evaluation of strategy /strategy execution is only used by larger organizations.

According to the interviews with ICB senior staff, ICO, ICCO and ISO don’t have full-

developed evaluation systems, which means that there is no systematic system to

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examine performance and obtain immediate feedback, the outcome of which will be, as

Sun-Tzu says, a waste of resources.

Another layer of Sun-Tzu’s “exploitation” is related to the building up of a healthy

internal communication environment between managers and employees / members. An

organization is an organic body that needs every part dedicated to its performance.

Timely evaluation of a communication’s strategy will keep internal communication and

interaction in a healthy state. Further, such evaluation facilitates keeping internal

stakeholders regularly updated on the organization’s performance.

Time Matters: Do It Fast Or Do It Right?

“昔之善战者，先为不可胜，以待敌之可胜

Of old the expert in battle would first make himself invincible and then wait for

the enemy to expose his vulnerability. (Ames, 2010)”

– Sun-Tzu (Chapter 4: Strategic Dispositions, the Art of War)

To act fast or to act right – that is the question.

It seems as though one needs to act both fast and right in most cases. However, being fast

and being right can be in conflict with each other in the world of business and

communications.

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Garcia (2012) suggests leaders should act fast if they encountered challenges or crisis, so

that they can remain proactive in both business and communication processes. While in

ancient Chinese culture, as Sun-Tzu mentioned, being patient and waiting for the right

time are important for implementing military strategies. On the other hand, being reckless

and hasty is dangerous. In Sun’s point of view, troops cannot successfully engage in

warfare until they are prepared inside out, which includes the internal preparation and

external forecast. Coincidentally, another Chinese philosopher, Confucius said “to do a

good job, one must sharpen one’s tool first” to emphasize the importance of investing

time in preparation.

Time matters significantly for business and communication, especially in the today’s fast

paced world. Sometimes, being patient and waiting for the right time can be viewed as

conservative. For most western companies, they believe that they can benefit from fast

action in order to gain advantages, however, fast actions will increase the risks of losing,

since leaders will have less time to consider strategies, tactics, messages, media,

audiences, and so on.

For ICBs, timing is important. For ICO, ICCO, ISO and other commodity bodies that are

facing relevancy loss, taking fast action may not the best strategy regarding the

communication of their value propositions. As one of the ICB interviewees mentioned,

his organization started a communications department a year ago, and its communication

strategy is still under development. However, being patient and effectively spending time

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on developing a sound organizational strategy and defining and refining ones’ value

propositions is more important for ICBs than directly taking actions to promote their

value and services.

The fact is, determining the appropriate speed in which to act is a balancing act. On one

hand, if ICBs wait to long to aggressively communicate their value proposition(s) their

relevancy may erode to a point of no return, on the other hand, without a sound

organizational strategy they will likely misfire on the creation and execution of a

comprehensive communication strategy.

For some organizations that are struggling with crisis, taking action as soon as possible to

rebuild trust, value and reputation in a short period of time, is required and advisable so

that they can minimize the damage to their business. However, this isn’t the case for

ICBs in the current situation. As mentioned above, the major issue for ICBs is seeking

new relevancy by enhancing their respective value propositions; therefore, it will be

virtually impossible for ICBs to communicate their relevancy and value proposition(s)

until they engage in a comprehensive strategy development process.

Based on current realities, it would be advisable for ICBs to immediately design and

engage in comprehensive strategy development processes. This would enable the

organizations to tangibly demonstrate to stakeholders that the organizations are serious

about recreating relevancy and strengthening value. At the same time, effective

communications tactics could be employed to inform stakeholders of the positive action

54

the organizations are taking. Parallel to the development of organizational strategy, ICBs

could give thought to a communication strategy development process and engage in some

initial research, including an environmental scan specific to communications.

Caution, of course, is warranted in two areas:

� ICBs still have to take efficiency into consideration. Even though the process of

building value is time-consuming, the world is changing fast. Readying for the

potential opportunities from the outside world should be done at the same time. It

does not mean that ICBs should take their time and move forward slowly.

� Spending time developing value propositions requires ICBs to take advantage of

all the tactics mentioned above– clear and reasonable analysis of itself and

stakeholders, the prediction of potential opportunities and strong organizational

strategy.

Be Adaptable, Be Invincible

“夫兵形象⽔水，⽔水之形，避⾼高⽽而趋下；兵之胜，避实⽽而击虚。⽔水因地⽽而制⾏行，

兵因地⽽而制胜

The positioning of troops can be likened to water: just as the flow of water avoids

high ground and rushes to the lowest point, so on the path to victory avoid the

enemy’s strong points and strike where he’s weak. As water varies its flow

55

according to (yin) the fall of the land, so an army varies its method of gaining

victory according to the (yin) the enemy. (Ames, 2010)”

– Sun-Tzu (Chapter 6: Weak Points & Strong Points, the Art of War)

Doorley and Garcia (2007) define communication strategies as ways in which the

communication goals will be achieved. In their opinions, communication strategies and

tactics answer the “how” questions. And the “art of how” needs to be adaptable and

flexible during the execution phase.

When Sun-Tzu consulted troops before war fighting, he always compared them with

water to emphasize the importance of strategies being adaptable to different situations,

which can be deduced from an organization’s communication strategies and tactics. It is

hard for an organization to create a communication strategy to fit in all scenarios, and it is

harmful for an organization to use merely one strategy to deal with all situations. Even

Doorley and Garcia (2007) describe communication strategies as ways; the utilization of

the “ways” can be kaleidoscopic, because communication is the art of thoughts

exchanges, and strategies are the guidelines for organizations to achieve its goals.

Regarding ICBs, the only “strategies” for most of them have are the commodity

agreements. During the interview, most of the interviewees asked me to turn to their

agreements for further information. It seems as though the commodity agreements are the

major guidelines/references/strategies/objectives for most of ICBs. However, ICAs are

not panacea for ICBs to solve every situation, not to mention that international

56

commodity agreements are not strategies. Indeed, ICAs have been the structure against

which ICBs have created opportunities and historically built relevancy, for example,

providing industry forums and research data for member nations. However, the

agreements have also acted as a crutch that has impeded the organizations enthusiasm for

creating real, sound strategy. On the other hand, the historic reliance on the agreements as

strategy can be viewed as a silver lining in terms of ICBs’ current situation; the

organizations have been forced into a life stage that demands immediate strategic action.

But the challenge for ICBs is how to make the silver lining brighter and shinier, and more

flexible. The answer lies in the development of sound communication strategy based on

a comprehensive organizational strategy.

In the meantime, acting as forums for member nations and providing research and data,

which are mentioned in commodity agreements, are and can be used to deliver baseline

value to stakeholders and create limited relevancy to some of their sectors. However,

after two decades, it seems that ICBs are still far from reaching their ideal state of

relevancy. Therefore, there is no reason for ICBs to keep insisting on using the same

“strategy.” Embracing the current realities, such as technologies, new management tactics

and so on, coupled with the institutionalization of strategy development and execution

processes will be necessary to ensure future relevancy and value delivery.

Objectives Are Gold

57

Objectives are addressed last in this study because they are most important for an

organization. For ICBs, discussions about their objectives have been constantly raised

throughout their histories, ever since the first ever clearly written objective on

international price stabilization was mentioned in Chapter VI of the Havana Charter

(Burger et al. 2007). When the objective of preventing or moderating price fluctuations in

primary commodities was reconfirmed by the first UNCTAD conference in 1964 (Burger

et al. 2007), the role of ICBs was respectively defined. Since then, the prime objective of

international price stabilization had made ICBs less relevant, as the world now operates

in a free market economy and political will for inserting economic clauses back into

agreements does not exist. In the late 1980s, more and more existing ICBs became less

interested in price intervention, which led to the complete withdrawal of price moderation

provisions from the ICAs in the1980s and 1990s. According to the interviews, now some

of the ICBs, including ICO, ICCO and ISO, have shifted their objectives from price

intervention to sustainable development (Burger et al. 2007).

Here is the question: what is the exact definition of “sustainable development?” Doorley

and Garcia (2007) have made it clear that an organization’s objectives are the basis of its

strategies, tactics and activities. However, interviewees could not clearly define

sustainable development in the realm of their organizations. Therefore, if sustainable

development is the current major thrust of ICBs, they need to clarify the specific

objectives related to sustainability and how they fit into the overall organization strategy.

Until this is accomplished, ICBs will continue to struggle with relevancy related to

58

sustainability and be at a disadvantage in the creation of sound organizational strategy

and communication strategies.

For different commodities, sustainability has different meaning, which is why it is

important that ICBs adapt a meaning that has relevancy for their respective audience.

With sustainable development strategy being mentioned as one objective in International

Commodity Agreements, International Commodity Bodies should think about how each

organization can clarify its respective meaning related to each sector in order to create

sound organizational strategy and a communication plan.

On one hand, ICBs are facing unclear mandates or lack a well-defined value proposition;

on the other hand, ICBs are characterized by too many objectives without hierarchy

(Burger et al. 2007). After economic provisions were removed from ICAs about 20 years

ago, there has been a vacuum with regard to a major objective that drives relevancy.

Equally important, the organizations have not engaged in robust strategy development

activity to fill this vacuum. During the past 20 years, a lot of small objectives have been

made, such as promoting international cooperation, providing a forum for members

negotiation and consultation, and so on. However, most of their “objectives” are

problematic; a large number of “objectives” mentioned by ICAs and ICBs are aims and

means instead of objectives, including “to provide forums” and “to collect and provide

information,” according to the research of Burger et al. (Figure 3) (2007).

59

(Figure 3)

The confusion and misunderstanding about objectives and the current ICB relevancy

challenges can be viewed as a domino effect. In another words, objectives, especially

clear and logical objectives are fundamental for an organization. For ICBs, the need for

clarification on objectives is critical for a vibrant future.

Conclusion

In large scale, because of the inevitable conversion to a free market economy, the

International Cocoa Organization, International Coffee Organization, International Sugar

Organization and other commodity bodies have lost a significant portion of their

relevancy and experienced an erosion of their respective value proposition. Since the

60

removal of economic provisions from their Agreements in the late 1980s and early 1990s,

the three organizations, along with others, have been struggling to define and deliver

value, and therefore lacked in relevancy. Lately, ICO, ICCO and ISO have shifted their

focus from price stabilization to sustainable development, although many details of their

new objective are still pending and under development.

There is no doubt that the three organizations express a desire to ensure their respective

relevancy and a strong value proposition. However, in order to achieve these goals, they

need to clearly define their roles and objectives in a manner that aligns with their

audiences’ needs. For this to occur, the organizations must develop sound organizational

strategies by engaging in comprehensive strategy development processes, that include

internal and external environmental scans and comprehensive stakeholder analyses, upon

which comprehensive communication strategies can be developed to communicate their

respective value proposition(s) and demonstrate their relevancy in today’s world.

Simply having a sound organizational strategy will not guarantee a vibrant future for the

organizations. In fact, relevancy and value are not simply created by the existence of

sound strategy. Relevancy construction and value proposition perception are dependent

on the masterful execution of strategy, including the value delivery scheme and the

organization’s interaction with their respective audiences and sectors. In other words, a

vibrant future will be highly dependent on the organizations’ ability to communicate their

respective relevancy and value propositions to their stakeholders and institutionalized

conduits for information and feedback to flow back from stakeholders. As such,

61

comprehensive communication strategies will be needed. Such strategies should address

incoming and outgoing communications.

For ICO, ICCO and ISO, in order to achieve their ultimate business goal, they need to be

experts on strategic communications. This study has offered seven mechanisms that can

be employed for them to achieve their goal of delivering value and being relevant:

� Seize the soul of an organization – build a sound organizational strategy

� Analyze the organization itself and everything around it

� Fully prepare for the probable and plausible futures

� Evaluate along the way

� Timing is important, taking action fast is not enough, they need to waiting for the

right time and take the right actions

� Adaptation is important while they are implementing organizational and

communication strategies

� Objectives are only the basis to develop their relevancies and value propositions,

comprehensive strategy development processes need to be employed.

In Chinese culture, Tao is one of the most important concepts for all philosophies. It

stands for the truth, the way and the method. As the initials of the seven points reflect, S-

A-F-E-T-A-O, being strategic and masterful in communication is a safe way for ICBs to

regain their relevancy.

62

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Appendix I – Abbreviations  CFC Common Fund For Commodities

EC European Commission

ICA International Commodity Agreement

ICAC International Cotton Advisory Committee

ICB International Commodity Body

ICCA International Cocoa Agreement

ICCO International Cocoa Organization

ICO International Coffee Organization

ICA International Coffee Agreement

IGC International Grain Council

IJSG International Jute Study Group

INBAR International Network for Bamboo and Rattan

INRA International Natural Rubber Agreements

IOC International Olive Council

IPC Integrated Program for Commodities

IRSG International Rubber Study Group

ISA International Sugar Agreement

ISO International Sugar Organization

ITTO International Tropical Timber Organization

IWC International Wheat Council

UK United Kingdom

UN United Nations

UNCTAD United Nations Conference on Trade and Development

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Appendix II: Research Instrument

In-depth interviews with organization professionals

1. Does your organization†† have a specific, well-defined organizational strategy?

2. What are the organization’s strengths and weakness?

3. Who are your organization’s stakeholders, and how do you think about the

relationship with the organization?

4. Except for the groups that you just mentioned, are there any other groups or

organizations that could potentially have an impact on your organization?

5. What has been the organization’s core value proposition since economic

clauses were removed from the agreement, and what has the organization been

doing to maintain its value proposition?

6. How has the CFC’s decision to no longer require that development projects be

submitted through international commodity bodies impacted your

organization?

7. Does the organization have a written communications strategy? If so, how

does it tie into the overall strategy for the organization?

8. What are the organization’s biggest communication challenges? (Be specific,

barriers?)

9. Why does your organization encounter such challenges?

††The organization refers to the three International Commodity Bodies the Capstone researches on: International Cocoa Organization (ICCO), International Coffee Organization (ICO) and International Sugar Organization (ISO).

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10. How could communications help the organization in terms of ensuring

relevancy and communicating the organization’s value proposition to its

stakeholders and member countries?

11. How do stakeholders contribute to the organization’s communications

performance?

12. ‡‡How do employees contribute to the organization’s communications

performance?

13. §§How does the organization engage technology for communications purposes?

14. How does the organization evaluate its communications performance, and

how can the evaluation contribute to the organization’s development?

15. What have been your observations regarding the organization’s relevancy and

how does your organization communicate it with your stakeholders?

‡‡ If it is mentioned §§ If it is mentioned