“There has never been a more exciting time to be a corporate communications professional—and yet, at the same time, today's communications directors face the most challenging, rapidly evolving environment their profession has ever seen.”
Those are the words of Russell Reynolds, the New York-headquartered executive search firm which released New Opportunities and Challenges for Corporate Affairs and Communications Leaders in August this year. Executive search firms like Russell Reynolds are among the leading voices in the ongoing reevaluation of the corporate communications function, and are ideally placed to offer a comprehensive, step-by-step analysis of steps that should be taken in the journey from communication director to CCO.
Importantly, the rise of the CCO - which we’re taking here to mean a communications director on the executive board - is being carefully tracked by executive search firms. An executive search with expertise in communications and corporate affairs, London-based Watson Helsby, is the latest to report an increase in the number of communications professionals on the executive board, in its annual survey of FTSE 100 group director of corporate communications/affairs.
As the firm’s Nick Helsby writes on the blog for the Arthur w. Page society, “Over 51% of FTSE 100 group corporate communications/affairs directors are now formal members of their respective executive committees. This is the first year that this is now a majority, albeit a marginal one. We have been tracking this since 2013 (using the same methodology) when the figure was 44% and it has been rising every year since, so we can state, with some degree of confidence that this is a trend, rather than a blip”.
This overview of thought-leadership and commentary by a handful of the world’s leading executive search firms - Egon Zehnder, Korn Ferry, Russell Reynolds , Spencer Stuart, VMA Group and Watson Helsby - aims to suggest reasons for the trend described by Watson Helsby, as well as present a snap-shot of ‘state-of-the-art’ thinking about the CCO role.
Three change drivers in the role of the CCO
1. The rise of digital: Executive search firms unanimously, agree that the digital revolution has had a no less revolutionary impact on the role of the communications leader. The rise of social media and attendant access to vast amounts of information is a major factor in the change of expectations for the function.
Spencer Stuart’s The Rising CCO VI research confirms that CCOs are increasingly adding digital and social media to their list of responsibilities, as well as taking on more digital and social media experts as team members. In fact, social media is expected to have the single greatest impact on the CCO’s job over the next few years, with 91 per cent them reporting that they expect social media to increase in importance more than other communication tools.
But it’s not only the expectation that the communications director act as a gatekeeper to a new world of digital opportunities: the new digital tools and networks break down all kinds of walls, thereby enabling conversations to cross boundaries at an unprecedented rate. An ill-considered Tweet is picked up and reported by a journalist on the other side of the world, which is then read by a consumer in another corner of the globe, who then reports it so that it becomes a regulatory issue in yet another part of the globe.
As Gizem Weggemans, global chief human resources officer and communications and public affairs officers practice leader at Egon Zehnder, explained to Communication Director in an interview following her keynote at last year’s European Communication Summit, “You no longer can afford to treat any of these conversations as separate conversations. Stakeholders are a lot more connected, the consumer of information is a lot more sophisticated, and reputation suddenly accounts for a lot more of your market cap"
2. Interconnected stakeholders: The emerging trend of stakeholder connectivity in an interconnected world demands a cohesive approach to stakeholder engagement, one that takes in in all stakeholders – internal and external, public and private, executive and employee, investor and shopper – and which integrates their different points of view and expectations. Executive search firms agree that the CCO is best placed to step up to this challenge.
As Richard Marshall, Korn Ferry’s global managing director of corporate affairs, told Communication Director magazine in an interview following his appearance at the 2016 European Communication Summit, “the CCO has a 360-degree perspective among all stakeholders (government, business partners, employees, media, regulators, NGOs, and a variety of others), and they are in a unique and highly valuable position. There’s really nobody else in the C-Suite that has that vantage point.”
The good news is that CCOs recognise this fact, as VMA Group’s Beyond Communications: A CEO Perspective On Reputation Leadership reports: “(CEOs) envision the new style of communications professional will be the one with a 360º view of all stakeholders… and perhaps the only person in the organisation with the expertise and resources to begin weaving a network of threads between these atomised populations. CEOs saw this as not just a matter of content segmentation either, but also the ability to juggle a matrix of different channels.”
3. Reputation, reputation, reputation: Time and again, the executive search experts return to a north star for the CCO: reputation. As Edelman’s annual Trust Barometer shows, levels of trust in business have fallen year on year, posing an existential threat to businesses who have adapted the concept of social license to operate from the mining industry and claimed it for their own work. The “authenticity gap” as identified by, among others, FleishmanHillard in the latest issue of Communication Director magazine, means that companies cannot afford to put a foot wrong when living up to their societal promises. As the recent Paradise Papers leak reminds us, the media is tireless in its mission to pick up on and expose wrongdoing or discrepancies between corporate words and actions.
How does this affect the CCO? As Spencer Stuart puts it, “If global CCOs could focus on only one thing in their role, they would most like to focus on reputation” (It is chosen by 28% in contrast to compared to the second-most commonly focus point, media, which received at 7%).
To support the CCO’s work in shoring up the corporate reputation, they should be given “freedom to roam” as Russell Reynolds puts it, “within an organisation to build relationships across functions, specifically legal, marketing, finance, strategy, regulatory, investor relations and human resources.” Again, they are increasingly likely to receive the blessing of the CEO in this, if VMA Group’s panel of 40 CEOs is anything to go by.
Of the areas that they believe the communications function should focus on, “foremost of these was reputation…. Repeatedly, the CEOs in our interviews returned to this idea: that their companies now existed in a permanently fragile space, besieged by a tidal wave of stakeholder demands, public scrutiny and regulatory impositions. They were under constant pressure to display more transparency, offer greater disclosure, and show more positive social impacts.”
Digital revolution, stakeholder connectivity and reputational co-creator: these are among the top new demands of CCOs. But what suggestions do executive search firms have for CCOs to develop their capabilities and in so doing meet these challenges?
Three areas for development and training
1. More investment in function: In their interviews with Communication Director last year, both Gizem Weggemans and Richard Marshall independently agreed that the communications function had historically suffered from under-investment, with reasons ranging from the belief that ‘communications = media relations’, and stakeholder engagement was approached in a segmented way by different functions - consumer relations by the CMO; achieving the license to operate by the General Manager, and so on - rather than being recognised as a distinct role.
"Investment in the evolution of the function has been overlooked."
Hence, investment in the evolution of the function has been overlooked. As Gizem Weggemans summed up: “When you talk to many corporate affairs people, very rarely will you hear that they’ve been sent on rotational development programmes. People were hired for their specialist skills and were tasked against deliverables in that specific space. By the same token, you will find very few people who grew up in other parts of the business who then came into corporate affairs because someone really wanted to make sure that they gained a holistic business perspective.”
VMA Group, for one, challenges CEOs to “walk the talk” and set up internal mechanisms to ensure that communications has the resources to match their lofty ambitions for the communications function. As their report says, “CEOs are ambitiously demanding a communications function that is now full-scale, multidimensional, online and offline, internationally tuned-in, serving multiple stakeholders, working in traditional media and wrestling down the unmanageable chaos of opinion on the internet – and all using about the same budget and team sizes as in the days of emails and a static intranet. It is a ‘say/do’ gap that some CEOs, at least, acknowledge.”
2. Proving business know-how: But rather than wait for organisational structuring or for management to train them for a leadership position, the message from executive search firms for CCOs is clear: CCOs should take the initiative and train themselves, in their own leadership development as business leaders. As Gizem Weggemans explained to Communication Director: “It’s time for corporate affairs professionals to step up and say ‘I’m a business executive’… unless you have a corporate affairs person who has actually developed themselves as a business executive and who has not defined themselves as the one who deals with the media and press releases only, that person will not be a credible replacement or a peer to hold an executive seat.”
Both VMA GROUP and Russell Reynolds suggest tangible points for improvement for communications directors to become CCOs: a range of business skills, from balance-sheet reading to vision creation, even an expectation of an MBA, preference for candidates with legal trading, formal mentoring shames, development programmes, deeper business acumen gained through increased exposed to senior business leaders.
In the words of one CEO of a Dutch-based science non-profit, quoted by VMA Group: “I find that communications people should be closer to the business. They should be able to understand the company figures properly – to understand the business, but also where it’s heading and what issues it’s going to face..“ The challenges faced by communication directors raised in the world of advertising, journalism or PR, backgrounds that don’t offer a commercial, business-oriented mindset, and who weren’t hired in the first place to have those skills, to make the leap to a more strategic proactive perspective is , recognised by several CEOs, finds the VMA Group. But it’s a necessary step if the communications director is to be seen as trusted advisor capable of counselling, challenging, and even contradicting the CEO.
3. Developing leadership traits: Executive search firms agree that polished business skills alone won’t be enough: in the words of VMA Group, what CEOs are looking for go “beyond textbook MBA skills”. They are looking for an ability to lead, to take initiative, to see the whole picture, to operate on several levels, to grasp the business horizon and show “a willingness even to be the shadow-outline of the CEO themselves.” (as a CEO of a global technology company told VMA Group)
Based on the above-mentioned three areas of oversight - corporate reputation, stakeholder ecology and digital environment - communication directors have the ability to support the CEO with a unique form of ‘joined-up thinking’ that our executive search firms agree is the key to being a successful CCO. As Richard Marshall told Communication Director, “CEOs essentially want somebody who knows how all the pieces fit together. In some organisations they may be most comfortable turning to the CMO; in others it may be the CCO. The CEO doesn’t necessarily care about the organisational chart. They mostly want a problem solver and trusted advisor they can turn to and, with the number of direct reports to the CEO shrinking, he/she may make the decision based upon who they believe has the best overall business understanding ….the person that is best positioned is the one who has the best insights into where the business is going, what the CEO’s game plan is, and has the best relationships and influence internally to drive alignment and action.”
To conclude, let’s end with the words of Nick Helsby, founding director of Watson Helsby, whose annual survey finds that over 51 per cent of FTSE 100 group corporate communications/affairs directors are now formal members of their respective executive committees (the first year that this is a majority): "Companies and their leaders are naturally focused on the internal world – strategy, operational issues, finance, people etc. This has to be balanced by someone who takes a more holistic view of the company, its relationships and environment, the way it is perceived by others and its longer term issues…It is still the CEO who has to bring it all together, but they need advice, intelligence, plans and views/recommendation… hence the elevation to the Executive Committee. As another director we know noted, ‘when a CEO cares enough about something, he puts it on the ExCo’.”
- Interview with Gizem Weggemans, global head, chief human resources officers practice and global head, communications and public affairs officers practice, Egon Zehnder, in Communication Director 03/2016
- Interview with Richard Marshall, global managing director, corporate affairs, Korn Ferry, in Communication Director 03/2016
- Spencer Stuart, The Rising CCO VI, October 2016
- Russell Reynolds, Transformative Times: New Opportunities and Challenges for Corporate Affairs & Communications Leaders, August 2017
- VMA Group, Beyond Communications: A CEO perspective of reputation leadership, November 2016
- Watson Helsby FTSE Group Director of Corporate Communications/Affairs 2016/2017, July 2017