Among the highlights at the 2018 European Communication Summit was the main-stage debate about communicators on the executive board.
We continued the discussion with panellist Dr. Stephan Feldhaus of Swiss pharma giant Roche, and asked him about gaining a seat on the executive board, long- versus short-term investor demands, and why being a theologian and leading a communications department have more in common than it might seem.
When you moved from Siemens to F. Hoffmann-La Roche, you joined its executive committee. What was the biggest challenge for you in stepping onto the executive board?
Roche has a multi-dimensional matrix organisation and a deeply ingrained culture of decentralisation and personal freedom. Our innovation derives from its diversity of approaches and the company's ability to put that diversity to work through inclusion. So as a leader, even as a member of the executive group at Roche, having an impact depends on your ability to influence indirectly. In the long run, this is very satisfying, but it requires a different skill set than when working in a more directive culture within a centralised environment.
At Roche, authority is not derived from what is on your business card. It is derived from experience, the ability to rally people with different backgrounds and, ultimately, the trust you build with your executive team peers. For communicators, trustworthiness begins with your credibility as a professional, but requires clarity of your role as an individual and member of the executive team. Clearly, your skills are important, but even more important are the relationships you build with your peers, which also means staying true to your role – and yourself – as your peers see it.
What advice would you give communicators who are about to take that step onto the executive committee?
Personally, I am a strong believer in joining organisations that have a strong, clear and well-articulated purpose. Communication leaders can make a tremendous contribution by leading the strategy for companies to find and articulate their purpose. A strong purpose is the foundation for any successful long-term engagement, whether internally to motivate employees or to manage change, or externally to differentiate against competitors and engage with stakeholders. A strong purpose provides you with the ingredients needed for compelling and distinct positioning.
Understanding the industry and how your organisation is different from its peers is another foundation to build upon. While that seems obvious, not all organisations have a clear and shared view of what makes them unique. At Roche, I found an organisation that has been able to reinvent itself while retaining its identity over 121 years. And everyone I spoke to intuitively had pieces of what that meant for the foundations of the company’s success. Yet it is up to the communications function to pull these pieces together in a way that allows a real differentiation the corporate brand.
Another piece is leading on building and protecting reputation. Particularly in large, multinational and publicly listed companies, communications are among the very few functions that can sense the perspectives of diverse stakeholder groups. Communications is in many ways about listening first. That can be a unique contribution at the executive level – ensuring that stakeholder perspectives are heard, understood and reflected when business decisions are made – and that any business decisions take ethical considerations into account.
This is not always the most popular task and you need to be able to have robust conversations. But ultimately a strong reputation and a culture of doing the right thing always benefits business. Successful companies realise that someone needs to be the organisational 'conscience' and stakeholder advocate.
And when there are disruptive developments in society that affect the long-term success of a company, communication leaders are among the first to sense the change in environment. In those cases, if you are willing to challenge your organisation and, when urgent, lead the way to drive change, you can make an immense difference.
When you work as part of an executive group, how do you ensure that your voice is heard?
The best way to ensure your voice is heard is to know when to contribute and when that opportunity presents itself, to speak concisely in terms your counterparts can relate to. The CCO is a counsellor and mediator, and should speak with empathy and confidence. Empathy is especially important because you are like a translator, taking the signals you are receiving from a company's stakeholders and translating them into terms that resonate at the executive table. Empathy is also important from your counterparts' perspective. Today's business leaders are under enormous pressure to make effective decisions in increasingly short periods of time, with less data and certainty about the impacts of these decisions – particularly in complex industries.
This means that they want to trust that you are aware of their challenges and needs, and can relate to their situation. Conviction has always been important, but is growing in importance today. Your counterparts want you to contribute in ways that increase their confidence and reduce complexity and uncertainty.
What do you do when you have to say something that is uncomfortable to the CEO or the executive team?
In the eight years I have been with Roche, I believe I have developed a relationship with the CEO that allows us to speak in an open and frank way. Of course, sometimes the situational context dictates timing of such conversations. And you need to be empathetic just as with anyone else.
I have found that many leaders are very open to any difficult conversation, as long as the timing is right and the feedback is given directly in a 1:1 discussion. In fact, they welcome it. No one likes to be “exposed” in front of his or her peers or others.
Regular exchange via one-on-ones, both formally and informally, help to develop the relationship with the CEO and your peers that will hone your timing skills, providing your work experience has matured your instinct. Particularly for a leader in communications, people-to-people interaction is essential to how we perform our roles.
How useful is it for Roche to have communications input right at the point where strategic decisions are made?
It has been very useful. Let me share two examples. The first is how we developed and embedded our company’s purpose – doing now what patients need next. The communications function led the work to both highlight the need for rallying the company around a purpose after years of organisational change, to develop and implement it. Our purpose is now integral to how employees identify with the company and a very strong point of orientation for management – particularly when thinking of the long-term strategy.
The other example is how we made decisions during the financial crisis in Europe in 2016. In some countries, health systems were under enormous financial pressure, which affected their liquidity and thus their ability to pay for the products needed for terminally ill patients. It was important that the executive committee, when deciding on how to respond, could receive counsel from someone who understood the impact various options would have on individual stakeholder groups as well as public opinion. The decisions made in these circumstances were wise and informed.
Investors demand of their boards quick decisions on short-term goals. However, boards must also plan for the long term. In your experience, how can executive teams work together to balance this?
Roche is in the fortunate position that the majority of its voting shares are still owned by the descendants of the company’s founder. The families behind Roche are strongly committed to our business and take a long-term view, which takes away much of the short-term pressure comparable companies face from investors. This also influences the decision-making culture. It also makes Roche an attractive investment for other long-term investors such as pension funds, which ultimately means a greater ability to focus on what makes sense in the long term. This allows us to pursue complex longer-term opportunities like the digitalisation of healthcare and with it personalised diagnosis and treatment of individuals.
But any executive team must balance on short-term imperatives while considering strategic options with long-term implications. The focus among executives needs to ebb and flow with the dilemmas they face in a high-paced, ambiguous and rapid evolving environment. For an innovative healthcare company the success of product launches is the basis for any longer-term investments in new therapeutic areas or building/acquiring new tools or capabilities needed to rewrite medical textbooks. Any executive team facing these dilemmas needs a strong ability to explore and debate options, build opinions and make quick decisions with very little data.
This is where a communicator as a trusted member of the team adds value, by bringing a unique set of skills that help structure a discussion and explore any given topic from multiple perspectives. And, once the decision is made, it needs to be brought into the organisation with the right context so it resonates intellectually and emotionally with a diverse group of employees – again a task that communicators usually excel at.
You are also a noted theologian. Does theology have anything meaningful to say in terms of the roles boards play in leading their companies?
I was educated and trained in social and applied ethics, but I remain a theologian at heart. Being a theologian and leading a communications function have more similarities than it might seem. You need to engage on matters of truth and trust and purpose. Above all, communications has to do with people – the digital age does not change this, it just makes us overlook it more frequently. Theology and communications ask similar questions. How can we express knowledge, opinions and feelings in a way that motivates people and gives them orientation? Essentially, both disciplines are focused on reducing complexity in such a way that a message can be received and understood.
And I think my background helps to find personal purpose, which for me has always been about building bridges between different people. Ultimately, any communicator should reflect on their own personal purpose just as much as on their company’s.
Interview by David Phillips