Organizations across the board count on the C-suite to chart their course through calm and troubled waters alike by “guess[ing] what the music is gonna do a week, month, a year from now,” to quote from a memorable scene in “Margin Call,” an Academy Award nominated depiction of the turmoil engulfing an unnamed bank at the onset of the 2007-09 financial crisis.
The current crisis presents organizations across the board with a threefold challenge. First, having to manage the expectations of a wide range of internal and external stakeholders–from employees and customers to shareholders and investors–despite the constantly evolving global health and economic landscape. Second, adjusting to the changes in consumer behavior the COVID-19 pandemic has caused and reacting to renewed discussions about the future of work. And third, as the pandemic impacts communities differently, accentuating inequalities within and between them, assuming a strategic position vis-à-vis growing societal demands for social justice.
Building Trust
If organizations were not confronting any of these three challenges, their success might not require more than effective management of finances, IT, marketing, operations and people–domains of the CFO, CIO, CMO, COO and CHRO. However, at a time when hyper-connectivity makes decisions and their consequences widely visible and with perceptions affecting an organization’s bottom line, communicators need to be part of the C-suite. Since reputation makes and breaks business, communicators must build trust among an organization’s key stakeholders.
Whereas management consultants are often envied for their proximity to the C-suite, advising on the bottom line, communicators are typically only brought in after strategic decisions have been made and the organization’s course set, left to then mobilize key stakeholders or, in case of a backlash from those decisions, try to appease them. Alas, communicators are all too often turned into firefighters, instead of being promoted to the navigator rank, to leverage their skills in observation and persuasion, helping get strategy and tactics right, thus laying the ground for impact.
Admitting communicators to the C-suite can take a variety of forms such as creating an in-house Chief Communications Officer (CCO), contracting a communications agency, whose lead works alongside the C-suite–akin to a general counsel from a law firm–or, ideally, contracting a communications agency to work with the CCO. While an in-house CCO will be cognizant of the intricacies of an organization, the scope of communications mandates is destined to exceed in-house capacity by far. A contracted communications agency, while lacking absolute organizational knowledge, will be able to utilize its breadth of experience, network and size, tackling multiple fronts at once. Ideally, a contracted agency will collaborate with the CCO, providing stakeholder insights for bottom line decisions, while developing and executing a proactive communications strategy.
Prioritizing Stakeholders
Rather than enlarging the C-suite, organizations might be tempted to equate the CMO with the CCO; however, this would be ill-advised. CMOs are skilled at identifying the wants and preferences of existing and prospective customers to create and sell products and/or services. They are less effective in analyzing and interpreting the larger societal context to not only create and sell products and/or services, but to build brands that stakeholders will want to engage with.
Indeed, hyper-connected societies humanize organizations, so that the brands with which you engage affect your own brand no less than the people with whom you are associated. In a world thus configured, the classical C-suite cannot survive, because the domains of its members presume that organizations are shareholder-focused entities, not organisms woven into the social fabric. Communicators, by putting stakeholders first, can help make the C-suite fit for purpose.
Admitting communicators to the C-suite does not mean prioritizing stakeholders over performance and results. On the contrary, in hyper-connected societies, in which not access to information, but the ability to establish truth–that is, to amplify opinions and enshrine conceptions–has been democratized, favorable perceptions and, thus, trust benefit the bottom line.
Leveraging Inclusion
Through their concept of “Shared Value,” Harvard’s Mark Kramer and Michael Porter demonstrated that the costs of putting stakeholders first, of building brands that strike a chord with society, are easily offset. For instance, improving working conditions in factories enhances communal perceptions, but also increases productivity, which positively impacts the bottom line. Similarly, thinking in terms of societal needs could mean creating or tapping into new, potentially sizable markets that further enlarge an organization’s customer base and drive revenue growth.
Thinking through the bottom line is necessary but not sufficient for creating Shared Value, since business decisions are based on the presumption that brands are shareholder-focused entities rather than organisms woven into the social fabric, thereby disregarding non-business imperatives. Once organizations admit communicators to the C-suite, they will enhance their bottom line precisely by thinking beyond it. Concretely, C-level communicators will enable organizations to:
- Identify, monitor and analyze societal developments affecting brand perception and brand identity.
- Leverage non-business insights to enhance the bottom line by deepening both trust and loyalty among key stakeholders.
- Develop a proactive, not a reactive, communications strategy by anticipating a brand’s necessary evolution.
- Conceive of Corporate Social Responsibility (CSR) for what it is, a brand-enhancing obligation for non-business social engagement.
So what will the music do? Before C-suites across organizations can answer that question, they will have to open their ranks to communicators, who by putting stakeholders first, can capitalize on hyper-connectivity. After all, communication is listening’s offspring. “Margin Call” reminds us that organizations are mere vessels for brands; seeking to grow one at the other’s expense erodes both. Enabling both to thrive calls for C-suites as diverse as the societies within which their organizations operate, a diversity only successful, inclusive brands come to capture.
APCO Alumnus Alexander Wegner coauthored this post.
