The New Era of the CCO

Roger Bolton, Don W. Stacks, Eliot Mizrachi

• Publisher: Business Expert Press
• Year: 2018
• ISBN:
  9781631575365
• Topic: Business
• Subtopic: Public Relations
• Index: Business

The role of the chief communication officer (CCO) in today's enterprise has dramatically changed over the past 30 years. Once focused on getting news out to media outlets, today's CCO has become an integral part of any enterprise—company, corporation, governmental, and nongovernmental entity. Today's CCO is responsible for internal and external communication, with creating and implementing communication strategies that help mold enterprise mission, vision, value, and character, and with building enterprise reputation through stakeholder engagement. As a part of the "C-Suite, " the CCO must understand not only the psychology and sociology of the business, but also the role that she has in informing the C-Suite and the chief executive officer what internal and external stakeholders are thinking and how this may affect corporate image in terms of credibility, confidence, trust, relationship, and reputation. In short, the new CCO must understand both the science and the art of communication and apply that knowledge to advancing her enterprise's goals and objectives through a faster and ever-larger-reaching set of media.

CHAPTER 1

The Changing Business Landscape

Tina McCorkindale, Aedhmar Hynes, and Raymond Kotcher

We are undergoing a revolution in human communication.

In less time than it took read that sentence—a single second—people around the world sent 2.5 million e-mails and 193,000 text messages, added 219,000 posts to Facebook and 729 to Instagram, viewed 125,833 YouTube videos, and tweeted 7,259 messages (internetlivestats.com 2016; Coats 2016; webpagefx.com 2016).

Every day, 2.5 quintillion bytes of data are created—so much that 90 percent of the data in the world today has been created in the last two years alone, according to analysts’ estimates (IBM 2016c). Much of this data is generated by individuals and captured by machines. The ability to access and understand this data from the “Internet of Things” is becoming a competitive differentiator for businesses. Think of all the data that enterprises¹ collect about their customers—the difference between those who make sense of these data through analytics to improve the customer experience and those who will not be a primary determinate of those who succeed in business and those who fail in the years to come.

However, this is about more than just data and how we communicate.² It is not just a revolution in human communication, but also one in the human experience.

The world’s balance of power is being transformed. There is a shift in the structure of the world’s demography. Millions are on the move from the Middle East to Europe, and across Eurasia and the African continent. Access to resources is becoming challenging, including fundamental human needs and rights, such as clean water, health care, nutrition, education, and equality. People are seeking and demanding transparency, integrity, and higher purpose from institutions everywhere.

Amidst this all-encompassing change, taking place at the speed of light, how does an enterprise succeed? For what changes in the business landscape do leaders need to be prepared?

In their CEO Report, Said Business School at Oxford University and Heidrick & Struggles (2015) reported chief executive officers (CEOs) are dealing with a business environment marked with uncertainty and change. CEOs said they value “ripple intelligence,” early warning systems much like the ripples on a pond, which sharpen as they learn to embrace the power of doubt. CEOs reported believing in an authentic sense of purpose for their organizations, and alignment in order to achieve it. Given intense stakeholder³ scrutiny, CEOs are looking for new ways to communicate effectively as old models become outdated; there are more audiences, languages, and communication channels than ever before.

In 2015, KPMG International published its Global CEO Outlook that surveyed more than 1,200 CEOs on the global economic challenges for the next three years, as well as their thinking on strategies for responding to those challenges. Growth is a top priority, even as CEOs navigate the vicissitudes of inconsistent regulations from country to country. Competitive threats not only from traditional incumbents, but also from new entrants, business models, and disruptive technologies represent increasingly challenging threats. Being relevant to customers, and maintaining both employee and customer loyalty, is critically important. In this digital age, cybersecurity and protecting private information are critical.

Similarly, PwC’s 19th Global CEO Survey (2016) of 1,400 CEOs reports that stakeholders have greater expectations operating in society with transparency and trust at the core. The CEOs reported a need for consistent and dependable communication, as well as the need to apply data and analytics to more effectively measure and express performance around business and strategy, purpose, and values. Nearly half said they are rethinking how they communicate “brand.”

Today’s business environment is going through changes on a level not seen since the Industrial Revolution. From technological to societal change, this upheaval presents CEOs and their Chief Communication Officers (CCOs) with numerous challenges: start-ups reinventing traditional business models, new ways of working, changing ways people interact with enterprises, and an increasingly diverse workforce. But where there are challenges, there are always opportunities. The question leaders need to ask themselves is, “Do I want my business to be a disruptor or disrupted?” Organizations that succeed will be those that thrive and adapt to this new environment, and CEOs need to be aware of multiple factors that will transform the landscape.

Business Landscape

Transparency, the primacy of the stakeholder, and engagement with purpose are all critical forces driving business and communication in this day of unremitting change.

Transparency

This is the age of transparency, or what The Economist (2014) calls the “openness revolution.” Stakeholders are demanding greater accountability and an end to “corporate secrecy” (p. 2) multinationals are being “forced” to reveal more information about themselves. According to The Economist, three forces are driving this: (1) governments demanding greater accountability; (2) the power of investigative journalism; and (3) the sophistication of nongovernmental organizations (NGOs).

In the Starbucks shareholder meeting in 2014, then CEO Howard Schultz emphasized how the world needs leadership more than ever, and companies have a responsibility to use the power of their businesses to do good in the world. He said, “The currency of leadership is trust and transparency” (p. 8). With such exogenous forces impacting the enterprise, transparency can no longer be borne out of practical necessity. It must be a deeply held value. Opacity comes with costs.

A survey by EY and the Boston College Center for Corporate Citizenship (2013) of senior corporate professionals who were familiar with their organization’s sustainability efforts found that transparency with stakeholders was a key motivation for enterprises to disclose information, and most respondents reported business benefits as a result of their company reporting efforts. According to Iwata and O’Neill (2016, p. 4), “highly engaged stakeholders, empowered by social media and demanding of greater transparency, pose new challenges for protecting brand and reputation.” As reported in the Arthur W. Page monograph, The Authentic Enterprise (2007), power continues to shift to the stakeholder, and the demand for transparency will continue to grow.

The Primacy of Stakeholders

In 2006, then IBM Chairman and CEO Sam Palmisano said, “What is different now is that the concept of shareholders has expanded to stakeholders” (Blowfield and Googins 2006, p. 2). Thanks to social media and technological innovations, the stakeholder universe has expanded to a much wider set of individuals—both internal and external—that the enterprise must consider (Gitman and Enright 2015). Gitman and Enright, after a discussion with 16 member companies of Business for Social Responsibility (BSR), a global nonprofit organization, concluded, “In our increasingly transparent world, where a tweet can be as influential as an opinion in the board room, a company’s strategy to engage with and learn from its stakeholders has never been more important, or complex” (Gitman and Enright 2015, p. 2).

The Boston College Center for Corporate Citizenship (2009) launched a report concluding a key competency of corporate leaders must be understanding stakeholders and their interests. According to the findings, “Nowadays, companies depend on favorable public opinion to ensure their license to enter, operate, and grow in markets around the world. This extends their agenda beyond compliance and following the law to understanding and engaging stakeholders and ‘balancing’ their interests in strategic decisions and operational practices” (p. 6).

The report also identified three reasons why the enterprise must be aware of the stakeholder landscapes where they do business:

1. Diverse stakeholders help shape the competitive context for business in a nation and globally;

2. They influence a firm’s license to enter, grow and operate in local global markets; and therefore;

3. Understanding and monitoring the stakeholder landscape is essential to the long-term planning of an enterprise. (Boston College Center for Corporate Citizenship 2009, p. 5)

In one sense, this is not entirely new. After all, Arthur W. Page, who was vice president of public relations at AT&T from 1927 to 1946, said, “All business in a democratic society begins with public permission and exists by public approval” (http://awpagesociety.com/site/historical-perspective, n.d.). What is profoundly different today is the ability of stakeholders to get access to more information more quickly and easily and to share it with others instantly, potentially transforming public opinion about an enterprise and its operations virtually overnight.

Social Purpose and Corporate Character

The Arthur W. Page Society’s 2012 report, Building Belief: A New Model for Activating Corporate Character & Authentic Advocacy (2012b, p. 7), posits that enterprises must adhere to a strong and admirable corporate character in order to earn stakeholder trust. Page defines corporate character as the unique, differentiating identity of the enterprise, as determined by its mission, purpose, values, culture, strategy, brand, and business model. As the expectation increases that the enterprise must operate transparently and responsibly, while serving a social purpose, defining and aligning corporate character are critical.

In the 2016 Edelman Trust Barometer, 80 percent of respondents said they expect businesses can both increase profits and improve economic and social conditions in the communities in which they operate. It offered Tupperware as a prime example that has a global sales force in countries all over the world, including China, India, and Indonesia, where 3.1 million women can earn much-needed income to help drive sales revenue for the company. Additionally, it found that stakeholders respond positively to CEOs who can both earn profits and provide societal benefits; trust in CEOs has risen in the past five years.

Kanter (2011) noted that great companies extract more economic value by creating frameworks that “use societal value and human values as decision-making criteria” (p. 5) and meet stakeholder needs in a variety of ways. Social purpose and values are “at the core of an organization’s identity” (p. 11). Therefore, seeking legitimacy or public approval by aligning enterprise objectives with social value is a business imperative. As Kanter (2011, p. 10) noted, “Only if leaders think of themselves as builders of social institutions can they master today’s changes and challenges.”

The Rise of Technology

Much of the change that is affecting the business environment is driven by technology. According to the International Data Corporation (2015), 3.2 billion people, or 44 percent of the world’s population, now are connected on the Internet. This number is growing rapidly in every part of the world, driven by the explosion of mobile technology. Half of the world’s population now has a mobile phone subscription, compared to just one in five 10 years ago (GSMA 2015).

The availability of inexpensive smartphones and laptops has made the Internet accessible to a whole new demographic. More than half of the population in each of the nations surveyed by the Pew Research Center (February 22, 2016) reported owning a mobile phone. The same study reported more than 9 in 10 own mobile phones in Jordan (95 percent), China (95 percent), Russia (94 percent), Chile (91 percent), and South Africa (91 percent). The advent of tablets and smartwatches has also broadened the spectrum of Internet usage (Kah Leng 2016).

Each mobile device is not simply a receiver, but a potential global transmitter. For example, in sub-Saharan Africa, landline telephone penetration is near zero as the number of mobile devices has exploded, with many mobile owners using cell phones to take pictures/videos, send text messages, or do mobile banking (Pew Research Center 2015, April 15). Smartphones have helped reduce the number of people who do not have access to a bank account by 20 percent in the past three years (The World Bank 2014). As The World Bank noted, “As seen in sub-Saharan Africa, mobile money accounts can drive financial inclusion” (p. 3).

According to the IDC report, the mobile ecosystem is a tremendous economic driver; in 2014, the mobile industry accounted for 3.8 percent of global gross domestic product (GDP).

Software has had an impact on how businesses operate. In 2011, Andreessen contended that “software is eating the world,” (p. 2) and software companies “are poised to take over large swathes of the economy” (p. 6). Four years later, Hendricks (2015, p. 1) wrote that now that software has eaten the world, it is starting to eat the company. In the same way that iPhones and iPads have turned into efficient ways to never need a personal assistant, Hendricks notes that software has slowly begun to make enterprises of all sizes leaner.

Innovation enabled by software is disrupting businesses of all sorts and transforming the economy. Google, Amazon, Uber, Airbnb, and others are transforming entire industries. In his 2015 book, Rise of the Robots: Technology and the Threat of a Jobless Future, Martin Ford, the founder of a Silicon Valley-based software firm, argues that “advancing information technology is pushing us toward a tipping point that is poised to ultimately make the entire economy less labor intensive” (p xvii).

A Deloitte study (2015b), on the other hand, concludes that “Machines will take on more repetitive and laborious tasks, but seem no closer to eliminating the need for human labor than at any time in the past 150 years.” And in 2016, IBM CEO Ginni Rometty, in a letter to the U.S. President-elect Donald Trump, argued that there are many “new collar” jobs being created in technology that require training, but not a college degree (IBM 2016d).

Similarly, social media powered by technology have had a tremendous impact on business. In this smaller, flatter global world, social media have not only changed the way people access information and communicate with each other, but also created new communities of interest that exert powerful influence on existing and emerging institutions. Indeed, stakeholder groups have become more empowered, emboldened, and organized (Arthur W. Page Society 2016).

This speed of innovation correlates with technology’s impact on society and people’s behavior, and the speed with which it drives change. Despite several industry predictions that Moore’s Law⁴ is dying (Simonite May 13, 2016), researchers and companies like IBM and Google argue that the speed of innovation is not dying but taking a shift (The Economist 2016). This s...