The failing economy has been an unexpected boon for communicators. The scrutiny companies confront every day, combined with social media minefields, has helped strengthen communications' role at organizations.
These complex realities have also given communicators more access to top-level executives than ever before. A recent survey shows that 58% of chief communications officers now report to the CEO, up from 48% last year. The study, conducted by Weber Shandwick and Spencer Stuart, also found that the need for crisis management increased 45% since 2007.
Joining the C-suite
These circumstances have presented an ideal moment for the PR industry to fulfill its longtime ambition of having a prominent seat within the C-suite.
“Crisis seems to be around every corner, so the CEO has really come to rely on the CCO as the right-hand man,” says Leslie Gaines-Ross, chief strategist for WS. “The economy is part of this trend, but also there is just increased scrutiny for companies now [than before the Web].”
Brad Shaw, SVP of corporate communications and public affairs at The Home Depot, who reports to the CEO, says its reporting structure has made the retailer more nimble to adapt to cultural shifts. For example, when Twitter's popularity exploded in 2008, Shaw was swiftly able to get the company situated on the platform.
“Because I report directly [to the CEO], we didn't have to go through... layers of bureaucracy for approval,” Shaw recalls. “We had the advantage of speed.”
This agility is a major reason the pipeline between CCOs and CEOs is more direct. The most frequently added communications responsibility is social networking and blogging, according to the survey – and this is expected to grow even more this year. Social media also supplanted a company's Web site as the fastest growing communications resource, perhaps as executives are learning they need to go to the consumers online, rather than expecting consumers to find their Web properties.
“This has all forced communications to become more strategic,” Shaw notes. “Smart CEOs know you can't execute your strategy in anything close to a vacuum.”
Rick Phillips, VP of communications at Nationwide Insurance, says this transparent media environment has amplified the amount that executives rely on their top communicators. Crises that emerged in traditional media were often expected and more controllable, but now CEOs are more on alert.
“Executives can see the... heartburn that social media has caused people and that [a crisis] can pop up from left field,” he says.
Defining the company
Ray Jordan, VP of public affairs and corporate communication at Johnson & Johnson, says although the top-level communications position has always reported into the CEO, he's made the post even more strategic. J&J's communications now takes a larger role in defining the company, in addition to developing strategic plans.
“Historically, communications focused on [helping the company] with its visibility,” he explains. “But increasingly, we're being asked and invited to define the organization and assess the actions the organization is taking.”
Jordan adds, “The more [communications] moves upstream from visibility to defining the organization, the closer it is to leadership.”
Even though communications enjoys more prominence, CEOs have finite time and resources. So as more departments have access to them, competition intensifies.
The study finds that 25% of CCOs name the CMO as their top rival, followed by other department leaders like IR heads.
“Communications and marketing are tasked with setting the tone, but sometimes their agendas can be very different,” says George Jamison, a principal at Spencer Stuart.
But The Home Depot's Shaw downplays this rivalry. “Home Depot's a very collaborative place, and there aren't many or any turf battles that go on internally.”
“[Marketing and communications] have to be more clear on their roles,” J&J's Jordan adds. “The Venn diagram overlaps more and more.”
What more prominent CCOs mean for firms
Creates an opportunity to help executives build a company's reputation, not just help in a crisis
Increases the need to know the client's business to be able to best advise top-level executives
Provides the option of offering senior-level agency professionals to give strategic counsel to company executives
Creates the chance to help train a company's top-level executives and CCOs on social media and how to handle a crisis