Under siege or leading the charge into the future? I wasn't sure what to expect from my audience of chief communications officers at the annual meeting of the Arthur W. Page Society.
It's easy to imagine CCOs of the world's largest companies feeling bruised and confused.
After all, they face a new world in which the command-and-control model of corporate communications is obsolete. Special interest groups and individuals have an unprecedented power to see over fences, through walls, and beyond strategies. Consumers are easily peering past public relations departments into the innermost workings of organizations. Once they've got the goods, they instantly share what they've found with the whole world.
It was striking to find that rather than feeling threatened, my audience was energized and optimistic. Their attitude is captured in their new report, Corporate Character, based on interviews with the CCOs of 25 Fortune 50 corporations. Filled with a positive vision and relevant case studies, it detailed “pragmatic steps that CCOs and other leaders can take to translate their values into behavior and strategy.”
I was thrilled. The society was boldly rethinking — committing to a new kind and depth of leadership.
It's a measure of how much things have changed that my mission – making the philosophical and practical argument for principled performance – found a receptive audience at the Arthur W. Page Society. I advanced five themes:
- The new power of the individual has changed the game;
- We are in an “era of elevated behavior” – and in this interdependent world, the CCO has new opportunity and accountability;
- Communication officers can positively affect behavior, internally and externally, as never before;
- Authenticity is currency; and
- Public relations is dead — public relationships are ascendant.
I've been arguing that the elevation of corporate behavior is the most important business of our time since BE -- that's “before Enron.” It has been my life's work.
By the “era of behavior” I mean we live in a new, interdependent world. Single acts anywhere can – and do - affect millions everywhere. And communications is part of that behavior. Every click and post, however casual, can reveal truths about an organization. Consider the mess the Golf Channel got into with what it thought was a harmless comment on the 50th Anniversary of Martin Luther King's “I Have a Dream” speech.
Given this era, communications experts need to rebuild from scratch. Even the pillars of PR pioneer Edward Bernays no longer hold up. He said, “We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of.” But today, our minds are molded and our tastes formed by our social graph. You all know this from Nielsen's latest Global Trust in Advertising Report, where 92% of respondents reported trusting recommendations from people they know, while ads tallied 47%. In the world of word of mouth, the old methodologies of delivering “targeted” messages are less effective. Spinning no longer masks inconsistencies. Often, it heightens them.
In short, hyper-connectedness and transparency demand elevated behavior and consistency. Arthur Page recognized this decades ago: “Publicity is the art of telling a good story well,” he said. But “good story” cannot mean a shrewd artifice, with PR cleverly camouflaging reality. Opacity leads to mendacity. A good story connects stakeholders and creates new organizational adhesiveness. John Iwata, the society's chairman and IBM's global marketing, communications, and citizenship leader, captured this a few years ago. He was discussing a merger of brand and workforce that involved “external and internal messaging coming together.” Such a system, he concluded, “is necessarily inclusive of corporate culture.” Indeed. As former IBM CEO Louis Gerstner said, "Culture isn't just one aspect of the game, it is the game."
By elevating culture – that which animates how things really happen in an organization, in other words, “corporate character” -- we also do the essential work of changing mindsets about the relationship between “doing the right thing” and bottom-line performance. These were once viewed as orthogonal; in some quarters, they still are. If that's what you believe, the implications for PR are ugly. Corporate decisions that are clearly “the wrong thing” – but have positive financial implications – have to be justified, massaged, and nuanced by corporate communications. No wonder the cliché of the stressed-out, ulcer-gripped, migraine-suffering, martini-swilling PR flack emerged. It's not easy to justify the unjustifiable.
The encouraging news, though, is that profit and principle need not, and in fact are not, locked in combat. And that's not hopeful theory. The paradigm shift is that we can now prove that elevated organizational behavior offers competitive advantage: 92% of employees at high-trust and truly values-based businesses report higher innovation than their competitors, versus 38% of those at strict top-down organizations. That percentage is 99%, versus 42%, on customer satisfaction and 92%, versus 46%, on employee loyalty. And, as for competitive financial performance, the figures are 93% versus 48%.
Of course, however strong the culture, CCOs will sometimes be in the crisis management business. Those are the times to realize that you are always in the authenticity business. Recall how Odwalla responded forthrightly to an e. coli outbreak or how last month, Samsung apologized to the Chinese government for selling phones that were crashing due to faulty memory chips. Samsung's approach seems exemplary to me. The company moved fast to accept there was a problem, said it “sincerely apologizes” for its own “management problems,” welcomed the media scrutiny, and pledged free maintenance and extended warranties for the phones affected by its manufacturing problems. It was authentic, personally responsible, and offered real restitution.
CCOs can do more by helping transform their organizations from fortresses to vibrant ecosystems. They are essential, because they are the in-house experts in communications. Core to this is embracing conversations between your multiple constituents. It is your obligation to encourage employees and other stakeholders to be full participants in the era of behavior by making them feel part of something, rather than subject to it.
That requires changes. Fundamental ones. Back in Page's day, life was simpler and straight-ahead. Now, CCOs must display resilience, accepting that paths to progress are curvilinear, moving up and down, not the predictable course that business tries to impose — and that business schools, for that matter, continue to push out in their curricula and their content.
I believe we are entering a golden era for corporate communications. You are newly liberated because you no longer have to spend your time in the justification business. Communications officers can become new leaders, elevating the stories you tell your companies, customers, and communities. I'm glad we're on this journey together, sharing the cause of inspired corporate character — and corporate character that inspires.
Dov Seidman is founder and CEO of LRN.