Milton Friedman’s dictum that the social responsibility of CEOs is to deliver profits for their shareholders was dealt its latest and perhaps most significant blow on 19 August. 181 members of Business Roundtable, the leading business lobby in the United States, issued an open letter addressing the “Purpose of a Corporation”. The signatories, including the CEOs of Amazon, American Express and Walmart, declared “each of our stakeholders is essential. We commit to deliver value to all of them, for the success of our companies, our communities and our country”.
It is obvious that society’s understanding of their role is currently undergoing a massive shift. Adjusting will require CEOs above all to communicate with greater frequency and effectiveness, both internally in their companies and externally to the wider world. The shift in our culture away from the proverbial collective to the individual means that the CEO is increasingly in the limelight, not the company. And that profits are not the only way they are judged.
The demand for effective CEO communications cannot be understated. In the BRANDfog CEO, Social Media and Leadership Survey, 82% of respondents “reported that they are more likely to trust a brand when the senior leadership and CEO are using social media”. Brand value and reputation are crucial drivers of the bottom line. Indeed, reputation is the difference between your company being seen as a mere commodity and bolstering your band’s trust cachet in the market. And no one is better positioned to embody the company’s brand than the CEO.
The reverse of this is that failure on the part of CEOs to communicate can be potentially fatal to the brand. This sombre lesson can be illustrated with a brief comparison of Germanwings’ and Boeing’s responses to aviation accidents involving their companies. Only three months after the March 2015 crash, the HORIZONT Brand Ticker reported a 20% increase in Germanwings’ July 2015 brand value compared to the previous month. Germanwings navigated the crisis thanks to the behaviour of its management team, exhibiting great empathy for those affected. The contrast could not be starker with Boeing. The CEO took months to sit-down for an apology interview after the second 737 MAX crash in 2019 and even then failed to show any empathy. Of course, a crisis situation is by definition extraordinary. But it is for that very reason that CEOs must always be prepared for effective communication when it matters most, otherwise it could spell disaster for their business.
It is the CEO’s job, then, to communicate with impact – every single time. This demands nothing less than constant effort and practice. It is a skill that can be learned, something attested to by Steve Jobs. Before he became the bespectacled visionary that effortlessly sold us on his latest innovation, he was a nervous – and nauseous – wreck when it came to interviews. At the same time, however, communications is not something CEOs should take for granted. Our innate communication skills are usually not sufficient to lead an organisation. The fact that we can walk does not make us Olympic runners.
This all begs the question: where to start? CEO communications covers a range of aspects, from media interviews to financial statements, and discussing it would require much more space than a single article or column. But the constant underpinning every aspect of CEO communications is authenticity. The CEO needs to be the person ultimately directing and driving the communications strategy. Of course, there should also be a chief communications officer or chief reputation officer, and social media team on hand. Nevertheless, CEO communications begins and ends with the CEO. They must be the owner or their own voice.