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Leadership
How should CEOs respond to the era of hyper-vigilance
CEOs face greater scrutiny than ever. Retreating from the speaking spotlight is no solution. IMD’s Jean-François Manzoni explains how CEOs should talk with trust and integrity.
Rapid read:
- The post-truth era and decreasing trust in leaders has been magnified by the omnipresence of media and the speed of information.
- Communications should be stress-tested for reactions that may be hostile to the message or the messenger.
- CEOs must invest more attention in ensuring their communications are as simple as possible, yet as complex as necessary, to reduce misunderstanding and misrepresentation.
An age of corporate comms exposure
Today’s CEOs are more exposed and scrutinized than ever. Sometimes, this is self-inflicted by those who take a position on a complex political or social issue, because they feel organisations expect them to do so, or to gain visibility for their brand.
Yet even when leaders are mindful of avoiding unnecessary attention, social media, the internet, and news networks have brought their every move under the microscope, amplifying reactions to corporate action.
This problem is exacerbated by two aspects of society. The first, as documented by the Edelman Trust Barometer over the last twenty years, is the loss of confidence from citizens in their business, political or religious elites, including CEOs. This matters: people who are trusted gain the benefit of the doubt when something bad may have happened, and some leniency when something bad has happened. But those who are not trusted don’t get these benefits, and they tend to get penalized more heavily.
Second, we live in an age that has been labelled “the age of outrage,” which explains the growing polarization of public opinion, and the growing speed at which high emotions become entangled within disagreements.
We are also in “the post-truth era,” where objective facts are less influential in shaping public opinion than appeals to emotions and personal beliefs.
In this context, CEOs are much more exposed when, as they are bound to do on occasion, they make an unpopular decision or take an unpopular position. The combination of omnipresent media scrutiny with instantaneously and globally reaching distrust, plus polarized stakeholders, creates a communications minefield for CEOs.
Be mindful when speaking to challenges
Some of this scrutiny and ensuing backlash is within the control of CEOs, related to their positions on complex political or social issues. My colleague David Bach has proposed a useful framework to help CEOs think through both when and how they may want to take public positions on tricky issues.
CEOs should consider: how relevant to my business is this issue? Do the company’s articulated values compel me to speak out? Does the issue resonate with my personal values? For those tempted to speak out, consider the extent to which stakeholder views are likely to be unified (i.e., relatively convergent) or divided (where divided stakeholder views create more potential for backlash).
Reduce scope for transgressions
An obvious way to reduce the negative impact of bad press is to reduce the number and magnitude of ethical transgressions by the company. Keep in mind that minor transgressions that might earlier have received only minor local or regional visibility, are now more liable to become global nightmares.
The first line of defense is for organizations to invest more time and energy in reducing the frequency and intensity of ethical transgressions (where compliance involves respecting the law, but ethics involve doing the right thing.) This starts with stronger education – at the very top and throughout the organization, on the challenges of ethical decision making.
Too many organizations under-invest in this area, for two reasons. First, they underestimate the time and energy it takes to align the ethical frameworks of hundreds or thousands of individuals with different experiences and education.
Second, organizations too often focus on conscious ethical transgressions by individuals who choose to cross the line, often for personal gain.
But in practice, a great many transgressions are committed by individuals who do not realize that they are about to cross the line. Most human beings want to see themselves as good people, and that desire encourages our brain to hide our transgressions from ourselves.
Training interventions can help employees to become more aware of powerful traps like ethical fading, motivated reasoning or moral licensing.
The first line of defense aims to reduce the frequency and intensity of breaches. The second line of defense involves organizations investing to ensure that if a breach is committed, it will be detected and reported internally as early as possible.
Specialized staff can help – or even more importantly, colleagues of the perpetrators. Too often, colleagues notice a transgression but don’t report it, because doing so is difficult or dangerous for them, and unlikely to lead to corrective actions.
Having a diverse team discussing the topic is a good way to reduce the likelihood that we miss a potential backlash.
Fair process
It is often said that turkeys don’t vote for thanksgiving, meaning that human beings will never support decisions that have a negative effect on them. This belief is intuitively appealing, but empirically incorrect. Research shows that when people find the process that led to a decision is fair, they are more likely to support the decision even when it has a negative effect on them.
Research also shows that people are more likely to find processes fair when:
- They understand why they must take the pain (why this, why now?), when and how the pain will stop (we have a good plan), and what benefit it will bring to them or people they care about.
- They feel that the pain is shared, decisions are applied with consistency, and they were heard and respected.
- They respect and trust the doctor.
These criteria are intuitively appealing and may sound simple, but ensuring they are put into practice requires courage, self-restraint, knowledge, and skill from leaders – starting with CEOs.
Stress-testing communications for different communities
Any CEO communications will receive extensive and ‘not-always-faithful’ echoes among potentially polarized receivers.
As a result, CEOs and organizations must invest ever more attention in ensuring that their communications are as simple as possible, yet as complex as necessary, to reduce the possibility of misunderstanding and misrepresentation.
This is particularly true for written communication. One cannot control the speed nor under which conditions written messages will be consumed. CEOs and organizations should assume they will be read quickly and with incomplete attention.
Communications should also be stress-tested for reactions that may be hostile to the message or the messenger. Having a diverse team discussing the topic is a good way to reduce the likelihood that we miss a potential backlash from an important stakeholder. Diversity helps reduce blind spots.
Another approach is to put yourself in their shoes for a moment. Go through your list of key stakeholders methodically: how likely are they to understand and react to this message? Is there another framing, or another way of saying things that might be more palatable for them?
Achieving change in the post-truth era
Leaders are paid to make happen what otherwise would not have happened, and to do so in a way that leaves the organizational, social, and ecological system stronger than it was before.
That has always been hard to do. It has always required CEOs to make decisions and take positions that are not ideal for certain stakeholders. The inevitability of inflicting disappointments has become ever more challenging in our age of outrage. The post-truth era and decreasing trust in establishment leaders has been magnified by today’s omnipresent media, and the speed of information.
The approaches discussed above can help. In addition, CEOs and organizations can create more wiggle-room. They should ensure they make positive efforts to develop goodwill, to build some credit on which to draw when they ask for grace on more negative outcomes.
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