When the business landscape is as unsettled as it is right now, all eyes turn to the CEO.
Employees, boards of directors, investors, customers, suppliers, regulators, and other important stakeholders are increasingly looking to CEOs for more context and perspective on the risks and opportunities associated with disruptive trends—geopolitics, generative AI, shifting workplace dynamics, and dozens more.
Stakeholders’ influence has only grown over the years as business operations and value chains span more and more geographies. Communities, societies, and the media have put corporate players’ actions in the spotlight. And stakeholders now have greater access to digital platforms, through which they can instantly spark and influence public debate.
Organizations generally have large corporate communications, investor relations, and marketing functions to help tell their stories. But it’s the CEO’s words and deeds that carry the most weight. Research shows that roughly six in ten people say a CEO’s actions affect their opinion of a company.1
For now, CEOs have the benefit of relatively high levels of trust with stakeholders compared with other societal leaders, according to the Edelman Trust Barometer.2 But the pressure remains on them to be transparent and ever-present. Stakeholders want to hear a singular narrative from CEOs about what’s happening on the ground and how the company intends to prepare, adapt, navigate, and otherwise lead through change.
Our work with leaders in global organizations, hundreds of interviews with highly successful CEOs, and ongoing research on the topic of leadership communications suggest there are three actions that only the CEO can take to deliver on these expectations.
To build deeper relationships with stakeholders, shape the organization’s image, and enhance the business’s reputation, CEOs must do the following:
- Set the tone for the organization; serve as storyteller-in-chief while empowering others to do the same.
- Articulate and champion the organization’s culture, purpose, and values.
- Call the deciding play in critical moments; speak up for and act on behalf of the organization on the issues that matter most.
To do all three successfully, CEOs will need to go on offense and proactively invest in dynamic, collaborative partnerships with a broad set of stakeholders. In this way, they can harness the power of their platform and catalyze growth amid disruption.
Set the tone for the organization
Issues related to communications and stakeholder engagement have moved steadily—and then suddenly—to the top of the CEO’s agenda. For evidence, consider the now widely anticipated annual shareholder letters from Jamie Dimon, Larry Fink, and other high-profile corporate leaders. These missives garner media attention and can often shape industry conversations; they are also important for conveying a company’s strategic intent and culture.
Other CEOs must similarly determine how they will incorporate their communications strategy into their overall leadership model. Their active (or inactive) engagement with stakeholders will set the tone for the rest of the organization (see sidebar “Telling the right story at the right time”). McKinsey research has shown that the world’s highest-performing CEOs spend, on average, 30 percent of their time with external stakeholders, including customers, investors, regulators, and local communities.3
The actual time spent will vary based on company, industry, the CEO’s tenure, and even regional context. Brad Smith, a former CEO of Intuit, adopted a targeted approach to stakeholder engagement, devoting 20 percent of his time to the task. By contrast, Peter Voser, a former CEO of Shell, envisioned himself as the primary ambassador for the organization and spent about 50 percent of his time building relationships with important stakeholders. And the cofounder of Netflix, Reed Hastings, allocated a third of his time to government relations, public relations, and shareholder relations, given discussions in that industry about regulation of streaming services. When combined with his customer interactions, Hastings’s commitment to stakeholder management ultimately grew to make up 50 percent of his schedule.4
Regardless of the time spent, CEOs who are deliberate about their approach to stakeholder engagement can not only boost their own personal effectiveness but also create more accountability and cohesion across the senior management team. Such intentionality can help to reveal those areas in which the CEO needs to be directly involved and areas in which the CEO can empower others in the C-suite to manage critical relationships. This approach can be important for succession planning, as well.
In the area of investor relations, for instance, the CEO typically engages with only the top 15 to 20 analysts. To prepare for those targeted conversations, the CEO often partners closely with the CFO, leveraging their deep expertise and relationships. In turn, the CFO may lean on the CEO for guidance on dealing with the public spotlight—an area of need for many finance chiefs, according to McKinsey’s ongoing research. “The holy grail is to have 12 people on a management team who are equal voices and equal storytellers,” says Richard Davis, the former CEO of US Bancorp. “That means they can speak for the team and for the company, not just for themselves.”5
Articulate and champion the organization’s culture and values
An organization’s culture underpins its ability to communicate effectively with critical stakeholders. Without a strong corporate culture—that is, aimed at building long-term trust and accountability—employees and leaders at all levels of the organization may not share information, learn from failures, adopt new behaviors and mindsets, or develop critical skills and capabilities.
The highest-performing CEOs understand this and take steps to articulate and role model the organization’s culture and values. They serve as both culture champions and culture ambassadors: They use all channels at their disposal to foster deep dialogues, convey their organization’s values, create more meaning at work, and build bonds at all levels of the organization. They also understand that their organization’s culture—and their role in shaping it—can pique the interest of those outside the organization, both positively and negatively.
Culture champions
“Our culture is at the root of every decision we make at Microsoft,” says CEO Satya Nadella, “and creating this culture is my chief job as CEO.”6 With that in mind, Nadella has personally invested time to mobilize employees, help create clarity of purpose, and shift the culture from “know-it-alls” to “learn-it-alls.”7 This focus helped ignite a cultural transformation at Microsoft and better performance across the business. Nadella has also established a “culture cabinet” of 17 change leaders to gather input on the desired behaviors and mindsets at Microsoft and reinforce any shifts in both areas.
Meanwhile, the CEO of a media company that was undergoing a transformation used the company’s quarterly earnings calls as a waypoint to build a sense of pride among employees about their outcomes and the organization’s performance. The quarterly calls were a trigger for the CEO to schedule one-to-one and one-to-many conversations—for instance, all-employee town hall meetings, debriefs with the top team, media interviews, analyst sessions, and planned visits with select customer—to put the organization’s transformation in context and provide a view on the company’s path forward. By doing so, the CEO was able to turn what would have been a singular event into a sustained dialogue with a range of stakeholders.
CEOs can serve as champions, but they can’t uphold values and culture alone; they need to activate the top team to help propagate key messages and meet employees where they are. James Gorman, chairman emeritus at Morgan Stanley, enlisted his president and chief legal officer to do a “world tour and only speak about culture.”8 This created a culture of ownership, whereby Gorman’s top team and employees “weren’t tenants; they were now landlords.” Creating such a mindset shift can be pivotal: Research suggests that people are up to five times more motivated to execute initiatives that they’ve had a hand in creating.9
Culture ambassadors
The CEO also has a unique opportunity to capture the imagination of external stakeholders, including prospective employees who want to be part of the organization’s mission. Indeed, the CEO can effectively shape the culture for new employees—before they even walk in the door.
Research shows many job applicants seeking to learn more about a company start by visiting the company’s main website, but the very next click is typically to the CEO’s LinkedIn page.10 What’s more, CEO engagement overall on LinkedIn has increased more than 20 percent in recent years, while followership has increased by nearly 40 percent.11 These and other vehicles for direct communication can help CEOs move beyond short-term, transactional interactions and create lasting, meaningful experiences with their audiences.
It’s important to note that while a CEO’s profile can attract some stakeholders, it may alienate others. But, as Alex Karp, CEO of Palantir, has said, “If you have a position that does not cost you ever to lose an employee, it’s not a position.”12
Call the deciding play in critical moments
We are living in a state of permacrisis, where CEOs must quickly determine when and how to engage on a variety of complex social issues. Their actions and decisions are further complicated by the advent of gen AI and other technologies and social media platforms that have served to increase the amount of disinformation and misinformation available to the public.13 Recent external research shows that eight in ten communications executives worry about the impact of disinformation on their business, and less than half feel prepared to tackle these risks.14
In this environment, CEOs and organizations must stay on top (or even ahead) of the news cycle. And as the team’s captain, the CEO must lead the process of determining the level of severity or impact of current events, mobilizing the team, and setting a response in motion.
Survey the field
“How relevant is this topic to our mission and values?”—that’s a critical question for CEOs trying to determine whether and how best to engage on an issue. As Priscilla Sims Brown, president and CEO of Amalgamated Bank, explains: “We are a bank first. When we get involved in issues . . . we stay within the swim lane of a bank. When we approached the gun issue, for example, we did it from the perspective of, ‘What are banks doing to finance illicit behavior?’”15
CEOs and their teams need to establish clear guiding principles as they consider the relevance and potential impact of their involvement in various issues—that is, striving for consistency in messaging, committing to actions that are aligned with company values, and taking the long-term view (see sidebar “Speaking from a position of strength: Four guiding principles”). Netflix’s Hastings also points to the importance of the CEO bringing the board along: “Board members need to know the market, the opportunity, the threats, the internal players, the external [factors].” All of it.
Mobilize the team
The CEO is the captain, but crisis management is a team sport. In periods of acute crisis, the CEO must rally the team, including the chief communications or corporate affairs officer, chief human resources officer, chief risk officer, and chief legal officer, among others, to serve as thought partners and strategic advisers. But ongoing planning, pressure testing of scenarios, and communication are also critical for meeting the moment, whenever it arrives. When GM was dealing with an urgent recall on ignition switches in 2014, chair and CEO Mary Barra met daily with her team to address the issue and, longer term, use it as a catalyst for cultural transformation. Their guiding principles were clear: Be transparent, do everything possible to protect customers, and make sure that nothing like this issue ever happens again.16
Call the play
Once all have agreed on the plan, it’s incumbent upon the CEO to take a position on behalf of the organization—one that is well articulated and well supported with facts and anecdotes. There must be some follow-up, as well, to demonstrate accountability and maintain the CEO’s credibility. Some CEOs have used earnings calls, for instance, or organizational milestones or event anniversaries to revisit their remarks and provide evidence of impact in the intervening days, months, or years. They may reiterate the organization’s stance on or commitment to an issue. Looking back on Delta Air Lines’ decision to speak out against a law in Georgia that restricted voting access, CEO Ed Bastian says, “Did it change anything? No, the law is still on the books. But we showed that we had a voice that mattered, and consumers give business to companies that have and practice values.”17
The CEO’s actions (or inactions) permeate the organization—and, increasingly, are traveling outside its walls. Stakeholders’ expectations for leadership are changing, and as we’ve outlined here, there are clear elements of communication and engagement that only the CEO can lead on—that is, setting the conditions for communication excellence across the organization, building and embodying corporate culture and values, and calling the play in deciding moments. By focusing on these areas and building a strong communications strategy and platform, CEOs can not only forge critical connections with a range of internal and external stakeholders but also lead their organizations into the next era of growth.
