Being a political leader in a democracy is an inherently tenuous role – elections are won or lost, mandates secured or whittled away. In business, leadership has required an ongoing effort to maintain support; but in recent decades, CEOs have started to experience a similar level of volatility that their political counterparts have long faced. Between 2000 and 2010, the average tenure of a Fortune 500 CEO fell from 9.5 years to 3.5 years – a period of time almost mirroring a single American presidential term. In 2011, nearly 15% of the world’s top CEOs left their jobs, with the turnover rate being highest among the 250 largest companies.
These trends need to be located within the wider context of the politicization of business, which means many companies are now often under the same harsh and unforgiving lens as political candidates. Brands are now public property, with assertive consumers feeling entitled to deem what businesses can and cannot do. As debates over executive remuneration and corporate taxes show, it’s not enough for something to be simply legal or commercially correct: it must also be judged as moral and fair.
Underpinning this shift is a greater awareness of the power of business. In developed economies, the lines between public and private sectors have blurred, with businesses moving further into the traditional domains of government, from running utilities and transport to involvement in healthcare and education. In developing markets, companies can often provide the know-how that the state cannot. Gillian Tett, a columnist for the Financial Times, has argued that companies are increasingly expected to have a broader view on issues impacting society, in part due to awareness of their scale. McKinsey & Co. sees this as part of a broader theme – the emergence and rise of the market state, where our conventional notions of “public” and ”private” become less relevant and meaningful.
Tied to the theme of politicization of business, corporate and political leaders face the same challenging media dynamics, including the constant scrutiny and default skepticism toward motives, as well as outlets that not only report the news but aggressively lobby on positions. As media channels of all kinds try to gain attention in the face of hyper-competition and splintering audiences, the emphasis in coverage is often on the extreme and the partisan rather than the nuanced and the balanced. Twitter and other social media platforms mean leaders now endure, in political commentator Matthew D’Ancona’s phrase, “the permanent acupuncture of criticism.”
Coverage of business is then infused with a greater emotionality. Mirroring what can happen to politicians, business leaders often endure personal attacks for their perceived ethics and lifestyle choices. Looking wider, companies can find themselves drawn into, in the sociologist Stanley Cohen’s phrase, “moral panics”– short, intense bursts of anger directed at institutions that are seen to be infringing on societal values or interests – for example, over issues such as data privacy, inappropriate marketing aimed at children, labor practices, or supply chain quality.
In this environment, language and symbols become increasingly dangerous for business – look at the phrase “banker’s bonuses” becoming voter shorthand for deeper misgivings about corporate activity, or executive buses ferrying workers out of San Francisco to Silicon Valley emerging as a proxy for wider anxieties about the technology sector’s impact on inequality. As there is often a tension between leaders who pride themselves on being rational and evidence-led, and consumers driven at times by feeling, belief, or ideology, businesses sometimes struggle to understand this new mood – a tension that Chrystia Freeland has argued can afflict political leaders too.
Both political and business leaders have to weigh the tension between the identity of the modern consumer or voter and the identity of the institution. As the journalist Paul Mason has argued, drawing on recent thinking in anthropology, people operate in a society where individual identity can be a fluid construct – for example, we exhibit a different persona online than we perhaps do in the office. In contrast, organizations of all kinds feel pushed to promote one cohesive self – and cowed by media aggression, worry about being accused of “message indiscipline” or showing a range of views. Yet, to show authenticity, leaders of all kinds have to embrace a more participatory, and flexible approach to both communications and engagement – and to balance the need to show a compelling vision with the desire for space to debate, critique, and create.
In response to these dynamics, business leaders and corporate communicators must guarantee that consumers and stakeholders see their companies’ values that inform initiatives, actions, and communications. This is not about a laundry list of meaningless words, but rather ensuring consumers and stakeholders recognize the principles driving corporate activity. Successful political leaders connect with voters’ values by proving that their policies have a clear definition that enables the electorate to easily understand their vision and ideas. As expectations of “good” corporate behavior increase, the need to champion a values-based agenda in business becomes more paramount.
Graeme Trayner is a Vice President at Greenberg Quinlan Rosner, and leads our global corporate practice. He has advised companies around the world on how to build and manage reputation. His recent session on activism and the corporate response has been shortlisted for two Market Research Society conference awards.
GQR Corporate Perspective is a series providing insights on the application of campaign thinking to commercial challenges, and views on the convergence of politics and business.
If you would like to receive emails for the GQR Corporate Perspective series, sign up here.