Changing expectations of leaders – stepping up or stepping out?
By Andrew Whyte, Echo Research Advisory Board Member
The other day, like many others, I was listening to broadcast coverage of the Government’s change of policy on the proposed abolition of the 45% tax rate. Among reactions from the usual range of political and economic commentators, I heard Richard Walker, Chief Executive of retailer Iceland. His comments were considered and measured, welcoming the change but at the same time saying that more help was needed for the most vulnerable people facing the impact of rising prices. Hearing him speak out like this took me back to my conversation with Johnson Matthey’s Group Corporate Affairs Director, Barney Wyld, for the recent Echo Straight Talking Podcast. Barney and I looked at the changing expectations of organisations and their leaders to comment on social issues and the associated emergence of the notion of the “activist CEO”.
Covering a wide range of issues we had highlighted Richard’s earlier comments on the impact of the cost-of-living crisis on Iceland’s customers as one example of this phenomenon. Barney’s insights on the challenges, opportunities, and risks of speaking out are thoughtful and thought provoking in equal measure. His analysis of the principles companies should follow when deciding whether to speak out provide helpful guidance and a checklist for the finely balanced judgements anyone grappling with these knotty issues has to make.
Richard’s interventions seem to me to be entirely consistent with the principles we explored. There was a clear rationale for him as CEO of Iceland to speak out on an issue that was impacting directly on his customers, and clearly rooted in first-hand evidence. His comments were also entirely consistent with Iceland’s values and practice, such as taking direct steps to support customers through the Food Club free credit initiative and the decision to cut the minimum order threshold for free delivery.
In Harvard Business Review’s article by Professor Paul Argenti, When should your company speak up about a social issue, published a few years ago, the decision-making framework to guide a firm’s approach echoes our podcast:
Professor Argenti suggests a rigorous approach to planning and preparing in advance for commenting on social issues. This reflects classic best practice in issue management: setting up a dedicated multi-disciplinary team charged with horizon scanning to spot potential issues, identifying the key stakeholders on any issue and building insight into their views and preparing a playbook for response in a variety of scenarios.
But something here feels different from ’traditional’ issue management. Usually (although not always) issue management has focused on things which are endogenous, inherent in an organisation’s operations or its operating environment, like regulatory or legislative change. But in this context, the challenge is different and more complex: the issues are exogenous, arising not from things an organisation does itself or its immediate environment but from much wider shifts in social perceptions and attitudes about things which – at first sight at least – seem to be outside a company’s core business and ambit. While the principles of issue management remain the same and need to be applied with the same rigour and energy, the range and complexity of the challenges organisations will face and have to manage is increasing markedly, maybe even exponentially.
As communications professionals we have to adapt our professional practice quickly, widening our horizon scanning, deepening our audience insight, sharpening our antennae and constantly assessing the impact of any interventions. At the same time, it gives us an opportunity to demonstrate our value, how the disciplines and specialist expertise we have honed are increasingly vital to an organisation’s long-term reputation, strategy and success.