Published on February 17, 2014
Updates from the World Economic Forum 2014
In 2014, The Holmes Report, in association with MSLGROUP, created a microsite called Engaging Davos (davos.holmesreport.com) that included real-time editorial content written by Arun Sudhaman, editor-in-chief, and partner content provided by MSLGROUP. We are pleased to provide you a reprint of much of the content that was posted. About Holmes Report The Holmes Group is dedicated to proving and improving the value of public relations, by providing insight, knowledge and recognition to public relations professionals. The Holmes Group was founded in 2000 by Paul Holmes, Editor-in-Chief and CEO, who has more than two decades of experience writing about and evaluating the public relations business and consulting with both public relations firms and their clients. The Holmes Group delivers against its mission by providing the most sophisticated reporting and analysis on public relations trends and issues. www.holmesreport.com @holmesreport www.facebook.com/holmesreport About MSLGROUP MSLGROUP is Publicis Groupe’s strategic communications and engagement group, advisors in all aspects of communication strategy: from consumer PR to financial communications, from public affairs to reputation management, and from crisis communications to experiential marketing and events. With more than 3,500 people across close to 100 offices worldwide, MSLGROUP is also the largest PR network in Europe, fast-growing China, and India. The group offers strategic planning and counsel, insight-guided thinking and big, compelling ideas – followed by thorough execution. www.mslgroup.com/@msl_group www.facebook.com/MSLGROUP @msl_group
Engaging Davos: The PR perspective By Arun Sudhaman Like no other event, the annual World Economic Forum in Davos provides us with a compelling reminder of how the language of public relations has well and truly penetrated the boardroom. The importance of trust, the requirement for authenticity, the need to marry profit and purpose — these are all issues that effectively form core elements of the Davos agenda. This year, for example, it is income equality that appears set to concentrate the minds of the superelite, who have identified it as the most pressing threat to the global economy. As WEF founder Klaus Schwab argued last week, uninclusive growth is not sustainable. The title of this year’s Forum, meanwhile, is “The Reshaping of the World: Consequences for Society, Politics and Business.” It is the kind of phrase that will ring true with public relations people, or at least those who are aware of the need to balance multiple stakeholder expectations, rather than focusing on profit to the detriment of all else. 3
So it is hardly surprising that Davos is now an increasingly necessary stop on the global treadmill for senior comms heads and global agency CEOs. A couple of years ago, we analysed this trend in some detail, asking whether Davos simply represents an exercise in spin—an attempt to deflect criticism and deter regulation during the one week of the year when business leaders profess to care about anything other than profit. That kind of argument is not an uncommon one, but is sharply contested by the public relations people who make the Davos pilgrimage. If nothing else, the WEF affords them an opportunity to position their work as central to corporate behavior, rather than as another trivial marketing tactic. In that context, the Forum’s agenda is not the only draw; the opportunity to build relationships with business and political leaders can only help the industry’s efforts to build stronger boardroom credibility. To investigate all of this and more, I will be reporting live from Davos this week for the Holmes Report, in conjunction with MSLGROUP. We’re hopeful you find the coverage illuminating and helpful. As always, we look forward to your participation and insight. 4
The comms world at Davos By Arun Sudhaman So which PR industry bigwigs have actually made the pilgrimage up the magic mountain this year? Thanks to an excellent attendee list from Quartz, I did a little research. The results are below, and reveal the preponderance of chief communications officers and corporate relations directors. That is unsurprising, given the close links between such executives and the CEOs that they work for. In terms of companies, the usual suspects are represented along with many major companies from emerging markets. 5
The agency world, meanwhile, is certainly better represented than it once was — drawn, no doubt, by the plentiful networking opportunities and, for some, actual participation in the Forum agenda. Unfortunately, though, in keeping with one of the criticisms of this year’s Davos turnout, agency representation is dominated by men. Thankfully, there are a few more women among the in-house ranks, although still not enough. Here’s my working list. Do let me know if I’ve left you off. In-house Clyde C. Tuggle Senior Vice-President, Global Public Affairs and Communications, The Coca-Cola Company Carlos Lopez Blanco Global Head, Public and Corporate Affairs, Telefonica SA Enrico Manaresi Global Director, Communications and Media Relations, Technogym SPA Simon Sproule Director, Marketing and Communications, Renault-Nissan Alliance Mette Fossum Beyer Director, Global Communications, Government and Corporate Social Responsibility, The Reitan Group Mike Davies Director, Global Communications, PwC John Murray Group Communications Director, Prudential Plc Håkon Mageli Executive Vice-President, Corporate Communications and Corporate Affairs, Orkla ASA Manuel Kohnstamm Senior Vice-President and Chief Policy Officer, Liber 6 Michael Prescott Director, Corporate Affairs, BT Group Plc Karin Schlautmann Executive Vice-President, Corporate Communications, Public Affairs and Marketing and Member of the Group Management Committee, Bertelsmann SE & Co. KGaA Pradipta Bagchi Vice-President and Global Head, Communications, Tata Consultancy Services Ltd Andrey Shtorkh Member of the Executive Board, Director for Strategic Communications, Renova Group Asif Saleh Senior Director, Strategy, Communications and Capacity, BRAC Libby Archell Chief Communications Officer, Alcoa Inc. Dan Bartlett Executive Vice-President, Corporate Affairs, Wal-Mart Stores Inc. William Sheedy Global Executive, Corporate Strategy, M&A, Government Relations, Visa Inc. Senior Vice-President and Chief Sustainability, Investor Relations and Corporate Communication Officer, IHS
Dina H. Powell President, Goldman Sachs Foundation; Global Head, Corporate Engagement, Goldman Sachs Morten Albaek Group Senior Vice-President, Global MarCom and Corporate Relations, Vestas Wind Systems A/S Catherine May Director, Corporate Affairs, SABMiller Plc Lise Kingo Executive Vice-President, Corporate Relations, Novo Nordisk A/S Ian Wright Corporate Relations Director, Diageo Plc Niklas Gustavsson Executive Vice-President, Corporate Public and Environmental Affairs, AB Volvo Paul de Lara Head of PR, Europe, Infosys Elinor Steele Vice President, Global Communications & Women’s Initiatives, Tupperware AGENCY Christopher Graves Global Chief Executive Officer, Ogilvy Public Relations Worldwide Richard W. Edelman President and Chief Executive Officer, Edelman Michael Stewart President and Chief Executive Officer, Europe and CIS, Edelman Jack B. Dunn President and Chief Executive Officer, FTI Consulting Inc. Mark Malloch-Brown Chairman, Europe, Middle East and Africa, FTI Consulting Barri Rafferty Senior Partner and Chief Executive Officer, North America, Ketchum Inc. Olivier Fleurot CEO, MSLGROUP Jack Modzelewski President, Americas, FleishmanHillard Malcolm Gooderham Managing partner, TLG Kathy Bloomgarden CEO, Ruder Finn Margery Kraus Founder and CEO, APCO Rob Flaherty CEO, Ketchum 7
Nissan’s Sproule: “Reviving the auto industry reputation” Simon Sproule, director of marketing and communications at the Renault-Nissan Alliance, discusses how technology has helped the automotive industry rebuild a battered reputation. 8
Comments from Simon Sproule made on video to Arun Sudhaman What we are seeing with the auto industry today, is an industry that is getting ahead of reputational issues and starting to set its own agenda. In the past, the industry has been a relatively soft or easy target for things like legislation, emissions and so forth. And if we look at where we are now as an industry, technology and the three technology pillars of EV, connected, and autonomous, just in the last one year or two, have really risen to public consciousness in a way that’s starting to get people to see the auto industry as a powerful agent for positive change. And we are coming up with mobility solutions, as opposed to just producing cars and trucks. So what we are seeing now is that the legislatives, governments, consumers, other companies, and Google with its investments in autonomous vehicles, are coming to the auto industry because we have got a product that is going to still be very relevant in the short and long term. And what’s interesting is that the technology is driving mobility in very different ways. So I think it’s a great time for the auto industry. There is going to be basic growth in our business. With 81 million units this year, we should be at 100 million units globally by 2020, which will create employment and wealth in emerging markets where we put manufacturing facilities. But in addition to that, we are coming up with very real and very pragmatic solutions to some very serious mobility challenges. So it’s a really exciting time to be in auto business. 9
Mahindra president: “You can’t delegate your reputation” By Arun Sudhaman Rajeev Dubey is president of group HR, corporate services and the aftermarket sector at Mahindra Group, the $16B Indian conglomerate that launched a new corporate brand in 2011 to try and unify its image across various industries. Along the way, Mahindra has garnered a reputation for good corporate behavior, led by high-profile CEO Anand Mahindra. Dubey sat down with the Holmes Report at the World Economic Forum to discuss why reputation is a such a critical element of Mahindra’s business strategy, and how strong leadership is crucial in this regard. He also warned companies of the perils of cutting corners in order to chase short-term gains, noting that they should be prepared to “pay a price” if they want to benefit from a strong long-term reputation. 10
How important is leadership to a company’s reputation? No matter how you define leadership, it’s absolutely critical. The reputation of a company depends on what the company is, what it does, how it communicates what it does, and what it stands for to its constituents. And, in all of these, leadership is absolutely critical, in first deciding who we are, and then making sure that everyone in that organization and the organization as a whole, behaves and lives out what we say we are. And thirdly, in communicating. Whichever way you want to look at it, leadership is absolutely critical. Now, is it sufficient? I’d say no, because you also need processes and systems and metrics to make what we say we are comes alive. So you need something beyond leadership to convert a dream and a vision into reality. But leadership is absolutely necessary. I’ve been in the corporate world now for 39 years. There was a stage when I thought it was processes and systems and metrics that mattered much more and it doesn’t matter what kind of leadership you have. That was, of course, a childish and silly thought that I had. Now, I’m totally clear. With the same processes and systems and metrics, you can have absolutely different cultures and behaviors, depending on what the leadership is. What do you think are the traits of leaders who understand reputation as an important intangible for the company, like you’ve just described? The first is to be aware that this is so. And then to be alive and be clear as to what decisions and what behaviors and what actions determine reputation. Having done that, you walk the talk. Make sure you incentivize others in the organization also. In a lot of companies, it seems like reputation is delegated to the communications department. Communications is just one aspect. That is one part of the food chain. First you have to be clear – who are we? Because that determines business decisions, it determines who we are in everyday life. Then when you’re clear, you have to a do a lot of internal – getting people on board and having a lot of clarity. And then behaving that way, which is where processes and structures and metrics come in. And then, the external communication. So the external communication, in a sequence, comes at the end, and it becomes a loop. 11
How important is a visible CEO? A lot of CEOs are quite low-profile. Your company has a CEO who is very comfortable taking on that public role. I think there are many ways in which a CEO can behave. One is the person who stands up front. We have a CEO who takes the lead in some things, but he will empower much more than other CEOs. It’s a choice. I think our CEO comes up front when it comes to defining the philosophy, when it comes to defining the culture, defining the brand. Then he delegates a huge amount. In fact if you ask me, two very important pillars of the Mahindra culture—one is empowerment and the second is respect for people. And then it is about sustained business outperformance while showing extreme care for all stakeholders, whether it is customers, suppliers, our own employees, even society. But doing all this with clear focus on what our core values are. Whatever we do nurtures and strengthens the core values of the group. In some companies, the CEO is only there for two or three years. Surely that must make it difficult to have that link between CEO and reputation? One could say that there are some organizations that already have a very strong and powerful brand. The importance of the CEO in that situation, versus a company where you are creating the brand — there 12
could be a difference. Different CEOs have different styles. I don’t think there’s any style which is best. More than the style, it’s the substance of what the CEO does. YOu’ve talked a lot about values, vision and reputation. Do you think that mindset is put under pressure by the focus on maximizing profit and on quarterly reporting? It used to be thought that the two are in conflict. But I think increasingly now, while in the immediate short term there can sometimes be conflict, I don’t think you’ll find anyone who will say that in the medium or long term, there is a conflict between good solid business performance and governance and values. The two support each other. If I had a choice, I would certainly sacrifice short term gains for the longer term benefits which values and reputation bring. I have been observing this very closely. Losing out on your values, your reputation, and the brand has such severe repercussions on your sustained business outcome. There is no question. What kinds of repercussions? So for example, if one value is quality. If you have any problems with quality, even if it means recalling your product or admitting there’s a problem, you have huge issues. Often times in India we have pressure to make shortcuts, or to use different means of persuading government agencies who have discretionary power. If you succumb to that once, then it becomes very difficult to resist it in the future. There are some companies and groups who have taken a stand. Once you’ve taken a stand then the other side knows they can’t expect this behavior from you and then they don’t badger you too much. But you have to pay a price, and you have be prepared to pay a price, is the view I would take. Some companies, caught in corruption scandals, would say that’s just the price of doing business in a market. You have to behave as the environment demands. Well that’s one view. There is another view which says we can do good business without necessarily resorting to things that are not acceptable to us, to our value system. And we’re going to stick to our value system, and still we’ll produce good results over the longer term. 13
Randi Zuckerberg: “Davos should look to Silicon Valley for inspiration” Randi Zuckerberg discusses why business and political leaders need to adopt a more disruptive Silicon Valley mindset if they hope to genuinely usher in change. The former Facebook executive, who now heads Zuckerberg Media, made the comments in an interview with the Holmes Report at the World Economic Forum in Davos, adding that the increasing acceptance of new technology companies at the event has been “astounding.” Comments from Randi Zuckerberg made on video to Arun Sudhaman This is my fifth year coming to the World Economic Forum at Davos. It’s been actually quite astounding to see the shift and how people have viewed the tech industry and the role of tech leaders here at the forum. In my first year, I came on behalf of Facebook, which was already 14
starting to grow very rapidly and expand. So we had some really powerful meetings with world leaders, but the tone of the meetings was definitely, “What is this new thing that’s happening?” “How can we understand it?” Now five years later, you walk around Davos and tech is so central to everything that’s going on here. The World Economic Forum has an official tech pioneers program. Yesterday, I attended a hackathon for Walmart and Pepsi on gathering minds from different industries and how they can rethink the future of their business. And you see all of the best evening events are thrown by the tech companies, so it is definitely a very shifting tide. The global leaders can really learn a lot from the tech industry and how they think about their countries and their futures moving forward. The ability to take risks, to think innovatively and disruptively, and to fail fast is something that a lot of businesses could really learn from. It’s difficult to take risks when you are a big corporate business with many employees and shareholders, but you cannot afford to not take risks because there are always other companies nipping at your heels. Especially in this global economy. It is now easier than ever for a competitor in another country. That being said, I do understand the challenges of political leaders. Sometimes it’s not easy to just move fast and disrupt things because you also have to take into account all of the feedback of your constituents. In the tech industry it’s very easy to just say, “Oh! Let’s try something!” Whereas when you are leading a country, there are very real concerns and problems that need to be taken into account. There are unique challenges. But if global leaders and business leaders look at tech industries for some of that momentum, the fast speed of innovation, their constant desire to be moving forward rather than resting on their laurels and letting their competitors swoop in, there is a lot that we can do around the global economy. In tech and business alike, there needs to be a focus on empowering and educating women. That’s something that all businesses have in common as a real, crucial need for the future. In tech, we desperately need to be encouraging more women to learn to code and go into technology entrepreneurship. Similarly, when you look at the fact that only 15% of the delegates here are women, it’s also very crucial in all areas of the world to be providing education, mentorship and guidance to young women. 15
Arianna Huffington: “Business can be a force for good” Arianna Huffington believes that business must be a force for good if it hopes to improve public trust. Speaking to the Holmes Report at the 2014 World Economic Forum in Davos, the Huffington Post chief also notes that the media should do a better job of holding the corporate world to account. Comments from Arianna Huffington made on video to Arun Sudhaman How business is doing is relevant to how government is doing. And because government is doing so badly in terms of the public’s trust, business is looking better. Even though people are still angry at what happened during the financial crisis, a lot of businesses are actually 16
doing good things. Not just social responsibility but looking again at how to integrate people and planet, and not just profit, into business decisions. There is a long way to go, but certain good things have happened. I moderated a panel today in which people from the CEO of Marriot to Sherry Blair—who is not a business woman but she started her own foundation to help women entrepreneurs—participated. You see also in the ideas of wellness and healthcare, a lot of businesses bringing a better way to take care of their employees. 35% of American corporations have integrated some form of mindfulness program. So there are steps being taken, and business has a great opportunity to be a force for good and an agent of solutions. Because when you look to government for solutions, it’s often not a good outcome. I think the media needs to do a better job both in holding business to account in terms of things that have happened that are against public interest, and also in putting a spotlight on the good things that business is doing and what is working. Because a lot of what is working, if you put a spotlight on it, can be replicated and become even more significant, in terms of solving problems. 17
Tech companies should boost data transparency, says Salesforce CEO By Arun Sudhaman Technology companies should embrace greater transparency if they want to stop being viewed as enemies of privacy, said Salesforce CEO Marc Benioff today at the World Economic Forum in Davos. Benioff made the comments at a Microsoft event which featured new research from Penn Schoen Berland into how people around the world view personal technology. The study, overseen by Microsoft advertising and strategy VP Mark Penn, polled 10,000 people in 10 countries, revealing that most see technology as a positive force for innovation, economic growth and education. The big negative, as Penn admits, is privacy. In the wake of numerous revelations about snooping and surveillance, 47% said privacy was the aspect of life most negatively impacted by technology, ahead of 18
personal safety/security (23%). In addition, developed countries are less willing to trade privacy for enhanced national security. Most developing countries are split on this issue; although in India, 80% believe it makes sense to give up some privacy to protect national security. The findings prompted Benioff to call on consumer technology companies to enable users to know “everything” about how their data is handled. “Do you know where your consumer email is?” asked Benioff. “These systems are set up in a way where you can’t see.” “Transparency is, fundamentally, the only way we are going to rebuild trust,” added Benioff. Fellow panelist Maurice Lèvy, the Publicis Groupe CEO, noted that consumer concerns over privacy had to be taken seriously, particularly in Europe where they are most pronounced. Lèvy pointed out that European attitudes are often rooted in the experiences that many of the region’s countries have had with totalitarian regimes. “It’s something which is extremely important in those countries and you have to understand those issues.” SAP CEO Bill McDermott used analytics to illustrate how technology companies can help enable greater transparency. As an example, he cited Turkey, where tech tools have brought a new level of quality and feedback into the education system. While Lèvy noted that the “American dream has become a Silicon Valley dream,” former US Treasury Secretary Lawrence Summers warned that stronger leadership is required to help ease the “difficult adjustment period” caused by technological change. Summers said that the technological revolution recalled the industrial revolution, but noted that a similar level of leadership was lacking. “We do not yet have the Gladstone, the Teddy Roosevelt or the Bismarck of the technological era.” Asked as to the kind of policies that would help ease technological disruption, Summers offered an expansive take: “Some combination of harnessing this technology to make public education far more efficacious than it is today. Some means of taxation that achieves a level playing field with less interference and more incentives. Some efficacious and affordable apparatus for providing broader social protection at a no more prohibitive cost than we have today.” 19
HSBC comms head: “We need to be more careful about reputation issues” HSBC co-head of group communications Pierre Goad discusses the banking industry’s response to its poor reputation, noting that some banks are tackling issues much better than others. Speaking to the Holmes Report in Davos, Goad also confronts the “conflict” at the heart of the World Economic Forum, where the general public is excluded from discussions about its problems. 20
Comments from Pierre Goad made on video to Arun Sudhaman I think it is very difficult to generalize about all banks. It is a large group of private and publicly owned companies now, spanning many different levels of development with lots of different issues. The major international banks are absolutely aware of the reputation issues that face the industry. We all look at the same surveys; we all get the same feedback from clients, from our own employees, from politicians and from regulators. What has changed is that we are now starting to see a clearer differentiation between different banks and different regulatory regimes. So in our case, and I am biased because I work at HSBC, we are certainly very aware of the reputation of the industry as a whole. But we are also very aware that HSBC within the industry, just to use HSBC as an example, is developing a different reputation than the general reputation. For some of our peers in the industry, it might feel a bit different. But I think what has changed, only over the last 18 months, is a clearer differentiation between the major international banks. I don’t want to talk about competitors, but it’s fairly clear that some people are still struggling with reputational issues, while others have moved forward on managing actively, in a way to try and improve whatever reputational damage was caused during the financial crisis, and are also very conscious that in the future, we all are going to need to be much more careful about reputational issues early on. I think that is really interesting. And it’s not just something that has affected banks; it has affected all corporations. You have seen it with the most recent outburst of the concern over privacy with the tech industry in the US. I don’t think that industry was prepared for the controversy that was caused by Snowden, as an example. They are now playing catch-up. That is where banks were 5 years ago, so in a way, people might look at the banking sector as an example of how you have to deal with very big issues; learn, move forward, and develop better tools for managing reputation, because it’s only going to become a bigger part of what we do in communications. And also, a bigger part of what CEOs do. In the future, in any major organization - NGO, political organization, government agency or a company, the CEO will spend 20-30 % of his or her time dealing with reputation issues, broadly defined. That’s just the way the world is. There is a conflict at the heart of Davos. It’s been there since Davos began 20-30 years ago. I don’t know actually when the first Davos was held, but 21
certainly over the last 20 years, as Davos has become more and more important, and more and more recognized as a gathering place; it has become obvious to everybody who attends, that it’s a bit odd to have everyone in a small Swiss ski resort, having meetings and discussions, closed off from the rest of the world. But at the same time, where else could you do this? I think that this is the conflict at the heart of Davos. If you insist that none of the people who come here speak to each other, that doesn’t sound like the right outcome. If you insist or expect that they do talk to each other every once in a while, which does sound like a good idea, where else would they do it? Davos, by an accident of history, by the drive of the people behind the World Economic Forum who started it so many years ago, has managed to create this space in January, for people to get together, namely business leaders and some politicians as well. The value of Davos is actually in the informal conversations that people can have in the corridors, over a cup of coffee. We all know, working in a corporation or a government, it is actually very hard for people to find time to just have a chat, working with very packed schedules. I get the sense, and I haven’t been here year after year, that people who come here are aware that they are in a privileged position. They are aware that there is a much bigger world outside this small Swiss ski resort. So they are not blind to how it looks to the rest of the world. But at the same time, there is a real value in having people get together and just talk. I have certainly heard from my colleagues here at HSBC, who have been spending time on different panels and have been meeting with clients, that there have been some really good discussions around regulations in banking. As you would expect, because we are a bank, but also around some of the other hot topics of the day, including privacy issues dealing with technology. My colleagues have been having conversations that they might not otherwise have had, and you have to think that is a good thing. 22
Does Davos have a PR problem? By Arun Sudhaman It is not hard to appreciate the irony of Davos. While the world’s superelite bemoans global income inequality during the day, at night it splurges millions of dollars on ultra-exclusive parties. Typically, public relations runs into problems because it focuses too much on communication rather than behavior. At the World Economic Forum, the opposite appears to be true. The sessions, for example, demonstrate a considerable focus on corporate governance and policy, or “walking the talk” in the current parlance. But the world’s business leaders seem oblivious to the message that Davos sends out to the rest of the world. For many outside the Davos bubble, all of the “consensus-building” is viewed as empty posturing, a one-week atonement session for sins committed throughout the rest of the year. Yet, if nothing else, Davos certainly affords a platform for conversation, one that has proved particularly useful for the civil society organizations that have proliferated at the event. Not everyone likes to hear what some of these groups have to say — at least two senior comms heads told me of their disbelief at the views they had encountered. 23
But those views are often more representative of the “real world” than any number of pronouncements from suited and snow-booted bankers. At the very least, the presence of so many NGOs has added a dash of reality to proceedings. At best, those organizations can credibly claim to be shaping, or “reshaping” as the WEF would have it, business behavior for the better. Given the event’s remarkable reach and profile, it can seem a little strange to ask if Davos has a PR problem. The stats from WEF communications director Adrian Monck are nothing if not beguiling: 31,641 online news items, 2,570 TV spots, 906 videos, 195,417 tweets, 68% more coverage than 2013. An army of journalists ensures that there is no lack of coverage. Neither is there a dearth of PR firepower; the comms world has well and truly arrived at Davos, led by corporate affairs heads and agency CEOs. Nevertheless, most of these communications specialists admitted that Davos does have, as Tata Consultancy Services Europe chief comms and marketing officer Abhinav Kumar puts it, a “perception issue.” “At the end of the day Davos is just a platform. The forum itself has no executive power to implement the change discussed in it,” adds Kumar. “That job rests squarely on the shoulders of the actors who are present here and need to go back to their daily operations and walk what they have talked on the snowy slopes.” HSBC global comms co-head Pierre Goad believes that the event can appear “odd” to the outside world, who are effectively excluded from discussions about the world’s future. That dynamic, says Kumar, feeds the “conspiracy theories and urban legends.” “There are no secret meetings setting the agenda or secret decisions being made on issues that concern us,” says Kumar. The fact that Kumar needs to spell this out, though, says a lot. Perhaps a little honesty would help the Davos reputation among the general public. Yes, there is plenty of agenda-setting about the global issues that matter most; but more of the WEF’s appeal stems from the ability to do business and build relationships at the many fringe events that punctuate the week. This is not exactly “reshaping the world,” but it is a crucial element of business, made more palatable by the evident optimism from improving economic sentiment. Ultimately, business leaders would probably benefit from a more credible assessment of why they attend Davos. Now that would really be “walking the talk.” 24
“Decline in print media has helped Davos rise” John Rossant explains why the decline in media influence explains the rise of “thought leadership” events such as the World Economic Forum in Davos. Rossant is chairman of Publicis Live, which has helped produce the WEF for 19 years. Interview conducted by the Holmes Report in Davos. Comments from John Rossant made on video to Arun Sudhaman We have seen over the last few years that thought leadership events like Davos, and Davos is absolutely the world leader and the granddaddy of these kinds of thought leadership events, have become an essential element in the communications toolbox for many companies. And we see a number of reasons as to why. 25
One is over the last 5 or 10 years, we have seen that the decline of the print press, as the real authoritative medium through which companies can do messaging and convey their messages. The print press has been really declining, as we know, in Europe and United States, while it’s a little bit less the case in the rest of the world. There has been a calling into question, of just how authoritative, the voice of, let’s say The New York Times or Le Monde or The Times of London is. I don’t feel they have quite the stature that they did years ago. At the same time, companies and CEOs come to Davos because they know the world press is there, they know that whatever they say here will be instantaneously transmitted to the global web audience. The other thing is with the rise of our digital universe—in which we spend so much of our daily lives in front of the screen and communicate virtually so much of the time—actually meeting and communicating face to face in a physical setting becomes much more important. And there is a premium attached to that kind of communication interchange. So when CEOs come to Davos, here in Davos, Abu Dhabi, Monaco or Aspen, for these kinds of meetings, they meet each other and can transact business in a real-time way. They can look at each other in the eye and there is no substitute for actually, physically being in the same room and next to someone. Tele-presence is great but it’s never going to substitute for actual physical meetings. And another factor is that the big media groups—whether it’s your Times, The Financial Times, The Economist, The Wall Street Journal— are all moving into the thought leadership events space, because they see that as a natural extension of what they do anyway, and that trend will clearly intensify in the coming years. So companies have to understand the event space much better; have to deal with it and come up with good events strategy, and that’s very important. 26
SPONSORED CONTENT The Role of Creative Content in Global Problem-Solving By Renee Wilson, President, North America, MSLGROUP As communicators, we too often fail to think big enough about our craft. The conversation happening this week at the World Economic Forum Annual Meeting in Davos nudges us to think about the potential we hold in our hands. For way too long, the communications function has been dismissed as having only a tactical purpose; its true value has often gone unrecognized and untested. But, in so many areas — from the income equality gap to conflicts around the globe; from the spread of disease to the failure to recognize risk—many of the world’s problems are compounded because of communication failure between people. As communicators, we have the power to build understanding of complicated issues and to root the emotional connections between parties. In this, we have the power to contribute to solving some of the world’s greatest problems and open locked doors to new discoveries. 27
The emphasis on content-centric communications over the course of the last year has spotlighted our craft. Content has provided us communicators with new opportunities for creativity. It has opened a locked box in which we have been trapped for far too long and has unbound us from traditional formats and methods. With such creative opportunities, we communicators have what may be a once-in-a-generation opportunity to reinvent our craft. As we work hard to create new forms for communicating, and before we fall back into new boxes and methods, we need to really think about what we are trying to do; build true understanding, establish conciliatory dialogue, and create the means for people – if not to like each other – then at least to get along through respect and understanding. How can we do that? By simply going back to communication basics. We need to build on the basic ways that people have communicated with each other for thousands of years. Listen We need to tune into the real conversation, understand it, and start there. Look Visual imagery allows us to peer into the eyes of another and evoke emotions from joy to anguish and from empathy to disdain. Easy-to-understand charts help us make sense of complicated ideas and breakthrough science, and infographics give us a quick snapshot of the changing world around us. Learn The easy access to video and audio in today’s content tool kit allows us to learn from the voices of others. Through their powerful stories, we can build deep understanding. 28 Share Giving to another begets a positive return and ignites the modeling of a positive behavior and engagement. Sharing in social media enables others to themselves share, spreading your important communication. Experience To truly enjoy the opportunity or feel the sorrow certain situations create, we need to go there or “there” needs to come to us. Experiential marketing is a communications tool that is underutilized in many circumstances.
Crowdsource The entire world is our brainstorm group. We need to tap the thinking of unlikely and diverse sources. Diversity of people leads to diversity of ideas. By broadening the pool of ideas, better ideas will emerge. Collaborate We need to reach across groups, oceans and generations to build better communications together. It goes without saying that the collaborative process of building, especially among those who are not natural allies, strengthens the kind of solid bonds that stick. Sort the Bits and Bites It seems today as if data is involved in as many of the world’s problems as well as its solutions. Nonetheless, it goes without saying that data allows us to peer into a situation like no other technique. With some intelligence, we can use data in so many ways to build a story, scope out a problem, define a best practice or adjust messaging based on real-time feedback. It goes without saying that the world is a smaller planet. Modern communication has contributed in meaningful ways to bringing people closer and solving challenging problems. On a global stage like the World Economic Forum, we are reminded of our potential to make not only a contribution to the industry, but a relevant contribution to the world. Renee Wilson is President, North America for MSLGROUP and is a strong proponent of content-centric communications 29
SPONSORED CONTENT Leaders At Davos Are Focusing On Trust: Good For WEF By Stan Collender, Qorvis MSLGROUP Understandably and traditionally, the World Economic Forum includes multiple panels on economics, finance and business. That’s hardly a surprise. When the world’s business leaders gather in Davos this week for high-level discussions on everything from “Reshaping the World through Entrepreneurship, Education and Employment” to “The U.S. Economic Outlook,” those topics will dominate the public and private discourse that takes place during those four days. But this year there’s one WEF discussion topic that stands out among all of the others. By the time you read this, five corporate chiefs — including the CEOs of PepsiCo and PricewaterhouseCoopers – who will have participated in a panel discussion called “Doing Business The Right Way,” will all be asking themselves and each other the most important current economic question: “How can business regain trust?” 30
Hopefully this discussion will include at least some recognition that trust will come from convincing more than just investors and analysts that a company is on the right track. Companies will also have to communicate with their customers in a way that will give them enough confidence to happily and continuously buy what’s being sold. This is not just the musing of an executive of a global public relations agency who wants to sell more services to the companies whose CEOs will be in Davos. Opinion polls taken specifically on the subject as well as the only real poll that counts – sales – show that, while corporate earnings and profits have recovered from the recession, the reputations and trust of those same companies’ customers is at least no better (and in many cases far worse) than it was before the downturn began almost seven years ago. The record earnings and profits of the past few years actually are part of the problem. Consumers, who constitute 70% of the economy in the United States and are similarly important elsewhere around the world, typically think that the profits come at their expense. When consumers consider high prices, layoffs, interest rates, product recalls, short billing periods, additional fees for basic services and declines in customer service, not to mention the seemingly constant headlines about their privacy being violated because of the theft of company-collected personal information, this has constantly reinforced their belief that they have been the ones paying for a company’s success and what they see as an executive’s high compensation. Add to this the still-obvious anger from small business and small business supporters at the US government bailouts of Wall Street and the auto industry and you get a virtual witches’ brew of consumer and buyer resentment. As a result there is little trust and corporations in a bigger reputational hole than they’ve been in for some time. Some of the WEF panel discussions are aimed directly at the trust problem. For example, one of the topics —“The Millennial Challenge”— is about the continuing problems (the WEF program calls it a “crisis”) with youth unemployment, one of the primary causes of consumer anger and reasons that sales aren’t growing as fast as expected. Another — “Money and Influence” – will debate another of today’s top reasons for consumer anger, inequality and whether those with the resources to influence policy are exacerbating the problem. As someone who has spent almost his whole career dealing with Wall Street and Washington, DC, I can tell you from very personal experience that the WEF has correctly seen both the present and future by having 31
the concept of regaining trust run through each of its nine specified themes, because the repercussions for companies not dealing with the issue will go far beyond lower-than-expected sales. It will also pose obvious domestic and international political risks as elected officials rush to conduct oversight and impose additional regulatory burdens to appease their constituents’ anger. Unless “money and influence” stops them, there simply will be no political downside to doing this. If you have any doubts about whether this is true, just consider the additional and more stringent regulations imposed on Wall Street firms following the financial crisis. Also consider the literally billions of dollars in fines, settlements, legal fees and lobbying expenses these companies already have and will continue to pay because of it. As the WEF program shows, corporate leaders cannot pretend that their customers’ trust can be taken for granted. Even many of the most esteemed companies and most admired brands have experienced sales and revenue disappointments because of this resentment. Many have already, and others may soon be, in danger of being called before a legislative committee and having its CEO appear on the front page of a major newspaper with her or his hand in the air swearing to tell the truth. And that picture, along with a video taken with a smart phone, will go viral in seconds, be shown repeatedly on Bloomberg and CNBC, and become the subject of a feature on Saturday Night Live and The Daily Show. That means that, as WEF has recognized, gaining back trust will likely be part of every discussion in Davos this week. Stan Collender is executive vice president and national director of financial communications for Qorvis MSLGROUP in Washington, D.C. 32
SPONSORED CONTENT The Millennial Force: Remodeling the Workplace By Olivier Fleurot, CEO, MSLGROUP The Millennial generation will make up around 70% of the global workforce by 2030 — that’s going to mean a lot of changes within the workplace as Baby Boomers and Gen Xers step back, and Millennials move proudly to the fore. It’s apt, then, that this year’s WEF’s overarching theme is “Reshaping the World: Consequences for Society, Politics and Business.” The workplace as we knew it is finding itself rapidly remodeled thanks to new norms like flexible working, powerful digital technologies, and compelling Millennial expectations. Companies that do not reinvent themselves in light of these potent transformational forces will undoubtedly fail. A report on Millennials in the global workforce released by Deloitte at Davos on Tuesday indeed showed that 70% of tomorrow’s future leaders might “reject” what business as traditionally organized has to offer, preferring to work independently through digital means in the future. We can imagine that those companies will thus fail, not necessarily because their business model was flawed, or their market collapsed, but because 33
they didn’t become “social enterprises” – places where young talent feel they can truly influence the future of the business, where they can actively participate to innovation and the creation of new services. Indeed, Deloitte’s study revealed that globally, 78% of Millennials are influenced by how innovative a company is when deciding if they want to work there, but most say their current employer does not greatly encourage them to think creatively — does not actively encourage and reward “intrapreneurship.” The Millennials surveyed believe the biggest barriers to innovation are management attitude (63%), and operational structures and procedures (61%). Those are worrying statistics for any global CEO today. What makes things even more challenging for traditional companies is that, as we discussed in our recent report, “The Future of Employee Re-Engagement,” in the last ten years, young entrepreneurs have successfully —and very visibly—created their own companies, turning their backs on the traditional workplace and demonstrating to others that going in alone with a great idea, is a very real alternative to a 9-5 job today. Conversely, traditional companies have had to start competing with these hot start-ups, as well as tech and emerging Asian giants, to recruit the diverse talents needed to thrive in the digital, global era. It’s clear, then, that the challenge today for any company that wants to survive and indeed thrive, is to reconcile the values of the organization with the expectations and the values of the global Millennial cohort. And this can only be achieved through employee engagement 2.0 —a sort of reset where companies who may have had previously wellestablished programs to engage with employees, are having to define their true purpose, re-understand their (increasingly Millennial) employees, re-engage them, re-focus on their employer brand and re-communicate their company’s story and purpose in a truly compelling—and differentiating—way. Olivier Fleurot is the CEO of MSLGROUP 34
SPONSORED CONTENT The New Expectations of Society By Scott Beaudoin, MSLGROUP Global Director, Corporate & Brand Citizenship/PurPle Successful companies and brands will be the ones that drive more rapid and meaningful change in society and business through co-creation and collaboration with people around a shared purpose. The first decade of the 21st century had a significant impact on what it means to be a good corporate and brand citizen. The intersection of four seismic shifts makes it imperative for global businesses to re-evaluate their citizenship efforts and the way they are communicated. 1 Power to the people People have new sources of power and people believe that only they themselves can come up with innovative solutions to our most pressing problems, not governments or corporations. 2 The erosion of trust People have more information than ever before and people don’t trust organizations. In fact, trust in all organizations, including corporations and governments, is at an all-time low across the world. 35
3 The quest for meaning 4 The opportunity of People are searching for meaningful connections with communities and organizations around a shared purpose, and expect organizations to enable such connections. shared value People are demanding that organizations not only rediscover their social purpose but also put it at the core of how they conduct their business and engage with their stakeholders, to create shared value. Based on these core trends and a desire to better understand how businesses need to re-define their citizenship efforts, specifically though the lens of engagement, MSLGROUP conducted the PurPle Index. This study uses social data, qualitative research waves, and a proprietary algorithm to evaluate and score companies worldwide on criteria including successful storytelling of the company’s purpose, the strength of the company’s collaboration and co-creation; and the level of engagement in social media. The results of the study reiterated the importance of engaging stakeholders in a dialogue and specifically found: • • The top performers consider engagement to be essential in maintaining or changing perceptions about the company. • The citizenship initiatives are global in nature with a number of companies focusing on improving living conditions in Africa and other developing regions. • 36 A majority of the Fortune Global 100 use visual storytelling and direct engagement strategies and tactics to ensure their messaging around citizenship initiatives is amplified. Many organizations do not recognize the importance of engagement. While they have a presence on social platforms, communication is predominantly one way and used to disseminate information.
As the expectations of society continue to evolve, to stay relevant to their stakeholders, businesses today must understand that both purpose and people are critical to their success. They need a shared purpose to inspire people, platforms to organize people, programs to energize people and highly shareable stories to spark participation and action. At MSLGROUP, we refer to this intersection as PurPle (Purpose + People). To build more meaningful engagement with your stakeholders, MSLGROUP encourages businesses to engage your stakeholders in co-creating innovative and sustainable solutions, empower your consumers to act as change agents to create grassroots movement and connecting existing initiatives into a cohesive framework and tell compelling and powerful stories. Scott Beaudoin is the Global Director, Corporate & Brand Citizenship/PurPle for MSLGROUP 37
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