The European Chief Communication Officer Korn Ferry’s 2013-2014 survey of pan-european companies
Introduction European Corporate Communications Officers (CCOs) are taking on expanded and highly strategic roles today, well beyond the traditional responsibilities of media relations, internal communications, issues/crisis management, and executive communications. CCOs across Europe are increasingly involved with corporate advertising and/or branding, corporate reputation and, more recently, social media. In fact, more than half of respondents to the 2013-2014 Korn Ferry European Corporate Communications Officer survey reported that social media strategies have been added to their mandates in the past 24 months, consuming an ever-greater amount of time, resources, and attention. When coupled with similar findings from the 2012 Korn Ferry survey of CCOs in Fortune 500 companies (our third such survey in the U.S.), a stronger embrace of social media emerges as a global trend. This burgeoning channel of communication is being used for much more than monitoring comments posted by others or to respond in times of crisis. Today, CCOs are using social media proactively to position their organizations in a positive light and as a tool of engagement with key audiences such as media, NGOs, policymakers, consumers, and the public at large. The 2013-2014 Korn Ferry European Chief Communications Officer Survey is the Firm’s first-ever exploration of the responsibilities, mandates, concerns, and priorities for pan-European CCOs, tapping into the insights and experiences of CCOs from among the top 300 European companies in ten European countries. Country Locations of Pan-European CCOs Surveyed
Belgium
Netherlands
Finland
Spain
France
Sweden
Germany
Switzerland
Italy
United Kingdom
Executive summary Amid an increasingly complex environment to manage corporate reputation, influence consumer acceptance and public opinion, and communicate with a widening array of engaged and vocal stakeholders, corporate communications officers (CCOs) across Europe are taking on greater strategic roles, according to the 2013-2014 Korn Ferry European Chief Communication Officer Survey. CCOs of large organizations with a pan-European and often global reach reported that an important component of their roles is to ensure operational excellence as part of the senior leadership arsenal of talent and strategic skill sets. Reflecting the importance of this role, the vast majority of CCOs (+70 percent) report to the CEOs of their organizations. Similarly, according to Korn Ferry research, top communications executives in the U.S. most commonly report to the CEO (43 percent), and if not, to someone in the C-suite.
Figure 1 European CCOs report to the top
Chief Executive Officer
71.9%
Chief Operating Officer
3.5%
Chief Marketing Officer
3.5%
General Counsel
3.5%
Head of Strategy
1.7%
President
1.7%
Other
14.0% 0%
20%
40%
60%
80%
100%
Unique to the European CCO role—and highlighting a competency for global leaders in this practice—is the ability to foster and support enterprise-wide corporate culture and values, while bridging diversity across multiple countries and languages. (One CCO surveyed reported job responsibilities across 32 countries and 27 languages.) An added complexity is the need to influence opinion leaders both within a particular country as well as across the European Union, which requires cultural sensitivity and savvy, as well as awareness of how business is conducted within one country and across Europe.
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Korn Ferry’s Global Corporate Affairs Practice conducted the survey of those leading the communications function at major European firms during October 2013, to assess the priorities that receive most of their attention and efforts, and to identify new mandates that have been added to their roles in the past 24 months.
Figure 2 Reporting structure of CCOs in the US (2012)
Chief Executive Officer
42.5%
Co-Chairman or Vice Chairman
1.4%
President
1.4% 12.8%
Chief Marketing Officer Chief Human Resources Officer
9.5%
Chief Administrative Officer
7.4%
Chief Financial Officer
6.1%
Chief Operations Officer
3.4%
General Counsel
6.1%
Head of Corporate or External Affairs
3.4%
Other
6.1% 0%
20%
40%
60%
80%
100%
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A seat at the leadership table More than ever, CCOs across Europe, like their counterparts in the U.S., are taking a seat at the leadership table, as corporate officers and/or part of the senior leadership team.
Figure 3 Are you a corporate officer?
No 8.7%
Yes 38.6%
No, but part of Senior Leadership Team 52.6%
Leadership skills have taken on more significance for CCOs over the past few years, primary among them understanding the business (identified by 73 percent of respondents)—in other words, business acumen, functional/ technical skills, and technical learning. As one senior CCO observed, the distinct skill sets for which these leaders were hired in the past, although still important, take second place to the “managerial maturity” required to build and run a business function tasked with handling “many of the more confusing items on the CEO’s to-do list.” As CCOs become advisers and strategists, their roles have never been as important, and their ability to influence and impact leadership teams has never been as great.
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Leadership characteristics that have become more important to European CCOs Understanding the Business
73%
Making Complex Decisions
51%
Character and Ethics
47%
Creating the New & Different
42%
Being Organizationally Savvy
38%
Courage
36%
Inspiring and motivating teams and direct reports
36%
Results focus
35%
Developing talent and leadership in direct reports
35%
Managing Up
27%
Managing teams, delegating work, evaluating people
22%
European CCOs identified strategic characteristics that are shared with other C-level executives such as chief marketing officers (CMOs), chief financial officers (CFOs), and chief human resources officers (CHROs). Thus, for CCOs in Europe, as well as their U.S.-based counterparts, leadership skills that enhance decision making, innovation, and the courage to take a stand and handle conflict allow them to be drawn increasingly into leadership’s “inner circle.” As we have seen in our work with organizations across industries, global CEOs tend to be “agnostic” about where strategic input comes from, whether a CCO, a CMO, or other senior executives. More important is the person’s ability to provide a 360-degree perspective of the landscape, an attitude and skill set that uniquely positions the savvy CCO within the leadership circle—acting more like a “chief collaboration officer.”
More important is the person’s ability to provide a 360-degree perspective of the landscape, an attitude and skill set that uniquely positions the savvy CCO within the leadership circle—acting more like a “chief collaboration officer.”
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Critical challenges facing pan-European CCOs today:
• Personally ensuring that functional leaders are able to influence, challenge, and advise to the degree necessary, to influence outcomes internally and externally.
• Mobilizing employees at all levels of the organization, attracting and retaining talent, developing trust and confidence in an interactive communication world.
• Linking brand strategy to corporate strategy and ensuring the corporate message is aligned enterprise-wide.
Responsibilities that receive more attention from European CCOs today Providing leadership on reputation, values and culture across the enterprise
98%
Designing systems, such as an enterprise-wide social media strategy
91%
Defining and activating corporate character
78%
Developing and publishing content for external stakeholders
67%
Understanding behavioral science to inform stakeholder engagement
55%
Other
42%
Social media As part of the senior leadership team, highly skilled European CCOs, like their U.S. counterparts, contribute significantly to the organization’s ability to take on the social media challenge. Although social media channels are used by other functions, such as marketing, CCOs are uniquely positioned to devise, implement, and manage an overarching strategy that encompasses all stakeholders —particularly when the leadership team has a limited grasp of new channels of communication and its impact on the business. As one CCO commented, “There is very little C-suite understanding of these [channels]. People on the team are not capable of managing the new world of online and social media” in the broader business environment.
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The reality for many European CCOs, as respondents noted, is that organizations are not fully capturing the potential of social media, particularly the opportunity to enhance and manage the corporate reputation using this and other online channels. Moreover, social media strategies go far beyond the defensive role of crisis communication and monitoring/influencing reports about the organization. Indeed, CCOs are in a position to use the extensive and still largely untapped reach of social media to generate and distribute content that positively, and proactively, influences a variety of stakeholders including consumers, the media, the public at large, and policymakers.
Although social media channels are used by other functions, CCOs are uniquely positioned to devise, implement, and manage an overarching strategy that encompasses all stakeholders.
Beyond its importance, social media is emblematic of a shifting business landscape, with greater fragmentation among stakeholders and channels with which to reach them. Inherent in the new communications terrain is “noise fog”; this makes it challenging for a company and its message to be heard and to distinguish what important voices are saying. “Add to that the loss of trust in institutions and the attendant loss of authority of those institutions, and it becomes more difficult to focus on what’s most relevant and important in a company’s narrative,” a CCO observed. On the minds of pan-European CCOs:
• T he speed of information and the change in how stakeholders gather it through various media channels
•C onflicting demands of different and increasing number of stakeholders
• L everaging social media (offensively and defensively) and the risks associated with it
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The talent challenges The multiple and highly complex demands on the CCO raise a talent challenge. People with digital/social-media backgrounds tend to be younger and lack in-depth leadership experience. At the same time, today’s CCO, as an “integrator and collaborator” working across functions, shoulders far more than the “traditional PR” responsibilities of the past. As we see in our work with clients across industries and geographies, the successful CCO role requires a unique combination of skills: a strategic orientation with many years of experience (often 20+); deep and highly nuanced skills such as critical judgment, high emotional quotient (EQ), courage to push back/make tough decisions, and business sensibility; cultural dexterity, strong relationship building/diplomacy skills, and a proven track record on complicated issues such as corporate reputation and building relationships with stakeholders; and the ability to learn new approaches that can be put into a broader business context.
Figure 4 New mandates for European CCOs
Have any of these areas been added to your mandate just in the last 24 months? 56.5%
Social media Advertising and/or branding
21.7%
Other marketing activities
21.7%
Corporate communications
17.3%
CSR/Corporate philanthropy/foundation
17.3%
Corporate reputation
13.0%
Event management (e.g. trad...)
8.7%
Marketing (CMO)
4.3%
Community relations
4.3%
Public policy
4.3% 0%
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20%
40%
60%
80%
100%
This balance of tried-and-true functional experience, leadership, and judgment, with knowledge of cutting-edge technology and techniques highlights the importance of learning agility as a leadership trait. Korn Ferry defines learning agility as the ability and willingness to learn from experience, and subsequently apply that learning to perform successfully under new or first-time conditions. High-potential, learning agile executives are curious, creative, and resourceful; thrive in new, complex, and ambiguous situations; get to the essence of any problem; and inspire others to embrace change and achieve results. Moreover, learning agility is among the growth capacity traits of leaders that translate into higher corporate profit margins (Lewis, May 2013).
Figure 5 New mandates for Fortune 500 CCOs
Have any of these areas been added to your mandate just in the last 24 months? Social media strategy
67.3%
57.1%
Community relations Corporate social responsibility
57.1% 55.8%
Corporate philanthropy Corporate advertising/branding
43.5%
38.8%
Event management 24.5%
Government Relations
20.4%
Public policy
18.4%
Marketing Investor relations
12.9%
Corporate strategy
10.2% 0%
20%
40%
60%
80%
100%
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The ‘bridge’ to crucial audiences As their jobs expand, European CCOs (like those in the U.S.) are uniquely qualified to provide feedback from the broadest variety of audiences— consumers, NGOs, policymakers, board members, partners/vendors, employees, and others. In addition, new and emerging areas such as social media are blurring the lines between the CCO function and other areas, such as marketing or strategy. That’s not to say that CCOs are taking the place of or infringing upon their senior leadership counterparts; rather, it points to the need for a unified, collaborative, and coordinated approach to manage new or emerging initiatives such as social media that don’t have a clearly defined owner within the organization. Within that team, the CCO often takes the leadership role, pulling others together to work collaboratively for greater effectiveness and impact. Key comments from CCOs: • Manage corporate reputation; make sure the company is seen externally and internally as a “good” citizen, as well as “effective”
• Internal communications is increasingly important, especially as employees have/are using social media tools
• Need to get closer to NGOs and policy influencers (playing offense and defense)
• Describe what the company does in a way that connects both inside and outside the company—not only using data, but also stories to communicate
• Ensure global alignment on priorities, desired impact, and key performance indicators
The global elite CCOs Among CCOs, there is a distinct group who form a “global elite,” working for some of the most significant organizations in Europe and the U.S. These distinguished CCOs, who often come from strategic policymaking roles (including government), are deeply embedded in their organizations as strategists and advisers to the CEO. Their purview extends beyond the pure communications mandate, encompassing broad oversight and responsibility for areas such as corporate social responsibility, consumer relations, strategy, corporate marketing, and public policy, government relations, and investor relations. Typically, these elite CCOs occupy a high-impact “inner circle” role, but with a very low profile in the public eye, which calls to mind a political adviser/strategist to a top governmental leader. Having a high degree of savvy, responsibility, influence, and discretion earns them lucrative compensation packages on par with the elite/highest-paid executives in their organizations.
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These top-notch strategists/advisers are not found in every company. However, they may be a harbinger of changes to come even among more traditional CCOs who are taking on responsibilities and duties of greater influence and impact, or who may be well positioned to step up to a larger, yet-to-be defined role in their organizations. As one CCO commented about C-suite expectations for the role: “Does [the enterprise] have sufficient quality of people globally to execute a more sophisticated and challenging agenda? Do we have the right level of involvement and engagement…in order to address some of the public policy issues we face, [and] prioritisation and focus on the right issues and desired outcomes as an industry?”
Typically, these elite CCOs occupy a high-impact “inner circle” role, but with a very low profile in the public eye, which calls to mind a political adviser/strategist to a top governmental leader.
CCOs who possess the right skill sets and learning agility will be in demand as advisers who can (and will) carve out bigger roles for themselves. Those who can step up to the challenge, add value, and earn the trust and confidence of the CEO are charting their own courses across what is becoming an open field of opportunity as roles morph and change. As greater demands are placed on CCOs, the need is for experienced individuals with not only a depth of expertise in the function, but also the leadership capabilities to address an increasingly complex and dynamic business landscape. They must be talented leaders and innovative communicators (as one CCO described it, “storyteller, charmer, and relationship-builder”) with well-established contacts in a network that includes key stakeholder groups. In addition, understanding societal, economic, political, and leadership trends is key, in order to take ownership of the corporate narrative internally, externally, and across all channels. Showcasing their experience, the majority of European CCOs surveyed (63%) have worked for three to five companies (including their current one). Current positions range across a number of industries, including banking/ insurance/financial services, consumer/retail, energy/utilities, healthcare/ pharmaceutical, and industrial/manufacturing. Prior industry experience was dominated by media/entertainment and consumer/retail.
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Compensation Base salaries covered a wide range, from €100,000 to more than €600,000, with the bulk of respondents (80 percent) paid between €150,000 and €375,000 (2012 salary data). Within that range, nearly half (42 percent of respondents) received base salaries of between €150,000 and €250,000. Nearly one-third (31 percent) of respondents reported bonuses that amounted to more than 50 percent of their base salaries, while another 18 percent received bonuses that were 40 to 50 percent of their base salaries. In total, they accounted for nearly half of all respondents. More than three-quarters (78 percent) of respondents said they receive annual equity as part of their compensation packages. Of those receiving equity compensation, nearly half (46 percent) said they received a combination of restricted stock units, stock options, and performance shares. Among the individual equity components, the most commonly received alone were performance shares (33 percent of respondents).
Figure 6 Base compensation (in euros) 100 – 149K
5.3% 14.2%
150 – 174K 175 – 199K
7.1%
200 – 224K
10.7%
225 – 249K
10.7%
275 – 299K
7.1%
300 – 324K
10.7%
325 – 349K
3.5%
350 – 374K
8.9% 1.7%
375 – 399K 400 – 424K
3.5% 1.7%
425 – 449K 450 – 599K
5.2% 1.7%
600 – 625K 0%
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The median base salary for CCOs is between €275,000 and €300,000.
5.3%
250 – 274K
20%
40%
60%
80%
100%
Figure 7 Bonus as a percentage of gross annual salary No annual bonus
3.6% 1.8%
1-19% 11-15% 16-20%
Nearly 50% of the CCOs had a bonus of 40% or more
10.9%
21-25%
12.7%
26-30%
12.7%
31-35%
5.4%
36-39%
5.4% 16.3%
40-50%
30.9%
More than 50% 0%
20%
40%
60%
80%
100%
Figure 8 Annual equity valuation (in euros) None
4.6% 18.2%
Less than 100,000
25.0%
100,000 to 199,999
The median annual equity valuation for CCOs was between €300,000 and €399,999 Euros
22.7%
200,000 to 299,999 9.0%
300,000 to 399,999 400,000 to 499,999
2.3%
500,000 to 599,999
2.3%
600,000 to 1,199,999
4.6%
1,200,000 – 1,699,999
6.9%
1,799,999 and above
4.6% 0%
20%
40%
60%
80%
100%
References Lewis, James. May 2013. “Proof Point: Leadership That Drives Profits.” Korn Ferry Institute.
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Authors Richard Marshall Managing Director, Global Corporate Affairs Center of Expertise 200 Park Avenue, 33rd Floor New York, New York 10166 +1 212-973-5816 richard.marshall@kornferry.com Philiep Dedrijvere Senior Client Partner Avenue Louise 489 – 1050 Brussels, Belgium +1 32 2 645 28 47 philiep.dedrijvere@kornferry.com
Other members of the Global Corporate Affairs Practice Nels Olson Global Practice Leader, Government Affairs Practice 1700 K Street, N.W., Suite 700 Washington, D.C. 20006 +1 202-955-0926 nels.olson@kornferry.com Beth Fowler Senior Client Partner 1700 K Street, N.w., Suite 700 Washington, D.c. 20006 +1 202-955-0938 E-Mail: beth.fowler@kornferry.com Megan Shattuck Client Partner 200 Park Avenue, 33Rd Floor New York, NY 10166 +1 212 984- 9430 megan.shattuck@kornferry.com
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About Korn Ferry International At Korn Ferry, we design, build, attract and ignite talent. Since our inception, clients have trusted us to help recruit world-class leadership. Today, we are a single source for leadership and talent consulting services to empower businesses and leaders to reach their goals. Our solutions range from executive recruitment and leadership development programs, to enterprise learning, succession planning and recruitment process outsourcing (RPO).
About The Korn Ferry Institute The Korn Ferry Institute, our research and analytics arm, was established to share intelligence and expert points of view on talent and leadership. Through studies, books and a quarterly magazine, Briefings, we aim to increase understanding of how strategic talent decisions contribute to competitive advantage, growth and success. Visit www.kornferry.com for more information on Korn Ferry, and www. kornferryinstitute.com for articles, research and insights.
About the Global Corporate Affairs Practice The Global Corporate Affairs Practice is a dedicated specialty global practice which focuses on corporate communications/public relations, government affairs, and investor relations searches across all industries and geographies. As former practitioners, we are the largest specialty practice of our kind among all major search firms and have teamed with our Korn Ferry colleagues in every industry serving the Global Fortune 500.
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Š 2013 The Korn/Ferry Institute