Arun Sudhaman 20 Jan 2017 // 3:45PM GMT
This year's Davos commentary should come, as ever, with a rather large caveat. Consensus views from the global economic elite that gather at the World Economic Forum are always wrong, according to Harvard professor and former IMF chief economist Kenneth Rogoff, a result of the stunning homogeneity and group-think that often typifies the event.
Check out all of our Davos coverage here.
How else to explain the utter incredulity that has greeted seismic political upheaval, going back as far as the global financial crisis of 2008, which set the stage for the Trump and Brexit shocks that ruptured 2016 and cast a bewildering pall over this year's Forum.
"We come to the mountain but the mountain’s crumbling under us," was how one CEO put it. Ultimately, that may be for the best. If nothing else, this year's Davos provided a sobering reminder of the yawning chasm between elite theory and everyday reality. Between pontificating about global solutions and actually listening to global views. Between rhetoric and action.
For communicators, of course, this should be nothing new. "Communicators live in the world of empathy," pointed out eBay chief communications officer Dan Tarman. The question is whether they can make that count, in a world where their CEOs — as Richard Edelman put it — are viewed as being "out of touch."
"This is the first time there is absolutely no consensus," said William F. Browder, a co-founder of Hermitage Capital Management who has been coming to Davos for 21 years. "Everyone is looking into the abyss."
Live from the abyss then, here are six communications themes from this year’s edition of the conference, drawn from the observations of several of the senior business leaders and communications executives in attendance. If anything, they highlight a simple premise — at a time of such dramatic upheaval, basic public relations principles, such as empathy, authentic behaviour and purpose, are more important than ever.
1. Thank you for listening
"How did CEOs miss this series of events? Entitled people have missed cues."
Richard Edelman got the party started in sobering fashion when he proclaimed the urgency of the situation: "We have to get back to a world where we are believed and trusted."
That the world had taken such an unexpected turn was a source of considerable disorientation at Davos, as the business elite struggled to get to grips with a populist backlash against their cherished ideals of globalisation and economic liberalism.
Communicators should already be keenly aware of the importance of listening. Yet it seems clear that business and political elites were woefully unprepared for the level of discontent with the Davos world order.
"One of the important lessons is that you have to listen to what people are telling you," says Burson-Marsteller CEO Don Baer. "Although, they are not always saying it to you in intentional and precise ways."
APCO chairman Margery Kraus points to Nik Gowing's leadership research as an important tool to help understand exactly how we got to this point, where CEOs failed to predict a series of events such as the global financial crisis, the rise of Trump and Brexit. "Entitled people have missed cues," she notes. "This has been brewing since 2008."
"What [Gowing] discovered is that the very thing that got people to their positions prevented them from seeing things," she explains. "In other words, conformity, don’t rock the boat, getting along with the boards. Not that they were not leaders, but the tolerance for thinking that was outside the box, or too provocative. When in fact that’s what we needed and that’s we need."
It is an apt enough depiction of the group-think that pervades Davos and seeps into board-level corporate thinking across the globe. If that reverie is to be disturbed, communications and PR pros are better placed than most, given their responsibility to represent the outside world inside their companies.
"We as a business need to understand the sentiment about disaffection that have led us to a dramatically changed geopolitical landscape," says Tarman. "Communicators need to truly understand what people are feeling and why. I think to the extent that there is and was a disconnect between mass sentiment and opinion leaders — maybe it speaks to a fundamental lack of empathy."
That empathy, adds Baer, is likely to be unfamiliar terrain for many companies, requiring as it does an understanding of forces "that may not be in our immediate experience but are clearly happening when it comes to people’s fears, frustrations but also hopes and aspirations."
The World Economic Forum, argues TCS Europe CMO Abhinav Kumar, largely features "CEOs and heads of government talking about their intent and vision." If they pyramid of influence really has inverted, then perhaps WEF should attempt to reflect this.
"It would quite interesting to invert this and have many of them sit in the audience while we have more panels of children talking about their hopes for the future, laid off workers talking about their challenges integrating back in the workforce, refugees talking about the hardships of fleeing conflict zones or women (who are not already CEOs) about the challenges they face in terms of glass ceilings," says Kumar. "If this shift can made more pronounced in 2018, then Davos would also be well on its way of being an even more responsible and responsive forum itself."
2. The devil is in the detail
"Global leadership is not seen as about creating big news — it’s about the commitment to the little issues that affect everyday people."
Davos is never short of lofty pronouncements, often boosted by a sprinkling of celebrity stardust. And while these grand goals can help garner headlines and focus minds, it is not always clear that they result in the concrete action required to address intractable problems around the world.
That kind of detachment, says APP sustainability chief Aida Greenbury, can be a problem for communicators. "Now is not the time for big headlines and big commitments," she believes. "Global leadership is not seen as about creating big news — it’s about their commitment to the little issues that affect everyday people."
Greenbury's own experience at APP, where she has been implementing a zero deforestation policy for the past four years, backs up her assertion. "Implementation is more important than policy," she explains. "Big commitments and headlines are more important to create that positive feeling, but it pales compared to what can be achieved with positive implementation. During the journey you have to listen to everybody."
These comments are a reminder that all the rhetoric in the world counts for nothing unless they are backed by actual action. Again, this should be nothing new for communicators, but it is not always clear that their own companies are paying heed to this advice.
That might also be because of the traditional tendency for businesses to "duck and cover" when the going gets tough, as Richard Edelman put it. This is simply not an option anymore, said Edelman, given the weight of opposition to globalisation and rapid technological innovation. A reliance on delivering economic benefit and great products is not enough, he argued.
"We’ve got to not just obey the classic framework of governance," said Edelman, pointing out "business needs to step into the void" created by plummeting trust across government, media and NGOs. "Establish a credible narrative on trade and security. Go out and make the case on supply chains. Don’t wait for government to do that."
That also means addressing fake news narratives, a persistent theme at this year's conference.
3. Beware the Trump effect
"I think they [businesses] are very worried about it."
Complicating matters further is the potential that an early morning tweet from President Trump could ruin all of those carefully calibrated communications plans. If there was a topic that attracted the most conversation among communicators at Davos this week, it was this one — how do you respond to the 'Trump tweet'?
As Baer points out, presidents have long used the 'bully pulpit' to pressure industries. Trump, though, is using the "bully tweet to push people." "It’s a fairly classic approach but he’s doing it in such a way that has more immediate impact," said Baer.
It is an approach that is certainly vexing business leaders. Hedge fund manager Anthony Scaramucci, who is set to join the Trump administration as a public liaison and adviser, told WEF delegates that Trump is "not necessarily communicating in a way that the people in this community would love."
"But he is communicating very, very effectively to a very large group of the population in Europe and the US that are feeling a common struggle right now.”
GM's response has been plain to see, as global communications SVP Tony Cervone outlined to us. The company responded to a Trump attack by making a high-profile announcement this week about new jobs, with Cervone dismissing the notion that the President's stance was not a factor.
"Business likes predictability," says APCO's Kraus. "When you can wake up in the morning and know that your share price is going to drop by a certain amount, and there’s no reason other than a tweet, that’s not predictable. I think they are very worried about it."
The risk, she adds, is that business becomes "less bold, less brave, at least for a while." "Given the level of solutions we need, if people think that they’re going to be judged on every action they take, the easiest thing is not to take an action," said Kraus. "And that is not good for business, for the country, for the world."
Not every business, meanwhile, is going to let Trump dictate their business strategy. But, as Baer counsels, they should be ready with their counter-narrative. "What are the proof points that make the counter-argument?" he says. "Or how do you develop them? Take proactive steps that provide you with reputational capital that you can either go ahead and deploy are are at least ready to deploy if you have to. Which is why companies are being vocal about the jobs they are creating. Don’t get caught off-guard."
Some points of Trump's agenda are clear, adds Ruder Finn CEO Kathy Bloomgarden — job creation and attention to those who feel marginalised in the globalised economy. "In preparation for a Trump tweet, be clear about your values, be authentic," she says. "In these early days, it will be key to be a partner working for economic growth."
4. Employees first
"It’s not just about selling more products or being loved."
Having a counter-narrative, though, presupposes that a company has already assessed the values that drive its thinking. It seems incredible that we are still having this conversation in 2017, but Kraus is clear that many companies still have to get serious about marrying profit with purpose.
"I think that should have been the case," she admits, noting that CEOs like Paul Polman at Unilever still remain the exception rather than the role. "There were always the progressive ones — they got it right away. And they’ve been proselytizing about this. But even they recognise that not enough is happening. There’s a long way to go."
As Paul Holmes noted after the US election, meanwhile, corporate values that may have seemed safe and relatively anodyne a few months ago—tolerance, diversity, inclusion—are suddenly controversial, and potentially expensive.
Ebay for example, has reiterated its commitment to fight the hard-line rhetoric on trade and immigration from the Trump administration. PayPal CEO Dan Schulman is clear that business has a "moral obligation" to be a force for good. And Mastercard's Ajay Banga believes that only diversity can address the profound disruptive challenges facing business.
All of these companies, importantly, have arrived at these positions after weighing what matters to their employees. If, as Edelman said, "employees are the most credible source of information", then understanding what they want from their companies is critical.
"It’s about who they attract to work for them in the future," says Kraus. "It’s not just about selling more products or being loved."
For Baer, that means that corporate values themselves might need to shift to take into account the backlash to globalisation and technological advancement. "Traditionally there’s been a growth perspective and then there’s been a CSR perspective," he points out. "But that hasn’t necessarily been directed at economic wellbeing."
"We’re going to see a shift to a grow and share approach," adds Baer. "Think of all the things business are doing with regard to benefits of their employees. Beyond even what you have dominion over in your own companies — there is now a tacit understanding that their growth has to also benefit a wider community."
That may explain why Ketchum president Barri Rafferty points to financial inclusion as being one of the key themes to emerge from this year's event. "As the rich continue to get richer, responsible leaders are looking for ways to share the wealth," she said. "I attended a session Thursday called Creating Profit Through Purpose, and was fascinated by the conversation about profit sharing with employees, finding a replacement for the pension system, and giving back to local communities through job creation."
5. Pace yourself
"Decisions driven by fear don’t tend to end well. We really need to understand that stakeholder sentiment."
Underpinning much of the political tumult are concerns about globalisation and rapid technological advancement — two drivers that have largely been seen as forces for good by business — and their impact in terms of job security.
"There's clearly a greater focus on the negative or potentially negative consequences of globalisation. And a focus on the potentially negative consequences of technological advancement," said Baer. "People feel like they are being rendered redundant."
Davos' evolution into a technology showcase has been underway for a few years now; at this year's Forum, artificial intelligence played a starring role. But any excitement was tempered by the realisation that people are scared about how these advances will affect their lives. And those concerns, admitted CA Technologies global CEO Mike Gregoire, are amplified by the exponential pace of change.
"There’s going to be displaced workers," said Gregoire at a panel on disruption. "The difference is there’s no time. Our life is going to change multiple times over the next few years. We can’t live the way we live today, five years from now."
With the robots coming, business has an obligation to address a potential job crisis, says Rafferty.
"The jury is still out on whether the future of artificial intelligence is a positive one or if the challenges will outweigh the benefits," she explains, pointing to "how much more efficient some industries could be with robots working around the clock and lower labor costs."
"But the dark side of that is the job crisis it is certain to create if we don’t find new ways to retrain and create new employment paths," continues Rafferty. "A recent Citigroup and Oxford University study found that within the next 20 years, 57% of jobs worldwide are at risk of being lost to automation."
"Displacing large swathes of workers without a plan," said Gregoire, "is reckless". Under the circumstances, business communicators will need to ensure that they can adequately respond to these real-world challenges, rather than assuming that everyone will be dazzled by the newfangled technology.
"The benefits from the forces of globalisation and technological advancement, while still great forces for progress — are not universally shared," notes Baer. "Brands need to understand that just as leaders have come to understand it. It’s important to be open to all of that. You have to take a very sensitive approach."
6. China takes centre-stage
"The problems troubling the world are not caused by globalisation. They are not the inevitable outcome of globalisation."
That quote was delivered by China president Xi Jinping, part of a robust defence of globalization that neatly illustrated how the global world order has been upended.
Xi was perhaps the star of this year's Davos, helping to soothe a business elite that was understandably jumpy about the prospect of a trade war. But his presence also underlined China's new role as a leader of the free-market world.
And China's status was reinforced by Alibaba chief Jack Ma, who also played a leading role at this year's Forum. That was to the credit of Alibaba's global communications team, and reflected the strides that Chinese companies have made when it comes to understanding the global PR landscape.
Other Chinese companies could do worse than to take note of both Xi and Ma's impressive communications efforts at Davos. Likewise international PR firms, many of whom are increasingly focused on helping Chinese companies take their offering to a global market.