ITL #377   Business understanding for the CCO: four levels, two contexts

6 days, 9 hours ago

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There’s far more to a business than its financials. Chief Communications Officers should focus on a broader and more holistic understanding to earn the trust of their top managers. By Anders Monrad Rendtorff.



For some CCOs, business understanding means being financially literate. For others, it means that they understand the business drivers within the context of the relevant competitive landscape and therefore can act strategically.

 

Right now, amidst the corona crisis, the CCO will more than ever be instrumental in understanding the external environment as well as being able to decode the sentiments amongst the internal stakeholders, i.e. the many groups of employees – not to mention advising, helping, and driving the top management and the CEO in being ever-present and yet relevant.

 

I suggest a more accurate term than business. I will use business context rather than merely business. In using the term business context, focus is on the framework in which the CCO works. This context has both an internal aspect (the organization, the communications department) and an external aspect (the industry, the marketplace and society at large).

 

The CCO must continuously stay updated on the current reality, developments and changes happening within the business context. Thus, the CCO will often be the person with a 360-degree focus and a holistic perspective on both the organization and the world surrounding it, enabling him or her to be very helpful for top management when running the business and making decisions with strategic impact.

 

Navigating the business context

Our model for the business context has four different levels and two perspectives, the internal and the external. The model can serve as a tool for analyzing and explaining the forces underlying the professional practice and development of the communications advisor:

  • The micro-level focuses on the communications function and the goal of setting up the communications function that matches business needs.
  • The meso-level focuses on the organization, its owners and the organization’s internal key stakeholders.
  • The exo-level focuses on the external stakeholders such as media, associations, regulators, and customers, mostly at national level – and the industry perspective as a whole.
  • The macro-level focuses on the global and societal perspectives, such as socio-cultural characteristics and mega-trends.

 

Characteristics of the four levels

The micro-level represents the communications function where the CCO can focus on practicing the business focus. The key tasks for the head of the communications department are to establish the team, the design, optimize processes, clarify roles and responsibilities, and set the KPIs. The overall objectives and strategy for the function must be based on the overall strategy for the business, thereby enabling the communications function to support the business and the execution of business strategy – which will be considered a hygiene factor for any communications department today and in the future.

This is not always an easy task to undertake. However, an alignment with the business priorities enables the CCO to determine the allocation of resources. It helps establish what activities to focus on, what competencies to hire or develop, and what KPIs to aim for.

 

The meso-level represents the organization and the key internal stakeholders, where the CCO should focus on peer-management as pivotal action. The organization and the business strategy constitute important parts of the business context that the communications advisor needs to understand. In fact, I find that the meso-level can act as the pivot for the four levels. But oftentimes, the interest in peer management happens to be slightly underrated for both communicators and top management. However, this seems to change during these times with corona implications driven by the Covid-19 crisis. For top management, it is essential to have a good feel of the sentiment of the entire organization. The advisor needs not only to understand the CEO’s agenda and priorities but also those of the entire executive management team. What are their individual agendas, which important coalitions exist, and what internal dynamics determine the decision-making of top management? Active and structured stakeholder management enables the CCO to better understand and navigate the organization and to “look around corners”.

 

The exo-level represents the industry context and is where the CCO can focus on providing outside-in perspective. The communications advisor must have a detailed understanding of many external stakeholders and their perception of the organization. Key stakeholders include customers, business partners, competitors, future employees, the media, the political system, the unions, NGOs, and the general public. The CCO needs be able to translate these insights into relevant perspectives for both the communications aspect and for the business at large. Furthermore, the CCO must have in-depth knowledge of the industry. Understanding the exo-level provides the CCO with the ability to carry out effective stakeholder management, position the organization, and create communication that supports the CEO as well as the business.

 

The macro-level represents the global context where the CCO can focus on the engagement in society. Over the past years, the elements of the macro-level have become increasingly important to businesses. Companies in general have more than ever turned into integral parts of society with duties, obligations, and commitments. The CCO must be well informed about and understand societal and global issues, ensuring an alignment between the organization and the rest of the world. Trends, developments, and patterns in ways of thinking eventually represent opportunities or risks for a given company. Understanding the greater themes have become assets for a business. Therefore, the communications advisor must be literate in these wider themes on a macro-level.

 

And then what?

I believe that a key to success for the future CCO will be the ability to effectively understand and navigate the entire business context. Although this might seem rather straightforward, it is in fact a demanding task for the CCO.

 

Not everyone is financially literate or has business acumen and might therefore find it difficult to participate fully in business conversations with peers or top management.

 

However, the concept of micro, meso, exo, and macro will certainly be helpful when the CCO, the CEO and the headhunters determine what skills and competences the CCO needs to possess in order to be fully equipped for the future.

 

 


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The Author

Anders Monrad Rendtorff

Anders Monrad Rendtorff, Senior Public Relations Advisor, is an experienced global executive, specialized in CEO Communication, Leadership Communication and Communication in transformations. He is one of the researchers on the CEO Communication project conducted by Relations People and the University of Copenhagen to gain insights into CEO communication and on the relationship between the trusted communications advisor and the CEO.

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