Shaping the fit-for-future Communications function

At the height of the pandemic, running the communications function at a global organization could not have been more difficult. While those dark days are past, challenges remain—and are growing not only in number but in complexity. 

Disruptions in the operating environment, workplace and labor issues, and social and societal problems, are just a few of the evolving dimensions that communicators need to consider. In short, organizations are facing more demands and engaging more stakeholders, in a world that is ever more agitated, polarized, and sometimes conflict-ridden. And everything is happening faster. No wonder, then, that many leaders are turning to chief communications officers (CCOs) and their teams for answers. 

Communications has always been about building institutional trust. Today, however, the need is to build trust in hurricane conditions. 

What do CCOs think?
So, what should a ‘fit for future’ communications function look like? Over the past several months, Joe Spratt, an expert in McKinsey’s Strategic & Change Communications practice, co-led a series of discussions with six Page-member CCOs. The participants focused on how the function is growing and changing.  Fifty-plus McKinsey clients worldwide also offered their thoughts. Here are some of the most important insights. 

First, CCOs emphasized the need for a broad organizational view to engage stakeholders, who may have competing as well as common interests. As the CCO of a large automotive player said: “My CEO told me, ‘You are the only leader on this team looking at everything left to right, top to bottom. You see it all and see that big picture as your accountability.”  

When asked what situations demanded communications leadership and organizational influence, multiple CCOs pointed to supply chain disruptions as a prime example. These can last for months with both immediate and long-term impact for customers, employees, investors, suppliers, communities, and industry. Such disruptions can affect entire industries and hundreds of companies at once, while actions to address them can benefit some players and aggravate others. In addition, climate change and geopolitical tensions can affect major trade routes, as has happened in the Panama Canal and the Suez Canal in recent months.

In situations like these, everyone needs to be sending the same message. As one CCO said, “Our leaders saw the problems of having a group of functions aligned alongside each other, but without an overarching communications or engagement strategy to connect them and the whole enterprise. Leaders began to view our role differently and saw that we needed to be in all C-level conversations about how the company would address critical business challenges.”

Second, given shifting consumer and societal expectations, building and protecting brands must be a high priority. This is ever more important in a world where, as one CCO put it, “a single influencer or small group can dominate a point of view across a democratized media landscape.” 

McKinsey Global Institute research shows why this is important. Its survey of 860 companies found that high-growth companies (the top quartile) invested 2.6 times more in intangible assets, such as branding, innovation, digitization, intellectual property, and human capital, than low-growth ones did (the bottom 40 percent). The implication is that CCOs need to work closely with a wide range of functions, including marketing, strategy, and investor relations, for branding and reputation success.  

Finally, the interviews revealed great potential for Communications—if the functionadapts. Leaders in the function should see themselves not only as technical professionals responsible for messaging but as strategic advisors who help to shape organizational priorities. To make that happen, it will be important to develop cross-functional campaign leaders who can offer deep insights, rather than (or in addition to) narrow group experts. 

A three-point agenda for change
To advance the influence of the Communications function in a way that benefits the whole organization, there are three core opportunities. 

Identify emerging and critical needs. Develop both an outside-in (market force/megatrend) and inside-out (performance/reputation) perspective on what the strategy will be for the next three to five years, and how it will be executed, whether that is M&A, entering new markets, or developing new capabilities. Then compare that strategy to that of the competition. Is it a matter of catching up, differentiating, or disrupting? Doing this kind of exercise provides essential insights for the Comms team; it can also strengthen relationships with top leaders. 

Next, consider how the enterprise is evolving, and whether the communications function has the right mix of skills, capabilities, and organizational influence to address its needs. Specific questions to consider include:

• Does the institution’s current reputation and key attributes align with future needs? 
• How are the sentiment and influence of different stakeholders likely to change? 
• Is the communications function ready to play its role? For example, an M&A strategy of spins, acquisitions and integrations will likely need significant capabilities in transformation and change comms. 

What performance indicators can be used to track how  stakeholder mindsets and behaviors are changing?
Examine the function’s current role and envision its future one. Start by putting together a fact-based assessment of the function's performance and capabilities. This can reveal opportunities where changes in org design, governance, and ways of working can make a difference. 

Too often, communications teams suffer from lingering perception problems—perceptions that may not be derived from data-driven evidence, but single instances or anecdotes. While a number of Communications leaders said that senior leadership recognizes the function’s strategic, multi-disciplinary, and enterprise-wide impact, this understanding varies wildly from leader to leader, unit to unit, and team to team. 

To do better, Communications leaders need to define (or redefine) their purpose, role, and value proposition. The premise is that the future-fit Communications function goes beyond informing, reporting, storytelling, and engagement. It can actually change the mindsets and behaviors of different stakeholders and help to build more positive relationships with them.  

Improve talent and operating models. This is particularly important with the advent of gen AI. 

For example, if some content will be AI-generated, that will change the role that communications professionals play, as well as how resources are allocated. From a talent perspective, leaders need to build the skills that enable teams to act as strategic advisors. The foundation is traditional communications planning, content, and project management. Additional essential competencies include critical thinking, negotiation, coaching, leadership, facilitation, and analytics/insights. To get there, functions need to consider how to build these capabilities, whether that is through hiring, upskilling, outsourcing, or redeployment.

The time to build a better communications function is now. As one CCO concluded, “I have never seen an opportunity for communicators to capitalize on the work and credibility that we and our peers have built over the years. Someone must take advantage of it before the window closes. So why not us?”

Thanks to Joe Spratt, Strategic & Change Communications Expert at McKinsey, for his contributions to this article.