LEADERSHIP COMMUNICATIONSAnd the New Model

Roger Bolton , PresidentArthur W. Page SocietyGeorgetown UniversitySeptember 5, 2013

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Three things to think about

What is the role of the CCO in leading within the enterprise?

How can leaders shape an organization worthy of trust?

Can leadership communications convert stakeholders into advocates?

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Arthur W. Page

AT&T VP of PR, ’27 – ’46 Corporate officer Member of board Adviser to Presidents

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ARTHUR W. PAGE SOCIETY

“All business in a democratic society begins with public permission and exists by public approval.”

- Arthur W. Page

“All business in a democratic society begins with public permission and exists by public approval.”

- Arthur W. Page

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“Real success, both for big business and the public, lies in large enterprise conducting itself in the public interest and in such a way that the public will give it sufficient freedom to serve effectively.”

- Arthur W. Page

“Real success, both for big business and the public, lies in large enterprise conducting itself in the public interest and in such a way that the public will give it sufficient freedom to serve effectively.”

- Arthur W. Page

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Tell the truth.

Prove it with action.

Listen to the customer.

Manage for tomorrow.

Realize a company’s true character is expressed by its people.

Conduct public relations as if the whole company depends on it.

Remain calm, patient and good-humored.

The Page Principles

ARTHUR W. PAGE SOCIETY

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ARTHUR W. PAGE SOCIETY

To strengthen the enterprise leadership role of the chief communications officer by embracing the highest professional standards; by advancing the way communications is understood, practiced and taught; and by providing a collegial and dynamic learning environment.

Mission

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ARTHUR W. PAGE SOCIETY

To strengthen the enterprise leadership role of the chief communications officer by embracing the highest professional standards; by advancing the way communications is understood, practiced and taught; and by providing a collegial and dynamic learning environment.

Mission

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ARTHUR W. PAGE SOCIETY

To strengthen the enterprise leadership role of the chief communications officer by embracing the highest professional standards; by advancing the way communications is understood, practiced and taught; and by providing a collegial and dynamic learning environment.

Mission

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DRIVERS OF CHANGE

Stakeholder Empowerment

Globalization

DigitalNetwork

Revolution

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GLOBALIZATIONInternational Corporation

Multinational Corporation

Globally Integrated Enterprise

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THE SOCIAL MEDIA REVOLUTION

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STAKEHOLDER EMPOWERMENTHighly influential new stakeholders

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STAKEHOLDER EMPOWERMENT

COMPANY

EMPLOYEES

ACADEMICCOMMUNITY

GOVERNMENT MEDIA

INVESTORS CUSTOMERS

LOCALCOMMUNITY

NGOs

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STAKEHOLDER EMPOWERMENT

COMPANY

EMPLOYEES

ACADEMICCOMMUNITY

GOVERNMENT MEDIA

INVESTORS CUSTOMERS

LOCALCOMMUNITY

NGOs

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DRIVERS OF CHANGE

Stakeholder Empowerment

Globalization

Social Media

Revolution

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Hyper-connectedRadically transparent

Implications for enterprises:

Threats … Influential new stakeholdersDemands for transparency, responsibility, accountability

Risks to brand and reputation

THE AUTHENTIC ENTERPRISE

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Implications for enterprises:

And opportunities … To reach stakeholders To advance policy interests To build brand To enhance reputation

THE AUTHENTIC ENTERPRISE

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The answer? Authenticity.

The enterprise must be grounded in a sure sense of what defines and differentiates it.

And those definitions must dictate consistent behavior and actions.

THE AUTHENTIC ENTERPRISE

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TRUST REPORT

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WHY TRUST MATTERS

Edelman Trust Barometer 2009

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WHY TRUST MATTERS

“Trust always affects two measurable outcomes – speed and cost. When trust goes down, speed goes down and cost goes up. When trust goes

up, speed goes up and cost goes down.”

Stephen M.R. Covey,In Chief Executive, June 1, 2007

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WHY TRUST MATTERS

“To make the McLane deal, I had a single meeting with … Wal-Mart’s CFO, and we then shook hands. ... Twenty-nine days

later Wal-Mart had its money. We did no ‘due diligence.’ We knew everything would be exactly as Wal-Mart said it would be –

and it was.”Warren Buffett,

Berkshire Hathaway 2003 Annual Report

Chairman’s Letter

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Trust Safeguards

– Legal compliance mechanisms

Balance of Power

– Risks and opportunities are shared

Mutuality

– Based upon shared values or interests

The Three Core Dynamics

DEFINING TRUST

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1890 – Sherman Act 1970 – OSHA, EPA

1897 – ICC 1972 – CPSC

1906 – FDA 2002 – SOX

1914 – Clayton Act 2010 – Dodd-Frank

1934 – SEC, FCC

PUBLIC TRUST IN BUSINESS

A century of regulation

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An ongoing debate

1889 – Carnegie –

“Gospel of Wealth”

1931 – Berle and Dodd – Harvard Law Review

1960 – Packard – “A contribution to society”

1970 – Friedman – “Profits”

PUBLIC TRUST IN BUSINESS

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An ongoing debate

1981 – Welch – Shareholder value

1984 – Freeman – Stakeholder theory

1987 – Gekko – “Greed is good.”

2011 – Porter – Shared value

PUBLIC TRUST IN BUSINESS

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Emerging “social contract”

Quality products and services at reasonable prices

Steady employment in a healthy and safe environment

Support for community institutions

PUBLIC TRUST IN BUSINESS

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WorldCom TYCO Enron HealthSouth HP MSO UnitedHealt

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– Bernie Ebbers

– Dennis Kozlowski

– Lay, Skilling & Fastow

– Richard Scrushy

– Patricia Dunn

– Martha Stewart

– Bill McGuire

Breaking the contract

PUBLIC TRUST IN BUSINESS

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2000s – Aggressive pursuit of high-risk financial instruments.

“Trust no one.”-- The Wall Street Journal, September 2008

Breaking the contract

PUBLIC TRUST IN BUSINESS

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He’s back!

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Goldman Sachs

MF Global

Olympus

Rajat Gupta

Breaking the contract

PUBLIC TRUST IN BUSINESS

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COMPANIES INTERVIEWED

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Corporate Character

What makes us unique: Our Beliefs

Our Values Our Purpose Our Actions

CORPORATE CHARACTER AND AUTHENTIC ADVOCACY

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CORPORATE CHARACTER

Corporate Character

What makes us unique: Our Beliefs

Our Values Our PurposeOur Actions

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““Character is like a tree, Character is like a tree, reputation is like its reputation is like its shadow. The shadow is shadow. The shadow is what we think of it. The what we think of it. The tree is the real thing.”tree is the real thing.”

– – Abraham LincolnAbraham Lincoln

““Character is like a tree, Character is like a tree, reputation is like its reputation is like its shadow. The shadow is shadow. The shadow is what we think of it. The what we think of it. The tree is the real thing.”tree is the real thing.”

– – Abraham LincolnAbraham Lincoln

Corporate Character refers

to the enterprise’s

unique, differentiating

identity:

MissionPurposeValuesCulture

StrategyBusiness model

Brand

“Taking on the world’s toughest challenges.”

CORPORATE CHARACTER

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“Let’s build a smarter planet.”

CORPORATE CHARACTER

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CORPORATE CHARACTER

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CORPORATE CHARACTER

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Defining

Ensure CEO commitment.

Create collaboration at the top.

Build on the best of existing values and culture.

Assess the needs and values of all stakeholders.

Include the entire team, from leadership to the rank and file.

CORPORATE CHARACTER

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Activating

Develop a set of “valued behaviors” that demonstrate how executives and employees can live the values.

Tell the story through consistent and far-reaching communications.

Create a series of actions and initiatives that reinforce and reward the desired behaviors.

CORPORATE CHARACTER

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Aligning

Work with the C-Suite team to develop mechanisms and processes to incorporate the values into the company’s business model and strategies.

Wherever possible, develop appropriate internal and external measurements of the impact on values on the company’s business strategies and results.

AUTHENTIC ADVOCACY

AUTHENTIC ADVOCACYMany to many more

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The HMO Model

Preventive health care Coordination of care Networks of physicians

− Wholesale vs. retail

THE AETNA CASE

Aetna believes physicians …

•Practice defensive medicine.

•Give patients what they want.

•Make dangerous and costly medical errors.

•Game the system to get paid more.

•Commit fraud.

BUILDING SHARED BELIEF

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Customers and shareholders firstFROM:PCP = care coordinator

TO:PCP = gatekeeperHMO bureaucrats

– Referrals– Pre-authorizations– Denials

THE AETNA CASE

THE AETNA CASE

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Aetna believes physicians …

•Want to do the right thing.

•Care about keeping patients healthy.

•Want to practice evidence-based medicine.

•Want to deliver care efficiently and effectively.

•Will respond if given information and data.

BUILDING SHARED BELIEF

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THE AETNA CASE

Mission

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Genetic testing Disparities in health care Care at the end of life Depression management

THE AETNA CASE

Aetna Chairman’s Initiatives

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Genetic Testing Commitment Pay for tests Never discriminate on coverage

or rates

Campaign for:

• Industry standards

• Government regulations

THE AETNA CASE

Aetna Chairman’s Initiatives

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THE AETNA CASE

5757

Mission Values Strategy

Cost-effective, high-quality health care

Information sharing with physicians

Consumer directed health plans

THE AETNA CASE

5858

Strategy New Brand Positioning

We provide information and helpful resources to help you make better-informed decisions for your health and financial well-being.

“We Want You to Know”

THE AETNA CASE

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Brand Products

MedQuery Aetna HealthFund Aetna Navigator “Plan for Your Health”

THE AETNA CASE

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THE AETNA CASE

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87

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6570

79 7982 83

84

57 56

68 6974

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2002 2003 2004 2005 2006 2007 2008 2009

Practice The Aetna Way (Values)

Proud to Work for Aetna

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“The once notoriously stingy and fiercely unpopular company is now frequently cast as the country's most physician-friendly insurer.”

Jan. 4, 2006

By Jessi Hempel and Diane Brady

THE AETNA CASE

THE AETNA CASE

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Leadership Communications Lessons

•Articulate a clear long-term vision

•Be open and honest about the scope of the challenge

•Don’t over-promise

•Take decisive action

•Lead by example

•Grace under pressure

How Communicators Lead in the C-Suite

Successful CCOs must have:

A clue Guts Woo

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Three things to think about

What is the role of the CCO in leading within the enterprise?

How can leaders shape an organization worthy of trust?

Can leadership communications convert stakeholders into advocates?

LEADERSHIP COMMUNICATIONSAnd the New Model

Roger Bolton , PresidentArthur W. Page SocietyGeorgetown UniversitySeptember 5, 2013