© University of Southern California 2014

ADDRESSING THE CRITICAL

COMMUNICATIONS TALENT CRISIS

IN THE “THIRD SPACE”

Ernest J. Wilson III, PhD

ANNENBERG School of Communication and Journalism UNIVERSITY OF SOUTHERN CALIFORNIA

2014

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EXECUTIVE SUMMARY

Globalization and new communication technologies are disrupting organizations’ performance,

and C-suite executives, particularly in the bellwether Media, Communication and Entertainment

(MCE) fields claim they are suffering from a deficit of talented employees with the requisite

specialized skills needed to respond to disruptive forces.

The same problem plagues professionals in the public relations, advertising, and other ‘vertical’

industries, as well as companies operating outside of the MCE space. The competitive

landscape is irreversibly changing, and will continue to do so.

Over the past 18 months, leaders and key faculty from USC’s Annenberg School for

Communication and Journalism have conducted a deep dive consultation with dozens of

C-Suite and senior communications executives, from a broad range of industries and from

Fortune 50 companies to media start-ups, to better understand the depth and breadth of

challenges they’re facing.

Drawing upon the rich feedback from these initial stakeholder discussions, and analyses of

dozens of industry reports on future workforce needs, we’ve concluded that future leaders must

be capable of communicating strategically – possessing not just critical skills, but a unique set of

attitudes, perspectives, experience and substantive knowledge. Moreover, attracting, growing

and retaining talented individuals with these capabilities are universal challenges, regardless of

geography or industry.

Our research has revealed a deficit in 5 critical, inter-related competencies that lie beyond

traditional Business and Engineering training, which we have defined as the “Third Space” of

21st century talent requirements.

We at USC Annenberg have initiated one of the most ambitious and innovative undertakings

ever launched in the communications space to more thoroughly explore the issues of the “Third

Space,” and to identify strategies to create a talent pool of next-generation leaders who will

significantly shape the future of media, communications, entertainment, and business.

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DEFINING THE TRILLION-DOLLAR CHALLENGE

When the consulting firm McKinsey & Co. introduced the concept of

“The War For Talent” in 1997, their efforts heralded forthcoming worker

shortages catalyzed by demographic forces; as the massive Baby Boomer

workforce aged into retirement, they would leave behind legions of jobs

left unfilled by the smaller populations of Gen-X and Millennial workers

that followed.

In the 21st century, however, technological

advancements, shifting economic fortunes

and potentially boundary-less globalization

are making obsolete the ‘old ways’ of

doing business.

Today’s organizations – particularly those

in the bellwether Media, Communications

and Entertainment (MCE) spaces – must

adapt to evolving market dynamics and

the new realities of user-centric social

media, which is empowering consumers to become content creators rather

than merely just audience members.

Research from McKinsey, Boston Consulting Group, and others shows that

companies that manage to tap into social media opportunities stand to earn

a combined trillion annually1.

1 Mckinsey.com/Insights/The Social Economy 2013

According to PWC,

1/3 of Entertainment CEOs

said talent constraints

hampered their ability

to innovate,

forcing delay or

cancellation

of at least one strategic

initiative during the past year.

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In 2013, global Box Office revenues exceeded US$89 billion, and the

worldwide video game industry approached US $93 billion2. Today, more

than 90% of adult U.S. internet users are on Facebook, and spend an

average of 7 hours per week on the site.

About two-thirds of brands are using social media to generate leads, which

is fortuitous, considering 79% of Twitter users recommend brands they

follow, and 4 billion of the world’s 6.8 billion people are using mobile

phones3.

This new, interconnected, interdependent global operating environment is

creating new levels of challenge and ambiguity as never before. It is laying

waste to traditional models, with its reliance on vertical operating

structures, discrete definitions of inputs and outputs, narrowly defined roles

for suppliers, manufacturers and consumers, and obsolete, one-way

communications models.

Now, organizations in all industries must wrestle with what the Institute for

Corporate Productivity defines as the “agility imperative4”: a competitive

global environment evolving at exponential rates of change.

So, what do organizations most need to survive?

2 PWC, Global Entertainment Media Outlook 2014-18 3 Edison Research 2010; 60-Second Marketer 2011 4 “The Five Domains of High Performance,” Institute for Corporate Productivity, 2011

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Over the past 18 months, leaders and key faculty from the Annenberg

School for Communication and Journalism at the University of Southern

California have conducted a deep dive consultation with dozens of

business thought-leaders – CEOs, Chief Communication Officers, Chief

Marketing Officers and other senior C-Suite executives – from Fortune 50

companies to media start-ups.

Our interviews included decision-makers from media, communications and

entertainment organizations, as well as senior executives responsible for

the Communications functions in a range of industries, including the bio-

tech, automotive, banking and consumer retail segments.

What we heard, frankly, surprised us.

To weather the tectonic shifts in today’s operating environment, these

executives said they did NOT need…

Greater investments in technology infrastructures

Increased numbers of potential acquisition targets

More seamless plans for globalization

Whether they came from PR, broadcasting, advertising, journalism,

strategic communications, technology, executive search, NGO or

government agency… essentially all of the executives we spoke to had

similar concerns. The commonalities were striking. Their greatest barrier

to success? The shortage of qualified talent.

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Our stakeholders specifically said that the individuals they were currently

recruiting with Business and Engineering backgrounds, while well-educated

and largely qualified to perform their jobs, still lacked a specific set of

critical communications competencies – not just skills, but attitudes,

perspectives, experience and substantive knowledge.

Our findings were supported by numerous research groups and projects,

including the United Nations’ “Global Leaders of Tomorrow” initiative,

which reported that senior executives perceived

a significant performance gap between what they

considered to be critical business knowledge and

skills, and the effectiveness with which these were

developed by business schools, company training

efforts or professional organizations.5

Our findings were further refuted by a recent Price

Waterhouse Coopers study, in which 65% of CEOs

in the media and entertainment industries, and 54% of CEOs in all other

industries, expressed concern that their talent pipeline lacked key skills

for sustained success6.

Why the critical focus on people as the solution? Because it’s inarguable:

Talent and Creativity Drive Innovation,

and Innovation Drives Success.

5 “Developing The Global Leader of Tomorrow,” Principles for Responsible Management Education, UN Global Compact, 2006 6 “Delivering Results: Key Findings in the 15th Annual Global CEO Survey-Entertainment & Media Sector,” Pricewaterhouse Coopers, 2012

These rapidly shifting

global, economic and

technologic changes

have further splintered

the “War for Talent” into

two distinct campaigns:

the need for more

talent, and the need

for the right talent.

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From our consultations emerged an unexpected picture of new challenges

and opportunities, which we at USC Annenberg have come to call the

“Third Space” of 21st century talent requirements.

Unlike the space inhabited by MBA talent, or the second space of talented

engineers, this “Third Space” represents unique strategic

communications competencies urgently needed in the rapidly

changing business world.

The “Third Space” of 21st Century Talent Requirements

BUSINESS ENGINEERING

?

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EXPLORING CRITICAL NEW COMPETENCIES

The executives we interviewed readily acknowledged that graduates from

Business and Engineering programs possessed strengths, drawn from their

respective knowledge bases.

For example, both start-ups and legacy companies require people with

critical analytical skills typically provided by Business schools. An MBA, for

example, can equip entrepreneurs and managers to analyze market

structures and dynamics, understand competitive advantages, and

embrace the importance of keeping their eye on the bottom line.

Such MBA thinking, however, has its own blinders and assumptions that

may not reward innovative problem-solving and creativity.

This premise is supported by Harvard Business School professor Rakesh

Khurana, who attributes declining numbers of applicants for traditional MBA

programs in US business schools to diminishing relevance. Khurana notes,

“…management school graduates are finding that their skills and training

are not ideally matched to the needs of global corporations that have

undergone rapid changes… we’re still trying to figure it out.”7

Similarly, Engineering schools provide rigorous analytic thinking geared

mainly toward operational problem-solving, development of technological

advances and optimizing manufacturing processes.

7 “The Multipolar MBA,” Strategy & Business, Jan. 2013

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Yet that methodical, linear thinking can lead engineers to miss the

unexpected ‘around the corner’ events that characterize our time, and to

overlook dynamic societal trends and conditions that decisively shape

patterns and rates of technological adoption.

Both disciplines typically assume their special domain is a powerful solvent

to other human traits – like culture, personality and patterns of

communication.

And both are more likely to underestimate the value of ‘context’ -- the

awareness of the dense systems within which technology and business

must operate, and the complex, dynamic networks that link society,

technology and business.

John Seely Brown, leader of Deloitte’s “Center on the Edge,” and visiting

scholar and advisor to USC’s Provost, notes that understanding context is

“…actually an ideal property for a 21st century citizen to have. We need

people who can read the context of a problem, and it takes more than IQ…

context shapes content.”8

So, while smart Business and Engineering schools are beginning to

recognize these deficiencies, they may be hampered by their professional

cultures and the orientation and skills of their current faculty. In our opinion,

they still have a long way to go.

8 “Why John Seely Brown says we should look beyond creativity to cultivate imagination,” Spotlight.Macfound.org – MacArthur Foundation, Jan. 2014

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THE THIRD SPACETM: DEFINING, FULFILLING

CRITICAL UNMET NEEDS

The Business and the Engineering spaces may be familiar and well-

defined, but the brave new world of the Third Space is still emerging, and

organizations must continue to experiment with attracting and cultivating

the strategic communications talent they badly need.

Drawing upon the rich feedback from our initial stakeholder discussions,

and our analyses of dozens of industry reports and articles, we’ve

developed some preliminary conclusions about the new realm of Third

Space communications talent.

First, we believe the Third Space should be defined as a unique set of

competencies that must include the right mix of not just skills, but

attitudes, perspectives, experience and substantive knowledge.

We insist that the Third Space not be limited by industry, function,

or traditional operating definitions; communications is essential in

all sectors. Truly strategic communications are as essential in

transportation and agriculture organizations, as they are in nonprofit, IT

or social media organizations.

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Competencies of the Spaces

Addressing the Third Space calls for broader, more sophisticated

knowledge of the conceptual depth and breadth of

communications and its multiple strategic applications. Effective

communication is a core strategic asset and must be viewed as such.

Future Third Space leaders will be an entirely new breed of

professional, defying current-day curricula or job descriptions.

They must possess unique capabilities that enable them to thrive in the

highly complex and rapidly evolving social, economic, political, and

global operating environment.

BUSINESS

Market Savvy

Bottom Line

Profitability Orientation

ENGINEERING

Linear Thinking

Process-Centric

Operating Orientation

Adaptability / Flexibility / Comfort with Ambiguity

360o

Thinking / Contextualization / Pattern Recognition

Intellectual Curiosity / Creativity / Willingness to Experiment

Cultural Competence

Empathy / Effective Listening / Collaborative Skills

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To be successful as strategic communicators, Third Space leaders will

demonstrate mastery in technical, creative and managerial

responsibilities, successfully operating from a broad, cross-

disciplinary foundation of knowledge that draws from

Communications, Management, Sociology, Psychology,

Anthropology, Design, and Engineering, among other areas.

Attracting, growing and retaining talented individuals with these

capabilities are universal requirements, regardless of geography or

industry. As noted by the World Economic Forum, “Any nation or

company that continues to rely on conventional learning and routine,

siloed work without fostering a culture of continuous learning will face an

ever-deepening talent gap.”9 Whether addressing projected shortfalls in

the developing world due to a rapidly ageing workforce, or creating new

capacity in developing nations, the need for people with Third Space

skills will remain critical, across the globe.

9 “Global Talent Risk – 7 Responses” World Economic Forum, 2011

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FURTHERING THE EXPLORATION

Through our initial stakeholder conversations and research, we developed

a preliminary list of possible “Third Space” skills and attributes, including:

While not intended to be exhaustive, this list of proposed competencies

provides a starting point from which to further define the most critical issues

and create actionable plans.

Some of the Founding Advisors joining us in this exploration of

the “Third Space” have shared their views on the most critical challenges

ahead.

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From Ron Ricci, Vice President of Executive and Customer

Engagement, CISCO:

ollaborative teams work best when they’re made up of people

who communicate openly – and in the 21st century these

teams are unequivocally becoming more virtual in structure and

execution… However, as we cross departmental, cultural and time-

zone boundaries, collaboration puts our personal communication

skills to the test… Establishing rapport –- quickly –- is one of the

most important aspects of successful collaboration, and it starts

with communicating authentically… The more you share your

authentic style with your collaboration partners, the faster you can

achieve trust – and diffuse unnecessary “human friction.”… The

challenge for 21st century leader: Learn to share our authentic style

of communicating and making decisions.”

From Elisa Schreiber, VP Marketing, GREYLOCK PARTNERS:

he successful companies of tomorrow will have a deep bench

of high-judgment, tenacious and flexible talent.

These companies will take great care to hire strong general

athletes who are not only capable and adept in their daily jobs as

communications strategists, but also adaptable and well-rounded

enough to pivot when the business demands it.

These companies will seek out the folks who are comfortable with

ambiguity, embrace the unknown, and are willing to take risks. And

these companies will inspire and nurture this new breed of talent by

offering a continuous the pipeline of challenges that can only be

met by individuals with fluency in technology, economics, and

design.”

C

T

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From Andy Cunningham, President of BITE COMMUNICATIONS:

he greatest talent challenge we face as we navigate a global

society in the 21st century is that of leadership… there is little

time for thinking outside the box, taking the road less traveled, or

coming to terms with a value system and learning to lead from that

perspective. Challenges like stabilizing global economies, calming

cultural clashes, establishing racial equality, slowing climate

change, taming technology and alleviating poverty—the intractable

issues of our time—rest on the shoulders of these young people

and… if we expect tomorrow’s workforce to lead us out of today’s

problems, we must make values-based leadership a condition of

global citizenship. We must provide venues for cross-cultural

discourse, encourage experimentation and reward outliers. We

must have the courage to change the system. We simply cannot

afford a generation of high-performance lemmings.

Among the issues we will explore in the Third Space:

Can we create a prioritized, definitive set of skills, traits,

perspectives and competencies that are critical for future

communications talents’ success?

To what degree are these individual talents, personality

attributes or acquirable skills?

How can these competencies be taught, created or developed

so individuals experience more optimal alignment with future

workplace requirements?

Can we measure the benefits of having these attributes,

and the cost of not having them?

T

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Meanwhile, every leader considering the future of strategic communications

talent in their organization will want to know:

How can we effectively find and attract individuals with critical

communications competencies? What are the relative benefits

and costs of “build, buy or grow” strategies to obtain such

capabilities?

How can we ensure our organizational culture and structure

support the needs and interests of Third Space talent?

What are the best ways to reward and retain such uniquely

talented individuals?

DEVELOPING “THIRD SPACE” TALENT

While the Human Resources literature encourages companies to engage

in “human capital planning,” we find the current body of knowledge to be

overly narrow, somewhat technical in nature and focused primarily on

tactical HR practices, particularly in regard to long-term talent issues.

With a few exceptions, the current approaches are insufficiently strategic.

In our view, cultivating the necessary future talent capable of truly strategic

communications remains a critical, under-addressed focal area, and badly

requires sound, innovative strategic thinking and solutions.

As result, we at USC Annenberg have launched an ambitious undertaking

to define and help create the next generation of leaders who will shape the

future of media, communications, entertainment, and business.

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Drawing upon the best minds from around the globe and across industries,

think tanks, universities and executive search firms, we will define the

critical competencies of the Third Space in the 21st Century, and to identify

strategies to create that talent pool.

The Core Goals of the Third Space Project are to:

Help define the requirements of next-generation leaders

who will effectively shape the future of Business and

Communications in the 21st century.

Offer alternatives to largely ineffective efforts to

“bolt-on” incremental skills and training approaches

for tomorrow’s workforce.

Cultivate a new breed of professionals who are

well-prepared to grow and thrive in the ambiguous and

rapidly evolving global business environment.

Moving forward, to remain an essential thought leader

and neutral convener in this space.

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AN INVITATION

USC Annenberg is launching a significant global conversation -- hosting a

series of interactive dialogues and curated conversations as we continue

working to close the chasm between the undersupply and rising demand

for high-quality, multi-dimensional future communications talent.

Through this process, we are exploring traditional issues of talent

development, cultivation and creation, from recruitment to retirement,

as well as the new 21st century conditions of high churn and cross-sector

mobility, global talent competition, and the emergent values of Millennials.

We anticipate these conversations will shape the thinking – and actions –

of leading institutions operating in this high-velocity universe, and invite you

to join us as we delve more deeply into helping organizations accelerate

innovation and experience sustained success, fueled by a steady supply of

uniquely capable talent.

ADDITIONAL RESOURCES

For additional information and to participate in the conversation, please

visit our website, www.uscthirdspace.com, follow us on Twitter

@USCThirdSpace, and contact Laura Jackson at the USC Annenberg

School for Communication and Journalism at laurajac@usc.edu.

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Acknowledgments

The USC Annenberg School for Communication and Journalism is grateful

to the following individuals for their guidance during the conceptualization

and launch of the Third Space Project:

Founding Advisors

Jon Iwata, IBM

Ron Ricci, Cisco Systems

Don Spetner, Senior Communications Executive

Andy Cunningham, Bite Communications

Margery Kraus, APCO

Dana Landis, Korn-Ferry

Michael Mand, CAA

Carmen Medina, Deloitte

John Roussant, Publicis

Elisa Schreiber, Greylock Partners

Aravin Sitarand, Cisco Systems

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