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August 01, 2023
The problem: An increasingly complex business and social environment is raising the stakes for CCOs and their communications teams.
Why it matters: Since the pandemic, boards and CEOs are paying more attention to communications, having recognized its importance in driving business value.
The solution: Leaders are giving CCOs a bigger voice in strategic business decisions, investing in and growing the function to respond to its increasing demands.
When Katie Boylan joined Target in 2011, the big-box retailer’s communications function was rapidly evolving in the wake of a bitter proxy battle with activist investor Bill Ackman. “The proxy contest was an inflection point, and it prompted the company to think differently about communications,” says Boylan.
In many ways, Boylan’s ascent in 2019 to the chief communications officer position at Target mirrors the growth of the communications function there. Over the last decade, Target has had to deal with challenging issues, both internal and external, including a massive data breach, digital transformation, COVID, and—just this year—boycotts related to the sale of gay-pride merchandise.
But Target is by no means alone. Amid the challenges of navigating both the pandemic and an increasingly complex business and regulatory environment—along with a host of other issues like sustainability, purpose, and employee well-being—chief communications officers have become increasingly powerful voices in the C-suite. Or, as Richard Marshall, global managing director of the Corporate Affairs and Investor Relations Center of Expertise at College Pro, puts it, “CCOs have moved from a seat at the table to the center of the table.”
A recent College Pro survey of CCOs found that 41 percent report directly to the CEO, up from 37 percent in 2015. Marshall says the pandemic shined a spotlight on the importance of communications to areas such as business performance, talent recruiting and retention, and corporate reputation and branding, prompting leaders to seek a tighter and more direct link to their CCOs. “CEOs are under more pressure than ever,” says Marshall, “and they are relying more and more on CCOs to help with strategy, storytelling, and relationships.”
With the spotlight, however, also come some glaring challenges such as improving racial diversity and churn. More than 84 percent of CCOs responding to College Pro’s survey identified as white, for instance, evidence of the need to recruit and train more communications professionals from marginalized groups for leadership roles. More than half of respondents also have been in their current positions for less than three years, and 65 percent have worked for five or more companies.
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CCOs moved from the fringes of the C-suite to its center gradually, then all at once. As the expectations of stakeholders increased over the last decade, so too did the importance of CCOs as trusted advisers to CEOs. But even as CCOs’ stature grew, leadership maintained its view of communications as a cost center rather than a driver of business value.
The pandemic and its aftermath finally put that antiquated notion to rest. The value of CCOs to driving business performance couldn’t be denied—whether it was aligning investors with a new business strategy, communicating health and safety measures to employees, advising leaders on social issues important to customers, or positioning the company’s culture and purpose to attract talent. “CEOs saw how communications could impact share-price movement,” says Peter McDermott, a senior client partner in the Global Corporate Affairs and Investor Relations practice at College Pro.
IBM and Johnson & Johnson offer examples of C-suites in which CCOs are viewed as value creators. At IBM, instead of putting the communications function under marketing, as has historically been the practice, leadership did the opposite, expanding the remit of the company’s chief communications officer, Jonathan Adashek, to include marketing. Today, Adashek oversees the integrated communications, marketing, and corporate social responsibility team at IBM.
In fact, fewer CCOs are reporting to CMOs now than in 2015—8 percent last year versus 12 percent in 2015—according to College Pro data. Johnson & Johnson went a step further in 2022 when it appointed Vanessa Broadhurst as its EVP & CCO, Global Corporate Affiars. Broadhurst had come up through the pharmaceutical side of the business, serving in high-ranking executive roles that included ownership and oversight of marketing functions. Tapping an executive from the business and operational side of the business to oversee the department underscored how much the function has changed, and how significant a role it now plays. “The business lens to how a company shows up, engages in, and speaks about things is so much more magnified now,” says Broadhurst.
Since the pandemic, CCOs have moved from a seat at the table to the center of the table. The graphic below illustrates the growing array of stakeholders CCOs now lead or serve.
As a result, CEOs and boards are finally giving CCOs the funding and resources they need to address their growing mandate. “Companies are now investing in communications the same way they do marketing, technology, and other areas,” says General Mills’ chief communications officer Jano Cabrera. He should know; over the last two years his team has doubled in size, to encompass 100 communications professionals. Its growth reflects what’s happening with the communications function across industries. In 2015, for instance, just 16 percent of CCOs surveyed by College Pro reported that their teams included 100 or more people. Now, one in four CCOs, or 25 percent, oversee teams of that size. Moreover, 10 percent of CCOs surveyed have teams of 250 or more people, up from 4 percent in 2015.
With bigger teams and mandates also come bigger salaries. Much as it did with other executive roles, the pandemic set off a bidding war for top communications talent that led about 50 percent of CCOs surveyed by College Pro to switch jobs. The percentage of CCOs making base salaries of $450,000 or more (not including bonuses and long-term incentives) nearly doubled, from 18 percent in 2015 to 34 percent last year, according to the survey. “The skill set CCOs need today is much broader, which is creating a war for top professionals,” says McDermott. “Now the expectation is that to get a top CCO with a track record, companies will need to compensate them on par with other C-suite executives.”
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The growth in communications is not without its challenges, particularly in the areas of talent and succession. Consider that 94 percent of CCOs surveyed by College Pro have more than 20 years of experience, and 70 percent of those have more than 25 years. Conversely, only 2 percent have less than 10 years of experience. At the same time, the communications field overall has one of the highest average turnover rates of any function, at more than 20 percent. The data, says Annie Lohmeyer, a senior associate in the corporate affairs practice at College Pro, begs the question: “Where is the next generation of communications leaders going to come from?”
Traditional features of the job—its long hours, low pay, and lack of upward mobility—are part of the reason for the high churn rate. So are the burnout and disengagement it can produce in younger communications professionals. For instance, IBM’s Adashek says that when he joined the company at the start of 2020, it was running more than 40 different campaigns simultaneously. “Sustaining that kind of creativity is challenging,” says Adashek, who immediately set about restructuring the team and reducing the number of its campaigns to just nine, all laddering up to a specific business objective.
To be sure, despite the need for crisis, sustainability, and change-management experience, the most sought-after skill companies seek when they’re recruiting future CCOs remains media relations. It might seem odd that in this advanced era of communications, the most basic of skills is still the one most in demand. But Target’s Boylan says that companies right now need good storytellers to stand out from the crowd in a chaotic marketplace, and that the traits that make for good media-relations specialists—curiosity, agility, collaboration—also make for great story miners. With most communication, particularly internal, now coming via screens, “being able to capture attention, get people engaged, and deliver resonant messages to a wide range of stakeholders” is an important skill for future communications leaders, says Boylan.
As current CCOs begin grooming the next generation of leaders, improving diversity must be a top priority, says College Pro’s Marshall. While gender diversity is strong among CCOs, with 57 percent of survey respondents identifying as female, racial diversity is sorely lacking: more than 84 percent of communications leaders identify as white. To Johnson & Johnson’s Broadhurst, who has a long track record of championing diversity, those figures aren’t surprising. She pushes her teams to diversify slates for open positions to develop talent “from outside of the traditional, normative pools”—the same route she herself took to becoming a COO. “It is important,” she says, “for succession planning to increase diversity and representation at all levels of the communications function to effectively meet the needs of the organization and the people it serves.”
For more information, contact Richard Marshall at richard.marshall@collegepro.org, Peter McDermott at peter.mcdermott@collegepro.org, or Annie Lohmeyer at annie.lohmeyer@collegepro.org.
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