Businesses are navigating an unprecedented set of business and societal challenges.
From the lingering impacts of the global pandemic to supply chain disruptions, the rippling effect of Russia’s invasion of Ukraine, the energy crisis, rising costs of living, to new expectations around racial justice and diversity and debates on abortion rights, companies are grappling with a non-stop barrage from every angle, and executives are feeling the pressure.
With everything executives are facing, it is hardly surprising that crisis management has become the fastest-growing area of responsibility for chief communications officers (CCOs) and chief marketing officers (CMOs). Our 2022 Edelman Connected Crisis Study reveals that half of the CCOs and CMOs surveyed say that their crisis responsibilities have increased amidst the rising pressure for hyper-transparency and immediate action on issues.
Unfortunately, our data shows that despite this increased focus, companies are still unprepared to navigate today’s issues landscape, respond to a growing number of stakeholder groups, and protect trust in a crisis.
Companies underestimating expectations around their role in society
Societal leadership is now a core function of business. However, the sheer volume of societal issues is overwhelming companies. Across each of the 22 societal issues we examined, more than half of CCOs and CMOs are concerned about their potential impact on their brand or company.
The deluge of issues is leading to reticence among executives who face the daunting challenge of navigating the important, complex debates over when and how to engage.
One CCO recently commented to me about the “game of gotcha” that ensues within their organization as they face questions from employees on why the company is taking a position on some issues and not others. Another client reflected on the “hair on fire” decision-making process that they went through on pressing decisions.
Meanwhile, despite the prevailing view of the general public being overwhelmingly supportive of businesses working to solve societal issues, we’ve seen a recent wave of backlash against companies who have done so.
No company should feel compelled to take a position on every issue, nor should these expectations alone drive decision-making. But these dynamics do exist.
As the function tasked with building trust across all stakeholders, communicators have both the opportunity and the imperative to guide company leadership through these situations. This means treating it as part of ongoing business operations — implementing a purposeful approach to decision making, the governance to enable it, and the right data both on the issues themselves and the insights required to enable informed decisions.
Until this happens, the gap between societal expectations of companies and their readiness to navigate this landscape presents a growing risk for those who fail to deal with this tension.
Gen Z changing the crisis game
Gen Z is driving major changes in the crisis landscape.
It’s tempting for some companies –- particularly those who don’t serve Gen Z with their products or services –- to dismiss this cohort. However, we must remember that Gen Z increasingly includes people who are graduating from school, entering the workforce and making purchasing decisions. This group has immense purchasing power, and it’s only increasing.
Gen Z is throwing companies off balance. Almost two-thirds of CMOs and CCOs believe that, more than any other generation, Gen Z has the power to disrupt the role of businesses in society today. They are challenging companies to maintain higher standards in their response to crises and in their role in society. For those that don’t, more than half of Gen Z says they have already taken action – starting or stopping their purchase of brands based on their approach to societal issues.
Companies are struggling to deal with the dynamics Gen Z is introducing. This group is outflanking companies through new approaches and new channels that challenge long-standing corporate approaches to crisis management and force companies to examine their ability to move quickly in new ways.
Simply put, what worked in yesterday’s playbook may not work today – with consumers and with your own workforce.
Businesses misjudge how to protect trust in a crisis
Our study also revealed that CMOs and CCOs need to close the gap with between their perspective and the expectations of the wider public when it comes to their response to crisis. The two most important traits that people expect companies to demonstrate during a crisis are integrity (being honest) and dependability (keeping your promises). However, this is not in line with the way that businesses are managing these moments.
Only 1 in 4 executives are consistently prepared to meet stakeholders starting with their point of view, and not the company position.
Actions matter. No matter how important values alignment is, when a company is in crisis that alignment matters little if the company is not honest and dependable.
Today’s crisis landscape is one of innumerable challenges; one that communicators of all levels are challenged to navigate. Given all of these challenges it’s hardly surprising that sixty per cent of CCOs/CMOs told us they don’t have the right skillset on their staff to manage this range of issues. Companies need to recognize importance of equipping the organization with the appropriate focus and resources to develop a proactive plan to protect itself from today’s risks.
Ultimately, managing crisis is no longer just the domain of corporate communicators. Today’s landscape requires the whole business to commit to creating a culture of resilience.
Dave Fleet is managing director and head of global digital crisis at Edelman.