In the second episode of the CEO Insights series, senior partner Kurt Strovink speaks with Laurel Moglen, McKinsey’s managing producer, to share how the best CEOs create a communications strategy and platform with which they can authentically extend their reach to multiple constituencies. Kurt and Laurel discuss approaches CEOs use to connect meaningfully with their stakeholders and the importance of proprietary narratives around the “who” and the “why" inside their organizations.
CEO Insights, which features short, sharp perspectives on the evolving role of the CEO, is produced by The McKinsey Podcast in partnership with the CEO Special Initiative.
This transcript has been edited for clarity and length. To catch the full episode, click here.
Why CEOs must connect with stakeholders
Laurel Moglen: Stakeholders, like investors, customers, the media, and employees, all want to hear from CEOs on a wide range of issues. Kurt, through your conversations with CEOs, how important is it for CEOs to engage with the public?
Kurt Strovink: It’s very important, and it’s becoming more important as time goes on. Communications and stakeholder engagement is one aspect that many CEOs are less prepared for, relative to what it takes. It’s not something they’ve necessarily encountered in previous roles before becoming CEO. And the enormity of the number of stakeholders, the balance between them, and how to manage and negotiate this is something that I think dawns on new CEOs quite quickly.
Our own research suggests that 58 percent of CEOs think that external affairs is a top priority for them. But only 12 percent feel that they’re handling it really well. I would also say some of the leading CEOs, those who have become skilled at being a CEO over time and some of who we’ve profiled in our book CEO Excellence, have also drawn attention to this priority.1
Satya Nadella, the CEO of Microsoft, has talked about how important it is to be able to manage multiple constituents in the world—team members, employees, customers, governments. As a CEO, you need to create that sort of continuous balance between multiple constituents.
Laurel Moglen: What’s the best way for leadership to adapt to this priority?
Kurt Strovink: In terms of how to adjust to this priority, we’ve tried to synthesize our perspectives into an approach called EDGE. It’s an acronym that encompasses four ideas for CEOs to understand what’s important.
The first idea is expanded. CEOs must think about themselves as a bridge to the outside world. They must recognize that they’re kind of public in all their comments at all moments. That’s a different mentality than thinking about yourself as a personal leader inside of a company, where your words won’t travel as far.
The second idea is distinctive, by which we mean do only what the CEO can do or try to think about those things that can’t be delegated. There are many things that you can have other people do on your behalf, but some of the communication needs to be from the CEO seat itself.
The third idea is growth oriented. Some of the best communicators and stakeholder balancers think a lot about growth in their communications. It’s something that’s ever present in the way that they interact with the outside world. It’s part of how they emphasize the upside of their companies, their contribution to the world.
The fourth and final idea is engagement. This means going beyond influencing stakeholders to try to truly inhabit the mindsets that they have, meet them on their own terms, and work from there.
This is one way to think about four important best practices that we think of in the context of communications with different constituent groups and to adapt to them.
Laurel Moglen: As leaders incorporate all that EDGE means into their communications platforms, what strategies have you seen work for them?
Kurt Strovink: I have seen a few strategies that work for CEOs and a few markers for progress as CEOs, who become more excellent on this dimension. I often will observe a CEO’s narrative itself—the way they talk about what they’re doing, what they’re here to do, what their company’s purpose is, how they engage their own employees—and I will listen for how proprietary that vocabulary is and how authentic it is to them. And we often find that CEOs who become skilled at this will have certain terms that they put more weight into, certain things that become meaningful. So this idea of the singular narrative with proprietary language is hard to encourage anybody to do, but we notice it as a distinctive strength.
I also find that CEOs need creative ways to enrich this narrative over time, to have it take in additional elements of what happens around them. They must repeat this narrative, sometimes more than they’d like to in different settings. They should find energy and enthusiasm and vitality in doing that authentically. It’s very important to see yourself as a real communicator of this message in broadcast and in narrowcast forms. The former CEO of US Bancorp, Richard Davis, said the holy grail for him was to have 12 people on a management team who were equal voices and equal storytellers.
What that means is that there are people who can speak for the team, for the company, not just for themselves. Sometimes, you see CEOs who develop enough of a narrative that they get another dozen people on their management team to really make it theirs and sound similar themes.
These CEOs create propagation that’s much greater inside the company and outside the company because they have other people and their management team who are fully resonant with those messages.
One last thing that I’ll share from our work with CEOs is what we call the four Ws: “who” “why,” “what,” and “when.”
You have to think about “Who you are?” or “Who do you want to be?” You’re really thinking about the identity of the organization separate from the initiatives and activities that are under way.
You also have to think about the why. “Why is it there?”
This gets us to the what. “What is the purpose?” or “What’s a larger mission that motivates?” This leads you to think about the series of things you’re doing. And that ladders down into many aspects of strategy, initiatives, and the like.
Lastly, you think about the timing, the execution of the plans, which is summarized by the when.
But I do see a failure mode in CEOs. They’re very good about the what and the when, though maybe not as thoughtful as they could be about the who and the why.
And in self-propelled organizations, especially organizations of high talent, there’s tremendous latent potential in deeper dialogues about the “who” and the “why.”
I would encourage all CEOs to think about all four Ws evenly as they think about building some of these messages, these narratives of meaning, and as they chart the course to figure out what they’re solving for with so many different constituencies.
1 Carolyn Dewar, Scott Keller, and Vikram Malhotra, CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest, New York: NY, Scribner 2022.