Crisis, what crisis? A Davos week that began with dire prognostications on the collapse of trust ended in upbeat mood, with corporate bosses buoyed by the kind of economic optimism that may help them banish the memories of political upheaval that coloured last year’s World Economic Forum.
Find all of our Davos 2018 coverage here.
Not that those issues, nor the populism that underpin them, have disappeared. But the corporate world is nothing if not pragmatic, and the combination of tax cuts, deregulation and economic expansion means they appeared just a trifle less concerned about the decline of trust or jarring inequality that continue to bedevil perceptions of the Davos elite.
If last year’s Davos man wondered whether the “the mountain’s crumbling under us”, this year’s version (still male, regrettably, despite WEF’s sterling efforts to increase female representation) is investing in upgraded footwear, and not just because of the record snowfall. There was a palpable sense that Davos continues to matter.
“On the one hand there was muted optimism about the economic upswing and plenty of issues and crises to discuss..but at the same time there was a collective sense of relief at the fact that Davos is still going strong,” said Burson-Marsteller EMEA chief operating officer Katarina Wallin Bureau.
“I didn’t hear any of the self-flagellation of last year when everyone was lamenting the demise of Davos man and the redundancy of a group of elites at the top of a mountain.”
That much was apparent even if little has changed when it comes to the threats that so destabilised the mood 12 months ago, handily illustrated by how the populist agenda found its way into the hallowed Congress Center. The opening and closing keynote speakers are two of the most populist people speaking at this conference,” pointed out Publicis Groupe chief growth officer Rishad Tobaccowala. “Modi and Trump. This feels like a very different Davos.”
Perhaps, although — this being Davos — there is plenty that remains the same. Not least the soaring rhetoric about addressing intractable global problems, nor the schmoozing and dealmaking that remains, for most of its attendees, the Forum’s primary benefit.
Regardless, APCO founder and executive chairman Margery Kraus notes that the disruption that is writ large across the globe is being keenly felt in Davos. “It is a conversation that every head of state and head of communications is having, and needs to bring back to their capitals and employees, regardless of sector or region of the world,” she points out. “If these ideas are left up in the mountains, this week will just be remembered for the snow. If we turn these ideas into action, we can make and see real change in the world.”
With that said, here are five themes that are likely to play a significant role when it comes to your corporate engagement agenda this year:
1. The activist CEO
“There have never been more opportunities for CEOs to demonstrate leadership in addressing these inequities and living up to social purpose”
CEO activism may well have been the most popular public relations topic at Davos this year, as corporate chieftains stepped up to fill the vacuum engendered by the glaring absence of proactive political leadership. And after a year when CEOs signalled their political stances on everything from LGBTQ issues to neo-Nazi violence, that made plenty of sense, even if it does raise challenges for public relations people.
“The mood at Davos this year was much more positive, which is not surprising given that the world’s economies are all experiencing growth. But there’s still concern about deep inequities which continue to give rise to populism and political dysfunction,” said Weber Shandwick chairman Jack Leslie. “There have never been more opportunities for CEOs to demonstrate leadership in addressing these inequities and living up to social purpose. Both consumers and their own employees are continuing to push companies to respond to social need.”
Much of this is being driven by employees, who Microsoft president Brad Smith referred to as the primary audience for his company’s external engagement. “What it creates is the need for principles that guide as to when you’re going to speak and when you’re not,” he said. “One of the things that struck me is the anxiety of employees who want to see us speak more quickly.”
As Mercer CMO Jeanniey Mullen added on the Echo Chamber podcast, younger employees increasingly expect their CEOs to take a stance on issues, whether political or moral. On the same podcast, KPMG citizenship head Lord Michael Hastings pointed to the impact of BlackRock CEO Larry Fink’s high-profile call for corporate purpose. In the words of Richard Edelman, silence may no longer be an option.
A good example of this is eBay CEO Devin Wenig, a visible advocate on everything from trade to civil liberties to immigration. EBay chief communications officer Dan Tarman explained that the key is to focus on issues that are “authentic to the DNA of the company and also the CEO.”
“What it takes to be a high-performing leader today is evolving,” adds Ruder Finn CEO Kathy Bloomgarden, whose firm’s social CEO study found that leadership performance correlates to social media engagement. “No matter the industry, big data, hyper-connectivity and local issues that become global phenomena are disrupting how CEOs lead, and how employees, customers and stakeholders perceive them. For us in communications, this means we need to help CEOs evolve their leadership style to leverage the power of social media as a means to bring their story to life and connect with many different audiences.”
Business leaders, added FT US managing editor Gillian Tett, are also being judged on their authenticity — “People are actually looking for authentic voices, rather than the CEO hiding behind a phalanx of PR officers.”
2. The age of disinformation
“I don’t think there’s ever been a more scary time for truth.”
Once known best for its corporate and political leanings, Davos is today dominated by technology and media companies. So it was hardly surprising that the issue of fake news rarely strayed far from the surface. Salesforce CEO Marc Benioff got the ball rolling by comparing Facebook and Google to tobacco companies that must be taxed, with financier George Soros adding that their days are numbered. Across the board, there was a realisation that the digital giants will soon be facing a regulatory reckoning.
“The denial of any responsibility for the content they carry by platforms like Facebook, Google and Twitter is over and they are all actively looking for solutions using automation, AI and crowd sourcing models to ensure checks on the content they carry, showing that public pressure brought to bear on them is creating a change,” says Tata Consultancy Services global markets CMO Abhinav Kumar. “At the same time, there is broad agreement that it would be unfair to treat these platforms as pure media companies. This debate will go on beyond Davos, but the views on it are maturing fast.”
“Unless the media sign up to a set of standards, we’re going to continue to have trouble,” added Leslie. “And there’s a clear sightline to heavier regulation of the big platforms and tech companies.”
Of course, the Big Tech backlash ensures that these companies are easy targets for the kind of righteous indignation that is a core Davos currency. Richard Edelman described the “age of disinformation” as an insidious threat to democracy. “I don’t think there’s ever been a more scary time for truth. We’ve got to get the conversation back to rational, away from emotional.
That thinking explains Edelman’s new campaign to reposition public relations away from advocacy and lobbying to education.” We’re going to talk about the good things and the bad things,” he said. “If the goal is an educated population, PR actually has to play a fundamental role.”
That effort is likely to prove controversial in some circles, carrying with it the shared value mentality that irks those who see corporate communications as a zero-sum game. Yet eBay’s Tarman agrees that companies are better served by this approach. “If we live in an age where there is heightened scepticism about information that creates an imperative to get real,” he said. “There’s a lot of information out there. Better that you talk about it and put facts into context that people can rely on.”
3. The robots really are coming
“The most discussed topics this week involved blockchain, AI, and cyber security/privacy. The conversation quickly tilted to the role of communication to advance understanding.”
If every company is a media company then it is also a technology business, noted Publicis Groupe’s Tobaccowala, pointing to the rapid strides being made in artificial intelligence and automation. One year ago, we wondered how communicators should respond to this pace of change — a concern that is only more pressing after this year’s event.
“The most discussed topics this week involved blockchain, AI, and cyber security/privacy,” said Edelman chief operating officer Matt Harrington. “In most settings the conversation quickly tilted to the role of communication to advance understanding. All view communication as vital to educate, earn trust and foster ethical behaviour.”
Ketchum CEO Barri Rafferty characterised the fascination with AI as “equal parts excitement and apprehension,” pointing to the prospect of doomed professions and entirely different career paths, which call for sensitive conversations and engagement around reskilling and, if we are being honest, redundancy.
“The plus side for our industry is that several people I heard this week predicted that the marketing and advertising field would be one of the areas that is hardest to replace by AI,” said Rafferty. “According to Sinovation Ventures CEO Kai-Fu Lee, over time, pieces of all jobs will be done by machines but there are four main skills that cannot be replicated by machines – complexity, dexterity, empathy and creativity. Because our industry is so driven by creative, we offer a human trait that is difficult for robots to duplicate.”
Rafferty added that JPMorgan Chase CEO Jamie Dimon echoed this belief, stating: “Marketing is not guessing. It is analytics, data, AI – it’s an absolute machine. But at the end of the day, it’s about people and their insights.”
4. Brace for the backlash
“The key thing with principles is you pay a price for them. The reality is there will be a backlash.”
While Davos is popularly viewed as the first line of defence against anti-globalisation advocates, it remains ironic that two of its staunchest defenders at the event have been Xi Jinping and Narendra Modi, neither of whose countries can be described as open trading markets.
Instead, Tobaccowala sees globalisation turning into “two flavours” at Davos. “On the economic perspective, everyone is bullish. But Europeans speak more about globalisation from a perspective of culture and society and immigration. If there are concerns, there are concerns about whether this economic resurgence is going to help inequality.”
Those concerns, of course, are underpinned by the populism that Tobaccowala describes as the “new inequality,” reinforced by WEF founder and executive chairman Klaus Schwab’s comment that people are increasingly united by “common interests rather than common values.”
For brands, this creates a complex challenge, amplified by counter-intuitive populist movements such as #MeToo and the technology backlash. “Be very careful about the tone of voice and how your management presents themselves,” says Tobaccowala. “The key thing with principles is you pay a price for them. The reality is there will be a backlash. But if you say you are for all the people instead of a small group of people, it is strategically correct for the business.”
Corporate tax cuts are only likely to hasten this predicament, ably explored by Paul Holmes in an analysis earlier this year. Or, as Leslie put, brands are increasingly being judged by their values rather than their traditional brand attributes.
That helps explain P&G North American president Carolyn Tastad’s conviction that the world’s largest advertiser should be tackling bias from its enormous marketing pulpit.
“From a P&G standpoint, we are very committed to leveraging our voice in media and advertising to really tackle bias,” said Tastad. “It is not only our opportunity but our obligation to have our voice stand for something.”
5. Trump tuned out
“It does seem to suggest that the multi-polar world of multi-polar voices is on the rise.”
No discussion of Davos would be complete without mention of the Donald Trump’s presence, greeted variously with pin drop silence (at the Congress Centre) or a kind of lurid, rubber-necking fascination, particularly when a sizeable White House contingent decamped to the annual Salesforce shindig.
Yet the reality is that the corporate world is learning to live with Trump, bypassing his agenda and trusting that little of his rhetoric — as objectionable as it is — means much when it comes to their actual business performance. And if Trump’s corporate tax cuts boost their bottomlines, so much the better.
Instead, it was left to other political leaders to carry the flag for the Davos agenda. “Normally the presence of a US president for the first time in two decades would have taken over the entire platform of Davos and been the stand-out feature of this year’s edition,” said TCS’ Kumar. “But there has been equal or even more interest and engagement from the delegates towards the other key leaders present. Prime Minister Modi of India had a sellout session, as did speeches by others including President Macron and Prime Minister Trudeau.
“Given that in 2017 the buzz was entirely on China with president Xi and in 2016 on Prime Minister Trudeau, this year it is more towards a plurality of regions — it does seem to suggest that the multi-polar world of multi-polar voices is on the rise.”
So even if the Davos globalisation agenda remains imperilled by the likes of America First, there were plenty of countries looking to step into the vacuum. Rafferty, for example, describing Davos’ famed promenade as a “United Nations” of investment opportunities in countries such as India, Russia, Argentina, Ukraine, Indonesia and South Africa.
“Many world leaders who spoke on the stage this week took the opportunity to solidify their countries’ positions on issues like trade and foreign relations, seemingly in anticipation of what Trump’s plenary session would cover on the last day of the forum,” added Rafferty. “But despite the interest in US policy, the rest of the world showed up to assert the roles their nations play in the global economy.”
Perhaps none of those countries exerts quite as much fascination as China, which has become an increasingly difficult market for MNCs to navigate, despite its remarkable consumer opportunity. Venture capitalist Kai-Fu Lee spelled out three reasons for this — spanning inadequate localisation and poor talent policies — but demurred on the topic of protectionism. As for Chinese brands going global, the advice from Lee is, don’t hold your breath.