This is the partner preview of the 2023 IRG Impact Study findings. It sets out the pressure on companies from four stakeholder groups, reports the five drivers of humanized growth with the gap between over-performers and under-performers on each, and closes on the expanding role of the chief communications officer.
The quantitative base is more than 800 online survey responses across six board and C-suite functions in 52 markets, with nine country studies and a social AI hypertrend study of 110,000 items.
Key findings
- The four stakeholder groups, colleagues, customers, community and capital markets, are described as louder, more demanding and more powerful, and as pulling in different directions.
- Companies are exposed on both sides, facing new ESG reporting requirements and bills banning ESG policies at the same time, with a risk of getting caught in the crossfire. On keeping a low profile, limited by fear of being accused of greenwashing or wokeness, the two groups index 35 and 28.
- The framing question is whether stakeholder value creation is read as an opportunity or a risk. Over-performers index 90 against 50 on treating it as an opportunity.
- The grounding driver is stakeholder understanding, at 75 against 17, engagement at 63 against 10, and representation in decision-making at 83 against 8. The most named stakeholder is employees.
- Transparency separates the groups sharply. Willingness to share good and bad news runs 64 against 14, and a long-term focus 80 against 25.
Purpose, and whether it decides anything
Pride in company purpose runs 92 percent against 28 percent, while purpose actually guiding all strategic decision-making runs 71 percent against 8 percent. The study asks companies to reimagine future backward, holding both a utopian and a dystopian vision of the emerging future.
Purpose is sorted into competency based, culture based and cause based, and tested three ways: connected to deep belief systems, rooted in company DNA, and not a marketing or communications tactic.
Focus, and the courage to stop things
Having a value creation strategy across all stakeholders runs 72 against 9. Aligning corporate social responsibility with the overall value creation strategy runs 73 percent against 2 percent, the widest gap reported in the preview.
The study describes the difference in language too. Over-performers hold two classes of terms where under-performers hold four, which it presents as an integrated perspective rather than a compartmentalized one, and it warns against treating stakeholder issues as a game of whack-a-mole.
The demands that follow are the courage to define what to stop, addressing short-term issues in the context of the long term, educating stakeholders on the value created, and adopting new and shared KPIs. The study also notes the shift in corporate value from 17 percent intangible to 90 percent, and the difficulty of measuring intangibles.
Organizing for interdependence
Driving systemic change to create stakeholder value runs 69 against 10, and working interdependently across functions and departments 66 against 8. Over-performers have 3.5 times more connections with other functions and 5.5 times more with senior leaders.
Colleagues closer to stakeholders are empowered to act for the business at 71 against 25, described as mini CEOs. Collaboration runs outward too, with industry collaboration at 70 and 73, government and public institution collaboration at 67 against 48, and aligned incentive plans with shared targets and KPIs at 61 against 10.
The fifth driver is role modeling and da Vinci leadership: creating space for all people and ideas, listening differently, and modeling vulnerability.
What it means for the CCO
The communications section rests on 39 global CCO vision interviews, with contributors from Schiphol, Kite Pharma, Nissan and others. Citing Spencer Stuart in 2022, it reports that 80 percent of CCOs report into the CEO and 67 percent are executive committee members.
The CCO is cast as a pacesetter with an opportunity rather than risk orientation. The stakeholder view is described as somewhat biased, scoring 4.5 against 3.5 on a combined qualitative and quantitative understanding score, and AI is noted as playing an increased role.
The practical agenda for the role is to own the stakeholder map, run employee and consumer immersion, develop the utopian vision and the corporate purpose, reimagine risk assessment, set new KPIs and move to integrated reporting, while collaborating with HR, marketing, investor relations and ecosystem partners.
Scope and limitations
This is a partner preview of the findings rather than the published study. Many results are shown as index values against a comparison group rather than as percentages, and the CCO section rests on 39 interviews.
Source
This page summarises 2023 IRG Impact Study: Findings – Page Partner Preview, by Institute for Real Growth, Saïd Business School, University of Oxford, Q4 2023.