Corporate CEO as diplomat

The art of being a corporate diplomat

From The Statesman

The days of autocrat corporate CEOs are gone.

Even a powerful man like Rupert Murdoch, the most powerful global media tycoon who is trying to take over Dow Jones, the company that owns the **Wall Street Journal**, is conducting himself as a superb corporate diplomat. It is not easy wrenching control of one of the most influential global newspapers from a family (the Bancroft family) that has owned it for more than hundred years. Whether he succeeds or not, it will be a good lesson for practitioners of corporate diplomacy.

Writing in **Harvard Business Online**, Michael Watkins, says: “The rise of corporate diplomacy is a global phenomenon, but it’s being driven by different forces in different regions. In the United States, one driving force is the decline of the imperial CEO resulting from the constraints imposed on senior executives by Sarbanes-Oxley and activist boards.”
The necessity of being a good diplomat arises from the fact that there are other powerful forces, not only NGOs and the government, but public interest groups and influentials who make it their business to mount a challenge when they see a corporation growing too big or indulging in unethical practices.

There is another important reason for doing corporate diplomacy. Since the foreign policies of a country can put a damper on its international commerce, multinational corporations must have their own corporate diplomats and protocol officers for business development abroad, as POSCO and other international corporations are doing in India, for example.

Corporate diplomacy is crucial to the credibility of a company in explaining, positioning and carrying out its business, especially in these times when the image of the Unite States abroad is not bright. International commerce depends upon the goodwill of the public, which must be continuously built so that it works as a shock absorber when some unforeseen calamity occurs and crisis communication strategy has to be deployed. The creation and the development of this intangible and valuable asset, the public goodwill, is the function of corporate diplomacy.

In the 21st century, doing business in a foreign country must be much more than making profits. In his keynote address to Owens Corning Executive Summit at Tampa, Florida, Bill Shireman, President and CEO, Future 500, said: “The world is demanding a lot of the modern corporation.” When a company captures market share, he said, it also captures mind share, the deep support of the people. When the host population perceives a corporation as a good citizen, it produces collateral benefits for the home country.

A good corporation in a foreign country can become a goodwill ambassador for the home country. On the other hand, when the local population perceives a country as hostile, foreign businesses could be hit hard. The foundation for grassroots public diplomacy, which is more than show-and-tell visits by celebrities, must be patiently laid as China has begun to do. Resentment against US foreign policy has been contaminating the image of US corporate brands, especially in Arab-Muslim countries, which requires corporate America to do its own public diplomacy.
Doing effective global corporate diplomacy requires local knowledge, competencies and tools for implementing strategic communications to deal effectively with foreign publics. The overarching goal of corporate diplomacy is to develop an effective corporate voice and to learn to use all available means of persuasion, media and human networks, to shape public opinion as well as policies of the government in the host country. KFC, McDonald’s and Coca Cola cannot depend upon their international brands to survive in hostile environment. They must engage local communities in meaningful activities that enhance the quality of life. They have to engage in creative business-to-people diplomacy.

Global business needs a new kind of corporate diplomat, one who must be responsive and effective in communicating with different publics, interest groups, activists, governments and stakeholders in international settings by using various media forms - print, radio/television and the Internet. The corporate diplomat must be able to create a powerful corporate identity that serves the mission of the corporation as a responsible global corporate citizen and at the same time support the culture of the host country.

Developing intercultural sense and sensibility will enable the practitioners of corporate diplomacy to develop culturally sensitive best business practices throughout the supply chain. Special focus must be placed on: developing strategic communications for foreign media; maintaining brand reputation; developing rapid response crisis communication strategies; developing corporate advocacy for environment, open trade and free markets; using philanthropy and community relations to counter negative sentiments; dealing with foreign bureaucracy, influentials, activists and opinion leaders. Above all, emphasis must be on maintaining corporate integrity abroad; and being a good global citizen. A corporate diplomat is a renaissance person, an enlightened opinion leader whose job is to educate stakeholders, including customers, lawmakers, the news media and NGO’s about the company’s commitment to social responsibility.

Developing a multicultural mindset, ability to use intelligence and tact, tolerance for ambiguity and contradictions, and being articulate and media savvy are some of the attributes of being an effective corporate diplomat

(ND Batra is professor of communications and diplomacy at Norwich University. He is the author of Digital Freedom: How Much Can You Handle?)