Few walls are as thick and deeply embedded as the barrier between executives and customers. CEOs typically emerge a few times a year, in highly choreographed appearances at shareholder meetings, analyst video calls, employee town halls, and media events. They are otherwise hidden away from the public even when many don’t want to be.
But that appears to be changing fast. In one recent high-profile case, Tesla CEO Elon Musk went so far as to poll his Twitter followers on whether to sell his stock. Other top executives have come out in force on social media too; indeed, one in five Fortune 500 CEOs now has a Twitter account. Prominent leaders have surveyed followers, announced new office and COVID policies, and lobbied for social justice. “It’s got to be driving their general counsel and communication folks nuts,” laughs Richard Marshall, global managing director of Korn Ferry’s Corporate Affairs Center of Expertise.
Experts say such transparency is only advisable when the executive is quite well positioned and well experienced to do so. “Any form of social media runs risks,” says Marshall. “It’s unfiltered, and can potentially produce legal issues, [increase] risk for the brand, as well as inadvertently create the stakeholder expectation that they will hear from you directly on every issue.”
Though some companies have found success through online engagement formats such as town halls with customers and apps that invite immediate customer feedback, those companies tend to be either founder-led or tech companies, and often private. And these methods of engagement can fuel unpredictable effects, such as marginalization. “These tools are intended to be inclusive, but they are potentially exclusionary because they favor majority rule,” says Andrés Tapia, ESG and DE&I strategist at Korn Ferry.
Experts say that it’s critical first to identify the source of that pressure to engage. “It isn’t always customers forcing transparency,” says Bradford Frank, a senior client partner in Korn Ferry’s Global Technology practice. “Sometimes it comes from social change or legislation or the SEC. The initiator often is not your customers.” In those cases, a Twitter account won’t actually address the underlying issue.
If the pressure is indeed coming from the public, direct communication is high risk unless executive behavior is genuinely in line with the company’s integrity and values. “You want to clean up your act before going transparent, and make sure the business is being run according to the values they’re espousing internally and externally,” says Evelyn Orr, chief operating officer of the Korn Ferry Institute. In companies that do this well an authentic and transparent executive can serve as a major driver of organizational transformation, according to research by the Korn Ferry Institute,.
Next comes identifying the topics of communication, which can be more difficult to control online. “Realize that maybe you want to speak about product design, but you might be called upon by an audience for your feelings about social justice or any number of other issues,” says Marshall. “It’s a balance between keeping a CEO connected with all the different stakeholders, but not completely open, unfiltered, and unregulated.”
With all those i’s dotted and t’s crossed, direct communications can be effective. “What I tell clients is that the more transparent you are, including flaws and improvements, the more likely customers, the public, and even the legal system will give you the benefit of the doubt,” says Tapia. “It used to be high risk; now it’s seen as less so.”