We Here for You

The HBO hit Succession has a lot of fans among FGS strategists—even when the plotlines come too close for comfort. 

On the eve of the show’s final episode, a few of our colleagues—Kyle Daly, Kerry Golds, Jill Lesser and Megan Moore—shared some thoughts about the show’s themes and what rings true about the industries and dynamics it depicts. 

  • Succession planning matters. The biggest challenge for a CEO transition is when there’s no plan, and the CEO is also a founder who has a hard time letting go. Succession planning can work very well when there is an intentional process with the board. Sometimes there is a proclivity to pick an internal candidate who has come up through the business. But given the amount of change that we’ve seen in the last few years—the pandemic, the transition to hybrid work, etc.—external candidates can provide much needed fresh thinking. 
  • There are some extraordinary elements in the way Waystar is managed. Most companies are run by an executive leadership team with a CEO who knows how to get the best out of them. Decisions tend not to be entirely personality-driven. At the same time, the tone and tenor a CEO sets really do trickle down. Logan Roy’s competitive eat-or-be-eaten, winner-takes-all environment makes it difficult for anyone to thrive professionally.
  • The show reflects a media industry in flux. Everyone is trying to figure out how to evolve the business model toward streaming. The last few years focused on growth and subscribers and in the last 12-18 months it’s all about profitability. There’s a lot of anxiety and change.
  • The relationship between business and the media is well-drawn. The Season 2 New York Magazine story plotline felt very real. The company tries to get the story killed but then realizes the reporting is there, followed by the familiar flurry of trying to read as quickly as possible, find the most damaging nuggets, figure out what the news cycle will be and steer it from there. And then, for better or for worse, like everything in today’s rapid-fire media cycle, everyone moves on.
  • The congressional hearing is a lesson in what not to do. Do not dismiss the hearing. Don’t destroy documents. Don’t be a difficult witness. Don’t be feisty. Prep. Lean on your friends in Congress, lean on places where you’re a major employer and provide economic benefits. Be humble, apologize, own the decision and fix the problem. 

Debt Roulette

Though the situation remains somewhat fluid and subject to change in the next hours or days, a debt limit deal—at least in principle—as soon as later this week appears likely.

The administration and congressional negotiators are feeling the combined crush of two clocks – the government running out of money as soon as early next month coupled with the time needed for legislation once drafted to work its way through the House and Senate. For example, under House rules – which Speaker McCarthy continues to insist on – members will be given 72 hours to review the final product and Senate consideration absent consent of all senators could take a week or more.

Ideally for all parties, this entire process would be wrapped up by June 1. But to be safe, McCarthy prefers the House pass a short term– a couple of days – debt limit extension after it has passed the deal so it can send both to the Senate. 

Basic components:

  • Discretionary spending caps. It looks like negotiators will agree to spending caps for two years on a single top line number for defense and non-defense discretionary spending below last year’s level. This will give Republicans talking points they need. But even if we avoid the debt limit cliff now, the sheer number of outstanding spending and policy issues that must be addressed later in the appropriations process —and the gulf between the parties—raises the odds of a shutdown this fall.
  • Permitting. McCarthy signaled last night that a deal to streamline energy permitting is very much on the table but he may not be able to reach agreement on the entire package of permitting proposals. So it could require revisiting in a stand-alone package later this year.
  • COVID clawback. The House-passed bill clawed back about $56 billion in budget authority from unobligated balances remaining in previous COVID bills. The final deal is very likely to scale this back by perhaps $5-10 billion.
  • Work requirements. The House-passed bill placed work requirements on three entitlement programs – Medicaid, the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). The final deal seems likely to just include work requirements on TANF—and according to the Congressional Budget Office, these requirements seem unlikely to save very little if anything.

Eyes on the Court

‘Tis the season. The Supreme Court delivered big wins for Google and Twitter last week, rejecting lawsuits that sought to hold tech giants accountable for terrorism-promoting content on their platforms. 

However, the Court did not provide any broad statements on the immunity provision of Section 230, which protects internet companies from most legal claims over user-generated content. The justices disposed of the Google case with a three-page, unsigned opinion, stating  the Section 230 issues were not ready for a decision at that time. 

In the Court’s rejection of a suit regarding an ISIS attack on a Turkey nightclub, Justice Thomas emphasized that imperfect efforts to remove terrorist content did not equate to assisting in a terrorist act.

The Court also rejected an emergency request to block a local and state ban on assault weapons sales in Illinois as the justices continue avoiding Second Amendment-related disputes. 

Additionally, the justices agreed to hear two notable cases next term. One involves the “seven-member rule,” a federal law allowing a minority of House or Senate members to demand records from the Executive Branch, originating from a Democratic-led effort in 2017 to obtain records related to former President Trump’s hotel lease. The other case reviews a lower court’s decision that declared a congressional district in South Carolina an illegal racial gerrymander.

Tell Us How You Really Feel

How can CEO communications inspire capital market confidence? FGS Hong Kong Partner Kirsten Molyneux shares some insights:

  • Leaders spend around 70% of their time communicating. Stronger emotional intelligence in CEO communications can help CEOs create more effective interactions with the capital markets and build belief and trust. And that trust drives reputation and valuation.
  • It also takes 3 other vital ingredients: Transparency, integrity and consistency in the messages. Delivering on milestones and expectation management is also key for CEO comms.
  • CEO comms should be insight driven, agile and easily understood from wherever your stakeholders sit. Most good CEOs understand the importance of listening to investor feedback. This insight helps shape future communication, gives leaders perspective and avoids the echo chamber.
  • When dealing with difficult news, CEOs must play it straight and be very cognizant of how bad news may land. Avoid overcommunication until all the facts are known.
  • CEO comms should reflect a leader’s own authentic style. Nonverbal communication plays a significant role in establishing trust and inspiring confidence.

CEO communication is an incredibly important asset for any company and should be amplified in wider corporate comms, which builds up the belief in the corporate narrative. All of this helps inspire capital market confidence.

Be A Better AAPI Ally

President of Asian Americans Advancing Justice (AAJC) John Yang urged companies to challenge the “model minority” myth and recognize Asian Americans are still underserved in a recent virtual fireside chat with FGS Global. 

The conversation, in honor of Asian American and Pacific Islander Heritage month, touched on a variety of issues currently impacting the AAPI community ranging from the implications of US-China tensions and anti-Asian hate in a “post-pandemic” world to the power of political engagement. 

Below are somekey takeaways for companies looking to be better allies:

  • Asian Americans are a very diverse group, so it’s important to have good, segmented data that reflects their varying experiences. For example, as a Chinese-American man, Yang admits that he feels better represented in the business world than Asian Americans of differing nationalities and gender identities.
  • Consider your company’s diversity across verticals. Asian Americans are often confined to more technical positions. Going up the ranks we see a definitive drop off of Asian Americans at the C-Suite level.
  • Companies should also re-evaluate their own metrics for diversity. He highlights how companies will often proudly claim 50% of new hires are from minority communities. But if the definition of “minority community” includes African Americans, Asian Americans, Hispanic individuals and women – the combination of these groups accounts for far more than 50% of the overall population.

Visit the AAJC website to learn more about how they’re fighting to advance civil and human rights for Asian Americans and building a fair and equitable society for all.

In Bots We Trust?

Despite rapid uptake of generative AI tools like ChatGPT, especially among younger Americans, most American adults do not trust generative AI technology.

Our Research and Insights team took a look at public opinion towards AI and found:

  • A majority of U.S. adults (64%) do not trust generative AI technology. Those who aren’t familiar with the technology have higher shares of distrust (71%), compared to those who are familiar with generative AI (60%).
  • Four in five U.S. adults (84%) agree someone could easily abuse generative AI technology and 68% of U.S. adults worry generative AI could negatively impact the economy. More than half of Americans (56%) worry that generative AI will worsen existing social inequalities.
  • More students aged 12-18 (58%) are using ChatGPT than parents (30%). Similarly, 54% of students aged 12-18 have heard a lot about ChatGPT, compared to only 30% of parents.
  • Students who use ChatGPT are three times more likely to use the AI platform (53%) than search engines like Google (18%).

Breaking Through

FGS employees recently had the opportunity to sit down with Pfizer Chief Corporate Affairs Officer Sally Susman and hear about some of the advice in her new book “Breaking Through: Communicating to Open Minds, Move Hearts, and Change the World.”

Here’s what we learned:

  • Nobody has more potential to influence public perception of your company than the people who work there. They are your most important stakeholders.
  • The decision to weigh in on social issues should be tightly tied to your company’s identity. Susman came up with a framework of five questions to determine whether a company should weigh in on specific social issues:
    • How does it relate to our purpose? 
    • How does it impact our most important stakeholders? 
    • How does it relate to our values? 
    • What are our choices here? 
    • What is the cost of staying silent?
  • Break through with storytelling. Susman describes thinking she could convince people opposed to getting the COVID vaccine through data and expertise—but it didn’t really make a difference. What did? Personal and emotional stories—”I got to see my grandkids because I took the vaccine” or “I got to go back to campus” from influential community messengers such as neighbors, barbers, family members, preachers and teachers.
  • Candor matters. “If you’re on the cusp of a breakthrough,” said Susman, “there’s usually a moment of candor you need to get there. ‘I’m sorry,’ ‘I love you,’ etc. if you don’t say it you may lose your chance at a breakthrough.”
  • Stay creative and curious. An idea Susman got while watching a movie on a plane became a successful program for Pfizer and a big publicity win.
  • Never underestimate the importance of thank you notes. Susman described how Leonard Lauder (of Estée Lauder) would send thank you notes to buyers before the company could afford ads.

Purchase the book here.