More Than Q Rolodex: The Government Affairs Leadership Imperative

The current headline-grabbing challenges of COVID-19 and systemic racism have reinforced the need for companies to have truly strategic government affairs functions, raised the bar for those who lead that work, and created an environment which allows the best qualified government affairs professionals to thrive. To make today’s work even more complex, the United States is heading into a presidential election which has the potential to reshape the stakeholder landscape at the federal, state and local levels.

To better understand the talent implications of this ever-changing landscape, Russell Reynolds Associates conducted leadership assessments, surveys and interviews with over 100 government affairs experts and leaders. That research highlighted the critical role government affairs functions play, the evolving requirements of this work, and the essential leadership traits that enable high-performing professionals to rise to the challenge in this moment.

Given the shifting ecosystem and expanding talent demands, we also evaluated top government affairs leaders according to our Leadership Span model, which in part assesses the ability to lead through uncertainty and disruption. We found that these leaders were particularly strong on dimensions related to setting strategy, executing for results, and relations and influence.

As business leaders and organizational strategists first and foremost, government affairs efforts require both deep functional expertise and broad generalist leadership skills.

A strategic, business critical function

While the vast majority of corporations have a government affairs function, and many have invested in and rely on these leaders and their teams, the recent confluence of crises and pending electoral outcomes have increased the vital nature of the function to the business. Regulatory actions, legislation and other political and reputational headwinds can create headaches at a minimum, and existential threats to a company’s license to operate in the worst case.

How has your interaction with the CEO changed? 

_{Source: Russell Reynolds Associates survey of government affairs leaders (n=33), 2020}

"Many CEOs now realized they have real problems they weren’t paying attention to, and now have to."

Joel Johnson
Glover Park Group

Has the overall reputation of the government affairs function within your organization changed?

_{Source: Russell Reynolds Associates survey of government affairs leaders (n=33), 2020}

To this point, Neil Bradley (chief policy officer at the US Chamber of Commerce) and Doug Pinkham (CEO of the Public Affairs Council) have both noticed enhanced C-suite attention recently. Tom Dohrmann, McKinsey senior partner and leader of the firm’s public sector practice in the Americas, put it even more urgently and proactively, noting that it’s “primetime” for these leaders. “If you work for a large, Fortune 500 company, you’re privileged to work to not only save your company, but also the broader ecosystem.” Putting it another way, Eric Loeb (executive vice president of government relations for Salesforce) said: “if you don’t understand that regulatory and political strategy is a part of your business strategy, you will have a critical blind spot.”

"[GR leaders] are privileged to work to not only save their company, but also the broader ecosystem."

Tom Dohrmann
McKinsey

The good news is that many companies already have a strong foundation, and their government affairs team is adding even more value right now. Louis Vega, president of Dow North America and also vice president of government affairs & advocacy, is in a unique position with his dual geographic and functional responsibilities. Citing Dow’s non-hierarchical nature, he was “surprised to hear how many layers many companies have between government relations and the C-suite.” Selina Jackson’s approach, as senior vice president of global government relations and public policy at Procter & Gamble, is to leverage her team’s expertise to “make P&G stronGR,” underscoring the connection between government relations strategy and the company’s bottom line and competitiveness.

"Having an engaged CEO makes all the difference."

Mike Boyd
Gilead

Liz Reicherts, vice president of external affairs at General Motors, needed to lean on her team and their relationships in Washington to highlight GM’s ability to pivot to producing ventilators, “contacting every member of Congress, sharing the story of what General Motors could do to help during the crisis. It required a clear plan, trusting the team to execute, and dividing and conquering to tell our story. It was an all-hands on deck moment.”

For Mike Boyd, senior vice president of global government affairs and policy for Gilead, the business-critical nature of his team’s work has never been clearer. Gilead, which manufactures Remdesivir (a COVID-19 treatment), is led by a CEO who is acutely aware of the impact of governments on the business and the need to shape their thinking. Boyd, who works alongside a chief executive who both seeks to understand the GR strategy and is willing to pitch in and do the supporting work, says that “having an engaged CEO makes all the difference.”

With higher stakes and visibility comes an amplified need for business acumen. The bar is raised, which means there is simultaneously more opportunity to have an outsized impact on the enterprise, as well as more pressure to perform and contribute (often outside of one’s functional “lane”).

Increasingly, government affairs leaders are expected to be business and organizational strategists first and foremost; functional expertise is still critical, but secondary. Best-in-class professionals in this area have the credibility and insights required to sit around the table with other senior executives, providing input on strategic issues outside of their own functional area.

Core leadership

When assessing top government affairs leaders across industries according to our Leadership Span framework, we found that many of the highest performing government affairs leaders demonstrated clear strengths in setting strategy, executing for results, and building relationships and influencing others. Moreover, we found that those with MBAs—suggesting stronger business acumen and insights—spiked in setting strategy and executing for results. In particular, these individuals were comfortable operating in a disruptive, risk taking manner, backed up by their commercial understanding and ability to synthesize environmental factors. Given the incredible pressure on businesses, and tumultuous state of the government and economy, the ability to leverage these leadership competencies is essential.

To this point, Public Affairs Council’s Doug Pinkham, whose organization is dedicated to advancing the field of public affairs, explains that discussing business strategy is more commonplace and recommends an MBA as the best complementary advanced degree a professional in this area can get. Tom Dohrmann explains that government relations leaders who can’t understand the drivers of business lack credibility, and Selina Jackson notes that being able to keep up during an earnings call is table stakes.

In short: functional expertise is not enough. Serving as a business leader, understanding and contributing to the enterprise, is no longer a “nice to have”—it’s a baseline expectation.

Public affairs engagement and reputation building

At a time of diminishing trust in institutions including government, the media and businesses—and increasing scrutiny on and skepticism of lobbying apparatuses—the need to think comprehensively about the interconnected nature of government relations, communications, CSR and sustainability is indisputable. As Eric Loeb put it, “GR leaders are also critical counselors in ethics and integrity. If you don’t have a sense of your company’s values and how those values can create policy, reputational, and governance risks, you are going to have a reckoning.” Unfortunately, many businesses have been caught in those crosshairs and are living through their own reckoning at the moment. Those who marry fiduciary and social responsibilities, and are mindful of both messaging and actions, have done best through this tumultuous period.

"If you don’t have a sense of your company’s values and how they can create policy,reputational, and governance risks, you are going to have a reckoning."

Eric Loeb
Salesforce

Joel Johnson, who has counseled clients about both their COVID-19 and Black Lives Matter responses, acknowledges that actions are often tied to reputation. “There is a difference between ‘can we?’ and ‘should we?’ Clients who are being very transparent with policymakers and legislators on what their circumstances are and how they’re managing through them, communicating effectively with all internal and external stakeholders, are faring better than others.” Mike Boyd echoes this sentiment: “We have taken a transparent approach, which won’t necessarily mitigate all criticism, but has allowed us to keep a cool, calm head and make pragmatic decisions with the utmost visibility.” Across the board, we heard about the critical partnership between corporate communications and government affairs. Engaging governmental stakeholders without communications support is like fighting a fire without water; you are not using every tool in the toolkit.

Balancing business outcomes and behaviors

Good News: 94 percent of GR leaders feel they are prepared to defend their reputation, and 88 percent believe this crisis has improved the overall reputation of the function.
Business Outcomes & Ethics: Both are critical in building and preserving company reputation.

ESG, Sustainability, & Climate Change: Only “political” issues the majority of respondents agreed companies would advocate for.

Source: Russell Reynolds Associates survey of government affairs leaders (n=33), 2020 

Monique Meche, the vice president and global head of policy and philanthropy for Twitter, feels fortunate to have that collaboration with communications, while also owning an integrated philanthropy, partnerships and political advocacy portfolio. She explains that these functions, “being so interconnected allows Twitter to have an outsized impact with relatively limited resources,” and that their CSR work related to COVID put their “product into emergency responses around the world. It’s not something we wrote a check for—we just used our platform for good.” This has benefited the company’s external reputation, while also boosting internal morale, with employees feeling that they are contributing and giving back.

Please rank in order of importance the following criteria in terms of your company's reputation

_{Source: Russell Reynolds Associates survey of government affairs leaders (n=33), 2020}

Effective stakeholder engagement has direct ties to regulatory outcomes and market access, and research shows a direct correlation between reputation and profitability. Corporations—and their government affairs leaders—must consider all of this component pieces in tandem.

Talent and resources impact

For most organizations, the recent increased demand on the government affairs function has happened in parallel with a financial downturn, resulting in a reduction of headcount and budget. Teams are being asked to do more with less, putting talent to the test in already trying times.

As a result, it may be that the era of the specialist is coming to an end. With smaller teams, and more issues to address, government relations professionals need to pivot at a moment’s notice. “We don’t need home run hitters right now,” said Terri Fariello. “We no longer have the luxury of having specialists. We need versatility, flexibility and adaptability.” Neil Bradley, who sits at the vantage point of seeing across a range of industries, sees that even when GR leaders have a subject matter expertise, their purview remains broad and they need to operate as a generalist.

What has the crisis revealed to you about the strength of your team?

_{Source: Russell Reynolds Associates survey of government affairs leaders (n=33), 2020}

Louis Vega echoed this statement: “When I hire, I do so with the expectation that they will engage with executives. They need to bring confidence. We can then mold them to navigate the day-to-day operations of the company.” If someone has core leadership skills, learning the nuances or picking up a new policy area is easier.

Relationships and stakeholders

Government affairs leaders—often called “lobbyists” as shorthand—are known for having strong, influential relationships. But what do you do when they are no physical lobbies in which to convene? Most of the leaders we spoke with were clear that relationships were more important now than ever before, but what’s surprising is that they are relying on them in new ways, and have been forging new connections in areas they wouldn’t have previously anticipated.

Louis Vega explained that Dow’s customers turned to them to advocate for inclusion in state relief measures. Liz Reicherts saw General Motors go from building cars to ventilators, working with HHS and the FDA rather than DOE or EPA. Monique Meche’s team at Twitter found themselves engaged in and providing resources for conversations ranging from racial injustice in the US to gender-based violence in Latin America and Asia. The consistent theme: relationships matter, even if they are now being leveraged in new, creative ways.

According to Selina Jackson, “government relations is a lot like an insurance policy—sometimes, you won’t have to draw on it, but when you do, you’re really glad you have it.” Joel Johnson echoed this: “my clients who invested in relationships, and who have a track record of working together and collaborating on policy decisions, are well positioned.” Neil Bradley has also seen “sharing” of these relationships to help others across the business.

"GR is a lot like an insurance policy– sometimes, you won’t have to drawn on it, but when you do, you’re really glad you have it."

Selina Jackson
Procter & Gamble

To be clear, this is not just about opening doors—a Rolodex is not enough. This is about proving value, being a committed partner, and leveraging resources to collaboratively problem solve in a way that is mutually beneficial, and ties back to organizational strategy.

Putting it into action

Unquestionably, the utility of the government affairs function and its leaders are at a premium. The stakes are higher than ever before, as is the bar for performance, and the need for truly strategic, best-in-class talent is now a non- negotiable for most companies. Business savvy, an integrated understanding of reputation, a generalist approach to talent, and deepening relationships are all essential skills for leading government affairs professionals.

For government affairs leaders, this is a time to self-assess whether you, your team, and your external consultants have the leadership skills and broad-gauged business acumen needed to contribute to broader strategic conversations, and to weather periods of extreme change and instability. It is also essential to continue the focus on acquiring and developing professionals with leadership skills above all else. Setting a strategy, executing for results, leading teams, and building relationships and influencing others (both internally and externally) should be non- negotiables. Content knowledge and connections are important, but ineffective without the leadership underpinning.

In time, today’s challenges will fade away, but new ones will emerge. When they do, CEOs will know that they can rely on their government affairs team to help them successfully navigate the next disruption.