Building a Businesson Virtue: Actual, Image, Or Spin
Marion K. Pinsdorf
Senior Fellow in Communications FordhamGraduate School of Business
Public relations practitionersdubbing themselvesthe conscienceof the corporationreally nettle other executivesand wryly amusemany publics. Yet, the bestcounselors practice and teachtruth telling. They havebuilt interna- tional, corporateand boutiquebusinesses by espousing,internally and exter- nally,the virtuesof individual,product, company, or just doingthe right thing. However,from the very beginning,tell 'em anythingpublicists split from and overshadowedthe more analyticand strategiccounselors. Following the con- ference'stheme, the virtue of business,the positiveside of public relationswill be emphasized.General abuses are more widely known and admittedlystill tar- nish the businessgreatly.'
Bloody Beginnings Publicrelations was without name,form or evenpractitioners until the bit- ter 1913-14Colorado labor strife known as Bloody Ludlow. Public animuscen- tered on the Rockefeller family, who owned the State's major employer, Colorado Fuel and Coal Company. When PresidentWoodrow Wilson ordered troops in, their indiscriminatefire killed eight strikers,eleven children and two mothers[Heckscher, 1991, pp. 330-31].Former SenatorGeorge S. McGovern in his TheGreat Coalfield War, and a Bill Moyers intervievdcites this as where adroit manipulation of corporateand personalimages began. Two major public relations pioneers-Ivy Lee and George Creel-were involved.Lee transformedthe Rockefellerpublic personafrom unfeelingmale- factorof greatwealth into the philanthrophic,political family of today. Creel later headed the Committee on Public Information, also known as the Creel Committee,America's first propagandaministry. As a Princeton student,Lee was greatlyinfluenced by his chief mentor, ProfessorWilson, who encouragedmediation between corporate practices and
• A personalcaveat. Attempting to distillnot only the voluminousmaterial about public relations, but morethan 30 yearsof practicing,writing, thinking about and now teaching the subjectto MBA can- didatesis akinto wrestlingan elephantinto a butterfly. 2Moyers, Bill., "The Image Makers: Interviews with EdwardBernays and Ivy Lee,"(Video tape shown on educationalchannels). BUSINESSAND ECONOMIC HISTORY,Volume Twenty-eight, no. 2, Winter 1999. Copyright¸ 1999by the BusinessHistory Conference. ISSN 0894-6825 186 / MARION K. PINSDORF public opinion [Hiebert, 1966,pp. 22-3].3 Ironic that a presidentso inept at wooingpublic opinion to his causesshould birth both positiveand bombas- tic aspectsof the business. From 1906, when Lee representedanthracite mining operations,he won recognitionfor his policyof "the publicbe informed." Sometimesthough he lapsedto whitewashhis clients.Over the yearsthey includedthe Pennsylvania Railroad,the Guggenheiminterests, Armour and Company, the Bethlehem SteelCompany, Chrysler, Portland Cement, and American-Cubansugar inter- ests.They demonstratedthat businessexecutives, if not yet politiciansand mil- itary leaders,were increasingly aware of how publicopinion could impact their operations[Bernays, 1952, p. 70]. At Ludlow, Lee entered an inflamed situation, not just current strife, but a milieu stirredup by powerfulanti-business muckrakers and crusadingjour- nalist Ida Tarbell'shighly critical book on StandardOil. Public criticismwas alreadystirring, but Creel's "febrile oratory" and the local pressmade sure Ludlow became an inflamed major issue. To counterthat, Lee not only arrangedcompany-sponsored publications, somecriticized for inaccuracies,but photo-opsof the youngerRockefeller vis- iting miners,dancing with their wives. Out of theseefforts grew Lee'smajor andlasting achievement, his humanizing Rockefeller Senior and trumpeting his majorphilanthropy. Ivy Lee'scontribution to publicrelations-corporate counseling and image or reputationmanagement-is often obscuredby EdwardBernays' razzle-dazzle publicity. Evenso, a 1970University of Michigansurvey of expertsranked Lee first asfather of publicrelations with 22 votesfollowed by John Hill, founder of Hill & Knowlton, PendletonDudley, a founder of D-A-Y, Carl Byoir, who establishedhis own firm, now part of Hill & Knowlton, and in fifth place Bernays. "Bernays'greatest achievement was living so long," the surveycon- cluded[Tye, 1998,p. 263]. Creel came from the radical left, from a journalism careerso "disheveled" even some newspaperinterests virtually ran him out-of-state. In attacking Rockefellerand money interests,Creel "exceededin vituperationanything else heardduring that emotionaloccasion and protest."His bravuraperformance upstagedeven Mother Jones [McGovern and Guttridge,1972, pp. 254-55,313]. But his prejudiceswere so blatantthey diminishedhis credibility.Lee and the Rockefellerseventually won this P.IL chessgame. Ironically,Creel, little known today,and WoodrowWilson, one of the least publicsavvy presidents, fostered the bestand the worstof the businessduring World War I. The Creel Committeedramatically established the importanceof informationto motivateand mold public opinion. But it alsofostered some
3 Ray Hiebertattributes to WilsonLee's concern about social ills and publicwelfare. While never adoptingWilson's position completely-"That the statewas a beneficentorgan of societycapable of har- monizingindividual rights with publicduties and socialdevelopment"-Hiebert considers Wilson impor- tantto thedevelopment of Lee's ideas on theutility and role of publicrelations. Lee sought-and played- an intermediaryrole between business and public. BUILDING A BUSINESSON VIRTUE: ACTUAL, IMAGE, OR SPIN / 187 of the worststereotypes still plaguingpublic relationstoday-spin, cause plead- ing absentof veracity,publicists as hired guns. Its centralizing,censoring, and propagandizingweakened public trust in the veracityof governmentand its leaders. The Creel Committee is not even remotely a virtue, except possiblyin demonstratingthe effectivenessof propagandaand developingsome leaders in public relations. However,attention must be paid becauseearly on it under- stood the changednature of war.
Capitalizing On Change Jay Luvass,who formerlytaught at the Army War College,has convinced many military scholars-andrightly so-that Europeanmilitary and political leadersin 1914tragically missed how technology,urbanization and industrial- izationdictated vital changesin strategyand tactics. Had they heededthe real- ities of our Civil War, the Boer and Russo-JapaneseWars rather than seeing only what fit their schemesof limited, controlled encountersamong profes- sionals,the carnageof stalemate,perhaps even a moretempered enthusiasm for conflict might haveresulted [Luvass, 1988, p.253]. 4 Curiously,the very nascentdiscipline of propagandaand still unnamed public relationsunderstood this was a total mass,modern war. Populations must be mobilized, "taught" to hate and fight the evil enemy,respond emo- tionallyto atrocities.That would encourageenlistment and a greaterwar effort. All nations did it. News becamea strategiccommodity. Abuses,misleading hyperboleand worrisomecontol of informationresulted. Credibilityof lead- ersand governmentswas dangerously undermined. Conversely,truthful, analyticcommunications, strategically used and stud- ied, can be like the canariesof the trenchesand corporations-first to sense dangersand opportunities.In one of his wittiest,most insightfulessays for the ManchesterGuardian, Alistair Cooke appliesVietnam Era reporting techniques to the Flanderscampaign of June 3 to November10, 1917. Horrors of the fruitlessbattle, remote leadership,awesome suffering were all "brought" into British living rooms through battlefield reporting. Cooke's conclusions? Communicationsalone would prevent a battlelike the Sommefrom everbeing fought again?Today, the immediacyof communicating,quite simply obliter- atesany gap betweenbattlefield and homefront,changing dramatically how politiciansgovern, generals fight and communicatorswork.
4 The authordetails how Europeanobservers missed lessons of the U.S.Civil War,particularly the stalemateof trenchesaround Petersburg, VA. The BoerWar and Russo-JapaneseWars might have been instructive as well. 5 Cooke,Alistair. "Lettersfrom America,"a personalchoice on audio-tapeby Mr. Cookefrom a weeklyBBC broadcast. 188 / MARION IC PINSDORF
Engineering Mass Consent World War I usheredin "engineeringof consenton a massscale," or the "industrializationof lies." "Ideasand their disseminationbecame weapons and words becamebullets. Publicity becameessential to the war effort [Bernays, 1952,p. 71]-a time of developingand testingnew technologiesof persuasion. The Creel Committee,a massiveeffort, usedevery available means-print, broadcasting,film, scholars,particularly historians, a massivepublications pro- gram, and specialappeals to hyphenatedAmericans. Millions were spent to ultimatelywhip up destructiveanti-Germanism against individuals, scholarship, and the culture, inducing an almost farcicalspy hunt. All such propaganda drivenhysteria produced little positiveexcept in honing communicationstech- niquesand many leadersof the public relationsbusiness which boomed dur- ing the 1920'sand 1930's. The committeespawned some of today'sworst P.tL abuses:Spin-say any- thing to win for your client. Outrageouscase-and cause-pleading at the expense of truth and plain-speaking.The "bludgeontechnique" and personnelpressure. That P.tL people like lawyersare hired-guns.The CPI's tone and graphics, humoroustoday, suitedits times. Creel'srabid oratory,however, would make modern P.tL personsblush - so florid it createdmore suspicionthan convic- tion. Creel let causeand emotion drive his publicity. A wiserleader, the late John Hill, taughtfacts must driveP. tL, not P.tL the facts.6 The chargewas made againstHill and Knowlton that it sold the Gulf War like cereal. Creel sold World War I like cereal,Coke, Pepsiand any other aggressiveadvertising/P. Ik campaign. Overshadowingboth Lee and Creel by virtue of a long flamboyantlife and egregiousself-promotion was Edward Bernays, who workedfor the Committee in the U.S. and in Paris. Bernaysviewed this as an opportunity for publicity men "to apply their techniquesin the nationalinterest," and made the United Statesgovernment the prime factor in public relations. One can justifiably arguethe prosand consof that development[Tye , 1998,p. 99]. J.P.Morgan's "the public be damned"had become "the public be manipulated." Bernaysdeems the experiencein "broad public relations. . . a turning point in the lives" of Committee members,himself included. Previously,he had been a pressagent mostly for theatricalfirms and performers. "Until the last two decades,most P.1Lpeople still came out of publicity or print journal- ism. The Committee had no precedentsto go by, so tried new methodsto conscriptopinion" [Bernays,1952, pp. 73-4]. Chilling in its frankness?A por- tent? Predictably,after the war there waswidespread disillusion with and reac- tion againstpropaganda. The American people resentedtheir own wartime gullibility" [Bernays,1952, p. 75]. Not that they were manipulated! War time P.tL neverattained its full potential,according to Bernaysbecause of too much "improvisation,"and coordinationand integrationwas lacking in
Private conversation in 1972 when the author was a Hill and Knowlton officer. BUILDING A BUSINESSON VIRTUE: ACTUAL IMAGE, OR SPIN / 189 every country [Bernays,1952, p. 75]. However, "Pre-warreformers and muck- rakershad compelledbusiness to adopt a new policy towardpublic opinion" [Bernays,1952, p. 78]. Now governmentswere forced to enter the field on a grand scale-a great opportunity which Bernaysseized for fame and fortune. The Creel Committee was very troubling overkill, unnecessaryexcept to counter the propagandaeffbrts of Germansand to some extent the British. The Zimmermann Telegram,sent by Germansto Mexico encouragingrecon- questof the U.S Southwest,had alreadysolidified public opinion. Had effec- tively silencedanti-war groups. The U.S. would fight. But the blatant cen- tralization, control and censorshipof information piled dangerousbaggage onto the business.Critical as one is of Wilson he was,however, the only world leader trying to talk not fight.
Super Hype And Abuses So much has beenwritten by and about Bernays,Larry Tye'sFather of Spin is merelythe most recent,that greaterattention will be devotedto public rela- tions peopleof a far differentilk. Briefly, Bernays,descended through both parentsfrom SigmundFreud, not only attemptedto apply his uncle'sinsights to engineeringsocial consent, but alsodeveloped a counselingpractice. In the 1920's, he promoted "torches in freedom" (cigarettes)to women for the AmericanTobacco Company and the miracleof light for GeneralElectric. His "big think" waspart P.T. Barnum,part J.P.Morgan, but effectiveusually short- term. Bernayswas renownedfor client churn. Conversely,my own associationwith communicationsofficers and my mentors,John Hill, Milton Fairmanand ChesterBurger, taught scholarly analy- sisof public problems,objectivity and truth telling. Lestpositive comments on thesemen and othersskewer credibility, let me acknowledgethere are too many spin-meisters,image artists, and prose-splittersaiming to cloakand deceive.Just considerthe spinning,sliming and obfuscationin Washingtonthe lastyear. Many of thosecritical of public relationseven today, overevaluate, perhaps even envy the power of P.tL That's exactlywhat Jeff and Marie Blyskaldo in their largelynegative PR, How thePublic Relations Industry Writes the News. They scorethe CommunicationsElite, includingthe media and particularlygovern- ment spokespeople,who they claim "must operatein the shadows"and P.tL practitionersas powerful "hidden persuaders."Actually, reality, money, adver- tising and lawyersplay that role more effectively. Falseimages discredit P. tL people with "alwayslying." The Blyskal'scredit media with "alwaysseeing through the lies" [Blyskal,1985, p.12]. That takeslots of hard work. Suchfalse imagesare laughablewere they not too frequentlybelieved. The authorssee P.tk's ultimate goal to promote tangible productsas well as intangible corpo- rate imagesand socialideas. In sum, the narcissisticbusiness of trying to make their clientslook good [Blyskal,1985, p.67]. But P.tL people and the very corporationsfor which they work suffera double standard.Media seemsunwilling to acceptwhat is good for the goose 190/ MARION K. PINSDORF is good for the gander. When journalismprofessor John C. Behrensbegan contactingwell-known reporters for interviews,he found paranoia common. Some neveranswered his callsat all. Others only after repeatedcalls. One shuntedBehrens to his lawyer.Most questionedhim closelyabout the reasons for his interest. Although eagerto ask othersabout income,journalists don't entertainquestions about their own and its sourcesfrom speaking,newsletters, and syndicatedcolumns. 7 Justimagine any public relationsperson attempting that, but Cokie Roberts did.
Enterprising Founders Foundersof the two largestinternational public relationsfirm-the late John W. Hill and the still very active Harold Burson-sharedan intelligent vision for the public relationsbusiness, as well as restlessdrive and insatiable curiosity. However, Burson early on associatedwith William A. Marsteller, who headedan industrialadvertising agency. Only much later, in the 1980's did Hill and Knowlton join with J. Walter Thompson. The Great Depressionboosted public relations. Respondingto widespread criticismof capitalism,business realized it could no longermerely sell its goods and services.It had to explainits broadercontribution to society. Hill, in a book written in 1957expanded this mandate,setting the stagefor a widening and prof½ssionalizingof communications.• To Hill, public relationshad no mysticalpowers to work miracles,sway public opinion, or createlasting value wherenone existed. Rather, communicationswas a broad managementfunc- tion rooted in integrity, soundnessof policies,decision making, and actions able to be viewedin the light of public interest. Hill's counsel succeeded because it suited the times. As labor and man- agementstruggled, he told managementthat employeeswere its nearestand most important audience.Lukewarm communications with them or any other public was worsethan none. Nor could smart publicity ever replacesound managementpolicies and good financialresults in buildinga lastingfoundation of good will Peoplemust know what a companyis doing to approveof its actions. if managementrefuses to tell its own story,someone else will, either incorrectlyor to their detriment. Too manymanagements bestir themselves to tacklea problem only at its flash point, Hill continued. Then, confoundedby slow-movingpublic attitudesand seeminglyintractable problems, they grow frustratedand bored,leaving the field opento the unrelentingefforts of dctrac-
7 A completediscussion of Behrens'difficulties in gettinginformation can be found in John C. Behrens,The I)pe•riter Guerrillas: Closeups of20 lbpInvestigative Reporters (Chicago, 1997). •JohnW. Hill wrotetwo books. The first, Corporate Public Relations, Arm of Modern Management (New York,1958), details the concept-morevalid today than when Hill wrote-thatcommunications must be in the matrixof its times,meeting needs. The secondwork is somewhatautobiographical; TheMaking of a PublicRelations Man (NewYork, 1963). In the interestof disclosure:The authorwas an officerof Hill and Knowlton from 1970 to 1978 and had numerous conversationswith Hill. BUILDING A BUSINESSON VIRTUE:ACTUAL, IMAGE, OR SPIN/ 191 tors. Hill espouseda differentapproach: once companies are surepolicies are right and decent,that their houseis cleanof possibleembarrassments, then they shouldtell the storyforthrightly and repeatedly.As GeorgeCabot Lodgewrote later,private enterprise can existonly under the franchiseof public opinion. In his prologueto a 1975anthology of Hill & Knowltonexecutives, Hill lookedback overhis 48 yearsin the business,but more importantlyahead. His counselis valuable still. "Nothing escapesquestioning. Nothing is sacro- sanct," even though "sound criticism sometimesexplodes into hysteria." "Businessneeds to close[its] credibilitygap," not "by double-talk"or conceal- ing factsthe public has a right to know. Only "candorand straightforward talk" will achievecredibility. The greatestachievement I haveseen in my lifetimeis the grow- ing recognitionthat you can'tdemolish or kill an ideawith a gun or a bomb-that public opinion is the final, all controllingforce in human society.But public opinion that is misinformed,mis- led or lied to can be a destructiveforce. Businessneeds to show, by policiesand actsin the public interestand by speakingout clearlyand convincinglyto people,that it is worthy of their sup- port and confidence. In my opinion, the survivalof enterprise will dependon how well this job is done [Hill, 1975,pp. V-VI]. Hill expandedon this theme in a CriticalIssues chapter. Repeatedlyhe cau- tioned public relationscannot be a cosmeticused to concealthe truth. Nor can its practitionerssucceed without "aggressivenessand guts... to make their points stickwith corporatemanagement." "Business [has] talked too much to and about itself and its needs;too little about what this meansto people." "It is imperative[in public relations]we keep a perspectiveof history-wherewe are,how we got there and wherewe are going"[Hill, 1975,pp. 13-24]. Outsidersoften tusslewith or questionpositive aspects of public relations. A recentstudy of Hill and Knowlton beginswith a descriptionof Hill's day at 72. Walking 5 milesdaily. Working at least8 hoursand sometimeslonger. Not idling his time in the sun as many do at that age,but managing"one of the busiestand most successfulenterprises in the nation. The agencyexaggerated" [Miller, 1999,p. 2]. No, it did not. Until just threemonths before his death at 86, Hill was still walking,managing and exploringnew businessopportunities. 9 Hill's greatestcompetitor was Burson-Marsteller. Its founder Harold Burson explains in an informal history that from the firm's founding in 1953 he sought to distinguish it by specializing in counseling mainly to industrial companies. Hence, the strategic alliance with Marsteller. Capitalizing on flukes spurred innovation. One example: Knowing news- papers used year-endersor industry roundup stories, Burson interviewed Clark Equipment Company executiveson expectationsfor the material han- dling business.The interview in full appearedon the first businesspage of
9At his death,Hill wasexploring new business opportunities in Brazilwith the author. 192/ MARION K. PINSDORF the New YorkHerald 7?ibune.Responses convinced the client of the positive power of public relations. Some 30 years before integratedmarketing communicationsbecame a buzz-word, Burson-Marstellerestablished total communications services-adver- tising,marketing research, promotion materials and public relations.That also fueledexpansion beyond the industrysector into consumerproducts. Burson developedadditional strategies for expansion:acquire marketing capabilities; expandgeographically, first domestically,then overseas,add a Washingtonpub- lic affairs office, strengtheninvestor relations capabilities, more aggressively promote and market the firm, and strengthenpersonnel through evaluation and aggressivetraining/recruiting. As Burson-Marstellerexpanded first to Geneva,then throughoutEurope and to Japan,it sparkedevolution from Pan- Europeanto countrymarketing management. In January1988, Burson became chairmanafter servingas CEO just two monthsshy of 35 years. He had man- agedgrowth from a staff of five to the world'slargest public relationsfirm. In 1998,Burson-Marsteller reported fees of 258.4 million despiteflat results in Europeand reflectingproblems in the Asia-Pacificregion. The currentCEO, Chris Komisarjevskyexplained, "We help our clientsmanage perceptions, build informedopinions and deliverresults" [O'Dwyer, 3 March 1999,p. 1]. Still activetoday, Burson voices concerns as the client/agencyrelationship diminishesfrom agencyof record,where clients used one agencyalmost exclu- sivelyfor all its communicationneeds, to multiple firms competingcontinu- ouslyfor individualprojects from largecorporations. Burson is far from alone in lamentingthat as a result"the trustedcounselor/advisor decelerated to low costvendor/supplier." To counterthis, Bursonemphasized strategic content. Clientsmay balk at payingwhat they perceiveas high ratesfor tacticsand basic implementation,but they will perceivegreater value in strategiccounsel and pay for it [Burson,History, pp. 1-45].•ø Burson'scontinuing drive for new solutionsand value-addedpublic rela- tions can be illustratedby his recentcounsel for his almamater-Ole Miss. The problem? A laggingpublic perceptionof campusracial relations. President Robert C. Khayatwas resolvedto closethis gap. But Bursonstill asked,"Do you realizethe likely emotional intensityof the opposition?" Burson'steam includeda lawyerwith southernroots and a Ukrainianimmigrant with his own personalexperience in minority rights issues. First, they did extensivefact gathering,including research among key Ole Miss audiencesto determineatti- tudesdriving college choice among high schoolgraduates, coaches and parents. Rumors begancirculating that symbolssacred to the Old South-playing "Dixie," the Colonel Rebel mascot,display of Confederateflags at football games,the Rebelnickname for athleticteams, even the name Ole Miss itself- were at risk.
•øThis sectionis distilledfrom an informalhistory of the firm draftedby HaroldBurson and gen- erouslyshared with the author. BUILDING A BUSINESSON VIRTUE: ACTUAL, IMAGE, OR SPIN / 193
Burson assessedthe "heat level" accuratelyand quelled rumors. The Presidentwas bombardedwith hate letters,e-mail, and threateningtelephone callsall warning"Ole Miss' symbolsare sacrosanct;change them at your own peril." The counter-messagewas equallystrong. This is not about symbols, but making Ole Miss a better educationalinstitution and gettingcredit for it. Researchdisclosed only one symbol-Confederateflags-rankled or determined collegechoice among both white and minority studentsand their parents. How to solvethis? The popularthen headfootball coach, Tom Tubervillepub- licly talkedabout the adverseeffect on recruiting,thus on both academicand athleticprograms. In essence,do you want the flag or winningteams? Burson concludes:"This is one of the few times in my careerwhen a public relationsresponse so quickly brought about a changein behavior. To me, that's what public relations is all about-affecting behavior-nothing more, nothing less"[Khayat, ':"":"•', pp. 1-3]. In short, the bestof public rela- tions virtue.
Growing The Business Public relationsis too large and varied an industryto discusseach firm. Insteadthose indicativeof changeor trends-privatelyheld, boutiquesand uniqueniches-will be mentioned. DanielJ. Edelmanfounded Edelman Public RelationsWorldwide, currently the largestindependent firm headquarteredin Chicagorather than New York.'• In 1998, Edelmanreported fees of $157.8mil- lion and 1,636employees [O'Dwyer, 17 March 1999,p. 1]. Edelmanbecame the acknowledgedleader in consumerproducts and createdthe mediatour. (A com- pany spokespersonvisits key markets,performs store openings, does media inter- viewsand participatesin talk showson localtelevision [Morley, 1998, p. 146].) Other importantfirms developedto servicespecific markets such as Anne Klein and Associatesfor Philadelphia,or to lobby, Powell/Tatein Washington, D.C., or specificneeds such as graphic design, crisis communications or finan- cial consulting. Many others spun off from major firms such as The DilenschneiderGroup, headed by former Hill and Knowlton CEO Robert Dilenschneider. Perhapsthe most unique niche was establishedby ChesterBurger, coun- selorto the counselors.Through his firm he not only counseledAT&T CEOs and seniormanagement, but advisedon the mergingand foundingof public relationsfirms. Still very activein advisingall who contacthim, Burgerspeaks frequentlyon ethnic conundrumsof the business. Internationallypublic relations grew through such firms as France's JacquesCoup de Frejac,which played a majorrole in encouragingUS and UK clientsto understandthe French market and Europeanmovements [Morley, 1998,p. 146]. In Brazil the first important public relationsbreakthrough came throughindustrial and literacyneeds. As the Middle South-Minas Gerais,Sio
AlthoughNew YorkCity still dominatesboth publicrelations and advertising,large firms such as Edelman,and smallerboutique shops are flourishing in othermarkets 194/ MARION IL PINSDORF
Paulo and Rio de Janeiro-industrializedand modernized demand for labor rosedramatically. Many migratedsouth along the trail of tearsfrom the pover- ty-strickenNortheast. Early public relationsefforts helpedthese workers with problemsof literacyand newwork demandsmainly by preparingvery effective materials. 12 In addition to global spread new types of firms, such as Shandwick, enteredthe business.Shandwick, founded in Britain, was publicly held. (The big two American multinationalswere privatelyheld until Burson-Marsteller was bought by Young & Rubicam and Hill & Knowlton by J. Walter Thompson.) From a strongUK base,Shandwick built autonomousunits prac- ticing financial and investorrelations, public affairsand consumerPtL As a public companyShandwick could finance a major buying spreeof 35 agencies in the USA, Europe,and the Far East. In the Asia-Pacificregion, its vision and growthwas aided by Taiji Kohara, who wasto JapanesePR what Hill, Bursonand Edelmanwere to the US. From his initial office in Tokyo in 1968, Kohara establishedInternational Public Relations(IPR), a network of officesin 43 countriesfrom Japan to Australia, which Shandwickacquired in 1988[Morley, 1998,p. 147]. As consultingfirms, large and small, evolved,they alsodemonstrated the efficacyof corporatedepartments. Ivy lee had blazed the way with his coun- selto the Rockefellersand other clients. Corporatepublic relations became an ego-enhancerfor the CEO; a signalthat the companywas modern and cared about its various publics. Milton Fairman, a Chicago journalist,established one of the first wide-rangingdepartments at the Borden Company. He com- bined pressrelations, a tastekitchen to not only test Bordenproducts, but to developrecipes using them. A largepublicity section promoted food, chemi- cal and other products.Fairman also sensed early the government'srole. Staff memberswith scientificskill testifiedbefore governmental committees on the regulation,labeling and safetyof food. An extensiveaward program honored scientistsin the field. Associationswere established with advertisingand pub- lic relationsfirms overseasimportant to companyoperations such as the Brazilian chemicalcompany?
Evolving Leaders And Liabilities Publicrelations in the lastdecade has changed drastically. Its powerdimin- ishedas communicationstechnologies proliferated. As media coverageextend- ed around the globe, around the clock and competedfuriously. Former stan- dardsof veracityand tastedeclined as marketshare ruled. All transformedthe practice,standing and leadersof the business.Lawyers cut deeplyinto lobby-
12The author'sobservations and research in 1973while doing doctoral studies in economichistory andanalyzing public relations opportunities for Hill andKnowlton. 13Materials gathered from the author'sexperience as a Bordenproduct publicist from 1964-69,and fromfrequent conversations with Fairmanas well as the officialPublic Relations Society of Americataped seriesof interviewswith PR pioneers. BUILDING A BUSINESSON VIRTUE: ACTUAL, IMAGE, OR SPIN / 195 ing and advocacyfunctions. Senior corporateofficers and counselorsless often came from traditional paths of journalism,but from law, scientificor governmentalspecialties. Areasof growthexisted, but wereshied away from or dismissedas too mun- dane. Two examples:helping transnational companies flourish in many differ- ent countries,and communicatingwith increasinglymulti-cultural and alienated, highly mobile work forces. Mainstreampractitioners have missedboth boats. Limitedby myopiaor xenophobia,they still prattleon aboutdoing business with manana nations,an egregiousputdown particularlyto hustling,ever bustling Paulistas.Years ago, employee communications was kissed off as too mundane to pursue,mostly in a vain, grandstrategy of counselingthe CEO alone. Counter trends and counselorsdo exist, however. Let RegisMcKenna illustratethat. By meldingmarketing and public relationsto distinguisha new companyhe waseminently successful for Apple and StevenJobs. McKennaby choice of name, logo, colors and publicity made personalcomputers user friendly. Customersno longer neededto be teckies. He positionedJobs as cerebralwith interviewsin Scientific•lmerican,Apple as an optimisticentrepre- neurialstory to contrastwith worrisomeJapanese success. McKenna built mar- ket sharenot by taking someoneelse's piece of the pie, but expandingthe wholepie. By the 1990's,McKenna had helped launch the first microprocessorfor Intel Corporation,the first recombinantDNA geneticallyengineered product for GenentechInc. and the first retail computerstore, The ByteShop. Typical of SiliconValley, he linked effortswith StanfordGraduate School of Business and developedstrategies for interactiverelationships vital to the age of the never satisfied customer. '4 McKenna'sideas have evolvedform WhoS•lfraidof Big Bluethrough The Regis3uch to his current Real Time. More marketingthan communications generally,the nostrumsapply. Old-mindsetsand stasisdefeat. Technology has compressedto nearly zero the time it takes to acquireand use information, learn, make decisions, initiate action, deploy resourcesand innovate. "Continuousdiscontinuous change." "Constantradical upheavals." That's real time management. McKennaexplains technology has embedded itself in everything.Speed is the differentiator. Information must be clothed as interactive entertainment. Many would lament that idea has invadedthe news. Throughout,however, McKenna is optimisticthat technologywill capturethe whirlwindof speed, changeand uncertainty2' It also invertspower. No more monologuescas- cadingdown to customersand employees.Even more conventionalcommu- nicatorsmust copewith the pancakingof corporatestructures as middle man- agerswere thinned out and information flowed horizontally.
--.Regis McKenna,1998
To McKenna, old monologueshave been supplantedby access-aconstant two-wayflow of information, collaboration,and co-creation.In short, "being in touch all the time." A new pull of customer/specificsolutions have replaced the old push of massproducts into a massmarketplace. "This profoundly altersthe relationshipbetween society and its powerful institutions,"he con- cludes.•6 A relentless, continuous offensive.
Bad Images: Good Images Someindividuals, either alone or with largelycovert counsel, by designor by just doing the right or wrongthings create public personas.At opposite endsof that spectrumstand Donald Trump, who braggedabout and plastered his nameon everything.Also, LeonaHelmsley, who wastransformed, but only temporarily,from the Queen of Mean to the ever-vigilanthostess dedicated to everyhotel guestand his comfort. Trump and Helmsleydemonstrate the trap of too much personalhype and dominantassociation of one individual'sname with the corporation. In stark contrast is Adam Feuerstein, who when his Malden Mills burned did the right, but surprisingthing. He kept workersemployed until the mills wererebuilt. He seemedembarrassed, almost surprised, by all the public adu- lation-and somesarcastic criticism. Today,new customersare returningsuch virtue by favoring garmentsmade from his fabrics. In December 1995, when flames destroyedthree of ten buildingsof his Malden Mills in Lawrence,Massachusetts, Feuerstein immediately told 1,000 of his employeeshe would pay their salariesfor at leastthirty days. Not only was this action important to employeesand community, but consistentwith Feuerstein'spast actions. He consistentlyrefused to follow the textile trend and move his mills to a cheap labor location, sayingthe laborers'technical skillsoutweighed the benefits.•7 He alsopromised the tragedywould not derail Malden Mills' leadershipin the local communityor the world textilemarket. In an era of downsizing,mergers, relocations and closing,most doubted initially the old mill would be rejuvenated."How could Feuersteinat age71 be expectedto rebuild? What executivewould not seizethe opportunity to retire, relocateor simply closedown?" But the sole owner desiredotherwise, explaining:"Whether ! deserveit or not, I becamea symbol of what the aver- ageworker would like corporateAmerica to be in a time when the American dream has been pretty badly injured."•8 In a dollar driven age, some, soon silenced,however, wondered if this were the most profitable use of funds. Three positivesarose from the ashes. Personalaccolades for Feuerstein. Also, many consumerslooked much more favorablyat garmentsmade from
Consumersrule service in real-timemarketplace. October 27, 1997
Gazing Ahead Thoughtful,senior practitioners see the major problemsclearly. William Oliver, AT&T's vice president of public relations, speaking on the "PractitionersDilemma" [Edison, 1992] noted "In a surveyof 225 of the top U.S. businessjournalists, about 47 percentof respondentsbelieve ElL people are more of a nuisancethan a help." That they lie. Why? "One reason," Oliver cited,"may be that journaliststhink that ElL peoplesimply get in their way of the pursuit of the truth." Journalistsappear to havemore faith in the truthfulnessof the corporateexecutives to whom PR peoplereport. Only 34 percentdisagreed with the statement"Corporate executives are truthful most of the time." Talking as high as possiblemay not, however,be solelya factor of truthfulness,but journalisticego as well. Severalother trendswere outlined in 1992 by Thomas Eidson, then Hill & Knowlton's CEO, now senior vice president of Fidelity.2• Citing Edward Bernays,he explainedpublic relationsAperhaps more than any other activity, continuouslyreinvents itself to reflect and serveour ever changingsociety•. For example, competition means one company no longer is pitted merely againstanother, but againstregional, even global economicinterests. To man- age suchglobal and competitivechanges, practitioners must be client-driven and their results measured. ParallelingMcKenna's ideas, Eidson noted public relationshas arrivedfull blown as a major marketingplayer that unaidedby advertisingor any other communications device can move product at a greatly reduced cost. Corporateimage or reputationmanagement also is re-emergingas critical. In the 1940s,'50s and '60s, buildingcorporate image was vital. Companiesnot only sold products,they sold themselves.That strategychanged. "Double
'9 Ibid. 20Franklin Pierce College Press Release.
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