PR's Role in the 21st Century Global Corporation
Speech by Professor Paul A. Argenti, Tuck School of Business
To the ICCO Conference in San Francisco, November 2001
If someone had told me I would be here in 1994, after the publication of Corporate Communication, I wouldn't have believed them. I was hell-bent at the time on destroying old notions of how corporations communicated. By labeling my text "Corporate Communication" I was purposely trying to distance myself from PR. And, lord knows PR distanced itself from me.
Coming here today shows just how much times have changed. I no longer believe corporations can handle it all on their own and your firms try to position themselves as more strategic by focusing (as I can see from the ICCO program) on issues like globalization and branding.
What I'd like to do today is ask you to push the envelope even further and focus on what I plan to spend a major part of the next several years focusing on in my writing, my consulting, and my teaching.
That is, the need to see our field, (whether we call it PR, Corporate Communication, or Public Affairs) as the central player in the corporation's quest to implement strategy. Not tactical players, but strategists.
So let me offer three reasons today why I believe your firms, and more importantly, your clients, need to reinvent themselves for a new era by focusing on a more strategic approach to communication.
Reason # 1: Not Enough Focus on Strategy Implementation
Corporations, academics, and managerial journals like the Harvard Business Review focus brilliantly, and almost exclusively, on the development of strategy, but spend little or no time on how to implement those same strategies.
I'm appalled that consulting firms like Mckinsey, Booz, BCG, or Bain can easily charge millions of dollars in fees to help CEOs develop new strategies and approaches to running their businesses. Investment bankers at Goldman, Morgan, and Merrill can charge even more to help these same captains of industry look at mergers, acquisitions, IPOs, issuances of debt and equities using graduates of my school to do the bulk of the analysis with little or no regard for how to implement those strategies through key constituents.
Most of these changes, like a repositioning, a downsizing, or a merger, affect key constituencies both inside and outside the firm, like employees, customers, shareholders, and communities. And the media is often a key player in selling these ideas to those same constituents.
Look at a concept like strategic intent developed by Prahalad and Hamel. The idea is to create a huge stretch goal, like sending a man to the moon, or British Airway's "world's favorite airline," but they said almost nothing about how to get the job done. The same is true for concepts like Core Competence, Hypercompetition, and Reengineering.
Well whose job is that if not yours and your client's? Who has the skills and abilities to develop the communication strategy, analyze the audience, develop the messages, and measure the response if not those of us who work as communications professionals?
Look at Apple's repositioning with its' 'Think Different" campaign as a classic example of the marriage between strategy and communication.
The company used credibility by association with famous people who "thought different" like Gandhi, John and Yoko, and Jim Hensen. iMac product advertising followed with the same "Think Different" tagline. This was an image campaign tied to a product campaign developed not by a PR firm, but by an ad agency.
Similar strategies involving other constituents should be implemented by you. Just as a firm like Apple naturally sought an ad agency to implement that strategy, firms should be looking to PR firms and corporate communication professionals within their own organizations as the keepers of the keys for implementing strategy.
Reason # 2: Reinvent Yourselves First
If you don't reinvent yourselves, someone else will do it for you.
Look back to the development of your field for inspiration and opportunity as a part of this reinvention.
In our new book, The Power of Corporate Communication, which will come out early next spring through McGraw-Hill, Janis Forman and I wrote about the roots of Corporate Communication.
The context in which the field emerged at the turn of the 20th century was much like ours today. Muckrakers writing for new, cheap, popular magazines were writing anti-big business articles. Many Americans began to see a dark side to unrestrained economic growth and the ruthless acquisition of power in the hands of a few wealthy men. Trusts, dedicated to manipulating prices and destroying competition were on the rise and popular literature, like Upton Sinclair's The Jungle and Frank Norris's The Octopus attacked business ferociously.
Who came to the rescue - our forebears, those twin fathers of public relations Ivy Ledbetter Lee and Edward Bernays.
Think about how creatively Ivy Lee repositioned the Pennsylvania Railroad Co. in its attempts to resist government regulation or how Bernays was able to popularize Ivory Soap with kids by getting them to enter soap sculpture contests.
At the core of PR in its early days was the notion of the field as a creative source for approaches to implementing strategy.
Identity firms, ad agencies, and consulting firms are all realizing the potential for ongoing business with strategy implementation, and the environment is similar to the one I described ten years ago. Today, 85% say business can't balance profit and public interest; CEO pay, estimated at 500 times worker pay, is seen as obscene; the popular press loves to beat up on business with a new generation of muckrakers, and film (Erin Brockovich), TV shows and even theatre are on the attack. And the anti-globalization movement has American firms trying to decide what to do about their positioning in other countries.
Someone will come along as the savior just as Lee and Bernays did if you don't rise to the occasion.
Reason #3: You Have a Broader Perspective
As generalists, you can bring a broader perspective to the table than your more specialized sisters and brothers in advertising and corporate identity and far more understanding about constituents than any strategy-consulting firm.
But, it will require PR firms and corporate communications professionals to take their generalist approach and marry it with a more rigorous research base and the development of frameworks culled from the best practices in a variety of fields.
Many of my colleagues are amazed and appalled at the lengths you must go to sell a piece of business to a client. Instead, clients should be seeking you out to buy propriety frameworks and research that will help them understand how to implement strategies. For example, Cees Van Riel of Erasmus University and I are developing a framework to measure which communication inputs have most influence on shareholders and intermediaries that can lead to the highest stock price.
Imagine a world in which you can tell clients ahead of time (through research and an analysis of the best practices) which communication vehicle would be most likely to enhance the firm's reputation, make employees happy, and increase stock price to its fullest potential.
If you can imagine that, you can probably also imagine a world in which PR firms would no longer be hired just to implement strategy, but also to develop the right strategies to have the greatest impact on constituencies.
But to do this you will need to hire people with a greater understanding of business and you will also have to reward them accordingly. I have always thought that PR should come out of the cold and become part of the club. The business elite come from business schools today and PR people need to realize that they must not only be excellent at communication, but also understand finance, marketing, operations, etc.
This will require an infrastructure and resources that don't even exist yet, but I believe that the day is coming when both the general counsel and the corporate communication VP will have to get an MBA. So too, the people who work in your firms will have to understand the whole business, which is only possible through an undergraduate business degree, experience, or an MBA.
So I look forward to working with you to reposition what we do as the center of a firm's activity in the strategy area over the next decade. By doing so, we will not just be helping to make our firms and clients more successful but also the business itself.
Thank you.