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August 30, 2007

School Days

It’s back to school time for many households around the world. In the Edelman home, that means our oldest child is packing up for her third year in college, with the attendant scattering of clothing and other belongings, before the eventual loading of the car and the tearful (parents only—bliss and relief for the kid) departure for Boston. In the context of this annual autumnal return to reality, I wanted to tell you about my recent breakfast with Abe Tomas Hughes, CEO of the Hispanic Alliance for Career Enhancement, a nonprofit dedicated to building Latino careers.

Readers of my blog will know that I am very passionate about diversity in public relations. It is a guarantee that we can provide the best advice to clients, who must sell their products, recruit talent and solicit investors in an ever more multicultural world. The key point made by Mr. Hughes is that Hispanics are largely unaware of public relations as a career option, though marketing and sales is their number one career choice. He suggested that PR firms and corporations alike should recruit at schools such as University of Texas Austin, Texas A&M, UCLA and USC where there are strong communications programs and large numbers of Hispanic students. He suggested that we should seek to enrich the curriculum, to ensure that course materials include case histories from successful PR campaigns to both mainstream and diverse audiences. He noted that in his visits to these schools, there is particular interest in new media, such as Migente.com, a Hispanic web site. He bemoaned the continued self-segregation of Hispanic students, though he said it is natural at places such as the Ivy League colleges where Hispanics are only 4-5% of the student body.

At a time when economic achievement is highly correlated to education level, the Hispanic community has a serious problem that will hamper future competitiveness, according to Mr. Hughes. Only 11% have a Bachelor’s degree or more. For every 100 Latinos entering college, only 25 get a degree. Only 57% of Hispanics have a high school diploma and 27% have under a 9th grade education. There is a 30-60% drop out rate from high school, with the most acute problems in large cities such as Chicago and New York. The problem is most acute for those of Mexican descent. Here is the correlation with income—only 26% of Hispanics make more than $35,000 a year, versus 54% of whites. Only 14% of Latinos are managers versus 35% for whites.

The Latino professional is younger but in most other ways very similar to his white counterpart. Most are in the US for more than one generation, bilingual and fully operative in English. Thirty percent of them work in non profit, government or academia, versus 25% of white population. They value growth and career opportunity over money, tending to stay in their jobs longer than their white counterparts. Fifty eight percent provide philanthropic support on an annual basis, most often to the Catholic Church or community non profits. Nearly half (49%) are single, 36% of them have two or fewer children.

Mr. Hughes told me that he is getting great support from Hispanics who have made it to the top, such as Secretary of State Carlos Gutierrez and Sol Trujillo, CEO of Telstraand former CEO of US West. But he is puzzled by the tepid response from many large companies given the clear trends in demographics. Mr. Hughes estimates that there are 50 million Hispanics in the US, of whom 10 million are undocumented. They represent 1 in 8 US residents as of 2005, growing to 1 in 5 by 2008, with 67% from Mexico and 40% foreign born.

Edelman has been making progress in multicultural PR and in improving our diversity of workforce. We now have 28 multicultural team members and 320 minority employees in total, just above 20% of our work force. We made a specific effort to employ summer interns of diverse background. We are a better firm for this. But it is only the beginning. We need to do more and we will start by taking our story to Texas A&M and other schools with outstanding Hispanic students. We will also look for ways to give back to our local communities to improve retention rates in high schools. I would appreciate your views on this important subject.

Posted by Edelman at 12:23 PM

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August 21, 2007

A Voice for Good Is Silenced

Robert Davies died on Saturday in London of cancer after a hard seven month fight. As founder and chief executive of the International Business Leaders Forum (IBLF), under the auspices of the Prince of Wales, Robert sought to catalyze the private sector to address societal issues, in partnership with civil society, government and communities. He was well ahead of his time in recognizing the global reach, the marketing expertise, the technological prowess, the supply chain leverage and financial capacity of companies, to do good while doing well. He traveled relentlessly, pushing himself through jet lag, spreading his message of sustainable development to executives, addressing issues as diverse as fair trade commodity pricing, advertising to children and access to credit for low income entrepreneurs. He was pragmatic and visionary, able to bridge between constituencies by power of personality and intellect. He was also one of my closest friends.

Robert believed in the possibility of transformation through the world’s youth. Two of the IBLF initiatives focused on youth careers in the hotel industry and another to get disadvantaged young people job opportunities in the developing world. He was an early supporter of Bunker Roy, whose Barefoot Colleges in India have educated 20,000 young women in English and mathematics, enabling them to break the cycle of poverty. Robert was so proud to take my family out to rural Rajastan over Christmas to show us young girls studying at a Barefoot College under solar lanterns after tending their small herds of goats during the day.

He was a true entrepreneur, with the instincts of a Wall Street trader. When we were having initial reservations about the first IBLF dinner in New York City, he told me that he had started the IBLF from nothing and that we were going to succeed by securing participants one at a time. Of course, as usual, Robert was right; the dinner was a hit. He was a consummate networker. He could enter a social gathering of complete strangers and make himself at home. He had a wide array of friends from the World Economic Forum, his IBLF board, and from civil society. He was respected and admired as a person who could bridge all of these worlds. He was a true citizen of the world, who was as comfortable in Mumbai or rural Jordan as in London and New York City. He took great interest in my business, giving me valuable advice about our work for clients in obesity prevention, environment and technology. He was unafraid of change, embracing blogging avidly last summer.

He loved the outdoors and was especially happy at our home in Long Island. He used to wake up to the “dawn chorus” of birds singing at first light. He would run every day to stay fit and to see his surroundings. I have a particularly vivid image of him after a run in Central Park in New York City, bubbling with enthusiasm about the possibility of a congestion charge similar to London so that traffic could be eased. Even to the end, Robert was committed to physical fitness, walking an hour a day in a park near his home, getting the air into his lungs, never allowing his condition to change his essential optimism.

He was a true friend…in fact, he always began our phone conversations with the descriptor, “Richard, my friend.” We talked about business affairs, our love lives, our ambitions and especially about current events. To pick his brain was a daily treat; he was an omnivore, from mainstream media to insights garnered from his many friends, through the cell phone always in his ear. He was especially devoted to the young daughter of mutual friend Alexis St. James and to my youngest daughter, Amanda, making special calls while globe-trotting to stay in touch with them, not just their parents. On our recent family trip to India with the families of two other IBLF members, Robert took the initiative to put out a daily newspaper, based on the observations of the children on the journey. The gift of traveling with him for those two weeks, rocking up the steep hill on an elephant to see the Amber Palace in Jaipur, to go for drinks at the Maharana’s residence in Udaipur, to go for a bike ride in the hills near Devi Gaur and stop to play cricket with the locals, are memories that will never fade.

The IBLF will go on from strength to strength because it is in a unique position in helping business to cure the ills of the world, the true legacy of this great man. I quote from Victor Hugo’s Les Miserables, “Social consumption is called wretchedness. People die as well when undermined as when struck by lightning….that to think before all of the disinherited and sorrowful classes, to relieve, ventilate, enlighten and love them, to magnificently enlarge their horizon, to lavish upon them education in every shape, to offer them the example of labor and never that of indolence…to limit poverty without limiting wealth…to create a hundred hands to stretch out to all sides to the crushed and the weak, to employ the collective power in opening workshops for every arm, schools for every aptitude and laboratories for every intellect…to proportion the enjoyment to the effort and the satisfaction to the wants…If nature is called providence, society ought to call itself foresight…The ideal is frightful to look on thus lost in the depths, small, isolated, imperceptible and brilliant, but surrounded by all those great black ménages monstrously collected around it; for all that, though, it is in no more danger than a star in the yawning throat of the clouds.” Robert, we will keep your promises. God speed my good friend.

   

Posted by Edelman at 11:46 AM

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August 20, 2007

Michael Deaver; Good-bye My Friend and Mentor

Mike Deaver finally gave up the fight against pancreatic cancer on Saturday morning, when he died in his home in Bethesda, Maryland, surrounded by his loving family. His passing leaves all of those he touched in his fifteen years at Edelman with a lifetime responsibility, to make sure that we continue his legacy of creativity, excellence and integrity.

Mike joined Edelman in the Washington office in 1992. My father, Dan Edelman, met him through a mutual friend, Chris Ogden, Time Magazine correspondent in Washington. Mike had been through a difficult period following his service in the White House and was looking for a place to practice his craft. It soon became clear to all of us that we had a unique resource, a man with exquisite judgment, dedicated to client service and to mentoring younger staffers. And yes, he had the brand name, based on his nearly 20 years of working with President Ronald Reagan, whose public image as the Great Communicator was at least in part attributable to Mike.

I had my first opportunity to work directly with Mike when Edelman won the Church of Latter Day Saints account in the mid 90s. The LDS leadership was tired of being stereotyped, with legacy issues such as polygamy needing to be addressed. The challenge of reintroducing the Church appealed to Mike; the Midwestern values, the importance of family, the commitment to a life without liquor and desire to give back to the community. He forged a close personal bond with Church President Gordon Hinckley and with several others in the leadership group of twelve. He conceived a bridge-building program, introducing Church leaders to top editors, academics and business executives. He persuaded President Hinckley to invite Mike Wallace, the legendary hard-boiled reporter from investigative show Sixty Minutes, to Church headquarters in Salt Lake City, leading to a transformational piece on that top rated show. He was intimately involved in the 150th anniversary of the Church, including the walk from Nauvoo, IL to Salt Lake City, and helped to secure a cover story on the Church in TIME Magazine.

Mike was the personal counselor to several chief executives. He helped Carlos Ghosn to set out a clear path to success for Nissan, persuading him that personal leadership and frequent communications were central components of the culture change necessary at the car giant. He worked with top Microsoft executives in the wake of the Justice Department antitrust proceedings in the late 90s. He was intimately involved with Fannie Mae, helping its CEO manage their reputation. His constant mantra to these corporate leaders was to be yourself and be true to your values. He often related a tale from the Reagan years, when he and then Governor Reagan were walking on Fifth Avenue. A New Yorker on the street stopped them and said to Reagan, “I know who you are. You are Ray Milland. Will you sign this piece of paper for me?” Reagan dutifully signed the paper Ray Milland and then walked on. Deaver asked him why he did not correct the fellow and Reagan said, “I know who I am.”

The Deaver touch was perhaps best seen at times of great public need, such as the publicity for both the 9-11Commission Report and the Iraq Study Group Report. Former Secretary of State and co-director of the Iraq Study Group, Jim Baker, said that Mike’s leadership gave those on both sides of the political aisle the confidence that there would be a fair presentation of the content. He was also a close advisor to the board of the US Holocaust Museum in Washington as it sought to broaden its mission without losing its focus. Mike and I were on a phone call earlier this year with two board members and naturally, given his superior knowledge of the subject, he offered the greater part of the advice. Five minutes later, he was on the phone to me, apologizing for dominating the conversation, which, of course, was totally unnecessary but in keeping with his humble nature. He wanted his disciples, including me, to have the opportunity to lead.

Mike understood our business to be communications, not just public relations in its narrowest context but the full complement of disciplines that could deliver the message in the most powerful manner. He led in the design of our integrated programs for the American Petroleum Institute and the Association of American Railroads. Just last summer, as a team sat around trying to come up with a tag line for the Panama Canal’s expansion efforts, Mike sat at the table and listened intently for an hour. Then he leaned forward and said calmly, “Let’s try to simplify things and just say, ‘A better way to go.’ With that, our work was done. He was a keen analyst of research; he loved our annual Edelman Trust Barometer and his tour of European capitals, spreading the gospel of “a person like me” as the new credible source. He often talked to me about the power of impressions and advised me to turn off the sound during political debates to watch the body language of the candidates. He admitted that he urged President Reagan to have a little sip of red win prior to TV appearances because it helped dilate his capillaries and provided him with a healthy, rosy tone on the air.

Mike Deaver was at his core a decent, hard-working American, a family man whose reality of goodness and integrity in the end is much more important than his legendary mastery of the photo opportunity. He had an almost constant teen aged affair with his long time bride and love of his life Carolyn. Once while walking to a meeting in Washington and waiting for a light to change, he pointed across the street and said, “Look at that beautiful woman over there… It’s my wife.” He was always excited to talk about her achievements at the Cosmetics, Toiletries and Fragrance Association. He was mad about his daughter, Amanda, teasing me that I got the lesser Deaver, as he related the latest new accounts at her fledgling agency. He loved his son Blair and constantly talked about how proud he was of Blair’s integrity. And he was absolutely enthralled with all three of his grandchildren, whose photographs filled prominent spaces throughout his office. He was a positive thinker, always looking at the bright side. With his bionic knees, replaced after years of racquetball, he was determined to get back on the court, to whip younger opponents. I will always remember the glint in his eye, the humor and the stories of his youth, including his piano playing in Santa Clara under the pseudonym, Michael Keith.

He was so proud of the Edelman DC team, whom he had worked with for so many years, speaking excitedly about how Jere Sullivan was thriving in Brussels, how well Neal Flieger was taking on the supervision of Strategy One research, how Pete Segall had made the difference for the Morocco Government, how smart Ben Boyd was on the GE business, what Jeff Surrell was doing for the Church of LDS and Chris Hayes' great work on the Panama Canal. And there was always a special word for Rob Rehg, whom he helped grow into the leader of the DC office, able to manage the most complex challenges. For years he and Leslie Dach guided the DC office and Mike would always say, “He’s the smartest guy I ever worked with.” He was so close to my parents, Ruth and Dan Edelman, helping my mother on her pet cause of mental illness, helping my father through the difficult days following his prostate surgery. He was my outside mentor, on family issues, on my relationship with my father and on management of the firm.

In closing, I quote from Shakespeare’s play Julius Caesar. Mark Antony, in describing Senator Brutus, his late rival and member of the cabal that overthrew the dictator, said, “This was the noblest Roman of them all…He only, in good honest thought and common good to all, made one of them. His life was gentle and the elements so mixed in him that Nature might stand up and say to all the world, ‘This was a man!’ Mike, we were privileged to have you as a friend and mentor.

We have a tribute set up for Mike on our home page, www.edelman.com, and I encourage you to visit it and share your own stories about Mike with the broader community.

Posted by Edelman at 9:50 AM

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August 13, 2007

Dispersion of Wealth and Authority

I helped to organize a conference over the weekend in Southampton, NY under the auspices of the Atlantic Council, a Washington DC-based think tank which seeks to strengthen ties between the US and Europe. The President of the Atlantic Council, Fred Kempe, former editor of the Wall Street Journal Europe, assembled a terrific group of speakers, including Richard Holbrooke, former US Ambassador to the United Nations, Brent Scowcroft, National Security Advisor to Presidents Ford and Bush, and financier George Soros. Here are some of the highlights of the meeting:

1) There is a tremendous shift in financial resources from the developed to the developing world. Brian Henderson, Chairman, Global Public Sector at Merrill Lynch, said that of the $5.7 trillion on deposit in government central banks, 38% is in the BRIC nations (Brazil, Russia, India, China), with China holding $1.3 trillion, up 42% in the past year alone and Russia at $417 billion, up 57% in the past year. Five nations in the Middle East hold $1.7 trillion, the largest single concentration of assets. Much of the shift is attributable to commodity prices, with earnings to OPEC nations rising from $200 billion in 2002 to $600 billion in 2007. Matthew Bishop, US Editor of the Economist Magazine suggested that we have moved from a bi-polar (Cold War) to a uni-polar (post Cold War) to a multi-polar world.

2) Sovereign wealth funds such as the Kuwait Investment Authority, initially conceived as stabilization mechanisms to manage commodity price fluctuations, now are investing in commercial concerns via investment vehicles offered by Barclays Bank among others. Investment protectionism, of the type witnessed a year ago in the failed attempt by Dubai Ports to acquire assets in the US, is a serious threat to global prosperity. At present a large bank in Portugal is rebuffing efforts by the Angola State Fund to take a large share position, particularly ironic given the colonial past of those nations.

3) Asian nations and companies are particularly well positioned at present, having paid down their debt and accumulated reserves since the debt crisis of 1998, said Bob Hormats, vice chairman of Goldman Sachs. There is real risk in economic nationalism; the US has to resist the temptation to restrict trade as part of the election cycle.

4) The new model for policy-making must be networked governance, according to Ashraf Ghani, former Finance Minister of Afghanistan and now Chancellor of Kabul University. “There is a new relationship between markets, government, investors and the corporate sector. The International Monetary Fund and World Bank will not suffice in making change; government no longer holds the monopoly on information or power. We need a new social compact that also considers civil society (NGOs),” he said.

5) Climate change was a continuing topic of discussion. Sherri Goodman, former Under Secretary of Defense for Environmental Security, said that the effects, ranging from sea level change to agricultural crop pattern shift from temperature rises and rainfall could be a “threat multiplier for Africa and Asia.” She noted that India is building a fence to prevent further immigration from Bangladesh. She also said that China has now passed the US as the number one emitter of greenhouse gases, with a new coal-fired electricity plant coming on stream each week, offsetting any reduction in the rest of the world.

6) Africa will be a new focus of world attention because of its oil assets, according to Dan Yergin, President of Cambridge Energy Research Associates and General Chuck Wald, former Deputy Commander of the US European Command. Wald noted that Africa already supplies more of US oil imports that the Middle East and could represent 40% of US oil imports by 2020. A further advantage of Africa is lack of “choke points”; 25% of total oil supply goes through the Straits of Hormuz, next door to Iran.

7) We witnessed a most fascinating debate between Dick Holbrooke and Brent Scowcroft on US policy in Iraq. Holbrooke suggested that the surge in troop numbers is bound to fail, that the American public is demanding a serious draw down in our presence and that we should use the next months to find a political solution. Scowcroft wants to get American troops “out of the business of population protection” and to contain the Iraq problem by engaging its neighbors in a broader discussion of the Middle East including the Palestine issue. Scowcroft does not believe in the Biden-Gelb three region concept because it does not envisage a strong central government to divide oil revenues.

The reality for those of us in PR is that we will be managing in an ever more complex context, with more-cross border deals, cross-cultural trends and an increasing number of voices seeking to influence the debate.

Posted by Edelman at 5:08 PM

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August 3, 2007

Fever of '57

Fifty years ago, on October 4, 1957, the Soviet Union launched Sputnik, the world’s first satellite. Sputnik proved the capacity of the Soviet R-7 multi-stage rocket to propel Intercontinental Ballistic Missiles, thereby altering the balance of power with the United States. Both superpowers had relied on long-range bombers to deliver nuclear payloads. Just a month later, Sputnik II was launched, a 1,100 pound satellite that carried a dog, Laika, opening the possibility of sending human beings, possibly soldiers, into space. Two months later, the first American effort to launch a rocket was a huge embarrassment, with the launcher exploding on the take-off. America launched its first satellite into space in early 1958, a diminutive 11 pound unit. The space race was officially underway.

The public reaction in the United States was nothing short of hysteria. Sixty percent of Americans said they believed we would shortly be in a nuclear war (Gallup Poll, April, 1958). The issue became fiercely political, with Republican President Eisenhower, a hero of World War II, under fire from the Democrats for allowing the missile gap to happen. Various drills were conceived by public safety officials, from the “duck and cover” in school rooms (yours truly participated in several of these, where we had to move quickly under our desks at school—greatest risk was catching your hair on a stray piece of gum left by fellow students) to building of personal bomb shelters adjacent to the home to preparation of subway stops as fallout shelters. Millions of Americans participated in a countrywide civil defense drill on June 10, 1958. Meanwhile, the US and USSR regularly exploded hydrogen bombs in test areas during 1958, with a constant drum beat of national media coverage in the US magnifying the threat to peace. The Chicago White Sox won the American League pennant race to go into the World Series for the first time since 1917. Chicago Mayor Richard Daley ordered the air raid sirens to be enabled to celebrate this event. Thousands of panicked Chicagoans, including my parents, were certain that the Russian missiles were coming; I think I hid under my bed.

There was a longer term impact on America, specifically a massive commitment to science and engineering. Some historians believe that DARPA, the basis for the Internet, was conceived as a reaction to the Sputnik shock. Hillary Clinton and Mitt Romney, candidates for President, have both described the need for a “Sputnik moment” in the next decade, an event that drives us to address key issues such as environment and education.

All of this drama will be captured in an upcoming film called Fever of ’57 by David Hoffman, whom I met yesterday night at the home of Jay Walker, founder of Priceline and now CEO of Walker Digital. Hoffman made several interesting points during the dinner:

1) President Eisenhower channeled American fears into enthusiasm. He made it a patriotic duty to be a scientist
2) Eisenhower created an alternative to military control of space by authorizing NASA (National Aeronautics and Space Administration), a civilian agency dedicated to space exploration
3) Eisenhower used his military credentials to tone down the rhetoric from his own military and from US media responding to inflammatory speeches by Democrats
4) Over the next two years, Eisenhower declined to release to the public America’s increasing capability in the missile arena for fear of causing the Soviets to overreact and escalate their spending. John Kennedy used the missile gap issue effectively in beating Richard Nixon in the 1960 Presidential race.

We are now in a very different communications climate. But the ability to turn crisis into opportunity exists for leaders in government or in business. You must have an alternative narrative that is constructive, measurable and creative. You need not respond to an adversary such as an NGO by threats or escalation; you can find a mutually advantageous outcome. Let me know your views on this.

Further Reading:

NYT Oct 13, 1957: The Sputnik--And Three Aspects of the Soviet Line

NYT Oct 20, 1957: Soviet Exploits Its New 'Sputnik Diplomacy'

NYT Nov 10, 1957: How World Reacted to Sputniks

NYT Feb 9, 1958: To Counter Russian Propaganda

NYT October 4, 1977: First Sputnik is Dim in Russians' Memory

Posted by Edelman at 1:29 PM

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