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March 26, 2010
False Choice
Every vacation, I try to read a long book. This week, I tackled Anna Karenina, Tolstoy’s masterpiece. Leave it to me to focus on the business angle in the classic love story. But find it I did, in a conversation between Konstantin Levin and his brother Sergei. It is the disagreement on the basis of human motivation, common good versus personal interest.
Sergei posits that it is vital to the future of Russia to spend money on health care and education for the peasantry. He says, “Can there be any doubt of the usefulness of education? If it is good for you, it’s good for everyone.”
Konstantin replies, “Maybe all that is good, but why should I worry about setting up medical centers I’ll never use and schools that I won’t send my children to…the motive force of all our actions is, after all, personal happiness….in our present day institutions I see nothing that contributes to my well-being…The roads are no better and cannot be better; my horses carry me over the bad ones as well…I will always defend with all my might those rights that touch on my interests…no activity can be solid unless it is based on personal interest.”
Sergei’s retort follows, “The chief task of philosophy in all ages has consisted precisely in finding the connection that necessarily exists between personal and common interests. The birches are not stuck in, there are planted or seeded, and they ought to be carefully tended. Only those nations that have a future…have a sense of what is important and significant in their institutions and value them.”
How is this relevant to the present time? Howard Schultz, CEO of Starbucks (disclosure: a client) related a story at his annual shareholders’ meeting earlier this week. He said that he had a phone call from an investor about a year ago, at a low ebb of the company’s fortunes. The investor recommended that Howard cut health benefits for his partners working at the stores, particularly those who were employed only part-time. Howard responded by stating that the health benefits were going to continue and that if the investor did not like that decision then there were lots of other public companies to follow.
In this context, Matthew Bishop’s new book, Road From Ruin, is an excellent read. Bishop argues that “capitalism must rediscover its soul….the obsession with short term profits helped to inflate the recent bubble…a culture known as IBGYBG (I’ll be gone, you’ll be gone) grew up in many businesses…based on one-off transactions rather than long term relationships. ..If capitalism is to emerge from the current crisis in better shape than before, it must be refocused on the longer term…the time has come for business leaders to stop offering up as an excuse Milton Friedman’s famous argument that “the social responsibility of business is to maximize its profits…a company must ask what sort of society will shape our customers in twenty years.”
It is a false choice to suggest that personal interest must contravene common good. Those of us in PR must take a strong position with our clients to operate with the mindset of business as a positive force in society. You can do well by doing good, or as Jeff Immelt of GE says, “green can equal green.”
Posted by Edelman at 3:10 PM |
Comments
Richard - What a timely (and excellent) book you chose to read! Wonderful post. Tolstoy's words still ring true years later. Thanks!
Posted by: Anne McPherson at March 26, 2010 4:52 PM
One of my first questions when discussing capitalism back in Uni days was (or still is) how sincere is capitalism when making positive acts in society? This will relate on how to convince corporations to do good. Do good because it will improve your bottom line or Do good because it is your responsibility to the people? A book I'm reading 'Capitalism 3.0' (Peter Barnes) gives a strong statement in the first chapter, "Assets in the commons are meant to be preserved regardless of their return to capital". Perhaps the debate will never end, as you can't please everyone but everyone should agree this should not hinder people obtaining benefits.
Posted by: Patria at March 26, 2010 9:18 PM
CSR is becoming one of the most important subjects that we learn as PR students. In the same class every person has a different opinion about how this part of the company has to be managed.For me it is surprising that there are a lot of people that would do whatever it takes to get a profit not paying attention to anything apart from their own benefit.
After read the entry I will try to read Anna Karenina see what I can learn from it.
Posted by: Alberto Rivilla at March 30, 2010 8:46 AM
As always, we, humans let ourselves be influenced by the environment around us, and if today we live in a capitalist society means that we have become very individualistic. It is amazing to see that in developed nations, citizens no longer have interest about the common good but only about their own interests. There is no longer the feeling of helping others and the act of doing good has become simply to donate money. However when analyzing the developing countries, in which the religion has much power, it is possible to identify a tremendous desire to really help the next, through contributions both physical and monetary. In poor countries the population is definitely more concerned with their similar. Maybe our economy has influenced us so much that we lost concern for those who are near us and unfortunately we are becoming lonely people. It is extremely gratifying to see someone like Richard Edelman talking about this matter. It shows that our society is not lost, and that even within large businesses there is still the possibility of the common good becomes bigger than the financial interest.
Posted by: Elvira Pilatti Pais at April 2, 2010 6:34 AM
The short-sightedness of so many of the arguments against the health care reform are dismaying, when you realize our elected officials are there to protect and grow this country's future. I love the planting of the birches parallel in the novel.
Thanks,
Barry
Posted by: Barry Collodi at April 2, 2010 8:47 AM
Outstanding post!
Pure personal interest capitalism from Adam Smith is rooted from an era (1776) when there was generally a one-to-one connection between the supplier and the consumer. Twenty-first century capitalism has multiple intermediaries, each pursuing their own self-interest; increasingly challenging the “invisible hard”. This, combined with the fact that since 1900 the average education of employee and consumer stakeholder groups has increased from 3rd grade to over 12th grade; business leaders must manage social systems versus mechanical systems.
A 1776 world-view is unlikely to get desired results in 2016.
Posted by: Hugh Campbell at April 2, 2010 9:02 AM
As public relations professionals we are called to serve the greater good rather than just serve the needs of just our clients. In all of these stories you have talked about, the message has been the same: if do good you will get good things in return. We need to speak the truth to our target audience, sometimes if its not what is in our client’s best interest. That is why ethics is such a huge part in what we do: we are the mediators between the world of the everyday man and the corporate world. We may be the only channel of communication for some people who need to hear a certain message and it is our duty to give that message as clear as possible so everyone has a shared understanding. Of course we also must be loyal to our clients, as they are the reason we have the resources to do what we do, but if anything we are asked to do is not in the best interest of our publics we are taking two steps forward and three steps back. There is a very delicate balance that public relations professionals must maintain in order to effectively influence and communicate with our target audience.
Posted by: Stephanie Romano at May 8, 2010 9:25 PM
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Does PR Make a Difference?
My number one issue is childhood obesity. My mother has struggled with her weight for her entire adult life. She even experimented with lock and key on the refrigerator to prevent midnight raids for ice cream. I have been a bit of a tyrant with my three daughters about the necessity of exercise at least four days a week. There are legendary stories about “Kids’ Day” at our home in Long Island, when family friends were invited over for activities ranging from egg carry to three-legged race to rolling down the hill. I am on the board of directors of the Children’s Aid Society, which provides health services and recreational opportunities for inner city youth in NY City.
So it was karma that Tom Gallagher, CEO of our client, Dairy Management Inc., called to ask me to join the “Fuel Up to Play 60” initiative, a cooperative effort to get more food groups to encourage nutrient-rich foods and physical activity in schools. The National Football League, Kraft, Domino’s and America’s dairy farmers are funding the program.
Most of you are aware of the incidence of youth obesity in America--1/3 of kids up to 18 years old are obese or at risk. But did you know that if you are obese as a teen, you have an 80% chance of being obese as an adult? Did you know that of the 55 million kids of school age, less than a quarter of them will have physical education this week at school, and most of them will have it only once? Only 20% of the young adults 18-24 years old are fit enough to qualify to serve in the armed forces.
I organized a breakfast for Mr. Gallagher with Lally Weymouth and John Meacham of Newsweek Magazine in January. It became evident during the meal that Newsweek was interested in partnering with the coalition. DMI offered to buy the back cover of the magazine and to underwrite a briefing for opinion formers in Washington in March.
The First Lady, Michelle Obama, announced her “Let’s Move” campaign in early February, to improve the diet and raise the activity level of American youth. Mrs. Obama appointed the White House chef, Sam Kass, to design more healthy meals for families.
Newsweek secured Dr. David Satcher, former Surgeon General, Agriculture Secretary, Tom Vilsack and Maurice Drew Jones, star running back for the Jacksonville Jaguars for the Washington event. At the last minute, former President Bill Clinton decided to come to lend his support to the campaign. Mrs. Obama then invited fifty opinion leaders, including dairy farmers, athletes and professors to the White House. The First Lady was the subject of a cover story in this week’s Newsweek on her campaign against obesity and what business and government can do to reverse the trend.
The point of this post is that PR people can make a real difference. We need imagination and determination to bring ideas to fruition. If you need inspiration, remember this poem, recited by Dr. Satcher at the event on Tuesday in Washington. It is called God’s Minute. “I have just one minute, only sixty seconds in It. Forced upon it, can’t refuse it, don’t see it, didn’t choose it. I’ll give account if I abuse it, suffer if I lose it. Just a tiny little minute but eternity is in it.”
Posted by Edelman at 2:06 PM |
Comments
PR professionals do make a difference every day. We share information, we educate, we empower, and we connect people. I take pride in the work I've done as a PR professional knowing that I've made a difference in the lives of many by me using my voice to give others who aren't being heard the opportunity. We need to share more about the positive impact we have on our society.
Posted by: Ann Marie van den Hurk, APR at March 19, 2010 10:27 PM
Richard,
You're right, childhood obesity is an epidemic. I heard a statistic the other day - this is the first generation where children have a lower life expectancy than their parents. Wow, that's scary!
I agree that PR people can make a difference and applaud you and all the other PR professionals who are promoting a healthy lifestyle for children.
I look forward to hearing more about your program and its success.
Ruth Keefover
Posted by: Ruth Keefover at March 24, 2010 10:18 AM
As a student who is graduating the University of Michigan in May, I came across your blog when I was researching the opportunities at Edelman. Having recently completed a project on childhood obesity for a Positive Psychology class, I was interested in your viewpoint on the issue. Convincing school aged children to eat healthy foods is a lot like PR. In PR, you try to give the public a positive image of your company, thereby improving their desire for the company’s products; in school lunches, you need to improve children’s image of healthy foods, thereby increasing their desire to eat these foods. Rather than using negative campaigns, like ‘banning’ certain foods and ‘demanding’ healthy menus that do not address the “I hate vegetables” mentality, my proposal involved having the older children (fifth and sixth graders) work with a nutritionist to develop the healthy menus and giving the younger grades the opportunity to name some of the foods (i.e. asparagus could be named Britney’s Spears). The children are more apt to eat a healthy lunch when they are positively engaged in the process. Similar programs that have been implemented have proven very successful; not only have children improved their eating habits, but lunch sales also increased since more students were eating lunch at school. I hope that you consider these options in your “Fuel Up to Play 60” campaign.
Posted by: Kelly Stein at March 24, 2010 1:58 PM
As a soon-to-be PR college graduate, I understand how important it is to love and believe in your work and who you represent. If you are passionate about something, it will show through your work.
Childhood obesity is a serious issue that our country is facing. PR professionals can use their connections to make a difference and promote a healthy lifestyle for all children.
Posted by: Haley Barr at March 26, 2010 10:45 AM
I agree that PR people can make a huge difference when trying to promote anything. It is inevitable the more people Michelle Obama gets to join her campaign the more publicity and recognition the campaign will receive. I believe that this is a great cause and one that needs to fixed in our country, especially in today's generations where childhood obesity has grown into a huge health problem.
Posted by: Paige Levy at April 7, 2010 4:20 PM
I am very passionate about this cause as well. It is truly amazing that 1/3 of our youth is obese. What really saddens me is the two, three and four year olds you see who are practically morbidly obese and there parents are feeding them mcdonalds chicken nuggets and french fries. I completely acknowledge the profound effect PR can have on our society and I am extremely excited about Michelle Obama's campaign. This is a cause that has gone unnoticed for too long and I applaud you for bringing the issue to social media as well.
Posted by: Meghan Callahan at April 18, 2010 5:59 PM
I couldn’t agree more with this blog. Using the subject of childhood obesity is a perfect example of how PR can truly make a difference in a life-threatening issue. Sound statistics, problem identification and even strong solutions are not enough to solve the issue. We need celebrity, political, and corporation support to make Americans aware of the problem and ways to fix it. I believe the campaign against childhood obesity will take a similar role to the anti-smoking campaign. The support from public figures, strong advertising and anti-smoking programs implemented throughout the nation has brought down the statistics of young smokers significantly in the past two decades. With enough support, we can do this with childhood obesity.
The responsibility of a PR professional is to effectively communicate to the public. It is our job to inform them in a way they will understand and encourage them to take action. By collaboratively using creative minds, logical thinking, status of public figures and exhausting all methods of communication, we will make a difference!
Posted by: Michelle Child at May 8, 2010 9:04 PM
I'd have to say yes. Anybody in a big business needs PR to get ahead faster and stronger. PR's can make a really huge difference to the person's/company's profile.
Posted by: Ruby at Science Camp at February 17, 2011 11:59 AM
PR professionals would be a great help in promoting a healthy lifestyle to all Americans. And this way they could lend a hand in every single obese person to make a move a practice healthy lifestyle. And i think we should help Michelle Obama in her advocacy to fight Obesity.
Posted by: Mari Ann Lisenbe at February 25, 2011 2:31 AM
PR can make a difference in combating obesity, but only if it a part of an education campaign. I have recently come upon some interesting and relevant stats. The CDC tells us the national childhood obesity rate has nearly tripled in the past 30 years. Over the same time, health spending in America has followed the same trend. In 1965, health spending in America, as a % of GDP, was 5%. In 2010 it was 18%. It steadily rose in the intervening years. If the rising trend in obesity is not halted and reversed, it will continue to consume an increasing % of GDP as the years go by. It is my view that the rising trend of obesity in this country will not be halted and reversed until there is a MASSIVE education campaign that teaches people, children and adults alike, about nutrition, healthy eating and the need to lead a physically active lifestyle to live a healthy life.
Posted by: Jay Hurwitz at September 22, 2011 10:00 AM
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Addressing the Corporate Gender Gap
The public relations industry is fortunate to have women as a large percentage of the work force, many of whom are in leadership or ownership positions at their firms. Other industries, specifically financial services, fare poorly in retaining senior women who become top executives. The World Economic Forum has just released a disturbing study of women in business across 134 countries that should provoke companies to concentrate on overcoming the patriarchal/masculine corporate culture and providing equal opportunities and pay. Here are some of the key findings:
1) Though women now represent over half of the work force in the US and nearly half in other Western countries, only 23% of Indian corporate employees and 24% of Japanese are women.
2) The women “tend to be concentrated in entry or middle level positions; the more senior the position, the lower the percentage of women. The highest percentage of female CEOs is in the Nordic countries. The US data shows 52% of total employees are women, 40% are entry level, 26% are mid level and 14% are board level in this sample.
3) Only one third of respondent companies have a specified target or other affirmative policy on employment of women. The US and UK based companies have universally applied such targets, while none of the Brazilian or Mexican firms have done so.
4) Salary disparity between men and women starts early in the career. According to a recent study of Harvard MBA students, its female graduates get lower pay, start at a lower level and have less career satisfaction from inception of professional life. Seventy two percent of respondent companies do not track salary differences between men and women.
5) The biggest barriers to women in management are masculine cultures and lack of role models, followed closely by the lack of opportunity for critical work experience and responsibility. Most companies do not track access to stretch assignments for women.
6) What seems to be working well is flexible working arrangements, parental leave and re-entry opportunities. These are no longer factors blocking female advancement.
Saadia Zahidi, who managed the study for WEF, concluded her remarks on Monday by saying, “Women don’t want to opt out. They want to advance. Business has to do better. We can do so only if companies begin to benchmark against best practices.” It seems that business has been content to do the “easy stuff,” but not to confront the macho culture or precedents favoring men. As the father of three young women whom I am counting on to carry the family business into Generation III and the husband of a professional woman who opted out after 17 successful years in banking, I can commit to our firm providing the very best opportunities and being judged on our performance relative to peers.
Posted by Edelman at 12:26 PM |
Comments
So happy to see this issue is still under discussion. It is part of the decades-long conversation about diversity and the discomfort of coming to terms with the fact that a dominant culture exists. My fear is that many of today's young women, in their efforts not to be labeled "feminist," are letting this important struggle fall by the wayside.
Posted by: Julia Walker at March 17, 2010 2:01 PM
So it is all down to masculine culture and attitudes? If only men could grow up and stop discriminating against women in the workplace. This is far too simplistic. There is no glass ceiling - people with talent and drive can get to the top in almost all organisations (except the Church). It is the choices that women make that often prevent them getting to the top. These are not easy choices. But please stop blaming male prejudice - it is facile.
Posted by: Paul Sloane at April 8, 2010 9:31 AM
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WSJ Green Eco-nomics; What a Difference a Year Makes
I am returning from the Wall Street Journal's annual environmental conference in Santa Barbara. The tone of the event changed profoundly this year. The heretofore simple orthodoxy that companies can “do well by doing good” with regards to environmental performance is evolving, if not experiencing complete metamorphosis. Emerging is a more ecumenical approach to environmentalism that threads across a variety of challenges, tools & solutions and even ideologies to create a (even) more complex tapestry of environmental activism and innovation.
THE CURRENT SITUATION
Established industries are vigorously defending their license to operate, with newer technology companies admitting financing shortfalls and higher than projected costs. The substantial discoveries of low-priced natural gas in the US altered the financial calculus for renewables while economic pressures have given new momentum to coal and nuclear industries. The regulatory forces have shifted, with governments failing to reach consensus on carbon targets in Copenhagen and relatively low likelihood of Waxman-Markey passing the US Senate. The academic basis for carbon cap legislation is in question, with controversy surrounding the transparency on the scientific methods coupled with disagreement on magnitude and effects of climate change. The ball has been passed back to the private sector to make progress in spite of these developments.
In a business requiring long-term investments and large upfront capital commitments, this level of uncertainty means that companies will likely pursue incremental change and will hedge their bets by participating in range of ventures.
MOVING FORWARD
There are certain fundamentals to watch:
1) Energy Consumption--Projected to rise by two times by 2050, as the world’s population grows from 6.5 to 9 billion and we begin to serve the 1.5 billion people who have no electricity and 2.5 billion without sanitation. The US uses five times as much electricity per capita as China and 25 times as much per capita as India.2) Natural Gas Reserves--There is between 4-8,000 trillion cubic feet of natural gas in the US, according to Boone Pickens, the equivalent of 700 billion barrels of oil, or five times the oil reserves of Saudi Arabia. He and Ford Motor representative suggested that it would be possible to convert the entire truck fleet of the US to natural gas, cutting oil imports by a third.
3) Capital Cost--Renewables are not on track to produce electricity as cheaply as coal, which presently accounts for 50% of US power generation (85% in China, 65% in India). But Amory Lovins of the Rocky Mountain Institute noted that new wind projects are half as costly as new coal and 1/3 as costly as new nuclear facilities.
MORE COMPLEXITY IN BOTH CONDITIONS AND COALITIONS
Within this context, the actions and alliances being pursued, continue to innovate and sometimes appear, “stranger then fiction”.
1) Renewables--The Wind industry is crying out for transmission lines that connect power generation locales to population centers. The smallest and the largest wind projects are attracting financing but there is a "donut hole" of mid-sized projects not being funded. Wind entrepreneurs are hoping for legislation that requires utilities to purchase its output first, over fossil fuels. About 8 gigawatts of wind power was added in the US in 2009; only 400 megawatts of solar was built. To put that in perspective, the goal is to have 2,000 gigawatts of renewables on line by 2050 (my math is 50 gigawatts a year, not 8.4 created in 2009). A few utilities are now pursuing "hybridization," combining solar with natural gas. FPL's CEO said that the solar plant at scale can only make 75 megawatts of power (11,000 homes served) versus a natural gas plant that can produce 3,800 megawatts. Solar is used to heat up synthetic oil that then is used to produce steam to drive an existing turbine.2) Clean Coal and Clean Nuclear--Mike Morris, CEO of AEP, a US utility that gets 88% of its power from coal, believes in the promise of clean coal. His company is spending $660 million on a facility that will pump carbon dioxide two miles into the porous rock formation where it will remain. Lou Hay, CEO of FPL, a US utility that gets only 4% of its power from coal, said that the cheapest electricity in the US comes from nuclear. He noted that many of the current nuclear plants are 30-40 years old and will need updating or replacing. In terms of the public debate, we are also provided a clear example of the emerging complexity, with different, highly credible environmental NGOs like Sierra Club and Environmental Defense Fund taking fundamentally opposite philosophical views on the environmental merits of clean coal in the energy mix.
3) Rise of Electric Cars--Peter Voser of Shell said that there will be a doubling of the number of cars from 1 to 2 billion by 2050 but predicted that 40% of those would be electric vehicles. If every car in the US were a hybrid we would get a 20% reduction in carbon output.
4) Decentralized Energy Production--Given the weakness of the distribution grid, there could be a market niche for products such as the Bloom Box Fuel Cell. This product, as large as a standard car, has zero emissions. It burns agricultural methane at 800 degrees to create electricity.
THE CONSUMER FROM TARGET AUDIENCE TO PARTNER?
Alan Murray of the WSJ and I ran a panel discussion on green marketing. Key conclusions were necessity of giving consumers information to make right decisions, potential for partnership with NGOS to boost business credibility and importance of selling more than green attributes, such as health, lifestyle and performance. The Disney team spoke about tying purchase behavior to specific philanthropic acts, which worked brilliantly in their Give a Day, Give a Disney Day promotion. Our group was quite pointed in criticizing the very notion of green marketing where people pay a premium, suggesting that behavior change would stem from authentic endorsement by peers and parity priced products. A Yale study indicates a person only spends 30 seconds to research the green provenance of a product, said Professor Dan Esty.
Marketers are still sifting through often-contradictory insights into consumer sentiment around “green”, where high aspirations are expressed, but true behavior change is often quickly de-railed by inconvenience and price premium. But all could agree that “green marketing” as a stand-alone conceit is becoming as anachronistic as “total-quality-management”. Instead green attributes are finding their place in the basic consideration funnel, needing to make their case to the consumer alongside quality, price, etc. Resulting purchase decisions will vary and depend on specific brands, markets and industries.
Those of us in public relations can play a vital role in the transition to a more complex greener society on both a rational and emotional basis. It starts with establishing the evidence for change. We can help the scientists communicate with more credibility by acknowledging uncertainty where data sets are insufficient. As Professor Esty said eloquently last night, "The culture of scientific consensus is not helpful. We need to have a broad range of opinions." We can inform people’s behaviors and purchases by providing transparency on the environmental impact of manufacturers’ and retailers’ supply chain, best done in partnership with civil society, because NGOs provide an independent and credible authority. We should also inform the emotional elements of people’s purchase decisions, by facilitating peer-to-peer discussion, creating hang tags that reinforce confidence in environmentally sustainable purchases, such as the FSC tag on lumber, and emphasizing safety plus comparable efficacy.
Posted by Edelman at 3:34 PM |




