I delivered the Grunig Lecture at the University of Maryland today to a group of students and their professors. My topic was the evolution of public relations into public engagement. I asserted that PR can become the discipline that melds strategy and communications, constituting an essential bridge between corporations and their stakeholders. I contended that PR must also be part of business strategy and policy formulation, in addition to being responsible for communicating the decisions.

There is the confluence of several trends in the marketplace that make this transition possible and advisable. The recent government emergency intervention in global financial institutions has ended the free market era of Reagan and Thatcher. The dispersion of authority continues with CEOs under fire (akin to the period 2001-02 after EnronParmalat) and government officials seen as ineffective regulators. The transformation of media is accelerating, with mainstream media downsizing (layoffs at Time Inc. yesterday morning), greater reliance on digital platforms and merging of news with entertainment (“newstainmentCNN’s new comedic news show). Expectations on companies are rising with stakeholders looking for Mutual Social Responsibility– merging cause related marketing with corporate social responsibility.

I suggested that Public Engagement has four important attributes:

First, it is democratic and decentralized. A good example of this is the Obama campaign’s mobilization of five million volunteers, who are able to make decisions on how best to contact voters, attract funds and communicate on social media. Another is the MyStarbucksIdea.Force.com site that solicits new product ideas from the crowd, reinforcing the company’s relationship with its customers while the company listens and learns (disclosure: Starbucks is a client, but we are not involved directly in this program).

Second, it aims to inform the conversation. This is a major change for PR, which has relied on research-tested messages delivered one-way to media, which then writes the stories. If Andrew Heyward, former president of CBS News, is correct in positing that “Every company today is a media company,” then smart businesses will take the opportunity to become public resources on areas of expertise, by providing credible well-researched data on its own web site, and correct on-going discussions, whether on discussion forums or in the press, if there are factual errors. An example of this is our work for Masdar, the first carbon-neutral city in the world that has become an important focus for data on new forms of energy.

Third, it calls for engagement with influencers of all stripes. To be influential today does not require academic or professional credentials alone. It means that the person has personal experience with the product, passion for the category, and a desire to contribute to general knowledge. It is our task in PR to build trusted relationships with the broad set of influencers. A great example is the Johnson & Johnson (a client) Family Health Institute in China, which helps educates mothers about family health, and funding schooling for nurses.

Fourth, it suggests that reputation is built on policy and communication. Our client Wal-Mart’s strong commitment last week to the highest standards on environment and workplace safety in China is indicative of this trend. It is often useful to partner corporations with the NGO community for input in the decision making process and help garner support in the broader community.

The rationale for public engagement is best captured by Thomas Friedman, who wrote a week ago in the New York Times, “In a connected world, countries, governments and companies have character…how they do what they do, how they keep promises, how they make decisions, how they engender trust…” The PR business must rise to the challenge, by creating a new form of expression that will work in today’s cynical and uncertain environment.