Below is a speech that Richard Edelman delivered tonight to the Jewish Federation of Greater Atlanta. Watch the video: http://youtu.be/-lUN2rd56a8
I stand before you tonight as the son of a self-made Jewish businessman, and as the CEO of the business that he began.
My parents, Dan and Ruth Edelman, passed away last year, but they died with their boots on, working at the company they founded and loved so much.
My sister Renee and brother John work at Edelman, respectively in technology and in sustainability.
My two eldest children, Margot and Tory, have joined the firm to carry forth the legacy… working respectively in the research and consumer marketing units.
I want to take the idea of Jewish family business in reverse order. Let’s start with business.
There is a new opportunity and expectation of business, which is to operate in a manner that makes money for shareholders but also improves society.
There are several examples in the past weeks of companies taking the lead in societal change, without waiting for government sanction or approbation.
CVS*, one of America’s largest drug store chains, announced on February 5th that it would ban tobacco and related products from its stores.
The CEO, Larry Merlo, said that selling tobacco is inconsistent with the purpose of the company. He accepted the loss of $2 billion in revenue, comfortable in the knowledge that the long-term brand equity benefit and customer loyalty would more than compensate in the long run.
Gap*, a leading American retailer, only three weeks later decided to raise its pay level for its workers in stores above the minimum wage to $9 per hour in 2014 then to $10 per hour in 2015.
The CEO, Glenn Murphy, said that he wanted the best workers and that he counted on his colleagues to service customers in the caring Gap style.
Mere weeks before that, Unilever*, the giant consumer products company, initiated Project Sunlight to enlist consumers in a personal way to make commitments from shorter showers to cold water laundry.
What we observe is a new focus by business on creating value for shareholder and society alike, the concept of “Shared Value,” introduced by Professor Michael Porter of Harvard Business School.
It is a shift that started 15 years ago with the rise of corporate philanthropy, and corporate social responsibility, which evolved in the last decade to companies recognizing a distinct marketing advantage in sustainability. GE’s* “Green is Green” (in the words of CEO Jeff Immelt) is a perfect example of positioning that helped cut through the clutter when Ecomagination launched in 2006.
The final stage, which we witness today, is business changing its core operations in order to achieve lower costs while achieving societal goals. Think of Walmart* changing the body style of its trucks to use less energy to minimize its environmental footprint in order to save money for the business.
At play is a dual recognition: First, in the words of Professor Subi Rangan of INSEAD Business School, “You cannot have a successful business in a failing society.”
Second, and more fundamentally, what is expected of business has changed. Consider the results of the latest Edelman Trust Barometer: 84 percent of people believe that business can make profit while also delivering value to society.
In sum, what we see is a shift from License to Operate to License to Lead.
Business has historically been good at the microeconomic challenges of production, delivery, marketing, pricing, innovation and finance. It has been transactional and faithful to the laws that govern the industry. It has provided jobs and investment opportunities for those seeking returns.
All of this has been under the rubric of License to Operate, the classic freedom to run the enterprise in a perfect Adam Smith-like world.
But today, there must be larger ambition for business, which can be described as License to Lead.
I do believe that business is our best hope when it comes to addressing our complex global challenges.
But it must be business showing up differently, bringing value and values to each decision.
In the words of Paul Polman, CEO of Unilever, “It is not just about value. It is also the ‘s.’ It is about values as well.”
In a secular society, we generally don’t discuss the values — cultural, familial and religious — we bring to the workplace that define the shape of our business.
A company’s culture is shaped by the actions of individuals, which are shaped by values.
Today, we at Edelman bear the distinction of being the world’s largest public relations agency. A title that, ironically, my father never desired. “It’s great to the biggest firm,” he would say, “but we must always strive to be the best.”
Yet, paradoxically, it was my dad’s insistence on a set of core values that drove us to where we are today.
First and foremost, work as a team, it is “we” not “I.” Clients are ours, not mine or yours. Employees are partners in the family, and the relationship with employees extends beyond the walls of the office. We give $2,000 upfront to any employee who agrees with a handshake to quit smoking.
Second, stay entrepreneurial, no matter how big you grow. We’ve grown to 67 offices, 5,000 people, 27 nations. But we still think as a small business with permission to fail as long as we are innovating. As a case in point, we continued to invest in digital, even after it lost money for the business in the initial years. Now, it’s a $150 million practice.
Next, reinvest everything into the company. If it’s a good year, that’s a new office in South Africa, not a new car.
Remain humble in spite of success. My dad wore his suits until they were shiny, drove the Buick until the odometer surrendered and took yellow cabs to the airport. It’s a trait we’ve carried on… I take the subway to work.
Carry on when the going gets tough. No one exemplified this better than my mother, who helped run the business through her battles with chronic illness.
On a personal level, being in a family business also means responsibility and dedication. Dedication to the firm meant that it was part of every dinner conversation and every family vacation.
Responsibility was a value I learned the hard way when joining the firm.
I had spent the previous two years of my life toiling to earn an MBA at Harvard Business School, and was planning a vacation with a very attractive young lady as my reward before starting work in September.
Edelman won a client in commodity brokerage, a subject that I had covered extensively in my senior thesis in college. My father told me that I had to begin work on the Monday following the end of exams on the Friday. So much for that vacation.
Being in a family-owned business means a relationship of trust with your father and mother, who were willing to let me, a young man of 26, take over the struggling New York office to see whether I had the right stuff.
Trust meant that my father and I had an unspoken understanding. It’s important to know that we gave each other space — 733 air miles to be precise — but we talked every day and had a relationship of trust that breached geography and our very different operating styles. We spoke every day about the business, even on his very last.
Lastly, being in a family business means that we have made a very conscious decision to remain a family-owned business and not sell to a holding company. In doing so, we’ve preserved the right to put the interests of clients and employees first. Indeed that customer-centricity is part of what makes family companies 50 percent more trusted than their public counterparts in the U.S., as evidenced by the Edelman Trust Barometer results.
And yet the soul of our firm is shaped by more than these principles, but values which can be defined as essentially Jewish.
For my father, being Jewish meant running an ethical business at any cost. (And to be clear, there are plenty of examples of unethical businessmen in our religion.) But my father deeply believed that being ethical in business was the most important manifestation of his Jewish faith.
I will never forget a senior Edelman executive telling me the story of a large foreign client visiting my dad in Chicago to congratulate him on winning his account.
In the course of the conversation, the client asked for a 5 percent commission for “delivering” the business to Edelman. My father raised his voice, got deeply red and said, “Get out of my office before I kick you in the pants. You have some nerve coming in here shaking me down. We are a professional firm and you insult me deeply.”
My father believed in the ethical practice of public relations. No front organizations, no covert operatives spreading malicious rumors. Not every client deserved representation, he would say.
Running a Jewish family-owned business also means dedicating oneself to the community. My father devoted his time to boards such as the Lyric Opera, the University of Chicago Library and the Art Institute. And he ensured that giving back to the community was also reflected in our programming, recommending initiatives such as a partnership between KFC and the March of Dimes, taking on pro-bono clients and encouraging Edelman colleagues to volunteer in their communities. His legacy is seen in the fact that we incentivize the Edelman team to contribute to their communities by giving paid time off for activities such as joining the United Walkathon – A Charity Walk for Kids in Shanghai and packing and distributing more than 3,000 food packages for the hungry with Open Hand in Atlanta.
Lastly, the constant search for a better life — the relentless pursuit of self-improvement — is at its core the Jewish experience.
My paternal great grandfather, Avraham Isaac Edelman, a rabbi in Minsk, Russia, took off to the New World in 1884, leaving his family behind.
Two years later, having established himself in Brooklyn, he sent enough money for a steerage passage on a boat that departed from Hamburg, stopped in Liverpool, then made it to New York City.
My great grandfather saw his children through college, into marriage and grandchildren, then still seeking self-improvement, asked his son, a lawyer, for a one-way ticket to the Holy Land. He served his students with such distinction that on his gravestone on the Mount of Olives the inscription reads, “His students drank wisdom from his lips.”
The relentless pursuit of self-improvement, exemplified by Avraham, embodied by Dan, remains a defining influence on our firm.
I tell you the about the values of my Jewish family business, not simply because I am proud of them. But because I believe that business cannot inject value into society without being driven by a core set of values as well. As members of the business community, we each have a role to play in the former, but we bear greater accountability for the latter.
My great grandfather Avraham Edelman’s Kiddush cup occupies a central spot in my cubicle, 8 miles from where he settled 129 years ago.
It is religious object, foremost. But it is also a symbol of where I come from. A suggestion that amidst the memos and press clippings, the photos and tchotchkes something more vital endures and lives at the heart of how we operate.
The story that I have told tonight is the story of how business must do more than business as usual.
But I end with the individual responsibility. Each of us in this room has our own story, of the persistence of our values, our essentially Jewish values, over time.
The technology changes, the market changes, but the principles do not. The values that are the essential force for business to want to do better in this world do not. Family, community, decency, honesty and hard work do not.
For business to be part of the story of humanity’s greatest hope it is on business to show up differently and it is on all of us to carry our values forward.
In closing, I leave you with a quote from the Book of Daniel, and the words that remind me of my father Daniel and mother Ruth’s lasting influence on my life and all the lives they touched.
“And the wise will shine like the brightness of the sky and those who bring the multitudes to righteousness like the stars forever and ever.”
Richard Edelman is president and CEO.