What to do when there’s zero room for spin

Trust in business has fallen to record lows and the president of Edelman PR is blaming business leaders themselves. Now he’s calling for them to trade in lavish parties for a genuine commitment to social issues, Jacquie McNish

March 2, 2009 at 4:04 AM EST

TORONTO - Edelman public relations has prospered for 60 years by coaching titans of industry and government on how to remain steadfastly on-message in the face of crises.

That strongman tactic is a hard sell at a time when trust in business leadership has been shattered by failures and scams at some of the globe’s most-admired financial institutions. These days, it seems everyone from television talk show hosts to political columnists have decided that it’s time to shoot the messenger.

Richard Edelman isn’t blaming the media for the outrage. No, the 54-year-old president and son of company founder Dan Edelman, the man who advises global giants such as Hewlett-Packard Co. and Starbucks Corp., points the finger of blame at business leadership.

"There is a disconnect," said Mr. Edelman, slouching his thin frame over a boardroom table in the company’s Toronto office. He has left his New York office to visit some of the firm’s 52 international offices to explain the results of Edelman’s 10th annual "trust barometer." The survey checks the attitudes of thousands of people in 20 countries toward business, government and the media.

For a man who describes himself as a "perpetual optimist," Mr. Edelman has nothing good to say about the results of this survey. It shows that public trust in business has fallen sharply, by 20 per cent in one year, to record lows. Since the report was released a few weeks ago, he has held it up like a mirror to shake business leaders out of what he describes as "a state of shock."

So far, he frowns, only a few executives seem to grasp that they no longer control the message and that "there’s zero room for spin." It will take years to restore consumer and investor faith in "the validity of capitalism," he predicts and the healing won’t begin until there is "contrition" from business chiefs.

Instead of contrition, however, Mr. Edelman said too many leaders continue to fuel a populist backlash by spending dwindling cash levels on jets and lavish parties and appearing defensive and confused when called to appear in front of U.S. Senate or congressional committees.

Will people be waving pitchforks in the street? They already are, says Mr. Edelman, reaching into his shirt pocket to pull out a frayed piece of newsprint ripped from The New York Times last week.

"This is pitchforks," he said pointing to a rant by columnist Maureen Dowd against Northern Trust of Chicago. Calling it "Northern No Trust," Ms. Dowd savaged the bank’s top brass for flying hundreds of clients and employees to Los Angeles for four days of expensive dining, golfing and a Sheryl Crow serenade only weeks after it was handed $1.5-billion (U.S.) of bailout money and laid off 450 workers.

Shaking his head in disbelief, Mr. Edelman, referring to Ms. Dowd, mutters "and she’s a centrist." The article, he predicts, reflects the emergence of "serious populism" fed by "rage" against business leaders that seem incapable of grasping their precarious position.

Business can help talk its way out of this mess, Mr. Edelman believes, but the old public-relations strategies won’t work. "People have to change or get out of the way."

The best business communicators he said are CEOs such as General Electric’s Jeff Immelt, who as early as November spoke publicly about what he calls an economic and social "reset" ushered in by corporate bailouts and increased government control of businesses.

Mr. Edelman said the GE chief gets that taxpayers’ support is pushing companies to shift their duties away from a narrow focus on maximizing shareholder values, and toward a broader class of stakeholders that include employees and communities. Against this backdrop, he advises businesses to depend less on conventional advertising and brand promotion and more on new-media and social missions. Customer, investor and employee faith can be restored if companies step forward and play a genuine role addressing social issues by co-ordinating and enlisting community support. These commitments, he said, go beyond the passive charitable donations that define most business philanthropy.

Some big names are listening to his advice. Three weeks ago, Edelman client Quaker Oats Co. launched an Internet campaign that calls for the company to donate one bowl of oatmeal for every product barcode entered by customers on the Quaker website. Haven’t heard of the campaign? That’s because Quaker Oats is not promoting it through conventional advertising or media. Instead it has teamed with the social network Facebook to spread the word.

So far the campaign wouldn’t feed a big village, as only 5,421 bowls had been filled as of Friday, according to the Facebook site. "It’s nascent," Mr. Edelman said. "There are so many reasons why this must work."