A New Reality: Opportunities for Public Relations
Karen Breakell, APR
Progress Energy
Roy Reid, APR
Consensus Communications

(Download the Powerpoint presentation)

What is the New Reality?
• Like no other time in modern history is strong, strategic and ethical public relations necessary in business and organizational management.
• Build and/or restore trust
• The whole world changed on September 11
• The “dot-com” bust shook the market
• The corporate scandals of 2002 ripped through the market’s soul
• Succeed in a 24/7 news and information cycle
• Understand and effectively communicate with government
• Create a “center” for organizational ethics and values

Presentation Overview
• Situation
• What’s happening
• Issues
• What are the results
• Opportunities
• What are the indicators of our future
• Actions
• What do we do

The Situation
• Broken Trust
• Transcends business to many organizations
• Economic Backlash
• Stock Market - $8 trillion loss in 2 years
• Customer Loyalty - dispersed
• Workforce - mobile
• Social Backlash
• Employment / Contributions and Support - skeptical
• Political Backlash – laws (Sarbanes / Oxley)
• Legal Backlash – liability (communicators)
• Media Coverage
• 1Q 2002 = more than terrorism / war
• Public Relations is still “earning its way”

Issues
• Greater Total Scrutiny
• Snowball effect in society – not limited to business
• More Criminalization of Business Wrongdoing
• Sarbanes Oxley / SEC rules
• Overzealous Enforcement
• Fortune Magazine feature on Elliot Spitzer, September 2002
• Higher Degree of Activism
• More “watchdog” groups feeling empowered
• Media Scrutiny
• “Investigative”
• Move from CEO to Board dominance through corporate governance laws
• The “celebrity” CEO may be a thing of the past
• Workforce Issues
• More volatile environment for employee relations
• Increased Liability
• What is our exposure?

Opportunities
• CEO Perspective on Communications
• PR Week 2002 Survey
• Increased recognition and reliance on communications
• 61% Increased internal communication
• 66% More time on external communications
• 51% More concerned about reputation
• 66% increased appreciation of Corporate Communications
• Price Waterhouse Coopers 2002 International CEO Survey
• Corporate Social Responsibility is an increasing priority
• Defined from the inside / out – read findings
• Company valuation – non financial indicators
• The Perspective of the CEO
• CEO2CEO Summit
• “Leadership Effectiveness Among Uncertainty” – panel looking at the CEO environment following September 11, 2001
• Peer-to-peer discussion
• Important Characteristics:
• Authenticity
• Communication
• Accessibility
• Team player and leader
• Listening skills
• Holistic people management
• Flexibility
• Employee Perspective
• SHRM / Council of PR Firms Survey
• Demand for more communication
• How the company may strengthen credibility:
• 84% share news
• 78% 2-way communications
• 70% meetings
• 72% involvement in decision-making
• 72% surveys
• Government Perspective
• Sarbanes Oxley Act of 2002
• Greater accountability
• Additional Board requirements / Audit Committee
• CEO accountability
• Stronger enforcement
• Additional SEC Rules
• Additional Legislation and Oversight
• Political “Capital”
• Creating leverage
• Media Perspective
• Increased “Investigative” Direction
• Local
• National
• Decreased Role of “Industry Analysts”
• Access to the 24/7 news and information cycle continues to expand
• Empowering more people with information (good or bad)
• The Market Perspective
• Consumers
• Donors
• Investors
• Impact on the indicators
• $8 trillion lost in the stock market
• 75% loss in the NASDQ
• Credibility
• Golin / Harris Trust Survey – February 2002
• Of 25 business sectors, 14 were (-25) or less
• Participants recommended twelve actions to build trust – primarily through improving communication efforts
• Education Perspective
• Our opportunity to better understand the “technical” business issues and the relationship matrix between other forces:
• Political
• Economic
• Social
• Better integration of Public Relations/Corporate Communications into the business schools and education:
• 93,000 MBAs graduated last year
• Only four percent had any communications classes

9 Actions
• These actions are:
• General and specific actions for practitioners / industry
• Crossing all areas of the career spectrum
• Entry-level to senior practitioner
• Strategic and tactical concepts
• Not an exhaustive list, but a starting point…

Action 1
• Become a Trusted Advisor
• The “expert for hire” moves to a “steady supplier” of service and then becomes a “trusted advisor.”
• Andrew Sobel, Clients for Life
• Trusted advisors do not chose the role, they are chosen.
• Irving H. Buchen, “The Power of Influence”
• Become the independent thinker
• Establish credibility through performance
• Transcend the boundaries of your “specialty”
• Flexibility to change as the organization demands

All levels of the career…

Action 2
• Focus on the “Inside/Out” Principle
• Start your plans and efforts with audiences closest to the core of your business
• Board
• Employees
• Shareholders
• Stakeholders
• Use this model in all planning

Action 3
• Advocate and “Own” Values and Ethics
• The core of trust begins here
• Do not just create the statements and lists, but “walk the walk”
• Darden Restaurants
• Interviewed stakeholders to determine the corporate values
• “Value Shift”

Action 4
• Create Transparency
• Two-way communication initiatives
• Interpretation of the financial condition
• For investors
• For regulators
• Proactive efforts in communication

Action 5
• Evolve from “Building Relationships” to “Building Trust”
• Identify the opportunities to improve the brand
• Build on the transparency concepts
• More open communications
• Honest communications
• Understandable communications

Action 6
• Crisis Planning and Issues Management
• The environment is more ripe than ever for an incident to become a crisis
• Audit your plan - regularly
• Find all internal and external issues
• How do our relationships influence our organization / business?

Action 7
• Build Corporate Responsibility
• Non-Financial Indicators (As stated by Pat Jackson)
• Brand Awareness
• Employee Engagement
• Management Connection
• Customer Loyalty
• Community Loyalty
• PWC survey
• Proven Business Concepts
• Balanced scorecard
• Benchmarking
• Continuous Improvement
• Core Competencies
• Customer Relationship Management
• Learning Organization
• Mass Customization
• Mission and Vision Statement
• Reengineering
• Total Quality Management
• Entrepreneur Magazine, May 2002
• 10 Movements Withstanding the Test of Time

Action 8
• Environmental Scan / Research
• Know the landscape internally and externally
• Research: knowing today’s issues and tomorrow’s concerns
• Provide information regularly
• Be reliant on data for decision-making

Action 9
• Become more knowledgeable of your organization’s / clients’ business
• Know your role
• Perceived value
• Expected return
• Impact of government and how it works
• Learn the language and culture of the organization’s leadership
• Understand proven business practices (previous slide)
• Become more process oriented

Good Books
• Clients for Life, Andrew Sobel
• How to Become the CEO, Jeffrey J. Fox
• Value Shift, Mary Sharp Pain
• Good to Great, Jim Collins
• The Tipping Point, Malcolm Gladwell
• Beware the Naked Man Who Offers You His Shirt, Harvey MacKay