My profession seems to be obsessing on stakeholder relationship management. I see why. When the angry mob is howling at the gates (actually mostly not so much a mob as a media, protester and Twitter scrum), it seems sensible to pretend that crowds have wisdom. Like politicians, media and most bosses in the West, public relations professionals are terrified of seeming elitist. They believe that leadership is no longer possible, or is toxic.

I have often banged-on about how PRs fear that corporations are seen as evil, so now mistakenly believe they must wear a bleeding heart on their sleeve. That’s not my point today. I want to stress here that it is a profound problem that PRs and many organisations – from firms to political parties – dread leadership and responsibility.

There’s a shortage of adulthood

What I’m on about today is related to a wider social problem. I think it’s time the grown-ups behaved like adults.

We live in a society in which people strut about in a macho culture of bullying, slap-head, hyper-fit, scowling aggression, but at the slightest set-back everyone’s weeping and in therapy.

Big cars, sharp suits and watches the size of dinner plates don’t confer anything worthwhile on a person. Aren’t you struck by how fragile the self-esteem of so many modern pseudo-adults seems to be?

We have watched stars, CEOs and politicians behave like greedy, petulant, hysterical teenagers rather than heroes. But what is striking about many of them is that they have so little fortitude. Most CEOs disappeared from view when the credit crunch struck. We have heard how former British Prime Minister Gordon Brown’s inner circle phoned bullying help-lines to complain about him. Their self-confidence was revealed as being wafer thin.

At the World Economic Forum (WEF) in Davos we are repeatedly reminded that profit, shareholder value and shareholders are no longer priorities because all stakeholders are supposedly equal. Such talk comes from Western leaders. The bosses from the East generally hold their nerve and sometimes express disbelief. The split between the two world views has become so stark that Richard Edelman reported enthusiastically from the 2012 WEF gig how Ian Cheshire of Kingfisher, Europe’s leading home improvement retailer, opined that: “we have to get consumers in developing countries past wanting the “American Dream of more.”’

We need corporations rooted in a solid culture

It’s this bifurcation I’m after. I want to try to make it understood that ordinary decency, a workable sense of fairness, a sellable ideal of enlightened self-interest - proper trust between firms and employees and customers and wider society – has to flow from a far deeper sense of corporate culture than can ever be achieved by becoming a weather vane.

Today I want to try to get a proper handle on this particular concern: that our clients cannot afford to aim to become whatever the media or ether-mob, the gobby bloggers, the placard-wavers fancy. They can’t pick up a self-definition by triangulating the top three or four messages they get from a consultant. Even if they did, they’d have to live it and that involves sticking with it and that involves ignoring the next fashion which hurtles into view out of the mists.

I am tolerably sure that floating along on public opinion is never good. It sometimes leads to rushing weirs and crashing Niagras, but more often to long dreary shoals where no-one’s boat floats.

The public says  - or rather the media and campaigners say so supposedly on its behalf –  it wants to humble corporations and corporate bosses, just like it says it wants to humble political parties and politicians. So it has created the risk that firms, parties and institutions become rudderless (sorry, I couldn’t resist another water analogy).

In fact though, if there’s one thing the public fears and distrusts more than strong, mean, unaccountable and self-serving public bodies and leaders, it’s bodies which are too weak to do their job.

Before we can have listening and flexible firms, we need to have firms which are quite strong and quite clear about what they actually want to be.

So the perpetual self-abnegation involved in stakeholder relationship management is a folly. It is a chronic abdication of corporate responsibility. It constitutes a surrender of leadership to instrumentalist short-termism, which causes a loss of vision and direction, encourages low-ambitions and, ironically, undermines public confidence in modern corporations and institutions.

It is a myth that the best reputations must be sustained by stakeholder management crowd sourcing. Good reputations are not based on living within limits set by consumer or voter research and stakeholder engagement, but on breaking down barriers and achieving something significant.

Reputations, trust and success

The best reputations arise from doing things and from keeping promises and delivering results and sometimes from managing failures well. Reputations that endure do so because they inspire.

Great companies and governments transform the world by creating demand and conditions that didn’t exist before. They often do so at great risk in the face of fierce opposition.

There’s more for PR to do than to get their clients to reflect what audiences say they expect or claim that they will accept. There’s more for PR to do than to try to forge consensuses before advising firms to make decisions. Good PR acknowledges that what’s wanted in society is not fixed. Great PR helps society transform the prevailing perceptions of sustainability on business, cultural and environmental matters.

Successful countries from the democratic UK, America and India to today’s undemocratic China (I’ll defend democratic accountability another day) were not built on the back of listening and forging an instrumentalist-driven consensus. They were built on the back of courageous leadership and innovation that won the trust and confidence of their people. This gave the masses things of value  to believe in, such as the American Dream.

Now let’s review a few more conundrums and case studies that highlight how current wisdom is flawed, before I propose my manifesto’s alternative approach.

According to Edelman’s trust survey, trust in business and government today is strongest where stakeholder relationship management matters least and weakest where it seemingly matters most. By a significant margin, China leads the world in both categories and its media are supposedly the most trusted on earth, too. India, Brazil and Indonesia score highly. While Russia records trust levels for both business and government that hover around the same level year-on-year as France’s and Germany’s.

Meanwhile, the PC, the internet and Google’s search engine are all examples of top-down disruptive innovations, not ones driven by bottom-up demand-led engagement-based consultation. They did not arise from listening to the market or to stakeholder groups.

Google

Google’s search engine was an innovative marriage between algorithms and computing power that created its own demand.

The motto of Google founders Larry Page and Sergey Brin was “question everything”. As this review of recent books on Google explains, they were like postindustrial Henry Fords, using digital technology to eliminate all inefficiencies in traditional economies.

Ironically, Google’s Eric Schmidt advocates in a Washington Post piece, Erasing our Innovation Deficit, bottom up crowd-sourced innovation. In it he underestimates the risk-taking top down investment and leadership which helped Google succeed, the internet take-off and the US put a man on the moon: see here. However, that weakness should not detract too much from the mostly timely, insightful points Schmidt makes.

Unloved Microsoft and lovable Apple

Microsoft at its peak never won our empathy; it didn’t need to differentiate itself through branding while it was transforming successfully how we all worked and played on our PCs. Microsoft hardly consulted anybody as it developed what some viewed as monopolistic tendencies. Bill Gates wielded Microsoft’s power like a blunt instrument against all comers, including customers and partners. But if Microsoft was always unlovable, Apple is its polar opposite. Its fans adore it (almost uncritically until recently), believing it to represent an anti-corporate, culturally-fresh, arty sort of an entity. That’s mostly nonsense, but in any case Apple achieved this myth-making with top-down communication and command and control management. Apple’s path was classic old-style branding designed to attack and differentiate itself from a dominant incumbent.

Rock ‘n’ Roll

The electric guitar transformed music. It created new possibilities by creating new sounds. It helped spawn Rock ‘n’ Roll, including Punk, that outraged public opinion. But its hall of fame contains some of the greatest reputations of the last century. But as Simon Cowell shows, even this grass-roots business is managed from the top, even if it draws inspiration and talent from the bottom. It created its own space and its own demand.

Ryanair: nobody’s friend

Last, Michael O’Leary’s Ryan Air’s low-cost digitally-networked business model revolutionised the airline industry. It was an achievement of an aggressive innovative genius, not of stakeholder collaboration, which he despises.

These examples provide evidence of Joseph Schumpeter’s law of creative destruction that drives the capitalist market. They support my argument that PRs who think our trade is all about aligning values, listening, engagement and relationships need a reality check; though I’m very pro using those techniques in the right context and more importantly for the right reasons.

Key manifesto messages

In contrast, I say PRs should be more prepared to defend, advocate and promote risk taking. They should be less concerned about what’s acceptable and what’s popular. They should be more willing to celebrate elitism and success. They should be less concerned with the crowd as it is currently constituted or inclined to emote and opine.

PRs should be more willing to celebrate the arrogance of the change-makers who bring innovation to society. We should be less concerned with bad headlines and with tyranny of media produced crises. Instead we should focus our campaigns on achieving positive outcomes and on getting things done. We should be the torch bearers honing the narratives and messages of the people and forces which challenge or ignore society’s constraints. In that game PR plays a transformative role: we could start by making economic growth our focus.

The blog which got me going

Here’s the article that inspired this manifesto: To listen, to engage: empty buzzwords? Let’s discuss. It sums up the risk adverse stakeholder relationship management approach of mainstream academic PR. According to this school of thought progress depends on winning the public’s trust by establishing empathy. For them it is all about connecting with stakeholders by gathering sense:

“The consequences of the interpretation-of the comprehension-of the gathered sense need to be explicitly related to the listener’s decision making process and are inherently fuzzy, non linear and situational. The competencies are creativity, feasibility, and time framing with their respective tools.”

This piece of gobbledygook is typical of current PR thinking. It springs from a misplaced faith in Grunig’s two-way symmetrical model of PR and an addiction to jargon and spin. Amusingly the author is so sure of his ground that he asks What comes after Grunig? and replies, “the answer to that looming question is that after Grunig…comes Grunig.”

The danger here is that Grunig’s supporters have ended up trying religiously to make reality fit the theory. That’s the trap, if I’m any judge of PR-related text, that the Stockholm Accords, arising from the Global Alliance’s World Public Relations Forum debate, fell into.

In summary, my point is that PR is a multi-faceted, flexible profession. Sometimes it is top-down and one-sided. Sometime it is a two-way interactive real-time force. In whichever way it does its job, however, PR is an objectives-driven art rather than a science that’s reducible to orthodox formulas. My take home message is that PR makes its most useful contribution to society when it advocates transformative risk-taking on which great reputations are built.

This is an updated piece that was first published in February 2010

No related pages.

Later Professor Toni Muzi Falconi and Professor Emila Costa joined us on a closing panel. Professor Falconi was usefully critical of us both. Professor Costa added another dimension altogether by outlining psychiatry’s latest insights into how to motivate and manage people.

I set about questioning some of the assumptions that underpin corporate social responsibility. My intention was to point out that more than ten years of serious investment in CSR had not restored corporate reputations and in fact had arguably harmed them instead.

My key point was that CSR makes claims that generate their own moral and reputational hazards.

Rather than take pride in the moral and social purpose of a firm’s business (let’s say oil or consumer goods) CSR often creates the impression that the core business has questionable merits. In contrast, the CSR programme supposedly makes up for that by giving the firm a human face. This in turn suggests that ordinary business is neither intrinsically human nor socially beneficial.

For example, BP once claimed to have gone “beyond petroleum” and to be on course to save the planet from the supposedly harmful business it was in.

I argued that all firms have an obligation (professional, moral and practical) to be honest. This, I said, is the ancient business of valuing probity: frankness, honesty, integrity, uprightness and sincerity.

Most of the reputational and ethical failure in the business world among bankers and other executives at Enron and so on has been in this area rather than in CSR. I said, BP’s beyond petroleum claim clearly failed the honesty test. Moreover as The Times’ editorial argued, massive executive pay raises in the UK are hard to justify through the prism of probity.

I agreed that I was advocating quite a narrow and inward-looking approach that prized self-examination and de minimus standards. But the key to managing reputations relies on setting realistic expectations about how much a firm can do and the least it must do.

I pointed out how CSR’s grand claims to planetary virtuousness had a demoralising impact on the very workers it was meant to inspire. I said in uncertain and tough times it was simply not convincing to say employees have two jobs: their own and another designed to save the planet (see Rosabeth Kanter’s SuperCorp 2009). I said such idealistic notions created a credibility gap between hype and lived experience that encouraged corrosive cynicism.

As an alternative, I argued that when it came to forging the future, PRs had a responsibility to help clients make a compelling case for economic growth. Though to clear the way we must first grasp that much of what passes for discussion around CSR today points in the other direction.

I said – and received a bit of flack for doing so – that CSR’s influence on discussion tended to undermine society’s efforts to improve our prosperity and affluence. I added that too much stress had been put on trying to connect with anti-corporate and anti-capitalist sentiments.

I criticised the mantra that less is better and that consumerism and greed were intrinsically bad. I criticised those who promote happiness over development. I made the case for supporting new technologies, innovation and massively increased energy generation. I pushed back on those in the audience who argued that profit-led growth was problematic and not morally defensible.

In contrast to Western pessimists, I pointed out that China and other economically dynamic regions of the world had no worries about the merits of profit and progress. The key challenge for the West, I said, was to workout how to compete with the countries we call BRICs.

Controversially I maintained that many popular CSR policies that called for costly regulatory restrictions on our economies, such as cap and trade carbon taxes, might have to be ditched.

While I accepted that CSR is sometimes good for the bottom line, I maintained that that is not an argument in its favour. Or rather, it is an argument about the expediency of CSR, whilst CSR’s real claim is to reach beyond expediency onto some higher plane.

Perhaps I should have said more clearly that I approve of the efforts that many PRs are making to drop the “S” in CSR (see here) because it removes some of the moral hazards associated with greenwash and talking nonsense.

I implied – but perhaps also not as clearly as I would have liked – that I respect PRs who prefer to talk about “sustainability” as an alternative to CSR because it captures ideas about future-proofing the firm. That’s got plenty of problems of its own, but at least it doesn’t claim huge moral virtue. Indeed, sustainability allows firms to put sustainable profitability at the head of all the competing sustainabilitities that different stakeholders advocate.

To avoid being misunderstood, again and again I made clear that I was not advocating for one moment that firms should be allowed to wantonly damage the environment, behave badly toward their neighbours or toward anybody else.

Nevertheless, some of the audience appeared to believe that I was some kind of fascist. One person accused me of supporting the use of child labour in China. People kept implying that those of us resistant to CSR’s charms were less moral and less attractive than those who backed it. But I replied, many businesses, for many reasons, are resistant to lumbering themselves with a wide social or moral remit. Many such businesses do great good and provide life-enhancing social benefits that they are proud to deliver. Such firms and institutions operate with authenticity and conviction.

I insisted on the merit of reminding everybody about the foremost layer of responsibility that firms have to society: probity.

No related pages.

This essay interrogates the response of leading academics, especially Jim Grunig, as they aimed to build an idea of PR fit for the post-modern, reflexive, inter-active, wisdom-of-crowds, stakeholder society environment they studied.

As the post Second World War euphoria fizzled out into new-age angst, the late 60s and 70s saw optimism turned into scepticism about progress. During that period protest movements arose that questioned the “military-industrial” complex of white-coated experts motivated by profit. Capitalism, it was claimed, was destroying the planet. People became increasingly sceptical about the value and consequences of economic growth. Books such as Rachel Carson’s Silent Spring, and groups such as Greenpeace fuelled a green backlash that we are still experiencing.

Events such as the core meltdowns of Three Mile Island and Chernobyl spooked the world. They became indelible symbols of man’s folly and served as proof points among anti-corporate anti-technology campaigners. Thirty years or so later, the nuclear industry has barely recovered. Moreover within the nascent environmental movement were the seeds of the new radical politics of the 1990s. With the fall of the Soviet Union in 1991 anti-capitalist sentiment took on different dimensions. Communism, socialism and the peace movement rapidly lost credibility. New forces emerged, consisting of politicised greens aligned with anti-globalisation protesters.

There was a feeling – one shared by protesters and serious thinkers – that major corporations had participated in undermining the sense of community which held society together. The growth of the shopping mall on the city outskirts, for instance, was seemingly responsible for turning town centers into decrepit zones inhabited by criminals. The likes the US’s WalMart and the UK’s Tesco became liberal bête noires. It was said that the corporate and major institutions in society were suffering from a core values crisis and, as a result, a trust deficit (see here how WalMart redefined the debate in the internet age by exposing Potemkin communities).

In the 1990s, from global warming to globalisation, the PR trade’s clients – particularly large multi-national companies – found themselves on the receiving end of a hostile crowd’s anger. The movement’s aims were popularised in books such as Naomi Klein’s NoLogo, a title that struck a blow at brand value, consumerism and globalisation.

The anti-globalisation protest peaked at the Battle of Seattle in 1999. In scenes reminiscent of the civil rights and anti-Vietnam protests of the 1960s, Seattle’s air was filled with tear gas, pepper spray and rubber bullets as militant demonstrators clashed with police. As delegates arrived at the conference their way was blocked by groups of demonstrators chained together at street crossings. One group even managed to disrupt the opening ceremony. Elsewhere mobs roamed the city smashing windows, singling out Starbucks’s for special attention. A civil emergency was declared. The National Guard took control and enforced a curfew. More than 600 people were arrested from the 40 000 or so protesters.

This was one of many such outbreaks of violence across the world. Similar riots took place outside major international conferences of bodies such as the World Economic Forum, the G8, EU and even the UN conferences on global warming. It was as if no international conference was safe from the mob.

There was a sense that corporations and governments were losing their grip on public opinion because their ethics and morals were not the same as the audience’s. This feeling became more extreme as the world’s economies boomed in the late 20th and for some of the first decade of the 21st century.

The anti-globalisation lobby became more subdued after 9/11 and more still after the global credit crunch turned into a global recession. Yet the interconnected economy, as the WEF savants of Davos now euphemistically dub globalisation, is now more rampant, arguably more in demand, than ever in the developing world.

Nevertheless, green, anti-corporate and anti-growth sentiments remain strong, particularly in the developed West.

In fact, while all these trends characterise something tangible, it would be wrong to accept such a one-sided picture of Western enthusiasm for anti-consumerism. The very fact that global economies boomed mostly from the 1980s onward shows another side to society’s drive that’s diametrically opposed to the campaigners’ viewpoint. The masses of the world embraced globalisation. They adopted new technologies such as mobile phones, IT, internet, CDs, DVDs, GMOs and bought more cheapened old ones such as air travel and cars etc..

It is debatable whether the protesters ever deserved the attention they received. It is also questionable whether they ever really represented the views and instincts of the avaricious consuming masses who expressed their will through their purchasing power. But of the influence of the protesters on academia, the media and on political debate there can be little doubt. This middle class green backlash had clout.

Dead-end search for models

Recognising the challenge in the 1980s and early 1990s were two PR academics, Jim Grunig, Professor Emeritus for the Department of Communication at University of Maryland, and Todd Hunt, Professor Emeritus at Rutgers University School of Communication. They came together with their peers in an attempt to find the key to reconnect corporate America with its public, and on a more ambitious scale the American nation with world opinion. At the same time they sought to address the low esteem PR was held in. They believed PR required a model that would define it as a proper profession and explain its role and behaviour to both the public and clients.

In their view, the absence of a progressive model was holding PR back; a model being a simplified representation of reality. They reasoned that one was required to transform PR into an acknowledged ethical, credible, trustworthy profession. They thought this was required to help head off activist protests and to put public relations professionals (let’s just call them ‘PRs’) at the head of the corporate pyramid with the C-suite.

The intention of Grunig and his supporters was to position public relations beyond advocacy. They felt that self-interest was not the exclusive motivation that PRs should focus on. They said it had to be combined with concern for others and for the impact an organisation’s behaviour had on the environment. In short, they wanted to produce a model of PR that could be used to balance corporate self-interest with the public interest, or with the interest of others.

In their 1984 classic Managing Public Relations, Grunig and Hunt put forward four models of public relations which encompassed its historical and current practice:

The first was a one-way communication model based on media relations, or press agentry, which seeks to get favourable coverage by either ethical or unethical means, depending on the practitioner’s standards.

The second was the public information model which is a one-way communication process where the PR acts as a conduit for distributing the client’s news.

The third was the asymmetrical model, which could be two-way or one-way, which uses persuasion and manipulation, backed by research, to bend the wills of an audience the client’s way in a process.

The fourth (the preferred model) was two-way symmetrical communication in which PRs resolve conflict by promoting mutual understanding and respect between the organisation and their public(s). The objective here, according to Grunig, was to use research and dialogue to bring about symbiotic changes of ideas, attitudes and behaviours of both audiences and organisations.

The two-way symmetrical model was, of course, an idealised model for PR practice that sought to separate it from its persuasive, propaganda and (supposedly) one-sided roots.

The preferred model was, I acknowledge, a very natural and legitimate attempt by PR practitioners to manage their own reputations. It was, though, not just mistaken, but a dangerous corrosive approach to engaging the public.

What’s interesting is how Grunig defined the public, which, he said, “can be identified and classified in the context to which they are aware of the problem and the extent to which they do something about the problem.” That effectively conflates the term public with activists, often militant anti-capitalist ones at that. Hence Grunig’s style of PR accepts the terms of discussion – the symbols and stereotypes – from the activists. It ends up perverting institutions by urging them to develop their narratives in a way that is out of sync with the public opinion of the silent majority.

The two-way symmetrical model of PR rests on a number of assumptions that require interrogation. It positions PRs as mediators between their clients and their publics. Rather grandly it supposes that PRs are the moral keepers of their organisations. With this model PR gives the target audience equal status to the paymaster. The objective is to ensure that no side dominates the communication process and all sides’ views are treated on level terms. To ensure fairness it assumes that both sides agree to abide by a set of rules which can be audited transparently to ensure compliance.

Its proponents claim that this approach is ethical because it empowers PRs to organise how the dialogue is conducted, or at least to negotiate the terms of engagement. Jim Grunig sums it up thus:

“To be successful, however, they [PRs] must be able to convince their client organizations and publics that a symmetrical approach will enhance their self-interests more than will an asymmetrical approach and, at the same time, that it will enhance their reputations as ethical, socially responsible organizations and publics.”

[Two-way Symmetrical Public Relations, Past. Present and Future, Jim Grunig, page 18 in Public Relations Handbook.]

For the model to work, rigorous research of their target audiences’ views is required. This information is then used by PRs. Ironically, knowledge is power and the more money one has the more research becomes possible. This fact clearly undermined Grunig’s proposition that PRs could mediate effectively between their clients and their publics in an objective and neutral manner. It scuppered the stated intent that neither side should control the perception of the other side’s ideas and viewpoints.

Hence Grunig has since been forced to revise his model representation of reality. To his credit, he accepted that his idealistic social perspective of PRs role in society took no account of the PR’s motives (PR is paid for by only one side of the relationship). In response, he put forward a compromise that acknowledged mixed motive communication.

Professor Grunig re-cast his theory by arguing that two-way symmetry is a process not an outcome. He said it was not so much about reaching a consensus with activists as about collaboration and conducting a dialogue. He defined the new take as a discourse designed to balance the private and public interest. Commenting on how the re-jigged models aligned, he wrote:

“Rather than placing the two-way asymmetrical model at one end of a continuum and the two-way symmetrical model at the other end….. A public relations strategy at either end would favor the interests of either the organization or the public to the exclusion of the other…..The middle of the continuum contains a symmetrical win-win zone where organizations and publics engage in mixed-motive communication.

“With this new model of combined two-way public relations, the difference between mixed motive and two-way symmetrical models disappears. In fact, describing the symmetrical model as a mixed motive games resolves the criticism that the symmetrical model forces the organization to sacrifice its interests to those of the public.” [Ibid, page 25]

Mixed motive communication then becomes a collaborative advocacy (the cooperative dance as Sandra Macleod likes to say) that defines what Grunig describes as a cooperative antagonism (which he accepts involves two-way asymmetrical communication as being inherent to the process).

Grunig’s philosophical pretensions

The idea Grunig posits as being practical and ethical is that all the players retain their uniqueness and self-interest in the process of negotiation. In support of this notion, Grunig calls for help from a leading Marxist semiotics and structuralist theoretician by the name of Mikhail Mikhailovich Bakhtin. He maintained that the essential quality of a dialogue is the simultaneous fusion or unity of multiple voices. However each voice retains its uniqueness and there’s an ongoing dynamic tension with and differentiation from the Other. It is from this understanding that Jim Grunig comes to redefine what public relations is about, thus:

“Simultaneous fusion with the Other while retaining the uniqueness of one’s self-interest seems to describe well the challenge of symmetrical public relations.” [Ibid, p28.]

This approach to PR supposedly draws on Kantian philosophy. This reminds us, in the tradition of humanism, that stakeholders (any humans, actually, rather than just those PRs define as being relevant to their purpose) are ends-in-themselves, rather than a means to an end. The views of the philosopher Jurgen Habermas are also cited in an attempt to give the model bottom. Habermas maintains that dialogue and not monologue is essential to mutual human understanding.

Grunig, in common with many PR thinkers, mistakenly believes that PR is about establishing mutual understanding between publics and their clients. Actually, PR is about advocacy on behalf of clients and achieving client objectives, something that achieving mutual understanding may or may not help. It isn’t necessarily necessary, for instance, that firms understand campaigners or campaigners understand firms. PR’s customers usually hope that – one way or another – their activities come to be accepted. They are dealing with real life challenges; not in a seminar. Nor is it all that obvious that a self-improving firm, anxious to be a good world citizen, should assume that it only has to get into an understanding with its critics to achieve its goal.

Anyway, Grunig has proposed that PRs, their clients and their opponents, retain a get out of jail card. He says that if after dialogue one side cannot accommodate the other it can disengage ethically from the symmetrical process. Of course, failure and the perception of the other side’s willingness to cooperate is a subjective matter. This joker in Grunig’s pack rather suggests that persuasion and getting one’s own way lie at the heart of his game-plan; at the end of the day by any means possible (within the law, of course). Indeed, Grunig tries to make a “virtue” of this motivation:

“…we have stated consistently that the symmetrical model serves the self-interest of the organization better than an asymmetrical model because ‘organizations get more of what they want when they give up some of what they want.’” [Ibid]

However where there’s a clash of seemingly irreconcilable forces over issues, such as pro- versus anti-abortionist, ditto nuclear power, ditto GMOs, and so on, Grunig’s symmetry runs aground. That’s because there really are fundamental differences in the opposing cases: these are existential and can’t be moderated away. Hence Grunig accepts that two-way PR becomes virtually impossible (except at the margins) when negotiating between two publics with diametrically opposed moral viewpoints. This is so with pro and anti-abortionists, for instance, or when anti-trust laws prevent collusion. So it is unfair to say that he is totally idealistic.

It is in the murky space where deals can be made that Grunig’s approach to PR becomes risky. Even when compromises can be reached, the obsession with engaging activists in a cooperative dance has very often eaten away at the values, self-confidence, self-belief, integrity and identity of organisations; as it did when BP said it had gone Beyond Petroleum (a change which was both skin-deep and corrosive).

Grunig, rightly in my view, says that persuasion is indeed what PRs do but that the persuasion of PRs cuts two ways:

“If persuasion occurs, the public should be just as likely to persuade the organization management to change attitudes or behavior as the organization is likely to change the public’s attitude of behavior.” [Ibid]

Sure, we can all agree that compromise is part of life. Compromise is necessary, and perfectly normal, regardless of the form or model of communication an organisation chooses to adopt. But allowing protesters or activist publics to set agendas risks persuading an organisation to give up something that is perfectly legitimate. Arguably this happened when Shell was persuaded to abandon dumping its Brent Spar oil platform deep at sea: the upshot was a less ecologically-sound solution. The regulator and the corporation had had the right idea in the first place and trust in both was eroded – not bolstered – by their giving in to emotionalism.

Contrary to what Grunig’s supporters say, the asymmetrical models of PR are not awful, if they are good descriptions of how different sorts of PR actually work. But they are a rather clumsy way of arriving at one idea (or ideal) of what PR excellence might be like: a symmetrical two-way process in which power is equal between the two parties, and so is the flow of argument and respect.

This begs many questions. It is indeed often wise for negotiators (which is what PRs are in the symmetrical two way process) to assume that the other party’s case is real and serious at least to the party which holds it. But that way lies relativism. It may be intellectually dishonest and dangerous in other ways too (for instance, assuming your opponent is rational and sincere may not be wise when she or he is idiotic, lying and or prone to terrorism). Such relativism, from left-wing critics of Grunig, led some PR academics to make excuses for terrorism, as if supposedly hegemonic asymmetrical PR were to blame:

“Yet we would also argue, in agreement with Deetz (1992) and Philo and Miller (2001), that Western corporate capitalism has succeeded in dominating the range of discourses, and indeed our material practices to such an extent that it is difficult for alternative discourses and practices to rise to any level of ascendancy without violence – as the 9/11 attack on the World trade Center demonstrated. Those attacks can be understood as an attempt to make America and Europe by attention to accumulated Muslim resentments against a history of western prejudice, exploitation, and anti-Muslim foreign policy in the Middle East”

[Source: "From propaganda to discourse", by Weaver, Motion and Roper in Critical perspectives in public relations; International Thomson Business Press, London, 2006]

The assumption here is that the “other side’s” claims are legitimate. It is also worth noting that no rational explanation has been given for 9/11 and that those that have been provided have been totally contradictory. Terrorism is nihilistic. It is not prone to rational explanation or interpretation. Blaming the West for 9/11 says more about the views of the PRs who make such comments than it does about the motivation of the terrorists.

Grunig is not the problem

I’m almost sorry to focus on Grunig. He is capable of nuance and anyway was not the instigator of the problem he is part of. Rather, he is the clearest in laying out his premises and arguments. His map of the PR dilemmas is the best we have. The kind of ideas which he outlines are indeed the kind which have become all too popular. The view that partisan PR – paid for by bosses of any sort – is unethical is widespread. Even critics of Grunig’s theories such as L’Etang share his distaste for positioning PRs as advocates:

“Only if practitioners engage with such [ethical and political] issues can they avoid the charges of superficiality and cynical exploitation of target audiences. The role of public relations itself is shown to be necessarily partisan and, furthermore, by operating on behalf of certain interests, intrinsically undemocratic…”

[L'Etang, J.  "Corporate responsibility and public relations ethics", in J. L'Etang and M. Pieczka, eds., Critical Perspectives in Public Relations; International Thomson Business Press, London, 1996, pages 82–105]

This quote and stance from L’Etang highlights the major problem within PR circles. It displays an intrinsic dislike of what PR is about: advocacy on behalf of clients. It also reveals a complete failure to grasp what democracy is about and where PR fits in. Democracy is all about the pursuit of self-interest on the part of certain interest groups. Democracy is merely the form and framework within which conflicts and different interests pursue their interests: it sets down the limits to how conflicts are fought and the means for resolving them legally and constitutionally, when persuasion does not settle the matter of its own accord etc..

None of the above should be taken as an inducement to firms to be anything other than morally alert. Contrariwise: my point is that firm should be more alert, not less. That’s why I put such a high value on truth-telling. The Financial Times‘s Martin Sandbu summed it up well in his recent piece (Aristotle – the banker’s best friend):

….moral philosophers have granted impunity to lazy thinking. And the result is a debate soaked in such inanities as “giving back to society” or putting “people before profit.” Fine phrases, but they mean little and in practice will achieve even less. Most attacks on business immorality conjure up villains in corporate boardrooms plotting their next evil deed. The real problem is harder. Most business people are like most people everywhere: wanting to do the right thing but confused about what the right thing is in a complex world.”

He goes on:

“… one may question whether corporate conduct must be justified by its social usefulness. Is business really responsible for the common good? Or is it enough to respect the rights of others while pursuing profits? To ask that question – surely a fundamental one – is to enter a big philosophical debate midstream, for which reading John Stuart Mill and Immanuel Kant is better preparation than any number of management books.”

Setting higher expectations

The real problem is, in my view, that PRs have struggled to talk sense about the world. They have endorsed many of Grunig’s premises, even when rejecting his theories. That’s because they share many of the protesters’ criticisms of modern society. Much of the Grunig and L’Etang take on the world has shifted subtly and resurfaced as stakeholder doctrine, CSR and sustainability mantras. One can read the narrative in Edelman’s Trust Barometer conclusions, and in initiatives such as the Stockholm Accords (see here here here here and here). It is an outlook which pretends that all stakeholders are equal. It is an arm of PR which claims organisations don’t serve their owners or founders or exist to fulfill their core purpose first and foremost.

My point is that PRs need to get beyond recommending to their clients that they outsource their reputations for NGO imprimatur. PRs should also stop advocating that firms and institutions redefine their social purpose to comply with NGO agendas (read soft-left, liberal and often anti-corporate activists). PRs should be helping firms and modern institutions establish their integrity and reputations based on their own merits. Instead of advising the likes of BP to rebrand themselves Beyond Petroleum, they should help them stand for something they really believe in, that reflects their core purpose, such as Better Petroleum.

I say PR’s paymasters should ask some tough questions. They should demand more from their highly-paid advocates. It is my argument that PRs have helped create the climate of cynicism and lack of confidence that so bedevils Western society. They have helped put it at a disadvantage to the BRICs by their failure to speak robustly and honestly to their publics. The PR industry’s leading academics have in a sense deprived the industry of what it really needs to be taken seriously as a profession: self-esteem and self-respect for its own contribution and that of its clients.

For instance, it has hardly been remarked upon by PRs that supposedly, according to Edelman’s Trust Barometer, China has the most trusted government on earth, its businesses are more trusted than the US’s and that Russian businesses are supposedly more trusted than France’s and Germany’s, or that the Russian government is as trusted as the UK’s (2010 findings) etc..

It is time Western PR got real. It is time it got beyond trying to construct trite idealised models. PRs should become less defensive and apologetic about managing the messy perceptions and realities that resound in our modern democracies. It is time that PR became part of the solution. It is time our trade grew up.

Note: this essay was inspired by a review of the best of 2010 PR books by Richard Bailey on his useful PR Studies blog.

Anybody wanting to know about my views on the issues above can read A Sorry State: Self-denigration in British Culture, edited by Peter Whittle, foreword by the historian Michael Burleigh, published by The New Culture Forum, November 2010. My essay there is entitled, “How public relations sells western firms short” (available from Amazon online).

No related pages.

Porritt is set to argue that Greenpeace and other environmental campaigners have gone soft. He will say that:

“There’s not a mainstream political party in the world out there challenging the orthodoxy of business-as-usual economic growth – stretching indefinitely into the future. Meanwhile, environmentalists continue to do their best to slow the pace of destruction, but are still losing battle after battle. Worse yet, we’ll lose the war if we can’t free ourselves of our subservient dependence on today’s earth-destroying economic growth”

He will argue that environmentalists have become too focused on creating “islands of conservation”, such as nature reserves, which cannot survive in a world of warming, habitat destruction and pollution. Instead the Greens should focus their efforts on stopping economic growth and development.

For him there is a contradiction between the words “sustainable” and “growth”, which makes the term sustainable growth an oxymoron. This debate is not trivial. That’s because the line that most PRs have been selling to their clients contradicts Porritt’s view fundamentally. PRs have pitched their argument saying that what’s good for the environment is also a catalyst for economic growth. We have advocated that going green boosts the top and bottom lines and therefore should be embraced as a business opportunity by the C-suite and boardrooms. This is the so-called win-win scenario.

Now that Porritt is laying down the gauntlet the response of most PRs will be to defend the status quo. For instance, the World Business Council for Sustainable Development’sVision 2050 tackles how to provide enough food, clean water, sanitation, shelter, mobility, education and health to provide for 9.2 billion humans. Porritt, in contrast, says the world can barely sustain its current 6 billion people. He proposes that world governments commit to limiting population growth to 7.8 billion instead.

However it is my view that we can do better than merely defend our current stance. First off, I think Porritt makes a valid point when he implies that sustainability and development are not comfortable bedfellows. Second, he might also be right, but for different reasons, to say that countries such as the UK should debate immigration and seek to manage population growth without being charged with racism.

We should be more critical about how we have been discussing sustainability issues, is my view. For instance, China’s industrial development, like ours before it, is based on the notion of Joseph Schumpeter’s creative destruction. Describing what that means in practice today, Thomson Reuters recently revealed how China has become the second-largest producer of scientific papers, after the United States. Moreover, research and development (R&D) spending by Asian nations as a group in 2008 was $387 billion, compared with $384 billion in the United States and $280 billion in Europe.

The Reuters report added that an AstraZeneca survey found that 27 percent of people think China will be the world’s most innovative country within ten years, followed by India with 17 percent, the United States 14 percent and Japan 12 percent, according to the 6,000 people in six countries questioned by the drugmaker. Reuters remarked:

“The survey across Britain, the United States, Sweden, Japan, India and China found a strong sense of optimism amongst people living in China and India, in contrast to relative pessimism in the developed Western economies. More than half of those in China and India thought their home countries would be the most innovative in the world by 2020, while just one in 20 Britons thought Britain would be able to claim this title.”

Today’s Sunday Times also reports how the West is being stranded in the doldrums as Beijing throws billions of dollars at its solar panel industry and other alternative-energy companies. It says:

“This partnership between business and government is driving some western solar firms to the wall and threatens to start a trade war in the alternative-energy sector.”

In the face of such challenges, Porritt’s call to give up on economic progress and growth looks pathetic. But there’s also a sense in which a new greener world based on new technologies calls for development, fast-paced innovation and levels of disruption which are going to bring into question the very mantra of sustainability. It also begs an investigation into what degree we can afford to throw out all the old Western growth, GDP, paradigms at the moment when the East (and rest of the world) is embracing them.

It should not escape PRs that optimism and trust and lack of cynicism is highest in the BRIC countries and lowest in the more developed ones, according to opinion surveys from the likes of Edelman. Moreover, the growing split in perspectives between countries in the East and the West on growth and development issues should alert us to the need to be more ambitious and not, as Porritt maintains, less.

But it is not my intention in this post to provide answers, as much as to highlight that the debate about the relationship between development, sustainability and global innovation is far from settled.

No related pages.

Here’s the essence of Professor Karnani’s case:

“Companies that simply do everything they can to boost profits will end up increasing social welfare. In circumstances in which profits and social welfare are in direct opposition, an appeal to corporate social responsibility will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests.”

Here’s the essence of Mr. Edelman’s reply:

“[Edelman's case studies] demonstrate that contrary to Karnani’s assertion, the decision isn’t whether to run an effective, “smart” business or a socially responsible, engaged one. Performance with purpose (a term used by PepsiCo CEO Indra Nooyi) is not an either/or proposition.”

Now, as it happens, Richard Edelman makes a good point. But he also misses it completely. The core social purpose of a corporation is to provide whatever goods or services it is in business to deliver – be that street cleaning, cigarettes, incubators, medicines, machine guns or bubble gum. Mr Edelman, in contrast, believes that a smart business is an engaged one with a purpose. Engaged in what else other than what it does, I ask.

Mr. Edelman tries to explain it with three examples drawn from his client base:

“Unilever’s Omo Detergent adopted the “Dirt is Good” campaign – aligning with the brand’s business proposition by asserting that “every child has the right” to be a child and get dirty. After fielding new academic research highlighting the importance of outside play for the physical and social development of children and engaging parents, governments and NGOs to take action, the campaign triggered real social change – Vietnamese schools agree to assess national provisions for school recess while the brand commits to build 100 playgrounds over three years.”

He’s shooting himself in the foot. Unilever’s campaign has self-interest at its core. The aim here is to produce more dirty children that will require the use of more of its product to clean up the mess. Moreover, from my experience as a parent, kids don’t need much encouragement to get their clothes dirty or to play outside (try stopping them).

He tells us how the Clorox Brita’s FilterForGood campaign:

“…inspires consumers – and communities – to take a personal pledge and even engage in (planet) healthy competition with others to reduce their bottled-water use, as well as informs them about other environmentally-friendly decisions that each can personally make.”

In essence, he’s positioning his client’s “healthy product” against the bottled water industry’s and mains suppliers’ supposedly environmentally unfriendly or unhealthy alternatives. That is, for as long as Brita remains a client and come the day Edelman represents, say, San Pellegrino, or has to convince us that a utility produces a product fit to drink straight from the tap. This should warn us that the “public interest” Mr. Edelman favours is often just the selfish interests of his clients.

Then, if those two weak cases weren’t enough, he adds:

“The Pepsi Refresh Project, partnering with NGOs and experts, is directly crowd sourcing ideas from consumers to foster innovation in social good – awarding more than $20 million this year to fund local community initiatives and ideas that refresh the world.”

Regardless of the trendy crowd sourcing, that’s just a classic – old-style – brand marketing and awareness-raising campaign. It is, actually, a very low budget one for a company with $9.4 billion in revenues.

One wonders why Mr. Edelman didn’t mention another esteemed client: Ryan Air. It is one which is likely to accuse Professor Karnani of being soft rather than harsh in his defence of profit. Ryan Air states unambiguously that shareholder value comes before its staff, customers, partners and suppliers. Ryan Air has little time for stakeholder PR or for CSR, except as the butt of jokes. Here’s the brief that Edelman pitched for:

“Wanted: PR firm who is able to LOL at the advertising gags, and doesn’t mind poking fun at expensive airports, rivals, prime ministers … and even popes! No precious, sensitive, politically correct or clock-watching publicists need apply. Long hours, stamina and patience of St. Christopher, the patron saint of travel, are all prequisites.”

Now, don’t get me wrong. I’m not against corporations acting responsibly or managing their risks properly. I accept Ryan Air is an outlier; though it is one which has moved an entire industry’s behaviour in its direction. It is just that most CSR is shallow dishonest nonsense that sails close to propaganda, as BP’s Beyond Petroleum clearly did.

It is precisely such transparent charades and double-speak that generates the disabling cynicism that undermines public confidence in modern institutions. So there’s something refreshing about Professor Karnani’s bluntness and Ryan Air’s Michael O’Leary’s loud mouth.

Of course, in one sense there’s a bit of voodoo coming from both Mr. Edelman and Professor Karnani. The problem with deciding between profit-first or profit-with-purpose is that they are difficult to separate. Firms live within society and have all kinds of unavoidable obligations to fulfill as they produce profit.

One has to ask some tough questions about Mr. Edelman’s motivation, however. His main concern seems not to be the public good as much as helping firms restore their credibility and by so doing avoid state interference in their affairs. He says:

“We are at a very important moment in the relationship between business and society. The catastrophic economic events of September 2008 undermined the confidence in the private sector’s ability to self-regulate. Bankruptcies of centerpiece companies in the global economy, such as GM, plus reputation issues for leaders in finance (Goldman Sachs), energy (BP) and transport (Toyota) have called into question the values of corporate leaders. In the race for public credibility, it is fortunate for business that its prime regulator, government, is not seen as a worthy replacement as the leader in the dance.”

My beef is not with what Mr. Edelman wants to achieve; a free and mostly self-regulated market place. It is with how he believes that he can win public acceptance for it. I rebel, as do most people who are moderately sceptical of corporate humbug, to his pandering to the more infantile elements of this discussion; you know, the audience who cannot (supposedly) be told the truth because it would destroy their illusions.

So, I’d like to leave you with what I think is an effective demolition of Mr. Edelman’s style of PR, by quoting Professor Karnani’s robust expose of it:

“Executives are hired to maximize profits; that is their responsibility to their company’s shareholders. Even if executives wanted to forgo some profit to benefit society, they could expect to lose their jobs if they tried—and be replaced by managers who would restore profit as the top priority. The movement for corporate social responsibility is in direct opposition, in such cases, to the movement for better corporate governance, which demands that managers fulfill their fiduciary duty to act in the shareholders’ interest or be relieved of their responsibilities. That’s one reason so many companies talk a great deal about social responsibility but do nothing—a tactic known as greenwashing.”

Exactly!

No related pages.

Here’s what Vidal says:

“A three-year investigation by the United Nations will almost entirely exonerate Royal Dutch Shell for 40 years of oil pollution in the Niger delta, causing outrage among communities who have long campaigned to force the multinational to clean up its spills and pay compensation.”

Of course, he slips in that Shell paid for the research (though it was environmentalists who campaigned to make “polluters” pay for such reports). He quotes Nnimmo Bassey, chair of Friends the Earth International and director of Environmental Rights Action, saying:

“It is incredible that the UN says that 90% is caused by communities. The UNEP assessment is being paid for by Shell. Their conclusions may be tailored to satisfy their client. We monitor spills regularly and our observation is the direct opposite of what UNEP is planning to report.”

But it beggars belief that a 100-strong multi-national team of UN investigators could be bribed or influenced by a research budget of $10 million from Shell. The report, it seems, will find that the majority of the spillage and environmental degradation was caused by locals, as Vidal reports, “illegally stealing oil and sabotaging company pipelines,” a practice known as bunkering.

I have plenty of reservations. The main one is the casual assumption by so many journalists that there is a handy split (let alone a 90/10 split) between “the communities” or “communities” and Shell. The official report is not yet out, but it is clear to me that the distribution of blame cannot credibly be split 90/10. That’s because Shell, however influential, is just one of many players in the region in the oil business. For a start it is partnered with the state oil company. On the “other” side, too, there are myriad complex relationships between every sort of “official” power, the “communities”, and criminal gangs.

There’s no doubt in my mind, however, that criminality both at a local level (from gangs to corrupt officials) and at a national governmental level (within the oil ministry and its state-run companies) must take most of the blame for the region’s plight.

Here’s what Mike Cowing, the head of a UN team, told Vidal by email:

“UNEP is not responsible for allocating responsibility for the number of spills being found in Ogoniland. Rather, we are focusing on the science. The figures referred to are those of the ministry of the environment and the department of petroleum resources.

“This is a Nigerian issue, not a UNEP issue. However, I would add that from our extensive field work throughout Ogoniland we have witnessed, on a daily basis, very large scale bunkering operations.

“It’s very controversial. We cannot say whether a particular spill is from one cause or another. Our observation is that there is a serious [bunkering ] problem. I am being seen to be siding with the oil companies, but I am not.

“We were provided with the official spill site list. This is given by the oil companies themselves but is endorsed by the [government] agencies. We are not on the side of the oil companies.”

According to Vidal, the UN team took 1,000 soil and water tests, and other investigations were carried out, and hundreds of communities consulted.  This scoping of the extent of the problem will most likely form the basis for focusing the clean up effort that Shell looks set to fund also.

Will this work? I think it might, up to a point. But on the ground it is most likely doomed to fail. That’s because the scale and complexity of the problem in a region of 30 million people is beyond Shell, and currently beyond the Nigerian government’s ability to solve.

It was always simplistic (and mostly entirely without foundation) of the likes of Amnesty International to accuse Shell of human rights abuses and causing mass poverty on top of the pollution in the region.

However, the UN report looks set to give Shell what it badly needs: a shield to defend itself in the West against the nonsense it has suffered from campaigners over many years. That’s got to be good for its reputation and PR. The rest of the solution rests with the Nigerian people.

Having said that, the question remains about just how honest Shell is going to be about the realities it faces on the ground. Those are realities which should urge Shell to set realistic expectations, or risk the issue blowing up in its face at a later date on a greater scale, the way it did for BP with its Beyond Petroleum charade.

No related pages.

There was no upside to HP’s reputation from ridding itself of Mark Hurd. The Economist described HP as Hurdless chickens. Wall Street pulled the rug on the share price. Shareholders looked on bewildered as, as the FT reports, transparency turned to opacity as the Board lost its nerve. Now let’s review how this might make a movie.

Married and slightly nerdy CEO gets obsessed with an events contractor, B-movie actress and former soft-porn star. He buys her dinner more times than he ought. She claims she was sexually harassed and hires a top lawyer with a nose for publicity.

The CEO gets cleared of the charge by the company. But he has difficulty explaining the more than $10k (perhaps $20k) he claimed on expenses to entertain her. He gets told to jump ship. As a result, HP’s share value drops by around $13 billion. That would be the opening scene. Then would come the flashback.

Mark Hurd’s predecessor knocks billions off HP’s share price after her fraught merger with Compaq proves nigh on disastrous. The Board that once backed Carly Fiorina decides to ditch her, but the news leaks. Yet only fellow Board members were in the know. So she orders private detectives to spy on the Board to uncover the traitor. Before they can report, Carly’s fired.

However, the chairman of the Board continues with the investigation (widened to include senior executives), which stoops to lies and deceit and unethical borderline legality. When the rest of the Board discovers how the culprit was identified, members resign in protest and the chairman is forced out. From then on, whenever somebody knocks on their front door, they fear that they’re being bugged by a colleague (the film would portray their spouses’ paranoia).

Carly’s merger antics alone mean that from day one, Mark Hurd is CEO of a company with a psychologically damaged and neurotic Board. The breaking of the spying story and near-implosion of the Board, just deepen his problems. But against the odds, he restores HP’s fortunes, winning widespread praise for the turnaround.

To top it all the temptress in the story proves to have a heart (surely that’s a heart on her sleeve?). She weeps and says she never wanted him fired. She backs up his defence and says that they never had intercourse. The audience weeps with her on behalf of their fallen hero.

What can we learn from this mess?

Above all, the scandal at HP is more about a failure of corporate governance, team-building and trust, than it is about Mark Hurd’s peccadilloes. The major issue for the Board was trust, and the issue of Hurd’s seemingly falsified expenses.

Contrary to popular opinion, corporate governance is not about CSR and personal ethics so much as about improving corporate performance. It is about making the right operational choices. It is about protecting shareholder interests and about assessing strategies to ensure that corporate assets are used properly to achieve corporate purposes. As Larry Ellison has pointed out, HP’s Board has clearly failed to do its job.

The PR consultants at APCO recommended, rightly, that the Board should proactively make a full disclosure of the “scandal”. However, they wrongly advised that Hurd should be sent packing. They produced mock scandalous headlines of what the media might say if Hurd was not ousted. This scared the risk-adverse, emotional Board. In APCO’s favour, however, they probably knew better than anyone else just how broken were the internal relations at the top of HP (leadership requires trust to function). This was no ordinary crisis.

The Board was like a rabbit caught in headlights. It first froze, then panicked. Not for the first time it collectively put personal feelings before the company’s interests.

Meanwhile, Wall Street punished the Board and the company for firing Hurd.

But what about Mark Hurd’s role in all this? His comment about his resignation (cue $40 million pay off) was revealing. He said:

“I did not live up to the standards and principles of trust and integrity that I have espoused at HP”

So, he knew that he broke the bonds of trust at HP, and that he was guilty of hypocrisy on the morality front. So here’s my guidelines for how to avoid such moral hazards in future:

• Don’t let PRs sell the politically correct narrative of your personal life.

• Don’t use personal virtues as a shield to promote your professional ones.

• Headlines about your personal virtues are hostages to fortune.

• Avoid the temptation to indulge in moral outbursts on any topic.

• Don’t bring your personal life to work or include it in your PR.

• Those who live by the sword die by it.

• Don’t lecture anyone (especially not your staff) about personal morality.

• Always assume that everything always gets into the media in the end.

• The public love sinners and winners. It loathes saints.

No related pages.

Vision 2050 advocates that big business solves mankind’s major social and environmental problems in partnerships with government and society. The aim is to produce enough food, clean water, sanitation, shelter, mobility, education and health to provide for 9 billion humans.

Here’s some of what they think needs doing over the next forty years to make a sustainable planetary society possible:

“These include incorporating the costs of externalities, starting with carbon, ecosystem services and water, into the structure of the marketplace; doubling agricultural output without increasing the amount of land or water used; halting deforestation and increasing yields from planted forests: halving carbon emissions worldwide (based on 2005 levels) by 2050 through a shift to low-carbon energy systems and improved demand-side energy efficiency, and providing universal access to low-carbon mobility.”

The WBCSD explains that:

“As part of this transformation, Vision 2050 calls for a new agenda for business: to work with government and society worldwide to transform markets and competition. New rules for markets will reframe environmental challenges as economic challenges, driving innovation and competition in the direction of sustainability and away from resource- and energy-intensive production. Rationalizing prices to include such externalities as climate and biodiversity impacts will make corporate environmental efficiency a true competitive advantage across all industries and regions.”

How to interrogate this stuff from an independent PR perspective? Sceptically, I suggest.

Big business likes this stuff because it sounds and even is virtuous. It has the merit of turning all kinds of uncertainties into market opportunities. I certainly warm to Vision 2050′s commitment to raising productivity (output) by improving land usage and making better use of genetically modified organisms. I can also see the logic of accepting political realities and in proactively helping governments turn costly externalities into profit-centres.

It’s worth noting, though, that this means that externalities and social desirables become goods and services which have a state-subsidy or state guaranteed price.

The problem is that state planning risks making the future of the world dependent on the short-term political thinking politicians are prone toward, which is the very opposite of what Vision 2050 aims to achieve. Certainly, WBCSD hopes that governments will map the paths to achieve pre-advertised and pre-announced priced services (the ex-externalities), which is something that may or may not happen.

Yet, when the state is required to map out the big things it wants to happen, won’t it be natural (as the WBCSD knows well) that big firms will be able to gear up to deliver it quicker and better than small firms? Won’t government find itself talking with the big firms which can deliver big stuff?

For instance, BP may have cocked-up in the Gulf of Mexico, but a small firm couldn’t have even begun to get the deal. If you electrify cars, the trains, build new track, put in huge windfarms or solar arrays, deliver new low-pollution chemical plants etc, etc, almost all the sustainability deliverables get delivered quicker by giant firms. So the big problem-makers become the big problem-solvers. Yummy. Trebles all round. And a PR victory to boot, you would think. Perhaps, says I, but it is a short term and limited one. Here’s why.

Vision 2050 assumes that in the future the world will have to cutback on carbon dioxide usage to combat global warming. However, what if we could either suck the carbon from the atmosphere or clean it up effectively as we go at little cost? With the former solution we could turn-reverse global warming and keep using fossil fuels. With the latter solution we could make use of all the fossil fuel resources we desire for as long as they are available without making AGW any worse than it already is (evidence suggests there are still huge reserves of gas, oil and coal waiting to be exploited).

Moreover, if the nuclear fusion technology comes on tap in the next 40 years then our energy usage could increase in intensity almost without limit forever. Energy production might remain centralized with the emergence of fusion. It would also make desalination possible on a grand scale; ending all worries about water shortages in a world that is two thirds covered by oceans. We already know how to build gas pipelines over distances of thousands of miles to deliver energy to our homes, so building a global water-pipe network should not be beyond us (something states might legislate for but might not pay for; while the market might be able to sustain the entire costs because it is profitable to do so).

By making best use of nuclear fission, solar and wind technology, this might facilitate the trend toward greater decentralized energy provision that environmentalists demand and Vision 2010 supposes: that is until fusion  - or something else – replaces them all (again subsidies might help, and they might not, and special pleading might not be attractive to taxpayers either).

My point is not to favour this or that solution over some other possible solution. My point is that innovation creates new industries, new possibilities and paradigms. Another issue is that the WBCSD Vision 2050 is in the business of envisioning. In that regard, I accept that the BCSD has identified all sorts of problems which are up ahead, and it may be right that government has a role in fixing them, helped by big business. My concern is only that we should be careful when big business signs up for a green agenda, but only because it’s neat and now it suits them.

Regardless, they may still be right. But I suspect they’d be quick to argue, whatever the reality was, for legislation, controls etc, which make their life more mappable. That doesn’t make them wrong, but it takes away some of their virtue, which they so boldly lay claim to. In any case, they may – as I fear – wrap us in all sorts of expensive taxpayer action which turns out misguided and which leads to its own backlash that undermines their credibility and reputations for honesty, integrity and insight.

The future is almost certainly unpredictable. And perhaps my most important point of all is that we should instead be encouraging new risk-takers to emerge to solve today’s and tomorrow’s problems. Such risk takers are as likely as not to be competitors to today’s major solution providers. They will make best use of scientific and technological breakthroughs to challenge the existing order. Such innovation and innovators rarely emerge from partnership relationships (cosy clubs) but unfold as the work of disruptive entrepreneurs, as the railways, automobile, IT, internet and bio-pharmaceutical industries did.

Vision 2050 does have PR potential, certainly for spin. It also has potential for making progressive progress through the promotion of partnerships, even if its difficult to know in which field. What grates on me is the self-interested certainty that is embedded in the content and tone of Vision 2050. At the very least I counsel that however well intentioned Vision 2050 is, I don’t think it is a sustainable plan over the next 40 years given the nature of the unknown unknowns – such as politics, serendipity and competition – that are as likely as not to tear the plan’s assumptions to shreds.

No related pages.

I’m not qualified to know whether Mr Thiam was more right than wrong in seeking to buy AIA. What I do know is that too many CEOs believe that they are laws unto themselves or that today all stakeholders are equals.

So the assertion by Pru shareholders of their power to stop the bid for AIA is a timely reminder of where the priorities and corporate lines of accountability lie. The deal’s collapse makes it clear to CEOs everywhere that they must listen to their shareholders more.

I’ve been predicting that in the future shareholders will, and need to, assert their power more and more. That’s because – contrary to popular mythology – one of the lessons from the last boom and today’s bust is that shareholder-value was not over-valued so much as marginalised in the pursuit of short-term interests. Real long-term shareholder value was denigrated by management teams which ran companies more or less for their own benefit whilst covering themselves in the rhetoric of wider stakeholder interests.

My bottom line (and the firms’)? Shareholders may be quite good custodians of long-term value after all. Perhaps even better ones than the “stakeholders” who bang on about sustainability.

I’m not saying that always applies or is even what’s applying in this case. I’m saying that it’s wrong to assume that modern shareholders always fit the short-termist stereotype that’s foisted on them.

What’s more, it may be that Mr Thiam has understood where the long term prospects of the Pru really lie (it may be that his spate with shareholders was mostly about the price of AIA rather than his strategy).

The challenge now is for the Pru to repair its broken relationship with its shareholders, particularly with Prudential Action Group, which planned to oppose the deal at a shareholder vote due to be held on 7 June.

Personally, I hope that the impressive Mr Thiam survives. I believe he should be given room to learn from this setback. But if the price is his head, so be it, because it will provide a much-needed reality check throughout the corporate and PR worlds.

No related pages.

Yesterday “Shell” (go to hoax press release) said it was going to clean up the Niger Delta, compensate local communities for past injuries, and institute a local stakeholders’ program that will help lift the region out of poverty. That sounds like good news. But what if the real victim is the truth?

There was something very panicky about what Shell called its visionary remediation plan for Nigeria. The press release partly explained the company’s motivation thus:

“The expected hurricane of regulation and policy change across industry, resulting from the negligent practices [in the Gulf of Mexico] by one pair of companies especially, means that all of us need to try to push harder in the interests of long-term survival. Shell will therefore distinguish ourselves by being the first oil company in history to cease taking risks with important delta ecosystems.”

But Shell has no more idea what caused the accident in the Gulf of Mexico than does BP. There’s been some discussion as to likely causes at a Senate hearing (dubbed the blame game by President Obama) but there’s been no conclusive evidence revealed that negligence sparked the accident. It is highly indecent, opportunistic and disrespectful of a rival for Shell to say or suggest otherwise right now.

Let’s get back to Nigeria. There is a blinding omission in Shell’s picture of its work in the Niger Delta. It has completely ignored the truth of the damage it is supposed to have done. Instead, it has scapegoated itself. It has seemed to accept responsibility for stuff it didn’t do. Maybe the “truth and reconciliation” work it is funding will start to reveal the rights and wrongs of all the parties in Nigeria, but I frankly doubt it. This is a pity. Nigerians have the right to know the truth about their country’s workings.

Poverty won’t be dented much

Shell proposes to spend $8 billion over the next two years followed by $1 billion per year over the following ten years to clean up the Niger Delta. That’s a region in which more than 30 million people live. So there’s no way that an investment of $2.50 per person per week for two years, followed by $0.62 for ten is going to lift the region out of poverty.

Such an expenditure might help clean up the Niger Delta. Equally (perhaps more than likely) it might not. Shell promises to use locally-sourced suppliers and staff in a region in which it was and remains responsible for just a small proportion of the overall oil pollution, and in which it has little power to tackle the problem of leaks at source. Moreover, the Niger Delta is the most corrupt region in one of the world’s most corrupt countries (the world’s 130th most corrupt state, and falling) as I recently explained in my personal account, CSR: it’s not the same in Lagos as in London.

Shell also said yesterday that it proposes to establish a $4 billion fund earmarked for compensation for perceived injustices in the Niger Delta caused by its operations since 1958. In describing its intentions, Shell borrowed emotive language from post-apartheid South Africa. It talked about creating a $45 million ”truth and reconciliation process” fund, which will assess and award reparations. That’s likely to create a feeding frenzy centred on locals involved in the fund in which those that win bank in Zurich, and those that lose reach for their guns and head back to the Niger Delta’s creeks.

To glimpse the trouble Shell might encounter, we need only examine how hard it has been for Pfizer to handover around $30 million worth of compensation to 100 or so so-called victims of its meningitis-related drugs trial in the north of Nigeria. Unlike Pfizer, however, Shell possesses no DNA data-bank of the people affected by its activities (regardless of the evidence, Pfizer has been unable to convince the other side of who is entitled to compensation and who is not).

China seeks to replace Shell

But there was also some more weird stuff wrapped up in yesterday’s press release from Shell. I say weird because it strikes me as unreal, and therefore as untrustworthy. Shell promised to:

“…cap oil production at current levels until 2015, and then to gradually reduce production to 10 percent of current levels by 2050, while compensating for this reduction through the development of renewable energy sources.”

Yet Nigeria has just concluded a deal with the Chinese to construct three oil refineries at a cost of $23 billion. It is clear from this that Nigeria is dreaming of an oil-filled future, not one based on renewables. But this deal might explain Shell’s warped CSR strategy, as the WSJ says:

“For the Nigeria government, the deal represents a victory of sorts over U.S. and European oil companies, which have long turned a deaf ear to Nigerian government calls to operate refineries in the country because of the poor financial returns.”

The real prize for China is getting its hands on Nigeria oil reserves. To do so it needs to displace the Western companies already established there with their rights to exploit the resource. So that perhaps explains why Shell took the bold step yesterday to cease:

“…deepwater drilling off the coast of Nigeria until the conclusion of a full independent safety review by our local government partners with international oversight.”

This will, as Shell explained in its release, ensure that it has a secure long-term licence to operate in the region (assuming it jumps this self-made hurdle). This pro-active move might well strengthen Shell’s grip on the Nigerian market in the face of stiff competition. It might well explain Shell’s CSR flannel. But yesterday’s announcement is not so easily dismissed. Hidden away, low down in the release was this very significant global commitment to create:

“…local stakeholder program [s] that gives decision-making and veto capacity over new and ongoing projects to communities affected by Shell and SPDC projects worldwide, pending more formal control at the level of local government.”

Exactly how this will be implemented is not explained. Whether Shell would really give, say, the spokespeople of 500 000 local Ogoni tribes people in the Niger Delta region the right of veto, when it has the support of the Nigerian government representing 150 million citizens, remains to be seen.

Lending Goodluck a hand?

There’s a new President in Nigeria. Goodluck Jonathan’s chances of remaining President come the next Presidential election depend in large part upon whether or not he can secure peace in the conflict-ridden Niger Delta region from where he hails. So one suspects Shell has a two-pronged approach. Its latest strategy looks like a ruse to see off Chinese competition and to curry favour with the new President. As I see it, Shell simply decided that its survival in Nigeria depended upon it helping to fund the peace process through its CSR initiative.

Much of yesterday’s announcement came wrapped in today’s obligatory language of sustainability:

“The unique geology underlying these deltas have sustained our shareholders very well, but we must not let that kind of sustainability come at the the expense of the biodiversity, carbon absorption and O2 production that are their true worth.”

But Nigeria’s economic future and sustainability depends upon oil revenue. The sustainability of Western economies also in large part depends upon continued oil supply. China’s future economic growth depends upon cheap energy much of which it hopes to obtain from Africa.

Some home truths

Sure, nobody can doubt that the Niger Delta needs cleaning up and that Shell should have stopped gas flaring years ago, which it announced it was ceasing immediately. Sure, it is also welcome news that Shell now proposes to exploit the surplus gas instead to provide free energy to local people. Sure, nobody can argue with a commitment to protect the region’s biodiversity. Actually, though, Shell has wanted to reduce gas flaring for many years and for several years (I cannot speak for the very recent history) its investment was bedevilled by the failure of its Nigerian government partners to cough up their share.

The issue I’m exploring right now, however, is what’s really driving Shell’s new strategy.

We immediately meet the oldest problem in discussing CSR. When a firm claims to be interested in environment and society, does it matter if these are cloaks for its own self-interest? Is it morally and strategically sort of OK for firms to claim an interest in being virtuous when, after all, it happens that the wider human and planetary good happens to flow alongside their own advantage?

I would not want you to think I am too much of a purist. Hypocrisy and humbug are often valuable. We need lots of sleeping dogs to have their peace.

But when a firm announces a CSR programme, half-way sensible people start digging (it’s better than running straight for the doors). Maybe we’ll never know what Shell’s motives really are. One casualty of the CSR process is honesty: outsiders will never now know what Shell is really thinking. We have to speculate.

Using Nigeria as a poster child

My main guess is this: Shell has decided that it will turn the Niger Delta into a poster child. It will do a very great deal to buy itself a good global reputation by its work there.

I believe that Shell’s imprudent comments on the Gulf of Mexico disaster reveals boardroom-level angst about the likely consequences of the spill for the entire petroleum industry. That will have tempted the company to over-hype the virtue of its CSR spend in Nigeria and throw into the mix some loose global commitments to listen more to stakeholders.

There must also be a very big Nigerian dimension. It takes very little cynicism to speculate that locally, regionally and nationally in Nigeria, these new CSR schemes have been designed to do some quite shabby or at any rate covert and unseen work whilst flying the CSR banner.

So I can’t help feeling that Shell’s response is a self-interested and cynical abuse of CSR and all that it should stand for.

Peter Voser puts his foot in it

There is something comic in hearing CEO Peter Voser say:

“At long last the words ‘stakeholder’ and ‘sustainable’ will actually mean something. CSR-ND means planning not just for short-term profits, but for what actually matters, including the viability of the planet itself.”

It’s as though he’s admitting that CSR has been hogwash so far, and this time it isn’t, honest injun. But maybe his successor, and his successor’s successor, will be making similar declarations that CSR is at last the real clean, saintly, truthful thing.

Shell’s stunt may work on most levels. The Niger Delta may be a slightly nicer and happier place. Shell may secure its place in Nigeria’s tortuous political economy. The firm may acquire a global bloom at tolerable cost. It may be able to feel better about itself.

I still think it matters to say that corporate culture is polluted when the necessary, expedient and self-interested are dressed-up as outward looking, transformative and virtuous. I don’t know how much narrow self-interest and canny show-boating lies behind this new strategy of Shell’s, but my guess is that there’s a fair bit of it. Anyone interested in the well-being of Shell, but especially of Nigeria, ought to keep watching and inquiring.

Maybe we should be asking Shell to archive its discussions on this CSR programme, and promise to publish them in 30 years. In the interests of intellectual and moral sustainability, you understand.

No related pages.