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.

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Yet how our clients juggle individual moral rights, social roles and social conventions cuts to the heart of what PRs communicate. As Martin Sandbu, economics leader writer at the FT, says in his new and accessible book, Just Business – Arguments in Business Ethics, philosophical thought can illuminate how these processes are managed.

Sandbu begins by ripping to pieces the two dominant, and conflicting, management mantras that guide business decision making today: Milton Friedman’s shareholder primacy theory and stakeholder doctrine. He then uses Kant’s methodology to put forward what I consider to have the makings of a superior alternative.

First, he interrogates Milton Friedman’s managing-for-shareholders mantra and finds inconsistencies inherent in the theory, which casts doubt on its usefulness as a guide to action:

“Friedman himself admits to qualifications on shareholder primacy. He says that mangers’ responsibility is to conduct the business in accordance with [shareholders'] desires, which generally will be to make as much money as possible while conforming to the basic rules of society, both those embodied in law and those embodied in ethical custom. But this is as unhelpful as it is eloquent. What is a manager to do if shareholders do not particularly care for ‘conforming to the basic rules of society’ – whether those of the law or those of ethical custom? …..

“…if by ethical custom we mean the morality conventionally believed by a majority in society, it could conceivably be the case that conventional moral beliefs require society to be ‘socially responsible’, even against the desires of shareholders. If so, conforming to ethical custom would bind managers to pursing ‘socially responsibility’ to the detriment of shareholder profit, which is surely the opposite of what was intended.” Page 20

I have to agree with Sandbu. There is a contradiction, though we both agree there’s also much to admire at the heart of Friedman’s position, not least when it comes to property and shareholder rights.

However, while Sandbu is tough on Friedman, he reserves most of his wrath for the incoherencies inherent in stakeholder theory. He observes:

“The imperialist nature of the stakeholder concept – its tendency to include an ever wider range of groups within the orbit of ‘managing for stakeholders’ – is part of what is wrong with stakeholder theory. For the more groups count as stakeholders, the less plausible it becomes to claim that managers either can or should run their business in the interest of all of them. Even if we set aside the difficulty of identifying who is and who is not a stakeholder, without which the admonition to ‘manage for stakeholders’ is rather unhelpful, there remains the problem of what exactly it means to manage in their interest. For, obviously, different groups have different interests, and sometimes those interests conflict. If we think of stakeholder theory as saying that managers should maximize the benefits of stakeholder groups – much as shareholding primacy says they should maximize the return for shareholders – we are hampered by the inconvenient mathematical truth that it is impossible to maximize two or more objectives simultaneously. If, alternatively, we think of the theory as saying that managers are the agents of stakeholders – much as shareholder primacy make managers the agents of the shareholders – we shall quickly find managers stymied by duties that conflict with one another. Shareholder primacy does not suffer from those problems. Even though it is mistaken in claiming managers’ duty is to maximize profit, there is at least no incoherence in what that duty, if it is actually applied, would consist of.” Pages 25/26

The real problem with stakeholder theory, according to Sandbu, is that it lacks a coherent (logical) normative core that answers the question for whom business should be managed. Stakeholder doctrine cannot identify those stakeholders with an intrinsic moral importance (shareholders) from those with an instrumental moral value. Moreover, as R Edward Freeman, the guru of stakeholder theory, puts it, there are a number of stakeholder theories each with their very own normative cores. Sandbu remarks:

“If there is no one definitive stakeholder theory that specifies the moral status of stakeholder groups and the duties of management, all that stakeholder approach per se does is to underline that such a specification is necessary.” Page 28

Amusingly, Sandbu concludes that stakeholder theory is not a theory at all but merely an acknowledgement that business is a moralized activity:

“Since that is something we already knew, we do best by simply leaving the term ‘stakeholder theory’ behind.” Page 28

So, having shown how the existing “philosophical” and theoretical frameworks are deficient, let’s look at Martin Sandbu’s proposed alternative. He suggests, and I tend to concur, that a social contract approach, which draws heavily but not uncritically on the work of John Rawls, provides a more durable framework for corporate image-building. Here, in Martin Sandbu’s words, is why the social contract approach to business and reputation management is so compelling:

“Once we acknowledge that business behavior must be morally justified and that mere social convention about norms cannot provide that justification, we recognize the need for principles, external to socially defined norms, that can adjudicate the truth and falsity of the claims those norms imply about what business ought to do. The metaphor of contract, the archetypal form of human intercourse in the economic realm, should be particularly congenial to those seeking an appeal of offering a general method for thinking about specific problems by focusing on what rational persons in an appropriate contracting situation would endorse. This is also its moral appeal: Unlike utilitarianism, social contract theory formalizes the need to justify morality’s commands to all affected individuals.” Page 179

So, how realistic would it be to adopt a social contract approach based on Kantian morality? Sandbu says:

“…the reasoning must be done in the face of the concrete challenges one may face. The true test of the social contract approach, or any other theory of business ethics, is whether it can help business people move from denial or confusion that recognitions of moral dilemmas often trigger, toward a more stable reflective equilibrium.” Page 195

To give us a guide into how Kantian logic could be applied to real-life corporate dilemmas, he uses it forensically to examine some classic PR case studies. He pores over Texaco’s oil spills in Ecuador, Enron’s fraud, Guidant keeping quiet about its faulty defibrillators, Google’s support for state censorship in China, LeviStrauss’s child labour scandal, executive pay and remuneration, and sub-prime mortgages, to name a few among many.

Turning to the practicalities of his approach, he says that the normative conventions of corporate cultures of, say, Microsoft and Google, might well require different moral codes of behaviours for their internal and external communication (variety will remain powerful differentiators).

Indeed, it strikes me that my Ryanair case study – perhaps not as Sandbu might like – highlights a robust and social contract-type approach to a firm’s staff, customers and suppliers. Arguably, Ryanair has re-educated a whole industry in a whole new set of normative conventions, ones that have become accepted as the price of low-cost flights and commercial success. It also strikes me that the banks are in dire need right now of a social contract, though perhaps one that is nothing like Ryanair’s (though don’t get me wrong, I’m a big fan of the airline).

But Sandbu reminds us – as perhaps Michael O’Leary never would – that profit is not everything:

“…there are a host of management theories that say that it is good for business to respect workers as rationally autonomous beings. In contrast, Kantian ethical theory argues that respecting autonomy is morally required, whether or not it helps the bottom line.” Page 153

Martin Sandbu is on to something. What he writes about is very much a PR’s concern; it addresses what PRs do and what value they add to business and modern institutions.

His work suggests (at any rate I infer from it) that firms (and our clients in general) need to apply quite tough and honest rules to the contract they are seeking to strike with the outside world. When the contract is more self-interested than obviously aspirational, the underpinning of their case can be both moral and pragmatic. PRs should be skilled in helping clients develop that contract, with its curious blend of the selfish and the virtuous. PRs, of course, need to become especially skilled at framing narratives that are not full of the flaws that Sandbu exposes.

At the very least, I hope that corporate ethics, conflict resolution and reputation management will increasingly be influenced by the ideas Martin Sandbu explores in Just Business.

Just Business: Arguments in Business Ethics
Martin Sandbu, Wharton School, University of Pennsylvania
Pearson, 2011.
ISBN-10: 0205697755  ISBN-13:  9780205697755

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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.

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The hacking of Google email accounts and the stealing of its worldwide log-in authentication code for every Google service, presumably by the Chinese military, threatened the brand’s core being. That’s because Google’s shareholder value depends on a combination of intellectual property and public trust, based on the exploitation of a worldwide web infrastructure it does not own or control. What’s more, Google can only optimise its money-making if its users divvy up more of their privacy in exchange for its world of “Free”.

So the pull-out from China was never about money. It was never about Google’s failure to gain market share in China. Neither was it about defending the right to the free flow of information or the freedom of speech. Google withdrew its co-operation with the Chinese government’s censorship of the internet in retaliation at the hacking of its users’ emails and the theft of the company’s property.

If Google’s users cannot rely on the privacy and security of the firm’s platforms, applications and services, then Google does not have a sustainable business model.

Google’s return to China – like its entry in to the market – comes with the implicit acceptance, however reluctantly conceded, that the government there has the right to restrict access to internet content. This time around, Google simply relocated its servers securely in Hong Kong. It has allowed the Great Firewall of China to censor access to them. It is a pragmatic compromise. As the BBC points out:

“The battle between Google and the Chinese government appears to have ended in a score-draw.”

Of course, Google’s reputation remains a victim of its split personality. On the one hand, the company was built on the premise of an ambiguous “Do No Evil” slogan and on the utopian notion of enabling unhindered free flow of data and information across the web. On the other, Google has always been a profit-driven, share-price sensitive animal, which pushes it to be pragmatic and not to be overly ideological in practice.

The latest development in China highlights how Google is growing up fast. It reveals a company which is learning how to keep hold of its integrity and USPs while remaining sensitive to the real-world forces and issues, many of which it is not in a position to influence. Nevertheless, Google has been scoring some own goals recently. One example was Google Buzz, which failed partly because its clumsy “auto-following contacts” in Gmail upset users. Another was the wifi privacy intrusions by Google’s mapping vehicles.

The PR challenge now for Google is to convince a sceptical world that it can be trusted long term with our personal and social networking details, viewing habits, interests and data. It’s my view that unless Google handles privacy issues well it will be replaced by the next big competitor that comes along. However, the news from China suggests that a grown up Google might survive into old age.

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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.

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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.

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Utopian PRs have been dreaming about “one world, people and planet” in which all the barriers between various publics come tumbling down. They envisage a connected world in which the lines of demarcation between internal, boundary and external stakeholders dissolve as they connect transparently and interactively in a value chain that links interdependent companies to their consumers and markets.

But such views ignore some major issues.

One is that in an open digitally-connected world, there’s more need than ever to conspire – organise, ghettoise, corral – to keep things confidential and hidden behind closed walls.

Indeed, we will see the kind of problem which Freedom of Information rules can produce: a clever, covert, closed decision making in which everything which really matters is centripetally driven to a cabal. (Remember the government of Tony Blair?)

Arguably, the more open things become and the more control bosses relinquish to networks, the more restrictions they will have to impose on those who operate in them. This might, paradoxically, lead to even tighter control on commercially sensitive information than exists today. It might lead corporates to adopt a civil service mantra of only releasing information on a need to know basis.

Another issue that the utopian PR camp ignores is competition. Companies forging various so-called value networks (I’ll argue later that PRs should avoid using the term) are as likely as not to form lots of them. They are as likely as not to value some more than others and to find themselves involved in contradictory and conflicting chains.

This will lead to lots of tension and uncertainty within corporates and institutions, such as government service providers, as they are forced to choose between their various product ranges, service offerings and partnership relationships, according to either their broader interests or their ability to sustain them. The resolution of such problems, or issues, will remain driven from the centre, from the top, by corporate or institutional bosses concerned with strategy.

Moreover, because of competition, PRs at either end of a chain, not to mention the middle, might find themselves pulling in different directions and unable to always align their interests, messages and narratives. There is no reason to believe that just because we introduce new tools into the workplace that real-world tensions, politics and commercial interests, will evaporate. We should, I warn, avoid falling into the technological determinism trap.

My point is that we should not think that corporations are about to relinquish control to horizontal or flat digital networks. We should not kid ourselves that top-down management and communication are about to die out. Neither should we imagine, as the PR utopians do, that existing internal silos, lines of responsibility and accountability, will be or should be altered very much by commercial Web 2.0 applications.

Here’s what Norman Lewis, Managing Partner at Open Knowledge UK, had to say on this when he commented on my piece There’s no social media revolution:

… it’s definitely the case that social media like any other technology does not alter the realities of the business world. (I very much like your points about the chaos that would ensue in a company if everyone could relate to sales, customers etc). This is based upon the naive hippie prejudice that enterprises can become democracies run in the interests of employees empowered to act like free agents.

Another of the problems that’s being overlooked by utopian PRs is how social media usage in the personal sphere is maturing. They seem to have missed the point that the major stumbling block for social media of all kinds is privacy, trust and control over personal data. It would seem that social media users are emerging from the blindly heady immature days of the early adoption period and starting to ask tough questions. Anybody really interested in this would do well to read Facebook challenged by ambitious upstarts on BBC online.

So already in the personal usage of Web 2.0, privacy and transparency are emerging as issues which are tempering how it is used. But in the commercial sphere the risks and drawbacks are fairly clear from the very beginning. While knowledge-sharing, collaboration and instant feedback and decision-making all have great appeal, in fact IP, confidential information and in-house knowledge lie at the heart of commercial value. The open information flows between various players presents itself both as an opportunity and as a risk.

But there’s even more reason for PRs not to get over-excited about Web 2.0′s ability to transform the workplace as utopian PRs do when they talk about paradigm shifts. Some believe that Michael Porter’s value chain model has already been replaced – or almost so – “by fuzzy (and not linear) and immaterial (rather than material) networks that normally disintegrate the distinction between internal and external publics.” But the truth is that Web 2.0′s commercial applicability is in its infancy and has yet to make a great impact.

The point the utopians miss is how much experimentation will be required to ascertain where and how to make Web 2.0 and social media applications work best in the corporate and public sector domain given the virtual impossibility of measuring their benefits accurately. But don’t get me wrong. I favour innovation and risk. I decry our current risk-adverse culture. I look forward to seeing more Web 2.0 applications introduced by business and institutions to deliver products and services. I don’t doubt for a moment that they can boost productivity and add great value.

This leads me to flag an event which I think PRs should attend, and to use it to explain why I think PRs shouldn’t use the terms networked society and value networks: International Forum on Enterprise 2.0 – Milan June 9 – 10.

The term Enterprise 2.0 was coined by Andrew McAfee, professor at Harvard Business School (Technology and Operations Management Unit). He defined it thus:

“…the use of platforms of social software in an emerging way inside the organization or between the organization, their partner and their client.”

The three building blocks which constitute E2.0 are:

• Social software: instruments which enable people to be in contact and collaborate together creating an online community of practice;
• Platforms, or rather, digital environments:  co-created interactive collaboration spaces that are visible to all users at all times;
• Emergence: the capacity to make visible the application structure and basic patterns of interactions between people.

As the event’s website explains, in McAfee’s words:

“Enterprise 2.0 technologies make the intranet similar to what the web is already: an online platform, continuously evolving, defined by the spread of independent user actions.”

I find the definitions and explanations provided by the International Forum’s organisers very useful. I’ve been arguing for some while that for PRs the terms “network society” and “values network” lack specificity and are confusing because they are in-house IT-speak. What the utopian PRs forget is that PR is and always will be about communicating with publics via networks and that society is nothing but networks personified. Moreover, all human networks are united by common interests and, or, values.

For those PRs wanting to get up to speed on social computing and E2.0 (both terms are useful and convey specific meaning in a PR context), I strongly recommend the following experts who explore – from different perspectives – this emerging field:

• The Social Enterprise – Italian blog on Enterprise 2.0
• The Business Impact of Information Technology (IT) – Andrew McAfee
• Enterprise Web 2.0 – Dion Hinchcliffe
• Futures Diagnosis – Norman Lewis

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.

Before we go on, it is worth building on part 1′s theme: what exactly do the Stockholm Accords expect to achieve? Here’s what the event’s website says about their objective:

“The aim of the Stockholm Accords is to articulate and establish the role of public relations in the “communicativeorganization”[sic] within a fast-evolving digital and value-network society.”

In essence, the Accords suppose that we live in a new “networked society in which communicative organizations are vital to organisational success” (forgive the clumsy words, they’re theirs, not mine).

In essence my beef is that this exercise over-complicates everything. Most PR is an effort to help clients both be and appear more attractive. You can usefully enrich that proposition by noting that there are internal and external audiences; that everything about an organisation can be part of its good or bad messages; that building up a good reputation may be useful for when things go wrong (as they will). One may want to stress how non-stop and intrusive and persistent modern observers are. Perversely, the globalised, modern world is more like a village than ever: everybody thinks everything is their business.

As I argued in part 1, the Accords ignore the obvious: society is, and always has been, networks personified. Moreover, all human interaction depends upon communication and relationships, or nothing whatever would have been or will ever be achieved. Of course, the digital bit is sort of new. I say sort of because the internet is now second or third generation. It strikes me that the Accords’ authors are really saying that their thinking boils down to considering technology’s influence on human behaviour. This narrow obsession has sent them and their new definition of PR’s role off in the wrong direction.

There’s no wisdom in a mob, but there’s often treasure buried in crowds. So, of course, I accept there is something in Reed’s Law. (See: “The Law of the Pack”). I accept its proposition that digital networks can scale exponentially by transforming technological platforms into social networks that add value. But in the business world, Reed’s Law is just a statement of potential. It remains a theoretical construct that might prove to be hopeless if taken too far. The commercial world is in recession. It is not currently up for the risky experimentation and investment that would be required to test the weaknesses and strengths of Reed’s Law. This is something I discussed in part 1 No. 2 & No. 14 (without mentioning Reed). In part 1, I also cited SM’s irrelevance in the British General Election and its only fleeting influence on American politics.

My charge is that the authors of the Stockholm Accords lack historical or sociological insight. Most of today’s social developments from the breakdown of traditional politics, to the shift in community alignments, or the fall of religious influence, to the decline in trust in, and authority of, traditional institutions, pre-dates the internet.

In other words, the internet and social media usage were shaped in the wake of already existing currents, including the already declining mass media. That was particularly the case with SM, which is more often used as a retreat from public life rather than as its lifeblood. That’s one thing China’s SM usage has in common with the West’s. There’s mass disengagement and passivity in society, which is the polar opposite of empowerment, which so many public relations professionals (let’s just call them ‘PRs’) like to crow about. That’s not to say SM is irrelevant, or that it does not have influence or empower people, sometimes, in this or that circumstance or usage.

It is the failure of the Stockholm Accords to look at these real world tensions during the boom and now during the recession, and the Accords’ myopic worship of all things digital, which I criticise. But let me make it plain. This blog celebrates technology and advocates innovation. It is obsessed with understanding them and with exploiting their potential. But it does not endorse technological determinism, which I believe the Accords’ authors do.

So, that’s the preamble. Let’s now look at the Stockholm Accords one by one.

Stockholm Accords on governance:

“The increasingly adopted stakeholder governance model empowers board members and organisational leaders as ultimate custodians of stakeholder relationship strategies and policies, as well as of monitoring their implementation.

“In today’s value networks, a communicative organization requires timely knowledge of economic, social, political, legal and environmental developments, as well as opportunities and risks affecting the organisation, its direction, its actions and its communication.

“Public relations professionals:
• co-create organizational values, principles, strategies, policies and processes;
• constantly report on the dynamics of stakeholder involvement;
• inform, shape the organisation’s overall communication abilities;
•  measure, evaluate and account for results;
• deliver timely analysis and recommendations to ensure an effective governance of stakeholder relationships, enhancing transparency, trust and sustaining the organisation’s ‘licence to operate.’”

My reply

I dealt with the above extensively in part 1. But let me now add a few more brief remarks;

• The stakeholder governance model or doctrine is seriously flawed. An organisation can’t look to outsiders as the first source of its probity and efficiency.
• Firms, governments and institutions primarily pursue self-interest. This will include a measure of enlightened and widened self-interest.
• PR is indeed uniquely useful in our complicated, media-orientated times. But we should beware over-stating the newness of our skills and roles.

Stockholm Accords on management:

“Effective and timely decision-making related to operations and resource management are essential for organizations seeking to enhance their license to operate. These management choices must be sensitive to the concerns of internal and external stakeholders, seeking equilibrium between societal and organizational goals.
A communicative organization listens to its stakeholders, uses this input to improve the quality of its decisions, and communicates through its behavior.

“Public relations professionals:
° help understand and interpret broader societal, political and economic interests and aspirations;
° participate to the solution of organizational issues and lead those that are particularly focused on stakeholder relationships;
° help to legitimize the organization; by increasing the communicative value of products, processes, services; and building financial, legal, relational and operational capital.”

My reply

Yes, PRs are the professional diplomats of the modern organisation’s internal and external relationships. But we won’t do the job better by having theories and ambitions which are too fancy for the valuable but recognisable work they have to do. Way too much of the Stockholm Accords’ approach brings in more posy sociology, management-speak, media studies, post modern guff. This is the way to lose the interest of clients and audiences alike.

Stockholm Accords on sustainability:

“An organization’s sustainability is based on balancing today’s demands with the ability to meet future needs, based on economic, environmental and social dimensions.

“In this network society, sustainability leadership offers a transformational opportunity for the communicative organization to enhance it’s license to operate and demonstrate success across the triple bottom  line.- economic, social and environmental.

“Public relations professionals identify, involve and engage key stakeholders contributing to appropriate sustainability policies and programs by:
• interpreting society’s expectations for sound economical, social and environmental investments that show a return to the organization (the advocate);
• creating a listening culture – an open system that allows the organization to anticipate, adapt and respond (the listener);
• ensuring stakeholder participation to identify what information should be transparently and authentically reported (the reporter);
• going beyond today’s priorities to anticipate the needs of tomorrow, by engaging stakeholders and management in long-term thinking (the leader).”

My reply

Sustainability has to do with robustness and flexibility, which can be darn hard things to reconcile. We need to be modest: sustainability is about the future, a thing we know very little about. We should not pretend to know the recipe for survival (or to assume, for instance, that environmentalists are any cleverer at it than supposedly un-green capitalists).

Stockholm Accords on the new boundaries of internal communication:

“Internal communication enhances recruitment, retention, development of employee loyalty and commitment to organizational goals by ever more diverse and segmented publics.

“In the network society a communicative organization goes far beyond today’s traditional definition of full-time employees, understanding that internal stakeholders now include full-timers with tenure generally shortening, part-timers, seasonal employees, contractors, consultants, suppliers, agents, distributors, volunteers and more.

“Public relations professionals constantly address:
° how organizational leaders communicate;
° how knowledge is shared;
° how decisions are made;
° how processes and structures are created;
° and expand communication to include many boundary publics that are also often considered as highly trusted sources of information about the organization and essential players contributing to the organization’s success.”

My reply

Yes, many of an organisation’s relationships are now both important and fleeting or arm’s length. Actually, that will often require an unattractive wariness. The need for secrecy, privacy and caution is greater than ever and has to be communicated as well as possible.

Stockholm Accords on the new boundaries of external communication:

“The network society mandates that a communicative organization expand its scope and skills to focus on customers*, investors*, communities*, governments*, active citizenship groups*,  industry groups*, mainstream, digital and social media*, and other situational stakeholders*.

“Public relations professionals:
° promote, support and contribute to modify products, services or processes;
° bring the voice of the organization into regulatory and community decisions;
° adopt social networking and research skills and tools to listen to stakeholder demands and report to management so that they may be appropriately interpreted and, where relevant and effective, integrated into the decision making process;
° strengthen brand loyalty* and equity*, thus reinforcing the organization’s license to operate;
° work with all organizational functions, through every step of production and delivery, to craft and implement effective communication programs*.
° actively participate in dialogue*, evaluate and measure results*, and accordingly adjust their practices.”

My reply

This looks like PR’s pitch to stick its nose in everywhere. Nice try, and to some extent justified.

Stockholm Accords on co-ordination of internal and external communication:

“In value networks, each communicative issue* is multi faceted*, multi stakeholder* and inter relational within and between different networks* and positioned in diverse legal frameworks.

“The communicative organization must balance global transparency, finite resources and time sensitive demands dealing with dynamic changes in inside/outside territorial borders and new conflicts of interests emerging from multiple stakeholder participation*.
Dialogue with internal, boundary and external stakeholders must be coordinated with the organization’s mission*, vision*, values*, implementation*, promises*, as well as actions* and behaviors*.

“Public Relations professionals:
° research, develop, monitor and adjust organizational behavior and communication behaviors providing leadership for issues based on stakeholder and societal relationships;
° develop a knowledge base that includes social and psychological sciences, best practices and formative research to create, evaluate, measure and implement programs for continuous improvement.”

My reply

This looks like a pitch for PRs to be rulers of the universe: all-seeing, all-knowing, etc. I don’t mind this accord but it is not so much edifying and energising as yawn-making. How about: “Almost every aspect of your work will convey a message about your organisation, so expect a good PR to take an interest in everything you do.”

No related pages.

My profession seems to be obsessing on stakeholder relationship management. I see why. When the angry mob is howling at the gates, it seems sensible to pretend that crowds have wisdom. Like politicians, media and most bosses in the West, public relations professionals (let’s just call them ‘PRs’) 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 just heard how the British Prime Minister’s inner circle phones bullying help-lines to complain about him. Their confidence is wafer thin.

At this year’s Davos we were told that profit, shareholder value and shareholders are no longer priorities. All stakeholders are now equal. Such talk came from Western leaders. The bosses in the East held their nerve.

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 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 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. I believe it is a chronic abdication of responsibility. It is also constitutes a surrender to short-term market and social instrumentalism.

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 and America to today’s China and India were not built on the back of listening, engagement and consensus, but on the back of courageous leadership and innovation. Let’s review a few examples.

According to Edelman’s trust survey, trust in business and government is strongest where stakeholder relationship management matters least and among the weakest where it seemingly matters most. By a significant margin, China leads the world in both categories. India and Indonesia score highly. While Russia records higher trust levels than do France and Germany.

Moreover, 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. Google 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’s recent Washington Post piece, Erasing our Innovation Deficit, advocates bottom up crowd-sourced innovation. It under-estimates 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. Microsoft never engaged with stakeholders. It hardly consulted anybody. 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, believing it to represent an anti-corporate, culturally-fresh, arty sort of an entity. That’s mostly nonsense, but in any case Apple achieves this myth-making with top-down communication and command and control management.

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.

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.

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.

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. 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, is falling into right now.

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.

No related pages.