This is the text of a talk delivered by Robert Phillips at the OECD in Paris on Friday 17 January 2014

Talking Trust:
The Fall of Public Relations & The Rise of Public Leadership.

The story of Vincent de Rivaz might be seen as a parable for our times.

Vincent, CEO of energy giant EDF, gave one of the worst speeches on trust that I have ever heard. He perfectly encapsulated everything that I believe is wrong about those who talk trust but, in my view, rarely earn it; those who seem to use PR to try and spin their way out of trouble.

The UK’s “Big Six” energy companies are among the least trusted organisations in Britain – accused of forcing millions to choose between “heating and eating”. Vincent still thinks we should trust him.

Almost a year ago to this day, Vincent was addressing a sustainability forum. “Trust” was again uppermost in people’s minds – courtesy of recent scandals surrounding supermarkets and horsemeat, paedophiles and the BBC.

Just before the event, I bumped into the Head of Media Relations at EDF, who proudly told me that he had helped Vincent with the speech and that the key theme was, of course, trust.

When Vincent appeared on the stage, stuttering as if he was reading directly from someone else’s script, it seemed to me that, in a very literal sense, he did not know what he was talking about. If someone had grabbed the script away from him, he would have been completely lost.

“Our customers and stakeholders need to trust us”, he said, as though this was a unique insight. Such words have been spoken by so many in his position, so many times before, in equally vacuous ways. They are simply the wallpaper of the banal.

Vincent spoke as though there was a magic wand or a silver bullet that could quickly restore trust in his company, in his sector and in society.

He was wrong.

There is no silver bullet to restore trust.

It is more complex than that. The world has changed.

* * *

Vincent de Rivaz is not alone among the business or political elite in endlessly talking about trust.

The CEO should be the Chief Trust Officer of his organization. But trusted leaders are those who recognize that trust needs to be earned, not spoken or bestowed.

In today’s world, trust needs to be hard fought, hard earned and hard won every day.

Trust resides with citizens, not with leaders .

This is usually where today’s leaders are getting it wrong. They often think that “PR” can either protect or save them. It can’t.

* * *

I believe we are entering the final decade of the Public Relations industry as we know it.

To many, PR has become the ugly spawn of the consumer society; has encouraged wants over needs and jeopardised our planet; has celebrated “spin” over honesty; and has sought to manage the message to the people rather than let the people speak for themselves.

“Spin” is now officially dead.

We should focus instead on actions, not words.

The future lies in what we do, not what we say.

It is also time to consider what replaces PR. The smart leader and the smart organisation is the one that changes course now – rather than spend the next ten years chasing a redundant model.

I believe that it is no longer good enough to speak simplistically of the transition from Public Relations to Public Engagement, which was the PR solution to the stakeholder society. This thinking is now out-dated.

My contention is that the future belongs not to Public Relations or Public Engagement but instead to Public Leadership – which speaks to the good of the many, not the few – and that the restoration of trust and the fall of Public Relations are inextricably linked.

* * *

There are four immediate reasons why the PR industry is no longer fit for purpose.

First: Data.

The rise of data creates a scientific base on which to build relationships between an organisation and its stakeholders. Insights are real and gathered in real-time. The PR sector is nowhere near properly embracing this, either intellectually or through investment.

Second: Organisational Design.

PR people have for too long ignored the importance of organisational design. They have no real expertise here. Deeper issues within businesses are frequently overlooked in the rush to communicate. Internal comms is not the solution to profound structural problems.

Third, Scale.

Creative PR ideas remain too tactical and lack scale. They fail to establish organising principles that transform businesses and brands.

When was the last time a genuinely big idea (not one that amplified either new product development or advertising) could be credited to PR? The Dove Campaign for Real Beauty maybe came close – but the advertising agencies would dispute that this was ever a PR idea first.

Communication needs to be transformative if it is to thrive.

PR, without scale, is rarely a transformative tool.

Fourth, Measurement.

PR remains obsessed about outputs rather than outcomes.

Without proper measurement, there can be no accountability. And, without accountability, PR will become marginalised further.

It is as though the PR industry does not care for its own credibility, let alone its survival.

* * *

More worryingly, there also remains a perverse determination to promote and defend “top-down” behaviour in a flatter, networked world. This erodes PR’s relevance and influence still further.

This may be because PR folk want to maintain control – to manage the message.

In the UK, the work by Alastair Campbell to get New Labour elected to government in 1997 was possibly the last epic command-and-control campaign, neatly juxtaposed by Barack Obama’s famed use of social media in his first election only a few years later. Alistair Campbell will admit today that the world has changed – you cannot manage the message. With social media “one man can start an avalanche”.

Another reason may be because too many journalists have entered the world of PR with out-dated beliefs, as their own top-down, traditional business models continue to struggle.

For many of them, it is all about the story. The brand with the best story wins. Not any longer. It is not about loudhailer media relations. Shrill press releases are irrelevant in a world that sees through, at best, message management and, at worst, deceit.

Building advocacy from within networks is the way forward. The voices of regular people need to be heard through their peer-to-peer networks and among their friends, families and communities. Companies and brands, CEOs and CMOs, should think and behave like social activists in our complex, activist world.

“Activism” is the pivot that moves us from a world of Public Relations and Public Engagement to one of Public Leadership.

* * *

Public Leadership is activist, co-produced, citizen-centric and society-first.

Activism sits within what the US National Intelligence Council last year called the “mega trend” of individual empowerment.

Individual empowerment sees power continue to shift from state to citizen; employer to employee; corporation to consumer. Society is becoming more atomised and more activist as a result. Power and influence are increasingly asymmetrical, both in politics and in business.

Traditional PR is not appropriate in this complex and chaotic context. Nor are traditional theories of leadership, as trumpeted by many Business Schools and Management Consultants. We are seeing a dying breed of charismatic leaders, replaced instead by the new generation of “horizontal” leaders, who understand that participation and freedom is more important than control.

Meanwhile, the message of Occupy, “we are the 99%”, continues to reverberate – even though the movement itself has faded.

I believe that Public Leadership is the logical answer to Occupy’s calling – which is why I suggest it is co-produced, citizen-centric and society-first.

* * *

Public Leadership is co-produced with regular people.

In companies, this means giving greater voice to employees and customers. It is a n argument for increasing mutualisation and co-operative ownership. It means more than simply co-creating ideas via extended focus groups. Co-production runs to the heart of how a business is organised and how it behaves.

When mutualised business models are not viable, then it is at least possible to mutualise the thinking. A wise citizen-crowd can better shape both policies and products.

The UK’s John Lewis Partnership, Spain’s Mondragon and India’s HCL Technologies are all good examples of this.

Public Leadership is citizen-centric.

Public Leadership demands an intimate relationship between an organisation’s leaders and the needs and aspirations of everyday people. This helps re-connect the purpose of business, specifically, with the needs of society. It also leads to an important re-think of the balance between profit and purpose.

This thinking is now at its most urgent in the banking and Financial Services sectors but the need to be citizen-centric was evident for some years before then.

The legacy of Edward Bernays, Vance Packard and others was not only to see Public Relations as propaganda, but also to help sell to consumer wants , not work within societal needs : to encourage a consumption-fetish over the longer-term sustainability of people and planet.

This is why Public Leadership in this, the Age of Responsibility, is also “society-first”.

The US clothing company Patagonia is a celebrated example of “society first” thinking. Social Enterprises like Grameen Bank offer equally good examples. Large commercial organisations – WalMart, GE and the UK’s Marks & Spencer -are re-thinking business models to ensure citizen-centric and society-first thinking. These are the early indications of the shift towards Public Leadership.

Sweden’s Handelsbanken is establishing best practice leadership on de-centralised decision-making and localism. Denmark’s Novo Nordisk is determining to “solve” global problems of diabetes.

It is important to distinguish, however, between Public Leadership and Corporate Social Responsibility.

CSR is an ugly discipline. It has actually developed through the failures of leadership and of the market society.

CSR has fostered a whole industry of production, conformity and compliance. Companies continue to outsource their consciences to those whose own barometers of success are often the preservation of influence or budget, rather than the transformation and betterment of society.

Public Leaders in both business and government have a moral responsibility to create and sustain an ethical behavioural framework . The failure to grasp this principle is what Professor Daniel Nyberg recently called “a moral corruption”.

The irony is that CSR was invented to help engineer a better and more responsible world. Instead, it begat a global bureaucracy with undoubtedly huge monetary value that enshrines rules and reporting mechanisms over genius ideas for transformational change.

Compliance has beaten values, hands-down.

I have often given Milton Friedman a pretty rough ride – cheekily distorting his “social responsibility of business is to maximize profits” to characterize all the evils of market fundamentalists. In truth, Friedman still believed in the need for social good. But many of his followers have twisted his words to place “the market” on the highest altar.

CSR is an unhappy and maybe unintended consequence of this.

* * *

So what does this next generation of activist, values-led Public Leaders look like in practice?

First, they do not try to control or spin . They do not turn first to Public Relations to determine or manage their messages. They address fundamental behaviours first. They lead with actions, not words.

Second, they empower and facilitate . Because they understand networks, Public Leaders think and behave like activists within them. They help channel the activism of others. They build coalitions, co-create strategies and ideas and shape organisations, products and services around what regular people think and do in the real world, not around what elites decide in boardrooms and marketing agencies.

GSK’s Andrew Witty and Unilever’s Paul Polman are the most frequently cited examples of Public Leaders in business.

GSK’s open-source approach to patents, together with commitments to fairer pricing in the global south, demonstrates Public Leadership in action. Unilever’s Sustainable Living Plan, driven by Polman and his CMO Keith Weed, is very clear about its Public Leadership ambition: to double Unilever’s sales while halving its environmental footprint. Worryingly, however, Unilever’s latest iteration, Project Sunlight, seems to be drifting back towards conventional “social marketing” or CSR territory.

Paul Polman and the founder of Grameen Bank, Mohamed Yunus, famously sit alongside Virgin’s Richard Branson on the B-Team, whose mission is “ to deliver a Plan B that puts people and planet alongside profit ”. I am yet to be convinced that Branson passes the Public Leadership test. His approaches are rooted in the conventions of “old” Public Relations – spinning away, looking for the quick publicity wins.

Third, Public Leaders are honest, open and transparent before the organisations and societies that they serve . Branson’s companies are, of course, rarely open or transparent.

Fourth, Public Leaders are accountable to the many, not the few. They are judged by their employees and their customers first – and thus move beyond the narrow confines of “shareholder value”.

Public Leaders must stand in crowds, not boardrooms. They must look to a critical mass of regular people for consensus, not simply demand compliance from executive colleagues or direct reports.

In the TV show, “Who Wants To Be A Millionaire?” those who “ask the audience” have a 91% chance of finding the right answer. Public Leaders work with the 91% to address the real needs of the 99%.

Finally, the Public Leader should be prepared to metaphorically stand naked – accountable to a crowd of regular people, including critics and peers.

In recent examples, Justin King, CEO of British retail giant Sainsbury’s, has stood naked on the company’s environmental record and asked to be judged publicly on successes and shortcomings.

If we are to speak to Public Leadership, not Public Relations or Public Engagement, we need to enable activism from within companies and encourage activist leaders to stand naked more often.

* * *

This shift from Public Relations to Public Leadership echoes the Aristotelian principle of virtuous leadership. It makes the case for the state (business state or political state) as an active polis : designed for the flourishing and wellbeing of all its citizens, not just the pursuit and protection of power and elites.

It also challenges the market fundamentalism of the past thirty-five years which, to paraphrase Harvard Professor Michael Sandel, has drained public life of moral discourse and views the polis with thinly-veiled contempt. It re-affirms that there is such a thing as a society.

Because Public Leadership speaks to the 99%, it heralds the fight-back of a new social democracy in the world of politics, business and brands. It is social because it is among and between the people; it is democracy because it enjoys the participation of us all.

 

And herein lies the confluence of business and politics – the re-definition perhaps of the modern state. WalMart famously has a turnover roughly equivalent to the GDP of South Africa. Amazon is bigger than Kenya. Nike is larger than Paraguay. Cisco outstrips Lebanon. Today, business states are de facto nation states. The Public Leadership I am describing for Multinational Corporations can equally be demanded from Prime Ministers and Presidents.

Politics, too, needs to rid itself of the failing model of Public Relations.

* * *

Which, appropriately and finally, returns us to the subject of Trust.

 

As we learned from Vincent, trust, as a word, been abused and exhausted. The Global Financial Crisis has accelerated this, as companies and brands rush in where the truly trusted correctly fear to tread.

Look around and many companies and brands are at it. “We trust our customers”. “Our customers and our employees trust us”. Except they don’t. Everyone is sounding like Vincent.

Trust is not a message. It is an outcome. It is deeply behavioural.

 

Trust often spoken is trust rarely earned.

 

Trust is rightfully earned by action, not words.

 

It’s what we do, not what we say, that counts.

In today’s activist, atomised and asymmetrical world, trust is more fragile and more complex than ever before. Trust is tougher than ever to win and much, much easier to lose. Anthony Jenkins, CEO of Barclays, said exactly this in his New Year’s message – admitting that it may take a generation before trust in banks is properly (if ever) restored.

The new world of Public Leadership must be aligned with the new realities of trust.
Trust has moved from a culture of “me” to one of “we”. The Edelman Trust Barometer, with which I was intimately involved for many years, has tracked this shift for over a decade now. We trust fellow employees and “someone like me” more than we trust CEOs or established authority figures and institutions.

“They” are no longer in control, in their boardroom bunkers. “We” are – in the workplace, in the shopping centres and at the till points. Even in the media and with institutional shareholders. “We” are all activists now and the future of business and government is safer in our hands. If only we all knew it, and had the confidence to use our collective citizen-power to better effect.

The smart, trusted organisations of tomorrow are therefore those who recognize the implications of the mega-trend of individual empowerment; to behave like activists themselves; to love and involve the citizen crowd; to mutualise thinking, if not business models; to gain co-operative, rather than competitive, edge; to re-balance profit and purpose; to put society first.

When it comes to trust, PR has been part of the problem. It is certainly not part of the solution. Beware the PR firm that tells you otherwise.

* * *

Ours is an age of citizen-centric power. No top-down model will survive for long, with the continued disruption of technology and costless communications and the parallel rise of social media.

If we can co-create on YouTube or with Nike, then why cannot we co-create at the highest levels of business and government? None of this is rocket science. Change is axiomatic and inevitable. It is time to re-connect with the legitimate authority of the polis .

Public Relations is over because it’s what we do, not what we say, that counts. An industry that has too often misled leaders into an ugly culture of deceit and apology finds no place in a more open and accountable, networked world.

Edward Snowden proved in abundance that the truth will eventually be told. This is not the massaged truth or the half-truth but the absolute truth. Even truth that sometimes hurts.

Trusted leadership, in particular, demands not only truth, but ethics and values; leadership with vision; transparency & accountability; democracy & empowerment; transformation & a transition plan to achieve it; and, above all, deeds, not words.

These are the points at which Trust and Public Leadership correctly coincide.

Some global leaders may be grasping this new agenda but, sadly, they remain in a lonely minority.

We need to find more and, together, do better.

- Ends -

Robert Phillips

January 17 2014

Robert Phillips is co-founder and Head of Chambers at Jericho Chambers and Visiting Professor at Cass Business School, London. The funding for his next book, Trust Me, PR is Dead has now launched on Unbound.

robert.phillips@jerichochambers.com

http://www.jerichochambers.com/

http://robertphillips.co.uk/