John Graham, Chairman, Fleishman, Hillard Inc.
TECHNOLOGY: CHANGING THE WAY WE COMMUNICATE
Chairman: David Edmison
President, The Empire Club of Canada
Head Table Guests
Carlyle Dunbar, Financial Journalist and Honorary Director, The Empire Club of Canada; Allegra MacDonald, senior student, Subway Alternative School; The Very Rev. Douglas Stoute, Dean, St. James Cathedral; Linda Smith, Senior Vice-President and General Manager, Fleishman Hillard Inc.; Dennis Pfeiffer, Business Director, BASF Canada; Gerry McDole, President, Astra Pharma Inc.; Mary Lou Benotto, Partner, Chappell, Bushell, Stewart and 3rd Vice-President, The Empire Club of Canada; Larry Barrett, President, Emerson Electric Canada Ltd.; Butch Freedhoff, General Manager, Sony Computer Entertainment; John Wright, Senior Vice-President, Angus Reid; and Scott O'Hare, President, Dell Computers.
Introduction by David Edmison
Matthew wrote: "By thy words thou shalt be justified, and by thy words thy shall be condemned." Indeed, how we communicate is important in our daily life but can be vital in our business lives. In some cases it can make or break many corporations.
The high stakes world of corporate public relations is among the toughest and most competitive industries in business today. Most of the bigger agencies offer PR support in the important sectors of health care, technology, industrial relations, packaged goods, crisis management and media relations. Broadly speaking, the role of most public relations activities is to present a situation, product, individual, company or event in the best possible light, as perceived by clearly defined target groups. It's big business where only the strong survive.
For years, PR professionals were dogged by the suspicious views of jaded cynics who claimed the industry existed to twist facts, bend the truth and alter reality to the benefit of the client. Slowly, the "spin doctor" image has given way to a more informed perspective that public relations plays a key strategic role in the overall success of a business, event, programme or individual. It's a fascinating industry filled with fascinating people--one of whom kindly joins us today.
John D. Graham is the dynamic Chairman and Chief Executive Officer of Fleishman-Hillard, Inc., a U.S.-based PR agency that last year earned the honour "Agency of the Decade" from "Inside PR Magazine," the leading industry publication. "Inside PR" rated Fleishman-Hillard and dozens of other top agencies in such areas as growth, management, work, environment, talent, breadth of service, reach and consistency, strategic thinking and creativity. They were assessed in a report card format with Mr. Graham's agency scoring "A" or "A+" in virtually every category. The supporting article said: "Its competitors rate it number one, and most of its clients do too." It's the only agency to be ranked first or second worldwide in six consecutive surveys. ( I must confess, I never got a straight "A" report card, let alone six in a row.) Ladies and gentlemen, this is definitely one PR agency that doesn't need a PR agency--their success is well earned and well known!
Many prestigious Fortune 500 companies seek the expert service of Fleishman-Hillard with over 40 on the current list including: Anhueser-Bush, Dell Computer, Kimberly-Clark, McDonalds, 3M, Motorola, Proctor & Gamble and Texaco.
Our guest's background is impressive. He attended the University of Missouri on both an athletic and curator's scholarship, graduating from the School of Journalism. Joining Fleishman-Hillard in 1966, his talents were soon recognised, as he was elected Vice-President, Director and Senior Partner just four years later. By 1974, he had been elected President and Chief Executive Officer and was named Chairman in 1988. He's a dynamic man with the experience and reputation that is unprecedented in his industry. He is widely regarded as an expert in all aspects of the business. Although he's responsible for the overall company operations, he remains active in programme development and execution for a number of the agency's largest clients.
Mr. Graham is a member of various public relations associations including the Public Relations Seminar, Arthur W. Page Society and Wisemen. He's a member of the Public Relations Society of America and the International Public Relations Association. He has been elected to the College of Fellows of the Public Relations Society of America and in 1990, was named a Public Relations All-Star by "Inside PR Magazine." In 1994, he was elected as PR Professional of the Year by PR News.
Mr. Graham is a celebrated leader in his industry and it is my pleasure to welcome him as our special guest. Ladies and gentlemen, I ask you to welcome Mr. John Graham.
Good afternoon, ladies and gentlemen.
It is a distinct pleasure for me to have the opportunity to address this distinguished group, and I thank you for inviting me. I am going to talk today about effective communications with particular emphasis on how technology has impacted the way we communicate.
When beginning any discussion on communications, one must take into account the atmosphere in which we are operating today and what is happening among hundreds of corporations and organisations around the globe. The world in which we live is changing very rapidly, and coping with change has become a way of life for people and corporations alike.
No doubt most of you have experienced the phenomenon of change in your own life or workplace. I think Fred Wiersema of the CSC Index summed it up very well when he said: "Management today has to think like a fighter pilot. When things move so fast, you can't always make the right decision--you have to learn to adjust, to correct more quickly."
Change can result from shifts in leadership style or corporate strategy. It can result from downsizing the work force or changing its composition. It can also involve shifts in corporate vision, values and culture. At our own organisation, for example, we are working with numerous corporations, helping them define or better develop their corporate values and their culture or, in some instances, helping change those values and cultures.
We also are witnessing changes that involve shifts in the decision-making process and changes that result from the increased use of information technology. We have watched corporations rediscover their customers, which may involve a major change in terms of behaviour and the way they conduct their business on a daily basis. And, of course, change can also be triggered by human resources policies and practices.
So how do we successfully deal with all of this change? Effective communications are the key. How do we go 'about developing an effective communications programme? Based on my 30 years of experience in this business, effective communications programmes are based on accomplishing three things:
• First, management must take maximum advantage of emerging technologies.
• Second, companies must better define their target audiences and the messages they want to get across.
• And third, managers must better develop their personal communications capabilities.
I will spend most of my time today on the first of these three subjects, but will briefly touch on the other two. When a company or organisation is able to take full advantage of emerging technologies to help it effectively communicate, it obtains a distinct "technological advantage." There are some basic truths involved in this "technological advantage."
The first is that emerging technologies enable us to overcome the traditional limits of geography and time. In the past, geography and time have been massive barriers to the ability of corporations and organisations to effectively communicate. Technology is enabling us to bypass those barriers. Today, using the proper technology, we can instantaneously communicate with employees, customers, suppliers, the financial community and the news media around the world. We can communicate anytime, anywhere, to broad audiences or selected audiences.
Many companies are already doing a good job of using technology to aid their communications process through e-mail, voice mail, teleconferencing and satellite technology. At Fleishman-Hillard, for example, we have video-conferencing capabilities in all of our major offices, including locations in Europe and Asia, which enable us to effectively communicate with our clients and staff although we may be many miles and time zones apart. Another example: I flew to Toronto with a colleague yesterday, and we were fortunate enough to be on an Air Canada flight with a telephone. That telephone enabled us to plug in a lap-top computer and pick up our e-mail messages on a timely basis from our office in St. Louis. Clearly, technology affects us all in one way or another and harnessing it is what gives us a technological advantage.
It would be impossible to have any discussion on this subject without talking about the Internet. The full potential of the Internet as a communications vehicle is being tested each day, in fact, each hour. The possibilities seem to be endless. Let me give you a hypothetical example to help illustrate this point. The names of the companies in this example are purely fictional.
Assume you are CEO of Richmond Enterprises facing your worst nightmare--a hostile takeover of your company. You understand the importance of communications in this type of situation, so you send an e-mail message to all of your employees that says something like this:
"To all employees,
You may read in the newspaper or hear rumors over the next few days of an attempt to buy Richmond Enterprises by MEGA International, Inc. [MEGA is the enemy, here.] We consider this unsolicited, hostile offer against our best interests and intend to reject it. Please refrain from talking to any members of the press or anyone at MEGA. Refer any calls to the office of Allen Nixon, VP and General Counsel, at extension 387. Thank you for your co-operation.
Chief Executive Officer"
You may think that you have communicated successfully and effectively controlled the situation. But what if your employees also get a message from the bad guythe chairman of MEGA International? Even worse, what if the MEGA message is personalised and interactive, something like:
I want to take this opportunity to inform you that we have made a generous offer to buy Richmond Enterprises. We feel there is a natural synergy between our two businesses, and as an employee stockholder this union is in your best interests. Our management team looks forward to working with you. [It sounds very friendly, doesn't it?] To learn more about our company and the details of our offer, please click on the icon to the right and visit our Web site."
If Carol clicks the icon, she is instantly provided with attractive information about MEGA International. Another click and she hears a voice message from the bad guy explaining why she and all your other employees should welcome a takeover. Who do you think wins the employee communications battle?
The second basic truth about technological advantage is that the convergence of computing and communications has accelerated the development of what Peter Drucker calls the "knowledge society." A knowledge society is one in which knowledge and information are freely exchanged with no geographical or time limitations. Today, as you all know, corporations and organisations with operations all over the world are able to exchange information and experiences like never before. At Fleishman-Hillard we have our own internal network, which allows our staff regardless of where they are based to instantaneously exchange knowledge. That means a client of our Mexico City office can, on a timely basis, draw upon the experience and capabilities of staff in our Toronto office or any of our other offices. It is this capability to share the knowledge base that gives us technological advantage.
Recently, while reading "Fortune" magazine, I picked up a quote by Tom Malone of the Sloan School of Business at MIT: "In the old world, information was very expensive, so we managed with relatively small amounts of it. We developed organisations that could work in an information desert. Storing, moving, and finding information is so much cheaper and easier that we're in something more like an information jungle. Those who learn to take advantage of this increasing amount of information economically will be much more successful."
This brings us to the third basic truth about technological advantage, which is that you should never underestimate the power of the Internet and on-line communications.
The most recent issue of "US News" has a headline that reads "Gold Rush in Cyberspace." Another "US News" story talks about how the best jobs in the future will be cyber jobs. And "Communications World," another publication, has headlines that read "From Worldwide Web to Selling Burgers" and "Tomorrow's Markets are in the Sky."
It is almost impossible to pick up any publication in this day and age without hearing something about the Internet and the power of on-line communications. That is because the Internet is the world's largest computer network and billboard, comprised of more than 20,000 networks on every continent. The wondrous Internet can serve as a child's plaything and a physician's tool. It is both an information repository and gateway.
This quote from "Business Week" really puts the importance of the Internet in perspective:
"As the Internet evolves, it is likely to take over your telephone, your fax machine, and maybe even your TV and stereo too. Sure, the information superhighway is supposed to meld all these technologies into a torrential digital stream. But while the information highway remains a work in progress, the Internet offers a solid test-bed for advanced communication."
Another way to think about the Internet is in terms of the people who use it. In the process of putting together this speech, I found some rather interesting Internet statistics. For instance, approximately 40 per cent of all the companies in the United States now have Internet sites, and 70 per cent of all major corporations are expected to be wired by the end of 1997. About 37 million people in the United States and Canada have access to the Internet, and according to a Nielsen media research poll, 24 million of them have "signed on" in the last 90 days. In Canada, according to a recent poll conducted by the Angus Reid Group, 50 per cent of all Internet users have university degrees and 25 per cent earn more than $80,000 a year.
Stop and think about it: these are incredible statistics. We are talking about a very educated and affluent group. Clearly, the Internet is a growing force in our society.
What are all these Internet users doing? Some browse, some seek entertainment, and others surf the Net for academic reasons. Just last night, in fact, I read a "Wired" magazine article that explains how you can get an MBA on the Internet.
But the Internet is also a business tool. A recent World Wide Web user survey indicated that half the people who use it do so for business purposes, which is reason enough to take the Internet seriously. The following is a quote from William Burks, Manager of Corporate Communications for the Chicago Mercantile Exchange: "We see the Internet as one of the most important tools for finding new customers. There is great potential to attract retail customers. The interactivity of the Web site is a good way to reach a new generation of people who may eventually use the markets."
The Internet has already become a significant marketing tool. And, I suspect, over the next few years you will see public companies using the Internet more and more as a shareholder interface. The possibilities are limited only by your imagination. Do not underestimate it.
The fourth basic truth about technological advantage is that the potential for immediate interactive capabilities has not yet been fully realised. If we could look into the future, I think we would all be shocked by the interactive capabilities our children will take for granted.
I cannot tell you exactly what is going to happen, but my general sense is that interactive technology will have an absolutely incredible effect on us all. It will play a significant role in communications, especially training and planning. Indeed, when development costs fall and technology improves, training will gravitate from video to virtual reality role-playing, and the scope of scenario planning will widen dramatically as modelling becomes more flexible and realistic.
Fleishman-Hillard does a lot of crisis-scenario planning with managers in various organisations. Sometime soon, we will be able to present them with an interactive crisis on their computers--interactive training in "real time" situations. With virtual reality technology and scenario modelling, management skills can be honed, and the effectiveness of new and existing employees can be tested.
The second point I will touch on briefly, which must be accomplished if you are to effectively communicate, is to clearly define your audiences and messages, or, as I call it, the "message advantage." Getting the right message to the right audience is key. After all, you can have the best technology in the world, but if you do not have the right message for the right audience, you will not be able to communicate effectively.
Content is also crucial. The medium is not the message; content is the message. A recent research study conducted by the Conference Board, involving approximately 120 corporations worldwide, found that 97 per cent of all responding companies agree that message content is the most important factor influencing the success or failure of any communications campaign.
The third and final point which must be part of any effective communications programme is developing the personal communications capabilities of managers, or what I call obtaining the "personal advantage." I cannot stress how important it is that during times of change, senior management must personally get deeply involved in communications programmes. In fact, during these times, the CEO should be the chief communications officer. He or she must make the time and should be prepared to communicate the major messages to the key audiences in person. You can use technology all you want, but if you simply sit behind your desk sending out e-mail to your audiences, you will miss major opportunities to get your points across.
Getting senior management involved in obtaining the "personal advantage" also means they must be able to listen to their key audiences. This is particularly true in employee communications. Two-way communications must be part of any effective internal communications programme, because employees want to be heard. Listen to them, because while technology has certainly provided additional avenues for us to communicate, personal, two-way communications are still the best way for us to get our points across and to alter or support behavioural change.
Let me summarise by saying that change has become part of our lives. As we all know, most corporations and organisations are changing and will continue to change. Those who understand how to use "technological advantage," "message advantage" and "personal advantage" in developing effective communications programmes are in the best position to benefit from this change.
Again, thank you for the opportunity to talk to you today.
The appreciation of the meeting was expressed by Mary Lou Benotto, Partner, Chappell, Bushell, Stewart and 3rd Vice-President, The Empire Club of Canada.