Delivered to the Stakeholder Communications 2003 Conference, February 25 2003

For more than 35 years I have been making presentations to audiences using whatever the technology of the day has been to make them arresting and interesting.

I think I have probably made even more presentations on corporate reputation, branding, issues management, public affairs, corporate responsibility and so on than Jim Macnamara has on evaluation and Carma.

They’ve included any number of five point plans, how-to-guides, flow charts, diagrams, recipes for success and so on.

Well today I don’t intend to do any of that. No Power Points, no charts, no five point plans.

Rather I want to have a conversation with you – a conversation about some concepts, some philosophies and some principles.

The reason I want to do that is because I want to approach a broader problem – the crisis of trust in companies and institutions and, more importantly, the extent to which we have been complicit as an industry in creating that crisis.

Now that sort of approach can be written off as simply the musings of an ageing man now retired and of little relevance to practitioners having to operate at the sharp end every day.

On the other hand I would like to think that there is some validity to the approach – which will enable you to work out for yourself some useful, practical concepts which can be applied to your particular situation.

My starting point is the assertion that the most successful organisations in the next decades will be those which build trust by aspiring to authenticity and practising transparency.

These three concepts encapsulate activities, attitudes and philosophies which are rapidly becoming more important as societies react against the excesses of the late 20^th century and the uncertainties of the 21^st century.

Why is this so, what does it mean, why is it important and what are its implications?

First, why is it so?

In the past decade almost every Western organisation had high-flown vision and mission statements, comprehensive sets of values, a commitment to ethics and a publicly proclaimed belief in dialogue with stakeholders.

Simultaneously organisations claimed they had achieved massively enhanced effectiveness; companies achieved sustained growth and increased profits; and, society’s leaders pointed to a new era or prosperity and peace.

It seemed miraculous and those who suspected it might all be too good to be true were dismissed as people who just didn’t get it.

Alternatively, the anti-globalism activists and anti-consumerist campaigners were dismissed as quaint Luddites on the wrong side of history.

Now, in the aftermath of corporate and CEO excesses, corporate collapses, bubbles bursting, terrorism, fear and uncertainty it is clear that it all probably was a bit too good to be true.

These reactions to past excesses and fears about future uncertainties have fostered alienation, distrust and anger amongst consumers, stakeholders and the wider community.

The zeitgeist of the 1990s is making way for a new one, whose tone is still developing, but within which successful organisations will need to think and act differently.

Second, what does it mean?

Philosophers often seek to define terms by exploring their antonyms.

This is a useful way of looking at the three concepts above.

The antonyms of trust are words such as disbelief, distrust, doubt – the very characteristics of the new zeitgeist.

With authenticity antonyms are phoney, spurious – the very characteristics of the accounts of the companies which were heralded a few years ago as the great companies of the future.

For transparency antonyms are obscure, opaque, unclear – once again characteristics of many failed company’s accounts, but also characteristics of much of the language used to describe and celebrate the late 20^th century developments.

In the case of transparency its synonyms – honest, open, evident – are as useful as antonyms in explicating its meaning.

Third, why is it important?

When we examine these words – and their synonyms and antonyms – we recognise almost instantly that they are not new.

During the 1990s many of the words associated with the qualities of trust, authenticity and transparency were included in those visions and mission statements written and promulgated by communicators around the world.

Why many organisations – perhaps even societies as whole – now battle the problems of fear, uncertainty and alienation is that the events of the early 21^st century have demonstrated a chasm between words and action.

It is this chasm which has made the phrase “just PR” into the ultimate pejorative descriptor of all the antonyms of trust, authenticity and transparency.

The challenge now is not just to bridge the chasm but to find ways of recapturing the real meaning of the words and then demonstrate that reality through performance.

Fourth, what are the  implications of all this?

It is impossible to discuss today all the implications for communication practice of the concept of building trust through aspiring for authenticity and practising transparency.

However, there are a number of broad areas which could be explored:

Trust

Confucius told a disciple, Tzu-kung that governments need three things: weapons, food and trust.

If the ruler simply cannot hang on to all three of them they should give up the weapons first; then the food next – but that they should guard the trust to the very end because without trust government cannot stand.

I was reminded of this the other day reading the BBC Reith Lectures A Question of Trust by the British philosopher Baroness O’Neill.

Baroness O’Neill starts her lectures by trying to ascertain whether there actually is a crisis of trust.

She would not entirely agree with my comments about alienation and distrust in the world.

And, indeed, there are many contradictory elements of  the situation.

Anti-globalisation protestors are having an influence and yet the big global brands are still symbols of things to which millions aspire.

Almost no-one believes their governments any more and yet there are no revolts – although there is a fair amount of revulsion – in the western world against governments.

Baroness O’Neill points up more paradoxes about trust.

For instance, she points out that lack of trust is also about our society’s growing risk aversion – our pointless attempts to be guaranteed safety in all circumstances.

Just think for a moment of the standard of media reporting where risk is concerned.

During the recent Canberra bushfires I heard a young ABC journalist interviewing the Prime Minister.

The tone and direction of the interview were typical of much modern journalism and fitted into three distinct lines – whose to blame, what are you going to do about it and can you guarantee it won’t happen again.

Now I know we expect a lot of our politicians, but for any Australian to seriously ask questions about preventing bushfires and giving guarantees suggests a degree of idiocy which is breathtaking.

The parallel of this was the idiotic discussion prompted by Alan Jones (unconvincingly denied by him later) about reversing the course of rivers and drought-proofing Australia.

Admittedly nobody really takes Alan Jones seriously on any terms associated with journalism or informed comment .

This is the man after all who quoted – as if it was fact – extracts from a novel in one of his commentaries.

And, this is a man who denied having said he thought rivers should be turned inland even when confronted by transcripts of his own broadcasts.

But putting aside his baleful influence on community opinion and the question of trust it once again points up this obsession with safety, of fixing the unfixable and drought-proofing Australia.

The recent Economist magazine preview of the year 2003 published a contest-winning essay on the balance between liberty and loss of liberty in the current world.

The essay focussed on how it’s not only impossible to eliminate risk but that if we want to live a fulfilling life we ought not be trying to do so.

The whole risk averse, blame culture is further compounded by environmentalists, the media, the health food police and by many companies.

Every day we read about some new claim about how some product will poison us, destroy the world, save the world or whatever.

While most of the claims are simply scientifically idiotic or just plain dishonest they all add to this risk averse environment in which we imagine that we can be totally safe.

Then, to compound it further, we make massive efforts to create safety and ensure we can trust people and institutions.

In the public sector, as O’Neill points out, we introduce targets, accountability systems, awful managerialism which ends up elevating processes above outcomes and in which change management becomes an end in itself rather than a means to an end.

She also points to the regulations, the security systems, the auditing systems and so on which are used to keep an eye on people, make things safe and ensure trust.

Yet, she says, the more we do it the less we seem to trust.

Last year , in conjunction with Leadership Victoria and the research firm, Quantum, I explored some of these questions about who we trust, and why, in some depth in a report called Leadership in Australia.

If you like to access it at the Leadership Victoria website or through Quantum you can get an Australian viewpoint on some of the issues the Reith lectures addressed.

More importantly, I think, you will get some insights into what people are looking for in the areas of leadership and trust and what different sections of the community think about the trustworthiness and otherwise of governments, businesses and other organisations and what they think about key issues facing Australia..

Arguably O’Neill’s view and the findings of the Leadership in Australia research tend to suggest that what we call the crisis of trust is actually more about the high levels of suspicion the community feels towards organisations, people and institutions than a total lack of trust.

The simplest example – we say there is a crisis of trust with banks and we are suspicious of banks yet generally speaking we tend to trust our own bank.

Indeed, the Quantum research even indicated that we find bank managers more honest and trustworthy than we do religious leaders.

But even if the crisis is about suspicion rather than trust we still have a problem. Perhaps the best we can say is that if it is only suspicion then all is not yet lost.

And it is important that all is not yet lost  because I want to argue today that building trust ought to be the single central goal of corporate activity and communities.

By trust I mean that, as trusting something or somebody and then acting on that trust is the ultimate form of personal relationship, so trust is the ultimate form of relationship between an organisation and its publics and stakeholders.

Trust encompasses and underpins corporate reputation, brands, corporate image and many of the intangibles which underpin value.

Time after time we see examples of it.

Trust in brands make effective brand extensions possible.

Trust in organisations increases the speed with which they recover from crises.

Trust increases the likelihood that you will maintain a strong share price.

Trust can also increase market share where your product and service is perceived as better value – more trustworthy.

That is all now axiomatic.

The question is what we can do about it?

I said at the outset that I didn’t have any five point plans for you – any ready guides in these areas – and I don’t intend to offer any right now.

After all if you think about it quick guides to trust are more likely to convince you of their untrustworthiness rather than the opposite.

A simple practical beginning to realising this value is simply to ask constantly whether any strategies and activities in all these areas contribute to the building of trust or not.

While it sounds simple it actually requires communicators with a mindset similar to that described by Peter Drucker when he said “the role of public relations people is to bring the outside to the inside of the corporation.”

Above all else it requires the empathy which allows individuals to engage honestly and openly with others who may not share the worldview, values and philosophies of their own organisations.

In other words communication practice is not just about instrumentalist approaches to  creating images, brands, reputations but rather about forms of engagement and empathy which build the elements of trust.

So – I would offer one simple test as to whether a communicator is building trust with stakeholders or not – and that is the extent to which their communications are dialogues with stakeholders rather than monologues.

Are you engaging or are you simply informing?

Are you prepared to listen to those feral environmentalists and consider whether they have a point or are you simply going to dismiss them.

I don’t know whether you have seen Bowling for Columbine but every communicator should, and then ask themselves what they would have done if they had been at K Mart when Mike Moore rolled up with a camera, some Columbine survivors and some questions about selling bullets in K Mart stores.

The answer you give when that problem arrives on your doorstop answers the question as to whether you genuinely have empathy or you are just a technician faking it.

Authenticity

Which leads me to the second concept I want to discuss – authenticity – the opposite to faking it.

Centuries ago aristocrats paid premium prices for the highly artificial and the unusual curio inaccessible to the masses.

This aspiration ultimately became the mass market phenomena discussed by Umberto Eco – hyperreality – in which the artificial seemed more real than the real.

In a society characterised by hyperreality – in which everything from basic products to political rhetoric are artificially made to appear real – the new premium in both financial and emotional terms is now paid for the authentic.

The problem is that while hyperreality appeared to offer us the opportunity to fabricate authenticity , recent business, global and human events are reminding people of what authenticity actually is.

In practical terms authenticity is not about whether we act authentically – it is about whether we are authentic or not.

In this context the challenge is not to communicate about authenticity but to foster cultures which encourage and enhance it.

Just think for a moment about the whole phenomena of spin and authenticity.

To give one simple example – modern politicians and the soundbite.

This is particularly pronounced with US politicians but how often do people in the rest of the world throw up when a US President comes on TV with a carefully-crafted – inevitably alliterative as well – soundbite.

It’s like the re-run of a bad movie to borrow one of those such phrases from George W. Bush.

Or, are they disarming our suspicions or making us suspect they are deceiving us – to borrow another one.

Today we do the same service – not quite as glib or as saccharine for business leaders, union leaders, public servants and all our employers or clients.

We craft soundbites which sound good and arresting.

We do it not to defeat a probing fourth estate media but to fit in with the way they have dumbed down and corrupted the political process. Because make no mistake – they are as much at fault as we have been in creating the crisis of trust in early 21^st century society.

I was asked by a left-of-centre think tank for some positioning advice late last year. I suggested they use the slogan “an antidote to soundbites.”

They are still thinking about it and I have realised since that I still think in soundbites even when I set out to attack them.

We shape phrases which keep everyone on message.

We train and train speakers and media performers so that they perform on the theatrical stages we create.

Increasingly, while we think we are being creative and clever we are actually helping our employers and clients to sound insincere.

A good example of the advantages of sincerity is the Victorian Premier, Steve Bracks.

Now Steve Bracks is not one of the world’s great orators. He mangles words, stumbles over names and so on.

When he debated the Opposition Leader, Robert Doyle, in the recent election campaign Doyle sounded more polished, more assertive and a better debater

Indeed, when asked by Channel Nine for a comment on the debate I said that Doyle had probably – in a technical sense – marginally won the debate but that Bracks had won the battle because he came across as more credible and more sincere.

The reason was simple – he was himself, he was honest, he was sincere and he was authentic.

I recently heard Steve speak at an Australia Day lunch and he gave a very polished performance. I said to the senior public servants I was sitting with that they ought to try and stop that happening because he might start to lose popularity.

While the comment was in no way connected to what followed I was pleased to see him a couple of weeks later at the Heineken Classic calling Ernie Els Ernie Eeels.

Now we can laugh about it, but it has an important lesson for us all.

Steve Bracks is a smart man and an extraordinarily successful politician who has just won a massive electoral victory.

Yet according to the criteria for technical professionalism we would expect from communication with stakeholders he is not that flash.

The question I would ask you is whether it is our criteria which are wrong rather than the publics’.

So what does this mean for practitioners?

I would like to make some off-the-wall suggestions and some more sensible ones as well.

First, why don’t we start junking much of our media and presentation training and instead spend more time helping people be confident about being themselves?

Why don’t we have the courage occasionally to decide that an issue is simply not one amenable to sound-bites on tabloid television and say: “Sorry we don’t want to appear”.

With the short attention span of the media the impact might be much less than we imagine.

I have never, for instance, suggested that any of my clients agree to appear on a program with Derryn Hinch. As far as I can see that advice has given Derryn a few more opportunities to get apoplectic but has never once done a skerrick of damage to the clients.

I actually think that if  Macquarie Bank had had the courage of its convictions it ought not have backed off on Alan Jones. Sure Jones is powerful – but there are a lot of people out there who would like to reduce that power. Someone with the courage to take him on might have found that he was not only easier to combat than they thought but actually quite vulnerable to the sort of attacks he mounts on others.

This whole approach to saying no to the media sometimes, of course, means developing alternative communication methods – dialogues with stakeholders, formal consultation processes and so on rather than relying heavily on media liaison.

But it also means stopping forcing our communications into an artificial and ultimately insincere framework.

Second, why don’t we spend less time in the Board room and more time on the shop floor, out with the demonstrators against Iraqi wars and in shopping centres where families go?

For years we have been saying the industry needs to get access to the Board rooms of the world.

The reality is that we’ve had it – particularly during the wonderful 1990s – when everyone was busy swapping jobs for more and more money while piling on more and more hype about less and less in the way of real corporate performance.

Now we have to get away from the environment in which it seems perfectly normal for a failed CEO to get paid $20 million to go away and into environments in which we try to understand why that gets up the nose of ordinary people.

We need to get out of company cars and into trams and trains; out of board rooms and into suburban shopping malls – we need to supplement all the research reports we commission with some old-fashioned observation informed by empathy.

Now I recognise that many bosses mightn’t take too kindly to you telling them this – so in the spirit of spin may I suggest you sell it to them as undertaking serious anthropological research.

The third thing we need to do is to act out constantly the reality of ethical behaviours rather than simply using ethics codes as issues management tools when things go wrong.

Whether we are companies, industry associations or whatever we all know how useful it is to be able to point to an ethics code when something goes wrong.

We all think we act ethically. Indeed, very few practitioners act unethically by making some wrong, illegal choice.

Rather we make small decisions – decisions based on looking after our families, paying our mortgages, keeping our jobs – which colour facts, which spin situations.

After all, let’s be realistic, PR people are paid to persuade people to think and behave in different ways.

What we need to do, I believe, is to become the office whistleblower instead of the office spin merchant.

We ought to be the ones who are asking whether things are ethical, whether we are telling it the way it actually is, whether we are being honest or not.

We might be amazed – if we use less spin and more genuine reality; if we fess up more rather than explaining things away we might find we are even more effective because people will start believing that, like Steve Bracks, we are behaving authentically.

Finally, the concept of transparency

Transparency is ostensibly both the simplest concept and the one in which the communicator has a great, and transparently, obvious role to play.

But if I could go back to Baroness O’Neill for a moment.

In her lectures on trust she remarks that the so-called crisis of trust with which we are living has actually coincided with an era in which communication has made possible an enormous increase in transparency.

She argues that lack of transparency – secrecy – is less than the problem than is the need to avoid deception.

Now we all blithely say that of course we never deceive – indeed the ACCC deals rather strongly with us if we do.

Yet, even at our seemingly most transparent we seek to put things in the best possible light.

How many Annual Reports, for instance, start the Chairman’s comments with words such as: “During the year your company made a very serious loss amounting to however many billion dollars. This was due to a series of strategic and operational mistakes your Board and the company’s management made. When we addressed these problems we consider a number of alternatives. We could resign and be replaced by others or we could sack the CEO and other senior managers (paying out their contracts generously) and employed a new team. This team would front the media and the analysts and promise a new approach and a new vision. Instead, we have decided to face up to the mistake – reduce our directors’ fees and the CEO’s package and work to fix the problems up. We know we made the mistakes and we are now – with the benefit of analysing them – setting out to fix them and rebuild shareholder value.”

I know that’s a bit of an exaggeration but the sentiments are what’s important not the exact words.

So, I would suggest that a practical beginning to improving transparency is to not only develop a pre-disposition to disclosure – as much, as often and as extensively as possible – but also to start thinking about less packaging and more authenticity.

In doing so there are a number of guides.

One of the most useful I have come across are the so-called Nolan principles – principles for open government developed in the UK in response to the sleaze and problems of the final years of Tory Government. I note that many similar problems have re-appeared with the Blair Government but that doesn’t mean that the Nolan principles are not worth considering.

The Nolan report said public officials should subscribe to seven principles:

Selflessness, integrity, objectivity, accountability, openness, honesty and leadership.

Now you could argue these are almost banal but how many of them are fearlessly practised by public officials, communicators and others.

I must confess that, sadly, an ongoing problem with communicating with stakeholders is that the stakeholders sometimes fail to live by such principles as well. I think Greenpeace, for instance, has probably failed on all seven at various times in its history.

But if we junk our codes of practice, our meaningless value and mission statements couldn’t we just say that the seven principles are how we want to be judged?

If we then act as Peter Drucker suggested – by bringing the outside inside to an organisation.

If we start acting authentically – by being a bit less concerned about creative soundbites

Then we might just start to have a very different sort of impact.

Almost certainly the greater the progress towards this goal the more progress an organisation will make to towards being and behaving authentically and thereby building trust.

The next thing I would suggest we do is to strive to cut out intermediaries in communicating with stakeholders.

Recently, with a colleague Lelde McCoy I wrote a paper on some research we had done on the Age-SMH Good Reputation Index.

It attacked the Index for a host of methodological flaws but our basis objection was that many companies were managing in ways designed to meet the Index standards rather than to create better reputations and that they would be better off doing away with the intermediaries and communicating directly with stakeholders about their actual performance.

Far too often we seek to communicate to the public through such indices and surveys; through the media; to environmental and other groups through industry and professional associations; and, to just about everybody through people like us.

I think we really need to start stepping back and saying – we can counsel, we can interpret and we can analyse – but we are not the prime communicators.

We facilitate communication with stakeholders but ultimately the best communicator is whoever is most accountable however good a communicator they are in technical terms.

Many practitioners already do this but I am suggesting that we think about doing it within the context of building trust, by aspiring to authenticity and practicing transparency.

Some concluding thoughts

A US industry friend saw a first draft of this paper and remarked: “who’d believe in trust, authenticity and transparency advocated by a PR person?”

They thought it sounded like Groucho Marx’s quintessential PR advice: “all you need in life is honesty and sincerity and when you learn to fake them you’ve got it made”.

Paraphrase it and it comes out something like “if you can persuade people that you are an authentic type by giving them lost of seemingly relevant information they’ll get conned into thinking you are trustworthy”

Yet there are a number of business leaders who are trying to put the concepts of trust and authenticity into operation.

Ray Gilmartin of Merck has been described by the Economist as “the acceptable face of capitalism” and a possible “new role model for post-celebrity chief executives.”

Gilmartin has a modest CEOs’ package with a real set of performance hurdles.

He actually supports Merck’s founders belief that “medicine is for the people. It is not for the profits. The profits follow.”

The company has now been given a triple-A rating in ethical company ratings and gives away millions of dollars of up-to-date drugs in Third World countries.

It does good by doing good things – by being authentic to its traditions and values.

Jeffrey Garten, dean of the Yale School of Management in his new book “The Politics of Fortune: a New Agenda for Business Leaders” talks about the need for business leaders to have a heightened sense of their roles in society and by that he means ensuring that they give new meaning and reality to commitments about corporate social responsibility.

Writing in The Economist he said CEO’s need to “surround themselves not with just the usual sycophants but with men and women who are willing to challenge every decision”.

That is a challenge to people like us – to become the office whistleblower rather than the spin merchant as I said earlier.

He also wrote that we shouldn’t just write off “charisma” because of celebrity CEO failures.

He quotes a Yale colleague, Jeffrey Sonnefeld, as saying: “If a chief executive has an inner strength and a constant set of values that everyone can rely on; if his (forgive me he chose the gender characterisation not me) personality inspires because of a combination of modesty and extraordinary competence; and, if he is frequently in the trenches with his troops – if these are the kind of qualities that emerge, as opposed to the lust for self-aggrandisement, then charisma is sure a prerequisite for steering a big organisation”.

Throughout history there have been companies which have practised exemplary corporate responsibility.

The Quakers who built so many great British companies.

Hewlett-Packard when it was an eponymous company.

There are lots of examples – far more compelling than the companies which were celebrated and hyped during the 1990s.

The reality is that people like us – indeed in many cases us – were responsible for this celebration and hype.

We conned ourselves into believing that all we were doing was maximising shareholder value although we did run a few CSR programs and risk management necessities ensured that we kept an eye on the greens, the unions and the regulators as part of our issues management and monitoring strategies.

But our mantras about how society worked were the ones that got the airplay – it was our soundbites which were complicit in breeding distrust and alienation.

Building trust by aspiring to authenticity and practising transparency is a virtuous circle which breaks down that distrust and alienation.

The more you do it the more each individual element is re-inforced and the more successful you become.

The more you arrive at a new paradigm for corporate reputation and brands.

There are no neat processes and products which facilitate the implementation of these three concepts – honesty, authenticity and transparency.

Indeed , it’s not really even a new paradigm despite what I told the organisers when I gave them a title for this session.

Rather it’s about concepts and a philosophic framework which can drive attitudes and actions.

Above all else, however, they are about a need to re-discover and recapture meanings which some 20^th century communicators helped to obscure and diminish.

We need the courage to start challenging the myths and the mantras which we did so much to create.