Richard Edelman Can’t Imagine Why People Don’t Like CEOs

Life is tough for CEOs like Richard Edelman. Edelman is the head of the biggest PR firm in the country - Edelman Public Relations - which represents the biggest company in the world - Wal-Mart - and life just ain’t what it used to be. In this interview with the Dallas Morning News, Edelman reminisces about the good ol’ days when CEOs could lie and get away with it. Life was so sweet! Too bad they have to deal with all this accountability nonsense nowadays.

According to a new study from his company, Edelman explains, trust for corporate CEOs is at an all time low. We can’t imagine that a string of broken promises, unfulfilled initiatives or an inhuman lack of care for employees has been helping Lee Scott in that department.

Business gains trust but CEOs are losing it [Dallas Morning News (Texas)]

Richard Edelman makes it his practice to gauge how trusting we are.

And when it comes to our faith in the business world and its leaders, the 53-year-old public relations executive has discovered a curious disconnect.

“Trust in business as a sector is rising,” says the president and chief executive of Edelman, the world’s largest independent public relations firm. “But trust in chief executives is at an all-time low – as low as it was in 2002 with all the Enron and WorldCom scandals.”

Companies are getting credit for social initiatives such as efforts to stem global warming or pay Third World workers a living wage, but the credit isn’t extending to the top executives, he says. There are still too many times when CEOs let us down with half-truths, missteps or bald-faced lies.

“In the old days, it was OK to fudge,” Mr. Edelman says. “But today you get outed. And when you get outed, its impact is awful.”

Edelman is a PR giant owned primarily by the Edelman family. It just released its ninth annual “trust barometer,” a survey of affluent, college-educated people around the globe with an interest in the media, business news and political affairs.

Mr. Edelman, who works in the firm’s Manhattan office, was in Dallas to share insights with clients about how they should deal with employees, investors, customers and the general public in this new age of multimediums.

“It’s clear that when it comes to traditional authority figures – whether they’re chief executives or heads of state – people trust them less,” says Mr. Edelman. “Employees are the new credible source of information. We have data that shows an employee blog is five times more credible than a CEO blog – and I say this as a CEO blogger.”

The informed person now has seven sources of daily media, he says. It used to be one or two. And this is profoundly reshaping the public relations industry that he’s been a part of for three decades.

Spin doctors have to become truth seekers, he says. “The PR business was always known as a megaphone business, right? We can no longer deflect and defend. That’s a bankrupt policy.”

Simply trotting out the CEO to apologize won’t cut it, he says, pointing to his recent aggravation with American Airlines. Flight cancellations last week caused him to miss, among other things, an important client meeting with Wal-Mart Stores Inc. in Bentonville, Ark.

“I’d like to have known before I went to LaGuardia that my flight had been canceled and more about the context of why,” he says. “Their message eventually got out. ‘We’re back, and our planes are safe.’ The CEO expressed contrition, and that got through to me – finally.”

For the first time, the Edelman survey on trust and credibility added opinions of 25- to 34-year-olds to its previous polling of 35- to 64-year-olds.

Age matters, but not the way Mr. Edelman expected. The younger crowd is surprisingly more pro-business than the older crowd.

“They’re less xenophobic. They’re more open to other views. They’re manic about getting multiple sources of information,” Mr. Edelman says. “Different age groups rely on different news sources. That’s fairly obvious. But the No. 2 source of information about companies among 25-to-35 opinion leaders is Wikipedia. That’s amazing.”

So if a company sees a mistake on Wikipedia, it should fix it in a hurry, he says. And it needs to make sure it’s adding its message to this online source.

In fact, Mr. Edelman says, every company needs to be its own news organization. “If there’s a problem, people go to the company’s Web site to see what’s up. Companies have to tell their own story on their own site in real time.”

Employee appeal

But more important than anything else, a company has to get employees on board.

“Corporations used to talk to the employees last,” he says. “Today you better talk to them first, because they’re going to talk to a lot of people horizontally – peer-to-peer.”

And their voice is often more credible with their circle of influence than the corporate line.

So how do you keep from sounding like you’re filling employees’ heads with propaganda?

It begins with telling the truth, he says.

“The biggest mistake is when companies think they can keep things quiet and skate,” Mr. Edelman says. “It’s always better to out yourself: ‘We have a problem. Here’s how it happened. Here’s what we’re doing to fix it.’ Show the proper amount of contrition. Fix it and move on.”

Posted by Alex Goldschmidt on Thursday, April 17, 2008