Richard Edelman, CEO of the world’s largest PR firm ($521M in fees in 2010), last night called on the PR community to strengthen its commitment to public dialogue and transparency.

Addressing more than 300 at the annual dinner of the Institute for PR in the Yale Club, New York, Edelman said PR should be thought of as “public engagement.”

Edelman at the IPR event.
He said this reflects “the evolution of business as a positive force in society” and said it “calls for business to participate meaningfully in the continuous global conversation.”

Those who violate the new norms of communication are in for rude shocks, he said, singling out mishaps at the Bank of America and Tokyo Electric Power Co.

BofA had to reverse its $5-per-month debit card fee and TEP lost its bid for a 15% rate hike because it failed to disclose information promptly when a tsunami damaged its plants, said Edelman.
The power company had “zero credibility” because of its initial stonewalling, he added.

PR Outlets Multiply

Edelman described the increasingly complex communications lineup which now includes mainstream media; hybrids like Huffington Post; social media (Facebook, Twitter, YouTube), and owned media (company websites and applications). [Full text of the address is here.]

“Every company should be a media company,” said Edelman.

“New influencers,” he said, are the 25,000 people who provide half the world’s tweets. “They’re passionate, fast, and prolific, which makes their expertise and personal experience resonate globally,” he said.

PR Must Be in C-Suite

PR pros must operate at the same level as the general counsel, operations manager, chief marketing officer and the director of corporate strategy, he added.

Said Edelman: “The role of PR must now be greater—to create coherence out of complexity. As the stakeholder discipline, we are the profession that pays attention to the broad interests of the corporation. We belong right in the middle of the continuum of advisors, with one foot planted on the policy side and the other on the communications side.”

edelman, ovaitt
IPR CEO Frank Ovaitt with Edelman last night.
PR pros who are chief communications officers or agency executives are already doing the following, he said: “Working with leaders to catalyze employees. Co-creating products with customers. Cooperating with civil society. Interacting with communities. Informing regulators and legislators. Re-assuring investors.”

The outcomes of “public engagement” will be “increased trust, changed behavior, deeper communities and commercial success,” he said.

GE, IBM Are Examples

PR’s “most progressive practitioners” are already applying the principles of public engagement, said Edelman, citing Beth Comstock of General Electric (an Edelman client) and Jon Iwata of IBM, both of whom had addressed the Institute for PR.

He quoted Comstock as saying, “Customers wanted to do right by the environment, so we created ecomagination. Innovation comes from listening for new ideas…we’re taking the chance of integrating different pieces of the company to define value beyond marketing.”

Edelman noted that 25% of GE’s sales now come from products under the ecomagination brand.

Iwata was quoted as saying: “We thought it possible to aim for transformation that makes the world better. We can build a Smarter Planet.” Iwata led IBM in engaging with “multiple constituencies,” said Edelman.

One activity was inviting 100 mayors to brainstorm on how technology could improve municipal traffic flow and garbage collection.

J&J's Nielsen Honored

IPR gave Bill Nielsen, retired corporate VP of public affairs for Johnson & Johnson, the group's Alexander Hamilton Medal for lifetime achievement in PR.

Nielsen retired after 17 years in the top J&J post, following agency stints at Carl Byoir & Associates and Hill & Knowlton.