Dim lights

INTERNATIONAL / GLOBAL

BOLTON: And how has the firm evolved under your leadership in the last, over a dozen years?

EDELMAN: Well, I think first we’ve really had quite significant growth. We’ve gone from about a $100 million firm when I took over to just about, we finished this last year Roger, at $487 million at Edelman. And if you add in Zeno, our second firm, it’s a $500 million business. Second, I think we’ve been very early in digital and that’s really been a boom for the firm. In fact, somewhere between 10-15% of our fees are directly related to money that we would never otherwise have had that would have gone to advertising or other firms. And then third, we’ve really built out our global network. We are seriously in 52 cities now and we’re in every one of the BRICs, we are substantial in the Middle East and Indonesia and so we’ve stretched ourselves substantially.

BOLTON: Advertising is clearly a tact that you described earlier, and one that is less effective without the PR planning strip that you just described. Marketing, arguably, is a strategic discipline and function within corporations. Do you see a trend to convergence of marketing and corporate communications or corporate public relations, and if so, driven at least in part by the digital realities?

EDELMAN: But it’s also driven by a change in expectation of business, Roger. I think you see that it’s now business in society. The whole theory of Milton Friedman, which is that the sole responsibility of business is to make profit, is now being eclipsed by Indra Nooyi for instance of PepsiCo, taking about Performance with Purpose. It’s both. So business thinks of itself in a stakeholder mentality instead of just a shareholder. So the reaction by companies is very interesting where you see a chief communications officer, a Jon Iwata, moving also now to take on marketing. So he comes not out of, in a sense of brand management, as much as he does with reputation management. So he’s put the two together and I think the program IBM does on Smarter Planet is brilliant. Because it puts IBM at tables where they are convener they are intellectual capital creator and they are not just selling boxes and software. It’s a whole other way of selling. And then you have a person like Leslie Dach to Wal-Mart who’s in the top 7 of people in the firm who is pushing Wal-Mart to be the change agent in environment through supply chain leverage and I think that’s again, indicative of this merging of brand and corporate reputation.

BOLTON: What do you see as kind of current trends in public relations agencies and relationships with corporate entities? Are your clients more the marketing people or the corporate communications people or both, and how is that relationship evolving and working?

EDELMAN: Edelman’s always had strong relationships with the marketing side of the house. So, that we are tied to the CMO and it is nothing new for us. What is new is that the PR executive, the Roger Bolton of Aetna days, wants a firm to be involved as counseling on global issues, on NGOs, on areas employee engagement, on things that may be outside of core strength of classic PR director. And wants particularly the global aspect to be on call so when CEO visits China, what’s going to be expected; how to do, what to do. And what bases to have made sure that you’ve covered which think tanks to have seen, what intellectual capital should we have developed, which speeches, a lot of that used to be solely internal and I see more of that now being, in a sense, a shared responsibility between the PR firm and the corporate center. 

BOLTON: Strategic partnership?

EDELMAN: It’s much more a strategic partnership, that’s right. I use the agency only for arms and legs. Give me your thinking, give me your connections, give me your wisdom, what do you see out there and, that’s really rewarding. It’s much better than when I started in the biz. Absolutely.

BOLTON: 1952. 1997 I think. We’re now in 2010. Imagine we’re in 2025. Can you take a stab at what the world might look like as it continues to evolve? What do you see?

EDELMAN: I think some of this is straightforward which is that the power of India, China, Brazil, maybe Russia, will be enhanced. You’ll see a continued shift. I think the FT (Financial Times) 500 ten years ago, had only 25 companies from developing nations; as of this year it’s 125 of the 500, maybe it’s half by then or maybe it’s close to half. So we have to move our mentality to be able to hub business from Sao Paulo or Beijing, not just service business, it’s a big change. Second, we are absolutely going to have to make digital core to how people practice our business. It can’t be called on Edelman Digital, you know. That’s nice but everyone has to appreciate the impact of having a Twitter embassy or other techniques that are necessary for connecting corporations in digital world. Third, I think the battle is still being decided about whether it’s business in society or whether it’s just business for shareholders, and the extent of relationship between business and government and how this is going to play out. Whether this is shortwave amplitude, where there’s heavy government or whether it’s long wave, as in the 1930s. I can’t tell you that…it seems that the populace doesn’t like it, to have so much government. They see business as a wealth creator. But if that’s the case, business is going to have to re-earn their trust and they’re going to have to behave differently. And whether it’s issues of compensation or giving back to community, how they feel philanthropically or products that are better for…I think that’s probably the way it will go. Business having the leeway but you know, higher expectation context.

BOLTON: You’ve been at this for a while now.

EDELMAN: Yeah.

BOLTON: Can you reflect on biggest challenges or lessons you faced over your career?

EDELMAN: I think that the first thing is to realize that even if I made a mistake, I’d rather act and correct than temporize. And I’ve made some hiring mistakes, I’ve made some acquisitions that probably weren’t the best but you know, you’re going to get up the next day, put your shorts on and get back in the ring. Some element of stamina or just determination, that’s really essential if you’re going to be a senior executive. You’ve got to be able to take the punch, because they’re going to come, and you don’t know when they’re going to come. I think second is, I really learned to be a much more global exec. It’s not just because I travel 90 or 100 days a year, it’s because I’m thinking about that all the time…that NGO risk might arguably come from UK first and how and having met some of them, I internalize that now. I don’t think I’m anywhere near as smart as I need to be about nationalism in China, for example with US brands, but you have to constantly be improving yourself in this learning thing. And then, it’s also a challenge when you take over your dad’s company, let’s be real. And I had several people who were longtime partners of his kind of thinking, what did he do here, naming this guy to run the firm? And I never had that as sort of a chip on my shoulder I just did what I did but I think it’s a special burden, in a way, to have the family name on the door but, it’s a special advantage too. If you’re going to get yelled at, it’s going to be by your dad who ultimately has an interest in your succeeding as opposed to some German who ultimately wants to stab you in the back and bring in one of his henchmen or something.