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Penn State Live

Lawrence G. Foster

Oral History with Kurt Stocker PDF Print E-mail

Dim lights

September 13, 2009
Chicago, IL
Interviewer: Cinda Kostyak
Videographer: Karen Bryan

1.  Interviewer:   It’s September 14th. We’re in Chicago and sitting with Kurt Stocker. Thank you for spending some time with us for the second time. We had technological problems with the first interview. Why don’t we start off talking about your early career? You graduated from Marietta College with a business degree. Tell us about the career path that eventually landed you where you are right now.

Stocker:   The good news is I got into public relations late. Had I gotten in early I would have failed miserably. I came out of Marietta College with a degree in Petroleum Engineering and Business. I quickly zgrabbed a business degree because I did not want go to Saudi Arabia. I took a job with General Telephone for a short period of time as a statistician and ended up with Allstate Insurance Company in personnel; then personnel, now human relations. I fought unions in labor relations for Allstate and Sears for many years, ran employee benefits, did all of the top things you do in personnel. Then the company was hit in the face with redlining, which was a big issue at the time where banks and insurance companies were accused of drawing red lines around urban areas and not insuring or loaning money in low income areas. In fact Gail Cincotta, who eventually got some fame in bringing some real good legislation to the whole issue of Community Reinvestment Act. She and about thirty other residents of the south side of Chicago ended up in the chairman’s office at Allstate and the PR department didn’t have a clue.

They had a lot of very clever skilled ex-journalists who didn’t know what to do with it and being a gunslinger coming out of labor relations; I was co-opted to handle this issue. I spent a year in the basements of churches all over the United States talking to communities and community organizers, who obviously got somewhat popularized lately, trying to deal with the issue and we did. We ended up doing a very good conference with the entire community organizing body and Allstate Insurance Company and it sort of lead the issue out of the dark and so I got into it sort of by a back door. Had I got into it early, as I say, I would have failed because I failed in probably every English course I ever took. I can’t even spell the word grammar. Fortunately, I had a lot of people around me who could.

2.  Interviewer:   And now there’s spell check. Did you have a mentor during your early years and how did that relationship affect the development of your career?

Stocker:   I did; I had a mentor. The guy’s name was Larry Wiliford and at the time, he was the head of public relations at Allstate Insurance Company. He had a breadth of knowledge and background and helped me sort of get into that mental place that you have to be in public relations, which is very different from where I had been in labor relations, which generally was fairly secretive. I mean you’d come back from a trip and they’d say so what did you spend on your expense account? What was this eight dollars for? And you’d say don’t ask. Public relations was very different, so he helped. The true mentors I’ve had frankly were much later in life and they were chairmen that I worked for: Dick Ferris at United Airlines and Tom Thiebold at Continental Bank. They were brilliant men; way smarter than I was; willing to listen; truly understood the difference between what they thought was good and what would work. Tom Thiebold many times would look at an ad or a program and say I don’t like it, but do our customers? If our customers like it, go ahead and do it. Those were the kinds of people you had to work for in this business to grow.

3.  Interviewer:   OK, so you mentioned Continental Bank so let’s move to the years you spent there. Talk about that a little bit, and was there a major challenge that occurred during your time with the bank?

Stocker:   Well, reminiscent of what’s happening today, Continental Bank was the first large bank that failed. In fact, at the time it was the third largest bank in the United States; it failed. The federal government, sound familiar, felt that if Continental Bank failed, the entire financial industry would crash internationally. It was that big a thing. So the FDIC (Federal Deposit Insurance Corporation) simply took it over. All the stockholders were disenfranchised to the point where the last stockholder meeting that was held actually had a metal detector at the door, the old board was so afraid of what they might do. So I came in with a new team, basically after it failed. The idea being, put it back in to public hands, build the bank up, and frankly if we could find it a partner to dance with, find it a partner, and we did. We got all of the stock back in public hands. When I got there the stock was selling at $2.50 and the federal government owned it; when we left, it was selling at $55.00, and the public owned it; not a bad story. So it was an interesting time.
Probably the most interesting story out of that was when Tom Thiebold called his top staff in, and the chairman, and said every one of you has to buy stock in this bank equal to four times your annual salary. You cannot take a loan; no stock options; and if you sell it you must leave the company. There are no guarantees the stock will go up or down, but you need to commit yourself to the company. I mortgaged my house, as did others. As one fellow said as he walked out the door after that, he said it really does tend to focus your mind. It changed the culture of the bank because until that day if you had a great person working for you and some other department wanted him then you’d hold them back. After that day, you’d give him to them. It blew off the silos in an instant, and it obviously has been copied by a lot of companies since then.

4.  Interviewer:   In your career, did any of the agencies, corporations, banks, whatever, have a code of ethics or a value statement, or a mission statement? Would it be something you’d return to in a crisis?

Stocker:   Unfortunately, I’ve been quoted as saying that mission statements were developed by the plastics industry so that they could put them in small little blocks and put them on your desk.  Unfortunately, in many corporations, that’s as far as the mission statement or the values got. I guess they weren’t written for real people. They were written for consumption and then again they fit in a glass block, and I don’t think values or mission statements fit in a glass block. Most of the time, it comes from the people themselves. You look at the Arthur Page Society and the principles of the Arthur Page Society. There’s almost no principle there that talks about the corporation or the organization. It’s all personal, and it’s your personal reputation that drives a company, the reputation of the chairman, the reputation of the person that’s out selling the product, the reputation of the person who’s in United Airlines in the guts of a plane looking for a small piece of rust. Those are where your values are and they’re generally personal values. So I’m not a great fan of mission statements. I’m a great fan of values, but when they’re personal values. I’m not sure corporations can have values.

5.  Interviewer:   OK, you’ve worked extensively to restore credibility to corporate governance and the disclosure of information important to investors. Could you talk about the Disclosure Advisory Board, the New York Exchange, and the increased responsibilities that are falling on public relations specialists? Is there movement in that level of trust for the public for those entities?

Stocker:   Trust is as tough thing and the words around trust today mostly coming out of governance are transparency and disclosure. To begin with, transparency and disclosure will not create trust. Just being able to know something is happening or to open your jacket and say if you really want to know what’s coming or what’s happening come and look, is not enough. The objective has got to be someone actually understanding the risk of that product or that company or that issue, so it’s not unlike what we’ve always said in public relations. It’s not sort of passing the ball, it’s catching it. It’s not enough to just put out a press release or to tell someone something unless they understand it. So disclosure and transparency are fine, but they’re only the pass, if you will. So I think number one, as a profession, much of our profession doesn’t think that way. They think that disclosure and transparency is enough. It is clearly not enough.

The second thing that’s happening right now is the issue of corporate governance, it is such a huge thing. We’ve seen it with AIG and Lehman and everything else like that. Personally I’m quite involved in it. I’m actually a regulator today with being on the board of governors at FINRA (Financial Industry Regulatory Authority) and the New York Stock Exchange Reg. It’s not the old term back in the west, because I live in the west, of a regulator which was that after the Civil War they came around and burned farms and stole people. But there are those who might say that’s what regulators are. But the issue today for public relations is I think that much of our profession is missing this whole issue. Traditionally it has been with the investor relations people. Unfortunately, I think that most people in our profession today still think it’s over there; the issue of board governance; the financial issues around it; and I think this is a huge mistake.

What will be happening in the next year is we will have majority voting for directors. Today it’s plurality voting, which means that out of six million shareholders if my single vote is for a director and the other five million nine hundred and whatever vote withhold, which is the only other choice, the director is elected under plurality voting. Under majority voting, the majority now actually has to vote this director in. Can you imagine the embarrassment in a company if a director is not voted in? The investor relations people haven’t got the skill base or the relationships that can work that campaign, so we’re going to have majority voting, and we have more and more disclosure, we’re going to clean up the channels of communications between companies, boards of directors, and shareholders. All of this is going to happen in the next year; plus, plus, plus. And frankly most of the people in our profession don’t think that’s their job. I’m very worried.

6.  Interviewer:  What has changed in the profession? 

Stocker:   I recently went back to my old alma mater and I was asked to give a speech for founder’s day. I asked the president, by the way, had she looked at my record at the college, she had said no and I said don’t or you’ll not invite me. So it was sort of wonderful to go back in that capacity knowing that they were not my finest years. But I was asked by a lot of students, so what’s happened in fifty years because it was fifty years since I had been back there. This profession probably has changed more in the last ten years or five years than it did in the thirty or forty years before that; and when you think about it, first, obviously the whole issue of media. When I got into this business, this business was media relations. The only way you talked to your constituencies was through the media, your shareholders, your employees even, and certainly your customers. People believed what the media said. They didn’t believe what we said, but it was the whole thing, well if the media repeats it, everybody believes it. What’s happened today is people do not believe what the media say. The research is very clear; they believe the media really doesn’t understand business and comes to the table with a skewed thought about business, an opinion. They actually believe what business is saying today versus what the media says. They want the source; they don’t want people to interpret information for them. This is an enormous change. Again much of our profession understands that, but some of it doesn’t. There are still media-centric places in public relations and it’s an old school dying part of our business, truly. Social media obviously is the living part. 

The transparency we talked about; there are no secrets left. There used to be secrets. There are none; you can’t keep them; and that’s changed what we do. Diversity certainly, we’ve gone from concentration on content and people spending hours a day editing pieces of work to distribution is now the issue. Content is important, but it’s more can I get it to you? Can I get it to you in the right form and at the right time? People that came into this business used to be journalists. We hired them out of journalism schools; we hired them from newspapers. Today, they’re all coming out of business schools. If you can’t read a balance sheet, frankly you can’t do business as a PR any more. So business has changed enormously and I think some of the problems we’ve got are some of our academic programs and the people teaching them; they don’t understand. It’s changed that much, and there are some people in our profession who are in fairly important positions and don’t really realize it because they’re still back the way things used to be done. The question is what’s going to happen next; I don’t know, but it’s going to be great.

Interviewer:   It definitely will be interesting.

Stocker:   This profession is getting more and more important because of the changes. It used to be fairly easy. If I can get someone as a reporter to repeat what I had to say about my organization, my job was done. Everybody believed them; I got a pat on the back, a raise, and a decent bonus. Today it’s not that easy. First off there’s more diversity in my audience, there are more ways to get to them, they have all the information about us, and not just what I’ve just given to the media. The job is getting tougher. Therefore it’s getting way more important.

Interviewer: The Page Center has a PR firm that’s helping us get the word out about our scholars and the results of their findings and so forth, and I have been amazed with the releases, the reaction to that, the blogs, and the web sites that are responding. It’s absolutely amazing. Every day I get multiple emails. Well, it’s mentioned here and here. It’s amazing; news just travels very quickly.
Stocker:   And they can look behind it. That’s the good news, bad news. We can tell people what we’re doing or how we’re doing something and they can look behind it. They can see what’s driving it. They can actually look at the people who are driving it and understand whether they are credible or not? What’s their background? This has never happened before. Again, it makes the job more difficult, but it takes a skill base that didn’t exist ten years ago, fifteen years ago. The social media is the new hot thing. It’s the blogs, twitter, and all that stuff; and that’s fine. Some people are organizing that well and some people are not. They’re just putting it out there. If we thought reporters had an opinion when they did something, blogs and everything else, and the Internet has way more opinions and you have to deal with that.

7.  Interviewer:   So Kurt, what’s the role of the economic bottom line in ethical decisionmaking?

Stocker:   The economic bottom line obviously has great importance because if the organization doesn’t survive, all the stakeholders lose. It’s the constant question that comes up in your three stakeholder groups; your shareholders; your employees; and your customers, consumers, or clients, or whatever they happen to be. Traditionally we thought about talking to them differently because they had different needs, and the truth of the matter is that they don’t really have different needs. The truth of the matter is that if the customer doesn’t believe in us, if we don’t provide a good product to the customer and the customer doesn’t accept that product and buy that product and think we’re an ethical company, they may not buy that product, because today people are voting with their feet. They know about us. They didn’t know that before. All the shareholders want is the customers to be happy with us. All the employees want is for the customers to be happy with us because if the bottom line isn’t there, the shareholders lose, the employees lose, and the customers lose. So the bottom line is very important, but it doesn’t drive ethical decisions. That goes back I think to whether we’re talking about corporate ethics, which again I’m not sure how corporations have ethics because they’re made up of individual people with individual needs. When you look at some of the major missteps that companies have made, they have made them based on incentive plans provided by the company. The companies incented the wrong things or they didn’t have stops to prevent them from going too far. In sales, and you can look at one crisis after another, so we incense occasional bad behavior by asking someone to sell too much or to sell it in the wrong form, or to not tell us when something went wrong in production, but it comes down to individuals. So it’s a matter of personal values, I believe.

Everyone tries to define PR; somebody says so what do you do? What is PR? I come up with two definitions in all these years. The first one is local because I spent most of my life in Chicago. The Chicago police department has on the side of their vehicles To Serve and Protect.  I’ve always thought PR people should have a patch that says we produce and protect. It’s what we do. We either do things that produce revenue or we do things that protect revenue. So that’s sort of my idea if you had to put a shoulder patch on. The other one is it’s just more fun and that is, and I think Arthur Page would totally agree that the definition of PR is finding a theory to fit the facts. Not trying to spin facts or to tell somebody else, but finding context around what someone has done rightly or wrongly. I think that’s sort of what we get with Arthur Page. I think he had a good story well told. I think that’s probably the quote that I love the most from Arthur Page, because it has everything to do with the story. We’re supposed to tell it well, but frankly what it’s come to is the power and as more and more people are at the center of the action, not just at the table, but at the planning sessions of the company, it’s a matter of creating the story and then telling it. It used to be the whole idea was just sort of to tell the story well. I think this profession is moving in the right direction.

8.  Interviewer:   Now you have had some experience in the classroom with some public relations students; in the business college?
Stocker:  In the graduate school.

Interviewer:   OK, how are those students? Are they prepared to make these difficult ethical decisions that they’re going to be faced with? Do they have the tools that they need to handle different situations? You taught at only the graduate level, it that correct? No undergrad?

Stocker:   Oh, I’ve done some undergrad as well. Not everybody should come into public relations. First off many people don’t really understand what we do, and they don’t understand the ethics around it. I think the ethics are a basic part of it. Everyone in the Arthur Page Society that has been very successful at one time or another has to have bet their job. They’ve had to tell somebody no. They’ve had to tell somebody that’s the wrong thing to do and that somebody normally is a fairly important person in the organization and they know they’re putting their job on the line when they do it; and sometimes they’ve been fired for the right reasons and they’ve gone on to successes someplace else. So number one if you’re coming into this profession, I think students have to understand that it’s a risky profession in a lot of ways. One it’s a very relationship profession; you end up with a very tight relationship with the CEO and others and we see in our profession the CEO leaves and the PR person leaves.

Second, and the thing is it’s risky because you have to tell truth to power and that’s not always easy and it’s generally not easy when you have a mortgage to pay. So I think the profession, the academics aren’t necessarily explaining what we do in the context of where you’re going to end up in the profession, not where you start in it. I’ve had two experiences. Undergrad, I’ve just visited my old college and I sat down with the professors and talked with a lot of the students. One of the questions I asked one of the professors is: are you teaching financial relations to your PR students? She said no. I said well then you’re not preparing them well. If they can’t read a balance sheet, if they don’t’ know how that company makes money they can’t do their job. I got a nice email from her some weeks later saying that I’ve made a deal with the business professors and we’re doing some cross-training. So I think that undergrad, I’m not sure we’re preparing the students for what’s happening today in our business. I’m not sure it’s grown as quickly as the profession has.
For graduate, which I taught at Northwestern, we generally had students who had worked for two or three years in the profession before they came in, so they understood what was necessary. They had seen really good people at work and what they needed was more knowledge. They needed an experience transfer, if you will, which is what I was able to do. When you end up doing this for forty, fifty years, you end up making some mistakes, you do some right things, and if you understand which one was right and which one was wrong you can tell somebody else not to make the same one. I think the issue from an education standpoint is at the undergraduate level. I’m not sure it’s keeping up with the profession.

9.  Interviewer:   OK, you mentioned telling truth to power. In the year 2000, you conducted a pre-seminar survey of Page Society members and discovered that there are three levels of public relations leadership. At that time when you got the results back, you were kind of disappointed that so many members were still reporting to staff or operating officers and not to their CEOs. Could you talk about your findings and again you’re hitting this, but the current state of that counseling relationship.

Stocker:   Well, we did this survey and basically what it came out with is there were three groups, but if you kind of cut them into two, there was a group who were doing pretty well. They were reporting to the top people; they were at the table. Then there was the group that wasn’t, that sort of got up every morning and they put on a hairshirt and they whined a lot that they didn’t get any respect, and they didn’t get to report to the right people. Basically what came out of that was both groups had created their own environment because the group that was reporting up believed in this profession and they believed what we did had great value and were willing to put it on the line. They were willing to go to someone if we’re talking about produce and protect and say I can increase the business of this organization because I can increase its reputation; I can increase what people think about us, or I can protect it; or I can move that product; whatever it may be; whatever piece of business we’re talking about within the profession. The other group didn’t even really believe in itself or believe it could do that and I hate to be gross, but CEOs could smell it on them that they didn’t have that confidence. Because when you look at the results, the people that were whining that they didn’t get respect probably didn’t deserve it. Again I think it comes from confidence. We’re talking about ROI (return on investment) today in our profession. We’re talking about actually putting numbers to it. The advertising profession for years puts out an ad then they do their own research and say look, everybody loves it and look how much our sales have gone up. We can do the same thing tomorrow morning and have been doing the same thing with ROI, but there’s a group of people in this business that don’t believe that you can measure what you do.

Chairmen like that. The other thing that I believe is a phenomenon in our business, and it goes with these two groups. In the group that is reporting to CEOs, the CEOs of most companies understand what we do and don’t need for us to prove it to them. They understand intuitively that if we do this we show a good reputation and we protect the reputation, then that means money to them. It means they’re going to make money or save money or whatever. Downward in an organization there’s not the same confidence and understanding and support for what we do and they want data. If you’re reporting to the head of marketing or the CFO, they want data from the person reporting to them. They want return on investment. Now you can create that and there are academics to figure out ways to do that, but that’s really the difference. It has more to do with the difference in where you report and the people who actually end up reporting here and that’s basically what the survey said.

10.  Interviewer:   OK. You’ve received a lot of awards and honors. Can you identify which is the most important to you and tell us why?

Stocker:   Clearly the most important honor I ever got was to be in the Hall of Fame for Arthur Page. It’s your own peers telling you that not necessarily that they liked you or didn’t like you but that you did good work and that you had given something back to the profession. You had created a body of knowledge. Hands down; the Arthur Page Society. The most interesting stuff is as an old retread silver-backed PR guy, to end up on a couple of boards as I am now, at the New York Stock Exchange amazes me. I’m constantly amazed that people who have a depth of experience in these fields; people that used to be the head of the FCC (Federal Communication Commission), the presidents of colleges, there are all these other people on the board who would let an old retread in and actually listen. So it says something about the profession. I’m not sure it says much about me. I happened to be standing in the right place when some of these things happened. But there are other people in the profession that are getting that kind of recognition, which historically we never had. There weren’t a lot of PR people on boards, other than charitable boards. So I think it says something about what this profession is and where it is going, but the Arthur Page Society, how do you not think that’s pretty cool?

11.  Interviewer:   Just to clarify, you talked about the stock exchange and the board that you were on, could you just clarify what that is. You gave us an acronym.

Stocker:  What I am involved in now, late in life, is for about the last ten years I’ve run the Individual Investor’s Advisory Board at the New York Stock Exchange. Hanging around there, by the way, my first job coming out of high school was a runner on the floor of the New York Stock Exchange. Fifty years later I’m sitting in the boardroom for what is called New York Stock Exchange Regulation. It’s a separate company and it regulates the New York Stock Exchange, and I’m on that board. Then there’s a board called FINRA, which used to be NASD (National Association of Securities Dealers, Inc.), which is now the Financial Industry Regulatory Authority, which regulates all the brokerage firms in the country and now the SEC (Securities and Exchange Commission), but the fact that they’d let me go do that is great fun. It’s very rewarding and probably has a lot to do with the experiences someone in PR had because when things go wrong, we’ve been there and we have some sense of how to prevent that from happening again or how to deal with it if it happens.

Interviewer:   It’s an interesting circle you’ve gone through.

Stocker:   I have had an amazing life so far, and when I figure out what I want to do when I grow up it’s going to be pretty neat.

12.  Interviewer:   You’ve mentioned some things. Looking back over your career, for what accomplishments are you most proud? And why? 

Stocker:   The thing that I think all of us should be most proud of in a long career is what we’ve done as far as mentoring other people. I go to the Arthur Page meetings and I look around and I can count seven to ten people in that place who have worked for me who are now running their own organizations, probably doing better than I ever would with those companies, but I had something to do with them doing that. I get emails from students who, ten years ago I had in class at Northwestern, the student said something just happened and I did what you told me and it worked. There’s nothing better than that. That’s what it’s really all about. It’s the giving back and creating something for the profession through real people. There are little things that have happened in companies that you take great pride in. Once at United Airlines, for example, I had been there about a month and a half and I got a call from 20-20 who said that they’d like to do a story. At that time, there was a series of accidents and the issue was planes are falling out of the air and we’d like to come out and look at your safety session out in San Francisco where you do maintenance on how your safety works. I went in to the president and he said “We do safety, we don’t talk about it.” I said somebody has got to do this story because people are getting worried about planes and basically it was a ‘bet your job.’

So 20-20 came out and we made two arrangements with 20-20. We said you can come out to the San Francisco base, but A, you have to spend a week there. You can’t come in for a day; you’ve got to spend a week. You’ve got to really understand it and before you leave you’ve got to interview with the in-house United Airlines employee publication as to what you found and how you felt about our safety. They came out and they spent a week and it was a no brainer because the safety out there, you would see mechanics with a dental pick inside a 747 picking out a spot of rust that you couldn’t see. I mean you felt so safe after going through it. So they spent a week there. Barbara Walters comes out to do the final story who—how should I say this? Barbara Walters as a journalist is a great actor. They plugged an earphone in her ear and a guy stood in the back and told her what to ask and she would ask and one of our people would return. Well anyway, the show started with Barbara Walters sitting in an empty plane saying planes have been falling out of the sky and we’ve asked every airline if they would show is their safety and their maintenance base and everybody turned us down except United Airlines, and I must tell you I’ve never felt so safe in my life. I’d wondered whether I had a job the next day; the show went on at 9:00 at night in Chicago and I sat there in my house telling Kathleen we may not have a job tomorrow morning.  At 9:10 the phone rang and it was the head of the San Francisco customer relations, which was all the reservations that move west at night. He said our phones have lit up; he said everyone is changing their reservations at any cost from any airline to ours. I hung up the phone and said—we have a job. But again it was a good story well told, but you occasionally have to take a deep breath and be able to tell it. But as one little thing goes, that was kind of cool.

13.  Interviewer:   You mentioned the importance of mentoring and it’s just very refreshing because I hear that from the Page Society members a lot, that giving back is extremely important to them. That’s so good to hear.

Stocker:   This profession grows on the backs of the people who have done it before, done it right. We’re not a profession that has, like lawyers, I hate to bring them up, but who have a lot of books and that’s your knowledge. Your base of knowledge is what’s coming out of something that someone did yesterday or something that someone is going to do tomorrow. It’s on the backs of these professionals that this profession grows and the people within it grow.
Interviewer:   OK. Is there anything else you’d like to talk about that we haven’t covered?

Stocker:   Give me a second. The famous journalistic question: what haven’t I asked you?

Interviewer:   Yes, right.

Stocker:   It produces the most interesting answers in the whole world, right? I can’t think of much that you haven’t asked. I think you covered everything that I’d want to pass on.

Interviewer:   Well, it’s good to hear how you value the Page Society because although we are not directly affiliated, we’re associated somewhat with the Page Society and if it wouldn’t have been for the Ed Blocks, Larry Fosters, and Jack Kotens, the Page Center at Penn State would not be in existence. So it’s always good to hear and it’s wonderful to talk with everybody from the Society so thank you so much for spending some time with us.  I really appreciate it.

Stocker:   Thank you for asking.

Interviewer: Especially to do it for the second time.

Stocker:   As I said before, I’ve had an amazing life and the fact that anybody cares is just wonderful. I mean where else can you so this? Somebody actually says gee we actually think you have something important to say and we’re going to record it? This is great. Thank you very much.


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