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Penn State Live

Lawrence G. Foster

Jack Koten at Innovation Park Interview PDF Print E-mail

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Jack Koten

June 22, 2007

Penn State University

Interviewer: Edward Block

 

1. Block:  We’re talking to Jack Koten. Jack’s a retired senior vice president public relations of the Ameritech Company which was absorbed into, what is the name, SBC which is now, if you haven’t seen the TV commercials, is now AT&T. Jack and I shared an experience 25 years ago. When the AT & T and the Justice Department of the United States settled an anti-trust suit that affectively broke up the Bell Telephone System. And which is where Ameritech came from. It was the Midwest piece of that breakup. And I wanted to talk to Jack about I saw my recollections of that were from the AT&T point of view where we were in affect had devised the announcement plan but Jack was in the telephone business side of it. And it would be interesting to me and I hope to everybody else to get his recollections and whatever lessons he may remember from that because AT&T was sort of the top of the pyramid. It was the holding company that owned all of the Bell Telephone Companies. But the fact of the matter the employees, for the most part a million of them, were immediately employees of the telephone companies and the customers were customers of the Bell Telephone Companies to AT&T so Jack saw that event, to put it politely, unfold from a different perspective than I did. And Jack talk to us about that. What happened? 

Koten:  Well I want to tell you. It’s a very good question and actually came somewhat as a shock to us even though the trial had gone longer than the negotiations had gone along for some time. But when the word was finally released that the break up of the Bell system was going to actually take place in January 1, 1984. It really came as a shock. I think to employees and particularly to employees in the operating companies. The company I was involved with at the time was Illinois Bell, which was designated one of the five Bell companies, which were going to become part of the Midwestern Company. There were seven companies operating companies that were created from what became Nine X on the east, Bell South in the south, Southwestern Bell, US Western, Pacific Bell but we were located in the heartland and in our company was composed of the operating companies in Wisconsin, Michigan, Ohio, Indiana, and Illinois. And I would say that the very first sense besides the shock of it was a sense of divorce. Like there was an enormous divorce in the family. I mean we could not believe that something like this was going to happen. AT&T had been providing cover for us for years. We felt very much a part of the Bell System and part of the Bell family. In fact the entire Bell system was regarded by most of the million employees that you cited is a large family. We were all dedicated to providing service to our customers, to meeting their needs, and to doing community service type things and it was an extraordinary work experience. So the fact that this company was going to be severed from AT&T was at the outset was was quite a shock and employees were I would say at the outset sort of dazed. They were disappointed. They were mad at the government. They were mad at the FCC. They were mad at the Justice Department. Mad at most at AT&T for allowing such how could this actually happen. I mean who in their right mind would break up the world’s largest company even though it was a monopoly but a company that people liked, that provided good service, that provided good service at low rates. It just seemed incomprehensible to those of us who were on the street, so to speak and working out in the heartlands. So when we recovered from that then the question became well what do we do about it.

 

2. Block:  What do we do now?

Koten:  And the thing that really took place was all of a sudden this creation of a will to, by God, if we are going to be separated from the Bell system that we were going to become the best of the operating companies and provide the best service and try to have the best relations that we could have with our customers and the commissions. Well that bit of bravado was much easier said than done. Because one of the first things that I wound up having the responsibility for, was picking out a name for the new company. And that I created of course as one always does a small committee made up of representatives of the five companies and a few other people and we hired our ad agency and consultants to help us with this project. And of course everybody had a different idea about what our name should be. And the key thing that became important to us was we had been Illinois Bell Company, we’d been Wisconsin Bell, Michigan Bell, Indiana Bell, Ohio Bell would we keep the name Bell as part of our new.  That’s the key, which we were entitled to do. And some of the companies did. But in our situation that became not only was it controversial but it was decided that we if we’re going to be separated, we didn’t want to have anything to do with what had gone on in the past. We were going to become a separate entity and that we were going to show the others how this we could make this work and work to our advantage. So there were those who held out for being Midwest Bell, some of course wanted to keep the Bell name called Midwest Bell. Great Lakes Bell, different combinations of names that were actually brought forth and suggested to us. But one of the things that we kind of claimed immediately we started doing research on what names would be most acceptable and forward looking because we wanted to be a forward looking company. And our research showed us that the words that signified in the telecommunications industry progress and future and being innovated words like information and technologies led the way. So we decided if we could create a name that had information and technologies in it that that would be to our advantage and then looking at the lineup of companies. One of the few suggestions I made that seemed to get universal approval immediately was that we ought to have the word American be our first. Because if we were American we would be the first in the alphabetical order of all the companies including AT&T if they chose to continue to be American Telephone & Telegraph Company. So in short order we adopted the name of American Information Technologies Company and that became our name. The trick then became if that’s the name, where all does that have to appear? Stock certificates for example, we were going to have entirely new stock issue and so all of our certificates had to be printed and made and we had to use the name and what do we pick as a symbol to put on this certificate because every certificate has a three dimensional image so to speak and after much discussion we decided to use the god mercury and we used that. Well there was controversy because mercury was and we’re in the Midwest of of course. Mercury was always half nude. And that bothered some of the people that we had. 

Block: slippery.

Koten:  Right slippery but nevertheless that all straightened out okay and we decided well what color do you want the stock certificates printed. Well you could have them brown or red or whatever. And of course our treasurer immediately said well they have to be printed in green because green signifies money so anyway that’s one of those things that happened in that area. But that just was one of the byproduct type of things that happened. Immediately we needed to develop an advertising and branding type campaign that suggested that we now no longer were Illinois Bell and Ohio Bell etc. That we were American Information Technologies. Our stock ticker symbol was going to be AIT and that became very popular immediately and we started using that in some of the employee information. But the trick was to begin to tell our employees that we were still in the business of providing customer service.  We still were regulated by the state commissions, only now that we had the FCC also providing oversight. Our playground shifted from just being Illinois or Indiana or Michigan now to Washington so we had a much bigger arena that we had to adapt to and my boss suggested that in addition now to worrying about what was going on in Springfield which had been my main government relations thing that I ought to start begin to worry about what was going on in Washington as well because we needed to have a Washington office. So as a result our lives began to change dramatically. But the, but the key thing was our, our employees. Employees were the most reluctant to give up the past and enter the future. There were the ones that wanted to yeah let’s go out and really show t hem that we can do this but more and  more there was talk about the good old days when we were part of the Bell system when we were part of Ma Bell and all of that. And there was some sense that when we started to repaint the trucks from with Illinois Bell on and having the Bell symbol on it with Ameritech is the name that there were people that were not enthusiastic about that. One of the things that I wound up having to do is come up with a graphic design for the how we were going to display the name Ameritech and then that meant choosing the colors. We had a superior [inaudible] Suttoner was the graphic designer, internationally known came up with a beautiful logo and forward looking symbol which we put on the stock certificate and used in our advertising all that. But the color that we chose to use was brown. And we picked brown because it was distinctive. It is a distinctive color. Everybody else had been used to Bell system blue or some combination of that and so we wanted to be different so we had brown. and there were people in the officer group that questioned me on why would we ever want to use a color like brown. And I had to suggest to them that there were thousands of trucks running around the country with brown. UPS and that it wasn’t that we were introducing brown as a color. And also reminded that most people’s favorite sweetness was chocolate. And chocolate was brown and so that we would be in good company. Now I have to admit those were sort of limp reasons for doing that but in the final analysis that it began to take and the people began to accept that as being this is who we are.

 

3. Block:  Transfer their allegiance. But I’m going to take you back to the human part of it, of breakup, because this is the story that I don’t know. A couple of things happened. First of all there are no longer Bell system employees. They must have wondered where did my pension go was the kind of thing that might have come up. I don’t know. Also in the terms of the breakup there was one stinker business as you may recall which was who sells or leases the telephones, because there was a dead last loser. You could not make money and there was in the Justice Department and the judge decided that was AT&T business. So you had many employees who were installers did repair work so on and so forth that were in limbo. They weren’t going to work for you anymore. They had to become AT&T employees or do something else. And of course you had customers. I remember where I was one of the television journalists entrapped me in an interview on the air by handing me three telephones which he had disconnected from his apartment he said and handed them back to me and said “Now what do I do?” So what happened to the customers and the employees in that in that it was a cultural shock for all of them at least those who cared.

Koten:  Well it was a big cultural shock for the customers about the, and confusion about the telephone instrument itself, and the connection. And we did our best with it was what I would call customer information pieces that were direct mail. We used advertising. We used letters directly to the customers trying to explain the difference but I have to admit that the job was long and arduous to get people to really understand that we provide the service up to a certain point and then the inside wiring was either on their own or that we would do it for a special fee. It was no longer for the phone instrument was whatever instrument they might have back to the central office that that had been separated. And that was a point of great dissatisfaction as far as customers were concerned. Customers were confused about who to call for what whether it was repair service and if it was repair they’d be ask. Well where is it? I don’t know where my phone. The phone is dead. I don’t whether it’s outside or inside or what. You know and that was that I’d say as hard as we tried, in all the states to overcome that.  That experience ultimately turned out to be the best teacher as far as the customers. After you’ve had a few run ins here and there, that’s a bit of a problem, the fact the customers got two bills now instead of one bill because of long distance services were provided by a different supplier, all of that is made time and time again when you go to a party or a meeting or whatever is they said the break up of the Bell system is the stupidest thing that the government has ever done. And then why did you let it happen. It was always our fault. It was like something gee we just said go ahead. Break us up. We don’t care. And time and time again that required you know kind of patience and being calm relatively speaking. To respond to some people who were quite irate. In the meantime the employees particularly the contact employees whether they were the service reps [inaudible] they had to deal with the customers just like the installers and repairmen who went out. And we equipped all of them with a little what I was going to call cheat sheets but I won’t that’s the wrong term to use here but with information pieces. Key talking points about what how to respond to these questions. And I would say that the majority of employees handled that pretty well. But as you well know not all employees are gifted with the ability to respond to people particularly irate customers. If the customer was friendly and nice usually that went pretty well. But if the employee was met head on either over the phone or face – to – face, those situations caused concern for us. We had a halo effect immediately after the breakup in ’84 and’85 where we had the Ma Bell influence carried over which we benefited from and then as customer experience multiplied, customer attitudes towards the service group providing dropped and all of that then required a regeneration of ability and of course in our company as you well know in the Bell system, the public relations department handled the customer information job. They were responsible for the advertising for the directory introduction pages everything that was explained to customers as well to employees funneled through our department. And I would have to say that our public relations people in the department understood this. They were willing to give of their time and energy and work extraordinary amounts of time to try to fix these things. But it was so pervasive that it just didn’t ever seemed to go away. Our advertising agencies and firms that we hired to help us with our customer information, they all worked diligently but it was a time factor that finally began to work in our advantage. When we would go to meet with state legislatures or and meet with the Congress. I remember meeting the representatives of various delegations in Washington, and of our congressmen and they all they are there in Washington. They had every opportunity to put their finger in the dike. But do we see much finger in the dike sort of thing. They are down there saying “I’m getting nothing but complaints back in my district about what you’re doing” like we should have actually tried to do something about it. And the fact is that it was a long pull. Now from your perspective you’re dealing with a whole different seam but we felt that we were in the field. We were in the front lines. And that the best thing that we could do is try to do our very best and not let the negative publicity that we got or comments whether it was on television, or whatever, really begin to get us down, and slowly that all began to turn around. I like to say that it was directly because of our efforts but it really was because of the efforts of really about 100,000 employees like when we were created, we were the 30th largest company I mean nobody really appreciated how big AT & T was. We came out as the 30th largest company in the United States. And it there were a lot of customers a lot of employees involved.

 

One of the things before we go to the next question and I just wanted to chip in is and thank you because this is stuff that I was to be happily involved in. But the judge gave us 18 months from the time we agreed to the settlement in order to actually operate separately. So you had your employees and our own…in limbo not the whole 18 months but a lot part of the time they many didn’t know which side of the dividing line they were going to land on or whether they would go to work for AT&T. Did they stay with Ma Bell. They’ve had angry customers. They were angry. And I think what probably did pull the whole outfit through all of this was that I, I used to say that the old Ma Bell was one third business, one third family, and one third religion. And it was a terrible shock but I believe that attitude that services our business many customers may not necessarily believe that every day, but service was our business and so we’re going to get through this mess and come out the other side. And the other thing is that it’s a high irony in terms of how government works in a democracy because it was 25 years ago more or less, that this happened and the whole darn thing has been put back together with the consent of the same Justice department. So, several hundred thousand employees went on the Bataan death march several tens of thousands of them lost their jobs and their careers altogether. Unknown amounts of marketing money was spent as you just described to explain we’re Ameritech and we’re here to serve you and it wasn’t very long that you’re AT&T again.

 

4. Block:  So I try not to dwell on that but I think you all did a really marvelous job of. I think people who may be watching this some day will not recognize what a culture shock it was and what a difficult human problem it is. Not a management problem in that sense or a technical problem but a human problem to break apart a company over –  I mean literally you closed business on Friday afternoon and you opened Monday morning as a different company, doing different kinds of things and different from what you had been doing before.  And so I think you, to me the lesson or one of the lessons is that that management may really think it’s very very smart but if you want to turn a business around if you want to move it in another direction, it starts with your employees. Because if they decide to go where you want to go, you get there. And if management decides and they don’t’ want to get there, it isn’t going to work.

Koten:  No it’s very true. It’s the employee on the street. The employee that customers come in contact with that makes your reputation, one way or the other.  A person’s attitude a customer’s attitude is shaped by the personal contact they have with either the employee performing their job or an employee who may be off the job in a social setting. Included in that group is retired employees, and just to put a little footnote on that, retired employees; everybody who is retired, just accepted the fact that they had retired from the old Bell system. The reality of it was wasn’t very long before their pension checks, their benefits, were coming from their new company and it was always some uncertainty about that aspect of it.

 

5. Block:  You mentioned one thing I was going to, I will talk about but you will understand because we were in this together. The old Ma Bell was probably the first corporation that ever did comprehensive consumer public opinion studies and from the time those studies were undertaken which was before you and I worked for the company, up until the last day, the one thing that affected a customer attitude to the company was the last contact with an employee and it is always boggled my mind that data never changed for more than 50 years and yet how many companies operate as though what the employee did on the last contact with a customer made any difference. You know it can’t be overcome with advertising. It can’t be overcome with anything else. If the employee is surly, if they screw up, if they don’t know what you know how to do the job, that affects how the customer feels about the whole darn company.

Koten: That contact also or that lasts for a long time. It doesn’t go away, that personal contact. You can see something in the newspaper or a magazine or see it on television and it will come and go out of your mind fairly quickly. But a contact that you’ve had with an employee that was disagreeable, shapes your opinion about whether you really want to do continue to do business with that organization. And as you said why all businesses that provide service to customers don’t recognize that is just absolutely amazing.

Block:  And of course the flip of it is that the best way to hate a company based on your last contact, is when you can’t talk to them. You get a menu that finally gets around to saying the estimated time of your wait is 35 minutes. If you think that doesn’t sort of permanently ruin your image, I don’t know. Anyway let’s go.

Koten:  What it does is it provides that there are great opportunities for people in the general customer information public relations world or whatever, in that context are great opportunities for improvement.

Block:  Simple.

Koten: Simple and if you talk about vocations that will eventually pay off for companies, because treating the customer right is going to make the difference, profit for profitability standpoint and general internal relations as well.

Block:  Amazing insight.

Koten: I hate to share that with you at this moment.

 

6. Block:  Let’s go to a more positive story now. You were the one person who saw the potential, the opportunity for the Arthur W. Page Society. I believe you were the second president of the Page Society. Tell me or tell us because again I was not personally much connected to that. Tell us how the Arthur Page Society came into being, as we know it today. What prompted you to persistently demand a change in the purpose of the organization and what was in your mind? What did you foresee? Because you, your idea at least, created clearly the number one membership organization in the field of public relations.

Koten: Well you’ve asked a very broad question and I have to say that you were really the inspiration for the organization being created to begin with because one of the last acts before the breakup of the Bell system was that each of the major organizations within the Bell system got together for meetings with all of their top managers, and Ed, as being the head of public relations for AT&T, brought the 25 of us who were officers of the various operating companies of the AT&T together for a final dinner with our wives.  And it was held at the Tavern on the Green in Central Park in New York City and it was actually a delightful wonderful evening, everything done in first class.  The situation could not have been warmer more conducive even though we all knew that we were ready to go off the reservation. And during the course of that evening you made comments to the effect that you gave a kind of nice talk about the fact that here assembled in this group were not only the most talented group of public relations people professionally in the country, collected all in one room but also that over the years, because of the interaction we’d all had together working together on various things, that we were really like a band of brothers. And that terminology which was borrowed from the book and then later from the movie really symbolized and characterized exactly how most of us felt. That we were part of an organization so at that particular session one of our members, actually Irv Zimmerman from Bell of PA, where we’re located now, suggested that why don’t we all get together and next year have a meeting to commend orate this, and we’ll all be together and see how everybody is doing. And he volunteered to host the that meeting in Hershey, Pennsylvania and various other people said well why don’t we create an organization and Irv volunteered to see if we couldn’t incorporate it so that we’d have some kind of a legal entity which would make it possible for us to get together. Well a year went by and, actually, Irv did all the things he said he was going to do.  He and his wife filed for incorporation papers in the state of Pennsylvania for the Arthur W. Page Society, and we had a meeting in Hershey which everybody who had worked for, you, either directly or indirectly all appeared. At that meeting there was a nominating committee composed of Bob Ehinger who was I think the chair and Frank Cain and Marilyn Laurie. I missed the opening meeting’s activities and when I walked in the morning the next day, Bob Ehinger came up to me and told me that we hade a meeting last night of the nominating committee and we decided that we want to elect you as the president of the new Page Society. And that your term would be for two years and you don’t have to worry because your vice president is going to be Jean Handley who represented Southern New England Telephone Company and she will take it after that for two years. So it won’t be really much of a job for you and we have he said Bob I’m going to be the treasurer and Frank Cain was going to be the secretary. Everything is all set. Is that okay with you? Well he made it sound so simple that you know it was very hard to say no. That’s not, I don’t want to do that; I can’t do that. So I agreed to do that. And so in reality at that meeting there was a formal business meeting, convened by Irv Zimmerman, at which I was elected as the first president of the Page Society. Irv had been the convener and the host and all that but he never ever held a title per se of being president, so that’s how I, you know, inherited that job. Well the fact is that everybody said oh great. Applause. This is duck soup. And Irv came up to me and he said “Well you know the main hallmark of all of our sessions that we had, we always have a big golf following so you got to plan next year’s meeting wherever it’s going to be at a place where we will be able to play golf and there will be tennis facilitates and all that. And then the result of it, we’ll just have a good time. Be sure and have a good reception cocktail party and all that sort of thing.” Well I got back to Chicago, I literally had begin to think about this thing and fortunately at the meeting at the Tavern on the Green the name Arthur Page had been decided upon because he was the patron saint of all of us who worked in the Bell system, and held these offices and we’d all heard about Page, knew about Page, most of us had never met him or laid eyes on him, but he seemed like the perfect symbol because all of us were influenced by his teachings and it just seemed like a good idea that we would carry on as a group in his name. Well it seemed to me in reflection right away that this was a great idea but basically all it was going to be was an alumni group and a alumni group with a limited life because eventually as people began to die which unfortunately is all of our fates, that the group would get smaller and smaller and smaller and that what’s the point of doing all of this because there would be people retiring and leaving and that sort of thing. So I convened a small group of my staff, which John McDermott was part of who you know and Steve Heinz and Sue Beryles and I said, I was elected to be the president of this organization. What should we do?

Block:  What is it? 

Koten:  And they all answered me of course right away. Who is Arthur Page? You know which was always one of those tricky questions that you have to answer. But out of that session John came up with the idea, well we need to have some kind of a newsletter type thing to be able to send to people and Steve said well anything I can do to help you and Sue said well I’ll be happy to write the newsletter, what would we put in and what would we do? Well to make a long story short we decided that that’s what we would do and that we ourselves would try to fund what the cost of that would be. I called Bob Anger, I may have called you too and I said “Well you know we can’t really do this thing and be paying all these expenses.” He said why don’t we add dues. Bob said why don’t’ we add dues. Five hundred every company puts in $500 and then everybody who works for the same company, we’ll have individual membership dues of $100. So he said that way you’ll have some money and he said I’ll take care of raising the money. So I said that’s a great idea. So I told our folks to go ahead. But then when we started to think about it. We said in order to perpetuate that Page stood for some wonderful things and what he had brought to the public relation profession was unique and he’d brought honor and distinction in that if we could do anything positive that we could honor Page by trying to disseminate what his teaching word was to other individuals and other organizations because as far as we could tell that the Bell system had been really successful because of what he had brought to AT&T. So again to make a longer story short, we decided that what we would try to do was create the best possible organization that had the highest standards like we had enjoyed when we were all part of the Bell system together and that if we were going to have a meeting some place it would be in a quality place just like where we had been accustomed to meeting. If we were going to put out a newsletter or have any kind of communication, it would be the best that we’d have. That we would have our own logo designed. We would have a distinctive image that would feature Arthur Page’s image on it. We’d have our own distinctive color which turned out to be bronze and all that started to come together. Then came the thing was that we still had this box that we had of just having Bell system people in it and we said there’s no life or future beyond this if we can’t expand and reach out into the general corporate world for people. At that point I think we had a meeting a board meeting. We got together and we reaffirmed the idea that the only people that we wanted as members basically were corporate people who were peers of ours who held jobs that were similar to ours. That we felt that it would be useful to have an academic or two in the organization to give us an academic perspective. And then we also felt at that time that suppliers of ours who were the heads of their firms would also be welcome. So with your help we got Lou Banks from the Sloan school at MIT to come on the board to represent the academic. Lou Harris, who was the probably the best known and best abled pollster of that time and probably still is for many reasons, agreed to come onboard again with your influence. We had the Northwest Air Ad Agency agreed to come and participate as part of this. And then Gene Stevenson who worked at United Carbide was the first person who was a non-Bell person who became a member. Shortly thereafter Jim Murphy who worked at Beatrice at the time just before he went to Merrill Lynch came on the Board and we started to reach out and grow. And I think you were one of the major recruiters we had of people who were non-Bell people. Eventually I should say that because we’re doing this under the auspices of the Page Center here at Penn State and about the second or third year we invited Larry Foster to join the board and he was more than willing and has been a dynamic member of the organization ever since. Jean Handley succeeded me as president for a two-year term and after her was Gerry Blatherwick who was the vice president or executive vice president down at Southwestern Bell and after that Larry became the first president who was a non-Bell person. But the whole idea was to keep it as an organization of peers, that no seconds were to be members of the organization; that we wanted a group of people who were comfortable talking to each other, who were used to dealing with similar types of problems…who had access to resources.  I mean if we needed funding for a project that we had that we could call on someone to do that. Shortly thereafter thereafter Jerry ceased being president, we moved to Larry, we decided that we needed help and you were generous in providing space for us at AT & T so we had an office. Maureen Schaeffer came onboard and all of a sudden all of the telephone and communications supplies, office equipment, and that you provided. And with that as a basis, the Page Society got off and got running but keeping the ideals at the highest level was the key element of all that and we had to say no a lot of times when people wanted to try to do something else.

 

7. Block:  You know one thing that leads me in to another related subject is that yes, Larry Foster certainly. His credibility and his, the respect that people in that peer group had for him, made it possible to recruit the kinds of members we wanted. But I think under, kind of under the skin of that was the fact that that even for people that didn’t know very much about Arthur Page people from other businesses after all he was dead for a number of years by then clearly this is a group of public relations executives that are different from what the world may think in a very important way. Because in Page was the prototype which is they were not communicators although Page himself was a good writer and communicator. He was a former journalist. But he was an advisor to management. He was a counselor. And that’s the essence for most of us, the essence of what a chief public relations officer does and I think you were wise to see that opportunity but I think one reason it caught on is that there is no other organization like that - that has a mission which is to promote the legacy of Page and the ideals that Page installed but also to bring back the notion of a what a kind of, I think the word counselor is sort of pretentious, but in the senior management of a company as well as in the non profit arena you really do need someone who is paid to  worry about the policies that the business adopts, the way it carries out the policies, its reputation, and that leads to integrity and a whole bunch of other things. So once subject.

Koten:  Let me stop you just for a minute right there because one of the things that you’ve touched on which is distinctive about the people who have positions that you and I have held can we go back to the origins of the Page Society that this is a counseling and advising role and throughout you know the early days of it, your own advice and counsel and support for what we were trying to do made a difference. And that is a hard thing to describe to people because whenever we needed to know, you know, kind of why are we here and what are we for, you were able to provide that kind of answer and support for us which we were able to communicate to others and perspective members or people who we wanted to join. Now the same thing and this is what gets me which you triggered is that that’s basically the role that we hoped to have and achieve with not only our members but for the American business can use people that have this capacity or this ability to do that very thing. At this point it’s beyond you know like things that we expect in new employees are people who have the ability to communicate to be good writers to be good persuaders of things, to be energetic and to know what’s going on around them and be perceptive.  You reach a certain point where those kinds of talents and abilities are just excepted as you move up the corporate ladder, so to speak. When you get to the senior level your ability to write and communicate and think and that sort of thing is sort of expected, but it’s what you have to offer the advice and counsel that you have to offer when the corporation is confronted with a problem or the CEO is confronted with a problem. It’s what makes the difference. And that’s basically what the Page Society is trying to do. I have to say that’s what Page why he’s such a perfect role model for all of us to have in which I think we’ve been blessed by being able to extend it through the Page Society and into the world today. And you’re putting your finger on the exact key for what a lot of American businesses need.

 

8. Block:  While you are thinking about the answer to the next question which is not only what the heck is counseling but how do you do it? I wanted to offer a Page quote or at least a paraphrase in one of his speeches to a, I don’t know whether it was a Bell audience or a mixed I mean a corporate or business audience, but he was trying to explain what this counselor does what this public chief public relations officer is supposed to be doing and so he used a metaphor. He said that job is like the officer that stands on the bridge of a very large ship, stands next to the captain who is commanding the ship and running the ship. And that officer’s job is to look out at the weather and see if there are threats out there, see traffic in the harbor, and see opportunities that and convey those to the captain who is busy you know saying you know full of steam or whatever captains say. And there needs to be somebody else there who is looking ahead at the weather and blah blah blah. I’ve thought about that from the time I read that speech, because I thought that audience probably said, what kind of mad man is this guy Page? But for those of us who have done it, it’s a pretty apt metaphor I think.

Koten: Well it’s perfect! 

Block:  But how do you do it? 

Koten:  Well

Block:  We’re not meteorologists.

Koten: No it’s a perfect metaphor for what we’re talking about because as a counselor, you need to have information that’s accurate information that you can bring to the table in order to present a case. It cannot be emotional, last minute type thinking. It needs to be rational. So you need and we talked about the value of surveys customer surveys to help run the business successfully. Well the same thing is true when you’re in this position and you’re standing next to the captain or you really are like a periscope or a radar unit that keeps looking 360 degrees around the business at all times to see what’s going on with all the various public constituencies that you deal with to see if there’s likely to be problems or where things are happening that are good, where things are going that may be a little iffy, and where things you know really need some attention. Then as a counselor it’s not your role to go in and tell the CEO we got a problem over here. You got to get that fixed. He doesn’t want to hear that. Or she doesn’t want to hear that. They want you to come in and you say we got a problem over here and here’s what I do about it. Or here’s what you might want to do about it or something of that nature. That’s what counseling is. You got to the doctor and you tell him what the problem is. You expect him to tell you well that’s this is what you do. You have to, you expect him to give you some kind of an answer and that’s what I think most of us that our jobs are like. So to me, and this is contrary and I’m in dangerous water here in a journalism school saying this, that to me to achieve this type of value within a corporation or within an organization requires that the person be a broad gauged type person with a wide range of interests. It’s nice to be able to write a news release or be able to write some ad copy or some slogans or to write a quick TV blurb or write this sort of thing and that. That’s all the stuff when you’re at this point, we all did plenty of that at one point in time in our career, But at this point what’s important is the advice and counsel that you can give based on your experience and your knowledge of what’s going on and frequently that really requires that person be well read, that they know what’s going on. I prefer personally people that have some form of a liberal arts background or at least some exposure to it so that they are used to thinking about things. that they have a degree in philosophy. That’s never bothered me because what you’re really looking for are people who can think, who have ideas, who are creative, who are innovative. You don’t want somebody who is waiting to hear what you’re going to say and writes it down and comes back to your office ten minutes later and says “Well I think this is what you ought to do.” It’s crazy. But that scene, I’ve seen that repeated dozens and dozens of times when somebody is waiting and this is even at the most senior levels waiting for the CEO to make some kind of a statement whether it’s good or bad or whatever and the minute he says somebody will say “Gee that sounds like a great idea,” may be the dumbest idea in the world, but the majority of people are not interested in challenging the CEO.

Block:  We’ll leave it at that on this question because I can tell you what happens to the senior public relations executive who says “Boss you had a great idea.” Nine times out of ten that boss knows he or she did not have a great idea is looking for a great idea and that’s probably the last conversation that’s ever going to occur between those two because the boss is going to say. “Go back and write me a press release and don’t call me, I’ll call you.”

Koten: Don’t get caught writing press releases at that level.

 

9. Block:  Jack let’s get into the flavor of the month, which is a very important flavor. An enduring flavor that sometimes gets lost from time to time. A couple of years ago you conceived of and edited a book that included chapters by prominent chief executive officers on the subject of integrity, corporate character, whatever you want to call it and I don’t want you to get out of here without talking a little bit about what did you learn from those chapters submitted by CEOs, or what had you hoped to learn and didn’t either way you want to look at the question. How do you institutionalize integrity? How do you insinuate that into a large organization?

Koten:  Well there are several answers to that question and the first thing I like to say is that building trust was written as a project of the Page Society and it was done really as a response to the headlines denoting week after week or month after month corporate corruption, dishonesty and really acts of real criminal negligence in several cases. And in a speech that Jeffrey Garten who was at that time the dean of Yale made, he said that all that American needs or business needs is for a dozen CEOs to speak up about what they’re doing in their businesses and that will begin to quiet this furor of and feeling that all American businesses are dishonest and crooked. So the Page Society took that to heart and felt that that was one of the things that we were pretty much for because the very first principle in the Page Society, which Arthur Page articulated, was tell the truth, and we believe that wholeheartedly. We subscribe to it and all of our members did that so it became apparent that this was something that we could that we could do, and that maybe we could help the reputation of American business by taking on this activity. So consequently, because I was at that time in a retired state although my wife wouldn’t necessarily agree with that, I agreed to take on the responsibility of trying to put that book together. It was done with the help of course of Dave Drobis who was then the president of the Page Society and Ron Culp and many others really contributed to helping make it happen. One of the things that became clear to me and we, as it turned out, we wound up with essays from 23 CEOs that were included in the book. Actually my idea was to have 24 which would be two dozen which was twice what Jeffrey Garten had said but incredibly at the very last minute as we were going on the press. One of the best essays and one of the best by one of the CEOs that I happen to personally like, called me up and said that our company is, he was a major shareowner in the company, he said our company is going through an enormously difficult time here. And we’re going to reorganize and I’m not sure how where I’m going to be when the reorganization is all over. And so he said I just don’t think it would be in your best interest to have me in a book that’s coming out in six months or a year from now because I’m not sure what my fate is going to be. And so I learned that this was typical of him upfront, integrity, honest, Here’s an alert. Not every CEO would have done that. Some CEOs would have tried to fly undercover because they felt that they wanted to be part of this mixed group of outstanding CEOs. I think that the thing that I learned, that there’s no question that in a major corporation and even a minor corporation, if there is such a thing, that the CEO sets the tone. If the CEO’s behavior is above board there’s a good chance that will filter down through the organization. It isn’t going to happen automatically but if there’s any question about the behavior of the CEO the employees are going to look at this with a jaundiced eye. I think one of the best examples is what happened with Boeing and Harry Stonsteiffer who was an absolutely terrific CEO but got caught up in a couple of situations which were not in the best interest of the Boing Company and he was forced to resign, which he did. His replacement at the first meeting they had of senior management team after that meeting called them all together and the chief lawyer put up on the screen photos of two actually there were two deposed senior people at Boeing and had their head shots on there and under the head shots were a whole row of numbers. And the chief general counsel said you all know that those are not social security numbers under that. And with that the attorney who was the new CEO said. And he said “That is precisely what will happen to anyone who violates our code of conduct and expectations for truthful behavior.” And he said “I want that to be understood right now and you are hearing it from me.” And that was a vivid illustration. I have several friends who work for Boeing and they told me if there was ever a message delivered that was that was really well done. Well in other other companies it was clear like in the Eaton Company with Cutler. He, right after he took over the job that he was confronted with the one of his officers in Asia. The head of their actually Asian operation, who was awarding contracts to the firm that his wife was involved with without putting them out for bids. When he learned that he was the best operating guy he had in the whole company, gone, he was fired. He then explained to the employees of the Eaton Corporation that this is not a three strikes you’re out company. He said one strike and you’re out. Those kinds of messages resonate through the corporations. Other corporations and Bill Weldon from J & J is a good example, have a long history of having a code of ethics or a code of conduct that they go over annually with all of their employees to make sure they understand so there’s a long history of t hat sort of thing. And consequently, you kind of expect them to have this and you learn that there is value in having a code of conduct or a set of basic principles but the thing is, and I would I think that you would agree with this, is that you can have all the code of conducts that you want in your corporation, but when it gets right down to it, it’s the individual who makes the difference. If the individual is raised in an environment where they are taught the difference between right and wrong, that’s likely to carry over throughout their lives and they’ll have that understanding. And no form of persuasion one way or the other will cause them to do other. There are other borderline cases that can be persuaded one way or the other but basically having a code of conduct is they know they are violating it but that doesn’t necessarily prevent them from doing it if they see in our culture today that somehow or other it’s in their personal best interest. And I think that’s one of the things that I learned again this whole sense of greed and the “me now” generation that you can have all the teachings whether they are from the Bible or the Koran or whatever about proper behavior, but in our culture today those can be easily ignored if there are people who feel that they can gain somehow personally from this. A person like Marilyn Carlson headed up the Carlson’s company said something that struck me as being in the book that was really significant. She said that this is basically a family company and she’s the generation that’s running it now. She said that if we expect and want our employees to keep this company alive and preserve it for a long we have to treat them like we’re running this business for a long term. We have to respect their rights. Their individual rights and what their needs are and if we can do that, then they will help us perpetuate this company. If we don’t, in a generation or two, she said we won’t be able to keep this company going.

 

10: Block:  I think you’ve nailed the answer, as I expected, and I will close out by just one last comment about Mr. Page. The things that we call the Page Principles, that animate the Page Center at Penn State and animate the Page Society or brought it into being is that his genius was horse sense, believe it or not. And you know Principle 1 is Tell the Truth. You know he didn’t mean sometimes. He meant if it’s convenient. White Lies are okay. I mean he could nail it and another principle that affected public relations and we can substitute the word corporate governance is 90 percent doing and 10 percent talking about it. So as you said it doesn’t make any difference how beautifully worded your code of conduct is if no one pays any attention to it and that of course was the genius of General Johnson and the Johnson & Johnson credo because it wasn’t something on the wall or on the dashboard of a company car. It’s a living document that the management not only manages by, but rates itself against those simple propositions. You know that General Johnson, just like Page put in that credo. That basically said our obligation is to our customers and to caregivers that and that’s that comes first. And basically it’s the last thing in the credo you know is if we do all of the above diligently, successfully, the shareowners will be well taken care of. He did not put the shareowners at the top. We have to optimize their income or anything like that. It was all about the customers, his employees, and the communities in which the company did business. To do right by all of them and we’ll make out fine. It’s the bottom line. So we’ll let it go at that. But keep it simple. Integrity is not something off in the ether, it’s what you do everyday.

Koten:  Right. 

Block:  and who knows what you’re doing. Thanks Jack for sitting in on this.

Koten: Well thank you very much Ed.

 

[End of interview]

 

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