Dick Martin opened his presentation with a nod to the Cardinals, sharing an anecdote about his 1970 interview with AT&T. The interviewer, a former Newark News city editor, noticed Martin had attended Boston University and asked him about the Bruins, starting a two-year relationship based on sports. The relationship ended when his wife expressed surprise at a company party, saying, "You don't follow sports." Fifteen years later, when Martin was doing the hiring, an applicant who had done her homework asked him about the philosophy of PR (he was a philosophy minor), and he joked he would have rather discussed the Bruins.

What would ancient philosophers say about PR?

According to Martin, a career in PR almost necessarily has to start in rhetoric. However, it must move beyond stringing words together to giving clients strategic advice. In considering AT&T, Martin said he was not offended by the ideas that AT&T made mistakes, AT&T made PR mistakes, or that the PR department was responsible for some of the mistakes. What offends Martin is a reference to PR professionals as "flak." He said PR professionals are much better than the spin doctors with whom we are often compared. Martin noted Jack O'Dwyer's assertion that we should be called marketing communicators instead of PR professionals. However, he said AT&T's problems did not stem from either marketing or PR - even at the lowest point, positive perceptions of the company were 10 times more prevalent than negative.

AT&T was mugged.

Martin then presented the circumstantial facts that led to AT&T's demise. In 1984, AT&T was forced to spin off local telephone companies, creating the "Baby Bells." Competition brought the cost of long distance down, but even though AT&T had a smaller slice of the pie, people were talking more, so the pie was bigger. In 1996, Congress gave the Baby Bells the roadmap to do long distance, and AT&T responded by spending billions on cable and wireless. AT&T was the first company to introduce a bucket calling plan in 1998. On the down side, people started using their cell phones for long distance instead of land lines, affecting the company's central business line. At the same time, AT&T's revenues were declining, while those of its main competitor - MCI - were rising. AT&T had to sell its recent acquisitions and go back to just long distance. What no one knew at the time was that MCI was committing accounting fraud. Martin asserts that if MCI had been reporting correctly, AT&T may not have had to sell off its valuable cable and wireless lines of business. He said, "It was not a failure of strategy or execution - the company was mugged."

Character comes from what you do.

While MCI's illegal accounting practices were an issue, Martin said there was another underlying problem. In order to illustrate this problem, he shared the story of "golden boy," a 40-foot statue that was placed atop the original AT&T building in 1912. When the company moved in the 1970s, it decided to bring golden boy along. The company quickly learned he needed to be re-gilded and also that he was anatomically correct for his size. Not wanting to offend anyone, AT&T decided to geld golden boy as well. Martin used this as a metaphor for corporate communications - companies are constantly trying to gild their reputations, while business writers and the media want to geld them. He noted a trend in media to pursue manufactured events rather than public discourse. On the corporate side, the error lies in sacrificing long-term value to meet short-term earnings targets. He offered the following example for AT&T. In January 1996, AT&T issued a release patently designed to impress Wall Street - the company was laying off 40,000 people. The release increased the market cap by $6 billion. Media coverage was heavy but neutral. However, Pat Buchanan, who was on the campaign trail, used AT&T as an example, criticizing the company for laying off so many people while CEO Bob Allen was making $5 million per year and made an additional $5 million off of the market cap increase. Allen immediately became a symbol of evil corporate America. This incident demonstrated that emotions are just as powerful as facts in any news. AT&T learned from its mistakes. The next time AT&T had layoffs, the company froze executive salaries and was praised for its actions. Martin concluded that you can advertise and publicize a personality, but character comes from what you do. AT&T focused on the stock market instead of on its customers, losing sight of its mission.

Questions

How do you fight internal battles with people who believe they are experts without alienating them?

Martin responded that CEOs are looking for PR professionals with judgment, creativity and integrity. We should make it a point to really understand how the business works. CEOs will respect those who have the same overall goals for the company that they do. PR professionals must have the integrity to speak out even at high personal cost.

What advice do you have for someone early in his or her career to move into a position like you had at AT&T?

Again, know the company's business inside and out.

Dick Martin - Backgrounder

_{Reporter - Michelle Mason, PRSA-St. Louis Board Member}