Interview Segments on Topic: Crisis Management
Ann Barkelew is a senior counselor of Fleishman-Hillard Inc., and the retired senior partner/founding general manager of the agency's Minneapolis/St. Paul office. She has more than 35 years of top management experience with Fortune 100 and small - to mid - cap companies. She is the recipient of numerous awards and recognitions including "Public Relations Professional of the Year;" Fleishman-Hillard's Lifetime Achievement Award, a “Public Relations All-Star”, and in 2003 the Arthur W. Page Society’s Distinguished Service Award.
Interviewer: Well, you mentioned Dayton Hudson and you joined them in ’82 as vice president of corporate relations and you were with them for approximately 14 years, directing PR efforts for many business ventures and crisis situations. First, could you talk a little bit about the problems that arose in 1990 when Dayton Hudson Foundation withdrew funding from Planned Parenthood of Minnesota? Dayton Hudson was always very generous, a very generous community sponsor and they received a lot of negative publicity about this. How did you handle both the critics and the supporters of this action, and what eventually transpired?
Barkelew: It was the issue of the year and that’s what you have to understand. That it was the year of a gubernatorial election and a lot of the legislative seats were up for re-election or contested elections and it was a single-issue campaign. You were either Pro-choice or Pro-life. Planned Parenthood nationally had run a lot of ads both on the east coast and all over the country. AT & T had just gone through a shareholder demand that addressed the same things with the AT & T’s funding of Planned Parenthood programs. And so, and it was defeated at their annual meeting, but nonetheless it created a lot of attention. So there was a lot of activism going on. Now Dayton Hudson Foundation was the only part of Dayton Hudson that gave money to Planned Parenthood and it was because one of the founders of the company’s wife was very involved in it. It was a grant in Minnesota for education in the public schools. It had nothing to do with clinics or anything like that. But, and we knew from employee surveys where employees would say I’m a little uncomfortable you know that we are making this grant, or and so we had decided to do away with, to stop making the grant. And we had told them that we always, Dayton Hudson was always well known for making access grants and so you would say we are not going to fund you in three years but we are going to give you double funding for the next three years. So to tide you over and help you begin to plan what you are going to do, without the Dayton Hudson money. When we announced, when it was discovered that we were not going to continue the funding, I was in my office and I got a phone call from a young man who said “Hi, I’m Cope Moyers, as in son of Bill Moyers, and I’m an intern at the Star Tribune in the St. Paul office and I’ve just learned that your corporation is pulling its funding from Planned Parenthood. And what do you have to say about that? And I said “Can I call you back?” I said “You know I really don’t know what to say to you because I’m not aware of this.” So I called the foundation people and they said oh, we put a copy of that in the, in the interoffice mail to you. And I said “Oh you’ve got some training to do at home.” And I think because they had done the exist (access) grant that they didn’t really rush up and say this might become public. But Cope Moyers very generously gave me a couple of hours to come up with a response. And it was because it fed right into the political climate in Minnesota at the time. It became a really big issue. And, but a big issue because people had already, were already so polarized about it. So we were caught in the middle on that and so we decided that the only thing to do since we were a company that said we listen to our customers that we should find out. We should convene an impartial, bring in an impartial person and then, and do some listening to find out what it is that people really were concerned about. So we brought in Jim Shannon who had headed the General Mills Foundation for a number of years and he did, he talked to every side of the fence and a lot of people sitting on the fence and he came forward with a recommendation. So this was one of those where you can’t win and no matter what you do, because what, what the recommendation was and what the foundation decided to do was to continue to support Planned Parenthood of Minnesota but for a specific line item, a separate line item in their budget that dealt with teaching in the schools, providing materials for teaching in the schools about family planning or safe sex or whatever, and so, but nothing to do with the part that was so volatile. At that point in time we were accused of flip-flopping. And so we received 9,000 cut up credit cards in the first week. We received the ugliest mail that you can imagine. We had people in tears opening the mail. We responded but we decided we knew how to respond because we had to respond to every negative letter. And we did. We responded to every cut up credit card, to everyone who wrote, everyone who called, and over a period of about three weeks. And then we took out an ad in the New York Times and wrote an op-ed piece with a point-counterpoint kind of op-ed piece about why companies continue to give to things that may not fit what everyone thinks is the right way to do it. But I remember my CEO saying to me at that time, because Dayton Hudson was a real pioneer in giving and you know the originator of 5 percent clubs all over the nation. And I remember him saying to me. “I’ve had so many phone calls from CEOs saying is it worth it?” “Is it worth it to give?” And so the op-ed piece sort of addressed that. You know why it is important to continue to support the communities where you do business. In hindsight would we have done anything differently? I suppose so. I’ve had the foundation give me a copy of the memo first you know. But it was we survived. The company came out of it very strong. And the elections were held in Minnesota and it was the big issue. So I think it was one of the retailers always say they want to be on trend. I think we were a little bit too much on trend at that point in time.
Interviewer: Did the, did the op-ed piece really turn the tide for you?
Barkelew: I think it was one of those I don’t know that anything turned the tide. I think that what happens is that you simply have to ride some things out. You are not going to. I mean there is no way. Look at the stories in the papers today, 20 years later. It is still an issue that is a divisive issue and that part of the social agenda I don’t think it is going to change until people learn a new language.
Interviewer: Well let’s move into 1987. At that time, you directed all the PR support that really helped defeat an attempted hostile takeover at Dayton Hudson. Now Arthur Page once said that “All business in a democratic society begins with public permission and exists by public approval.” I don’t know if you actually thought about that statement but would, could that statement I mean did it affect your approach in any decisions? Did you think about any of the Page Principles and the kinds of things that Arthur Page stood for at that time when you were going through that takeover? And what was your strategy in working with the corporate lawyers, because their first instinct would be to probably not say anything, or as little as possible to the media. And that would be counter, probably to what you would be willing to do. So how did you handle that?
Barkelew: It was a very interesting time. And I was not yet a member of the Page Society. So I didn’t really know about the Page Principles. But being aware of the public and behaving like the public was the most important organization or group that is your responsibility, that’s how we did business all the time. I mean, we were a customer-oriented business. And we, that’s why we gave to the communities where we did business long before the company was a public company. There was a belief that you had to be sure the communities where you did business were healthy and so you gave back. And that was, that gave people a reason to shop in your stores, but you listened to customers, you understood what was important to them. So when we learned, the day we learned when someone was beginning to accumulate shares of our stock, now this is right after we’ve been named the best-managed corporation in America by the University of Southern California, and the general thought was that the only companies that people went after, were companies that were poorly managed or you know had some sort of issue to deal with and that someone thought they could do it better. And so this was quite a surprise. We had another thing going for us and that was we were a Minnesota incorporated company. Unlike many companies that are all incorporated in Delaware, we were incorporated in the state of Minnesota, so we were governed by Minnesota law. So as we sat down and thought to ourselves well, about, I don’t know 60 percent of our stock changed hands in the course of a couple of weeks time, and so we knew that there’s something going on and everyone is trying to track the stock but as always the most valuable source to us is the media because they have all these sources and they would call us and tell us who they had heard it was that was buying our stock. We met as a group. The CEO convened a group of his top advisors and we brought in our outside advisors. And we looked at all of our options, and we decided that the best option, because we had always been so community focused, concerned about our employees, concerned about where we did business, was not to do a knee jerk reaction kind of thing but to very thoughtfully go to the state of Minnesota and say “Let’s look at the law.” “Let’s see, we didn’t’ think it was right. The people that were identified as accumulating our stock were Greenmailers. They were people that would come in and they would they would say. They didn’t really have a lot of money but they would they could get enough money that they could buy a company and then they would come in and break it up and sell it off. Or they would convince you to pay them so much for all their shares that they would ‘greenmail’ you into getting rid of them. Well we didn’t like that. That’s not how we did business. And so we said, “let’s look at the laws.” If someone has good money and wants to buy this company, then you have some fiduciary duties that you can’t ignore, but we don’t think it’s right that you have, that you can come in and break up our company and sell it off. So we decided that’s the way we were going to go and thus began what we refer to as Seven days in June. And it was a seven-day program that started with a visit to the governor, and who famously said on television that when the CEO called and said I have to meet with you this evening. He said to his wife, “Have you overcharged at Dayton’s?” But at that point in time, we drew up ads to run in newspapers statewide, we commissioned a poll of people in Minnesota to find out if they thought that changing the law, strengthening the law, to prevent people coming in and breaking or busting up companies. We had a slogan that said, “I like Dayton Hudson whole not halved,” because the people were coming after us with halves. And so we launched a seven-day campaign to convince the people of Minnesota that the governor should call a special session and change the law to prevent people from coming in without good money. And so, that was what we learned in the survey of the people of Minnesota, was they all agreed that something should be done. But we had thought it should be because of all the money that we have given or all the contributions we had made. What we found was the people of Minnesota said, “Yes do something for them because they have this wonderful liberal return policy,” and they’ve trusted us all these years, they never asked for a receipt, or they had taken it back if we said we bought it there. So, and that was the tipping point that made it safe for the legislators to agree to have a special session. And so that was the program and it was the most covered story in the United States, because we were fighting a hostile takeover threat, because so much stock had traded hands and because these people were sort of colorful. And they owned Crown Books, which was a discount bookstore and at the time we owned B. Dalton Bookseller, which was now what you know today as Barnes & Noble. But it was probably, it was, if we could go back and do it over again, there are lots of things we would do over again and one of them was how to deal with lawyers. Because this is something in one of our meetings my CEO said, “have any of you ever done this before?” And we all said no. We’ve never been through this kind of thing before, so when you have investment bankers and lawyers and everyone telling you, you can’t say this; you can’t say that; you can’t say this. And we kept saying, but we can respond to the media. We can put out news releases, why can’t we communicate with our employees? But perfect lawyers don’t’ like paper. And so they, they would discourage that. We did a lot of presentations after it was over saying if we could do this again, what would we do differently? And the number one thing is that we would have communicated more quickly with our own employees and I think the turning point was the day that the CEO said “Just tell the lawyers and the bankers to back off, because I’m the captain of the ship, and we’re going to start calling the signals here.” And it was it was an incredible experience for a company. The leadership of a company to go through a threat to the company, not just the way you’ve always had it, but something you believe in. Now the interesting thing with the law is that it was the first time that a law was passed that said that a corporation had to pay attention to its communities where it did business and to its employees and not just to shareholders. So…
Interviewer: That’s wonderful. Let’s talk a minute about counseling. I’ve had other interviews with other Page Society members and they’ve expressed a concern over the current state of corporate public relations and the decline in the number of PR counselors to corporate CEOs. It’s been noted that individuals who have been indicted in recent waves of corporate scandals, and there’s been many of those, have not held PR position. So does that mean that those of you who held the counseling positions were ethics police guiding upper management towards making correct ethical decisions? Is the trend changing now? Are we getting back to having counselors to CEOs and having the PR person at the policy making table?
Barkelew: I don’t feel quite as discouraged about corporate PR in the last decade as some may have been. I think we have fewer companies today because there have been so many mergers and so we don’t see maybe as many people, and a lot of senior people retired and functions may have shifted or changed a little bit or been integrated in a different way. But I feel like there is still wonderful solid corporate public relations practice going on today, and there are still hundreds of people sitting at the table helping CEOs make decisions. So I guess I’m not quite as gloom and doom about that as some may be. Maybe it isn’t all being done the way it used to be, but I don’t think that’s all that bad. I do believe that the role has changed as you would expect it to because we have more things available to us. I mean, we talk about how the kinds of technology [inaudible]. Boy, you know those of us who started on a manual typewriter and then you know, thought we had died and gone to heaven when we had a self correcting Selectric where you didn’t have to or you didn’t have to use carbon paper anymore or things like that, and going from mailing news releases to faxing news releases, to the electronic transfer of something when you are disclosing information. I don’t mean that everything is news releases but for those times when you have to make public announcements, to now just going on the wire directly. I mean it’s amazing, the speed of information and I think that has changed a lot of what we do. The being at the table, you know, we used to always say oh if we could just get to the table. I wasn’t quite so sure it was all that glorious at times to be at the table, but the fact is what you want is you want to be a place where you have the ear of the CEO, and where you can because [inaudible] doing is really the CEO’s job, and so I mean, in terms of public relationships, the reputation of the corporation and so you become a partner. It isn’t just you doing it, I mean you are the CEO’s partner. So I think that our counseling role is still there. It just may not be in the same form that it used to be. It’s, but I do feel like, like CEOs are still listening a lot, at least the CEOs I know are still paying a lot of attention to what their chief communications officer or chief public relations officer is telling them now. When there isn’t, when you do have a problem and I always say to people, “Pray for a crisis,” you know, because whenever you have a crisis, then everybody says “Where are those PR people. Let’s bring them in here and let them show what they can do.” And that is a time. I mean it’s not all crises are bad. You know you can. It’s a great time to show what we can do. And to really show how we have as much business sense as, as anyone else. If we have lost that key to the door, if we’ve lost that, then I think it’s because we haven’t paid enough attention to how business is changing or we wanted to hold on to an old way of doing something when we needed to move more into an strategic counseling mindset and not just into tactics, or well, we can solve this by working with the media. You know there isn’t’ time. By the time the paper comes out or a television program goes on, you know someone’s been yelling on the, on a blog or somewhere they’ve already changed how people think about a company. So it is it’s an exciting time, but I just think it’s kind of a different time for PR people. It doesn’t fit the old model.
Interviewer: Okay, well we are really just about finished here, but is there anything else that you’d like to talk about that maybe we haven’t covered. Anything that you want to tell the next generation PR professionals?
Barkelew: I thought about that too and I put together if I can I just do it this way do you mind? Okay all right.
Barkelew: I’ve had a lot of wonderful experiences in my career. And it covered a lot of decades and many different arenas but I thought about with all the experiences I was so fortunate to have what are the lessons that I learned as a result of those that I could offer to the next generation. And the first one is; I have 12 of them here; and the first one is it is increasingly important to be a public relations generalist. So not just focused on one particular field like financial public relations or media relations. But it’s very important to be a generalist. The second lesson is that there are great opportunities in the public sector as well as in the private sector and the world of non-profit is another great opportunity for people going into public relations. The third lesson is the importance of patience as you learn and earn your place at the table. Young people today want immediacy, they want to talk to the CEO tomorrow, and I always say that the best counselors are ones that know, that know that their job is to make someone else look good. It isn’t all just how we put ourselves forward so I think that you are going to have to be patient in getting these experiences before you can really make it to the CEO’s office to give advice, even though your advice may be really good when you are so young. The fourth one is how important our function is to the success of the organizations we are part of. It is a critically important function and we must never just set idly by and let it get pushed aside. We need to speak up and find ways to work with other people. In my first PR job I kept in the schools, I kept a list of every school and I actually put a check mark beside when I’d get a story in the paper. I’d have something in a newsletter or do a project in a school, and if I saw there was some I wasn’t doing anything to help, then I’d go find something to do. So I think finding a way to integrate the function into the whole organization is really important. Doing your homework is a daily opportunity. This is not a job where you can just casually approach it; you have to read the paper; you have to read magazines; you have to look at the blogs, you have to know how the internet works and know how to make it work for you. The sixth lesson is that effective public relations leaders are the common denominator in their organizations. I really believe that we are that common denominator. We are the common ground for HR, for finance, for control, for the foundations, for any kind of function. We speak the language that everyone can understand. So to be that kind of go to person I always tell people that there are a lot of decisions made after five. And so this is not a nine to five job or an eight to five job and I found that my CEO used to drop by my office about six o’clock in the evening almost every day.; And we did a lot of decision making at that point in time that was very, very fulfilling. So, anyway, the seventh lesson is the importance of the relationship with the CEO and the rest of the top management team. Respect and credibility are earned. They are not just given, and so it is important that you that you have that you build those relationships. The eighth lesson is to be a full-fledged player in business decisions and in planning the future of the organizations means that we have to be leaders. We have to step up and demonstrate our leadership skills and be leaders and today I think that means being really authentic about being real about what we do. So we need to understand the business. We need to really be a full-fledged player. The ninth lesson is to accept the responsibilities of being a doer and not just a delegator. Most CEOs today will say I want to know who’s responsible. And so sometimes you see people at the top and they say well the CEO goes around me. Well the reason is I believe that CEOs stop seeing some people is the fact that we are the ones, that we’re not just responsible, but we also can do that kind of thing. And I think CEOs want to see us in charge and want to see us as leaders. The tenth lesson is the importance of collaboration, bringing people together. Helping them discover a common language and realizing that it’s what we can accomplish working together on projects, being the, establish a collaborative environment. The eleventh lesson is that it’s hard work. There aren’t always a lot of, not a lot of monetary benefits but there are great non-monetary benefits that come with this job. It is never boring. No two days are ever the same. It is always exciting. And it can always be fun, I think. And then my final lesson is to never stop learning. You are never too old to keep learning and look at every opportunity as a learning experience. So those are my twelve offerings for lessons based on my experience in the field.
Interviewer: Well, they are wonderful. I am so happy that you shared everything with us today. It’s been very interesting. I want to thank you so much for taking your time away from all of your friends who I hear bustling about out there and for just sitting down and talking with us. I really appreciate it.
Barkelew: Well, thank you for asking me. I’m honored.
Interviewer: Thank you very much. [end of interview]