Interview Segments on Topic: Trust/Credibility
Bill Margaritis is the executive VP of corporpate affairs at Hilton Worldwide. Previously, he was corporate vice president for global communications and investor relations for FedEx Corporation.
INTERVIEWER: You’ve talked about corporate culture. I wanted to find out from you, what is your role in shaping and reinforcing the corporate culture in FedEx?
MARGARITIS: I think corporate culture is arguably the most important asset that a company has. It is the connective tissue to reputation and brand. And if you have a strong culture, you will invariably have a strong reputation. The two are complementary and intertwined. Our philosophy is, you start inside before you can win outside. And particularly today in culture it’s so important because as businesses become more and more commoditized, and there is a race for intellectual capital—particularly because we’re dealing in free agent societies—people and workers are so mobile now. They’re not as loyal as they used to be. Employees can be either your best ally or advocate, or your worst enemy. All of these reasons--recruiting retention, discretionary effort, the ability to engage people and empower them to be your advocates over the Internet--to me demonstrate the fact that culture now is more important than it’s ever been. And if you can put that front and center as an executive—and we’re fortunate enough to do that here so it’s a real pleasure to work in a company that really shares this philosophy—corporate communications people can find immense opportunity to add value.
INTERVIEWER: You mentioned the idea of corporate culture and reputation being linked. I wanted to follow up on that by asking you to talk a little bit about the ethical considerations that you keep in mind when you’re thinking about communicating to the folks inside and to the external stakeholders.
MARGARITIS: Communicating inside and outside, I think you have to use the same principles and guidelines because the line of demarcation between a workplace and a marketplace is now blurred largely because of the Internet. So, what we send internally and how we communicate internally and how we inspire our folks internally, has to meet a litmus test of someone on the outside seeing that and making a judgment call on that.
INTERVIEWER: Is that a change? I wanted to ask you to talk about the changes you’ve observed in the public relations practice over the decades, is that one of them?
MARGARITIS: The most profound change I think, in the world of communications is that the old model of command and control has been turned upside down. The pyramid has been inverted. The power curve now is with people, consumers, and your employees. And certainly you factor in the historic levels of distrust that people have now in corporations; which is unfortunate, I think, because it’s only been the bad actions of a few that have kind of colored a lot of really good companies. You have to really change the way you think through your language, your actions; how transparent, candid and authentic you are. And really try to find a way to engender loyalty and pride among your people. Because if the world knows that you’re treating people with respect and you’re treating them fairly and you have a strong culture or ethos, they will give you the benefit of the doubt in a crisis. And every company faces them. They will also be more likely to purchase your product. They will also be more likely to trust you, to invest in you, to want to work there and buy your product or service. So to me, culture has both tangible and intangible benefits. The tangible benefits are that you’re able to incent people to do the absolute best they can do in whatever job they have; whether it’s a customer service agent, a pilot, or a courier in our case. So you’re trying to get optimal performance because they believe in what you’re doing. They are proud and loyal. Then the ultimate payoff really--and this is I think the holy grail with respect to culture--is finding the sweet spot of discretionary effort. That comes from the heart. That can’t be legislated. Finding a way to get to people’s hearts is a very interesting issue. You have things like reputation, the conduct of the executives, how you’re treating people. When we have cases of couriers going into burning homes to rescue babies, all these heroic efforts—that’s not something that’s in their manager guide or their job scope. It’s because they want to live up to that ideal they have of what a FedEx person should do. We have this interesting saying here. It’s actually a rallying cry. It’s called the purple promise and everyone in the company, whether you’re in Hong Kong or Boston, or any operating environment, can recite to you. The purple promise is that ‘I will make every FedEx experience outstanding whether I’m dealing with a peer to peer, or with a customer.’ And that is the rallying cry. It really is celebrated, rewarded, incented. So when you come into this company and you’re a new employee and you hear about these heroic stories; you hear about discretionary effort, you hear about the value system, you hear about the purple promise. You want to emulate that because if you don’t, then you’re likely not to fit in. And humans, really, are motivated by peer pressure and legends. I think story telling also now is really important as it relates to both communications internally and externally. Humans love stories, because you can bring a lot of emotion and meaning to something in stories. We’re now starting this amazing campaign here called ‘I am FedEx.’ It’s real people and real places telling their story about so many different aspects of their job. They’re volunteering time in a community, what they think about the company, some innovation. And it’s authentic, it’s stories, it’s something we can put over the Internet. It’s cool stuff like that; that you can do now, that you couldn’t do before. And by the way, if you think of yourself as a modern media company, rather than just as a PR machine, you start to look at the world completely differently. You start to look at managing and creating content differently, the distribution of content and what that content does. In our case we look for productivity, knowledge workers, collaborative opportunities, putting campaigns over the Internet. So being a modern media company, I think transcends the traditional role of PR in corporate communications into a whole different space.
INTERVIEWER: How have social media and the Internet impacted your work on a pragmatic level?
MARGARITIS: Well social media has had a profound impact on our business and how we communicate. It’s still a work in progress. I think we’re all learning. It’s sort of like the wild, wild west. There are tremendous benefits to it but there are also a lot of vagaries and pit falls. Clearly the most important part of social media is the importance of relationships and understanding and being sympathetic towards what people expect of you as a corporation and for you to know them at a deeper level and communicate and serve them in ways that you wouldn’t know and have done before. That means that you’ve got to change your whole customer service approach, your service levels; the kinds of choices and features that you’re giving them. The more customized you make your value proposition or your product to a consumer, the more likely you are to engender that loyalty and trust, and develop advocacy. So it’s understanding the emotive part or dealing with consumers in social media space, as well as their transactional part. I think before social media, companies tended to put more emphasis on their transactional part—the price, the quality of the product, why my soap is better or different than yours. But now, not only do you have to get your transactional parts right, you also have to have equally compelling—what I would call emotional intelligence capabilities of the corporation; and dealing on a one to one level rather than one to masses.
INTERVIEWER: The recent ethical lapses in business, CEO missteps. Failure to pay attention to perhaps safety of employees, safety of the public, etc. across the corporate landscape in the U.S. How has that impacted the public relations profession in the modern media company?
MARGARITIS: The corporate malfeasance that we have witnessed in this past decade or so and the sort of flashpoints of executive largess, whether it’s incredible packages that people get—parachutes to leave companies or a lack of integrity around pay for performance and the meltdowns of some of the companies—has created a level of distrust. That certainly has, I think, had a downstream effect on a lot of really good corporations that are doing the right thing. And what it has done is, is it has made it more difficult for companies to be effective in advocating. Whether it be policies to create and stimulate jobs or growth, or to improve our competitiveness—and you’re seeing that right now. The corporate voice in Washington, I think, is inhibited and stymied a bit by the fact that there is a populist sentiment out there that corporations can’t be trusted as much as they used to be; that executives are living large and that there is this unfair divide between them and the frontline worker. And these flashpoints, these sort of egregious examples if you will; because of the visibility and transparency that people have, because the way the news media operates now, I think have had a downstream effect on us. It has diluted the power of the voice in policy making. And history has shown that business is the locomotive for job creation and growth. So right now you have this tax reform debate. Should rates go up, should they go down? Well business is up there saying if you bring the rates down to competitive levels, vis-à-vis other countries around the world and you incent businesses to spend their capitol on equipment and software and things that create jobs and durable goods and stimulate activity, then we will find a better way out of this. Well guess what, that’s a tough sell these days. Because the political folks are trying to read the sentiment of their constituents. And if you look at the research, a lot of these constituents are saying, I don’t know if we trust corporate America anymore. They’re already living large, don’t give them any breaks. This creates a significant problem.
INTERVIEWER: And a big challenge for corporate communications.