Oral Histories

James Arnold

Interview Segments on Topic: Selecting a PR Career

James Arnold Biography

James Arnold is a management consultant who specializes in reputation management. He has served more than 200 companies of the Fortune 500, as well as large government agencies and major nonprofits. Arnold also has experience in public affairs at local and national levels. Mr. Arnold served for 18 years as a trustee of the Page Society and is accredited by PRSA.

Transcript

INTERVIEWER: Well good morning, I’m with James Arnold. It’s March 23, 2012 and we’re in New York City. Welcome Mr. Arnold. I’d like to start out with you talking a little bit about how life’s path got you to where you are today. The CEO of your own consulting group, Arnold Consulting group so just talk a little bit about that, how did you get here?

 

ARNOLD: Well thank you Cinda. Thanks a lot for inviting me to be here. I started off to be an English Literature professor, and along the way I got sidetracked. I had an assistantship—teaching assistantship—at Vanderbilt in the Graduate School of English Lit, and while I was there I began doing historical research, another love of mine, for the Hermitage, Andrew Jackson’s home on the outskirts of Nashville, and I had the good fortune to publish a number of articles. It was an exciting thing for me because I had direct access to Jackson’s papers. I could actually sit in his office; go through his notes, go through his papers, he even had a travelling liquor cabinet that we put on the coach that he was writing in and I could open that and one day I found myself sniffing his Brandy bottle to see if I could smell any Brandy in there. So, clearly I was excited by the physical proximity and the actual authenticity of looking at those documents. I found that at that time, which is before the National Endowment for the Humanities had come along and nurtured all of these kinds of things, but there was a lot of really good rich, textured things to be found and written about. So I wrote about a number of them, and as a result of that, I ended up never really completing my academic cycle. Was always going to finish that dissertation and get it done, but I was writing and doing something else that I liked. That brought me into the circle of a man named John Seigenthaler who was the editor of The Tennessean at that time, later the publisher and eventually the first editor of USA Today after Gannett bought The Tennessean. And he was a lover of history, and he read some of the things I wrote and he began to ask me to write stuff for the Sunday magazine in The Tennessean, and I would. Then I ended up having a gig on the noon show there, which was a television show on the NBC affiliate about middle Tennessee history, and I would go on and do a walkabout and tell people about things that were of interest. As a result of doing that, kind of out of the blue, in 1966 when I was still in graduate school, not yet out, I was asked to work on a gubernatorial campaign that Mr. Seigenthaler had a big interest in in Tennessee. And I did, I became an issues writer, I did a lot of issues research. Our candidate lost, but he lost in the primaries, so 1968 when Robert Kennedy decided to run for president—John Seigenthaler had been Robert Kennedy’s press secretary and he asked me if I wanted to go to Northern California and handle media in Northern California for Kennedy. I said sure. I mean I was all of 26 or 27, I had never really handled anything like that, but I thought how hard could it be? And while there, I got to know Jesse Unruh who was at that time the chairman of the Kennedy campaign for the state of California—former first speaker of the assembly, later after losing to Ronald Regan, (he) became the Treasurer of the State but was kind of a legendary character and a political figure—he was running the campaign and I ended up being attached to him. He was my boss in that part of California. So I became very involved in political activities and the Democratic Party, and of course the Kennedy campaign ended very sadly. I went back to Tennessee, kept on doing research and soon another campaign came along in 1970, same candidate for Governor, so I worked again, and we lost again. This time everybody lost. The real Al Gore as we call him—was Al Gore Jr.’s father, Al Gore Sr.—lost to a Republican from East Tennessee. Howard Baker had already been elected to the Senate, taking Estes Kefauver’s seat. My candidate for Governor, also we had in Tennessee for the first time since reconstruction a Republican Governor, and we also had two Republican United States Senators. So I was a little bit at loose ends, and Tennessee is an oddity of the states. It’s the only state where the President of the Senate of the State is also the Lieutenant Governor under the constitution. So you’re a real Senator, you have a vote, you have appointing powers and everything as the President of the Senate does in most states but, in Tennessee, you’re automatically made the Lieutenant Governor. So, I got a call one day from this man whom I barely knew who said, I’m thinking about running for Governor. And he was then the Lieutenant Governor, the highest ranking Democrat left in statewide office and he said, would you like to work for me on my staff and we can develop a plan. I did, I organized political campaigns for the Legislature, we had in 1972 an unfortunate nomination at the federal level when McGovern ran in Tennessee; George Wallace actually won the Democratic primary, so we had to organize legislative campaigns outside traditional lines of the Democratic Party. So we created an organization to do that, I ran that organization, we kept control of the legislature but the Democratic Party in the State lost a lot of seats and was pretty well decimated. In short order, I was elected President of the Young Democrats of Tennessee and I became the official, unpaid executive director of the Democratic Party. And my job in that was to put together a campaign for someone who could regain one of the Senate seats. And I did that, that man’s name was Jim Sasser. He became Senator for Tennessee shortly thereafter. My boss said to me, I don’t want to run for Governor I’ve changed my mind, I’m going to support someone else. I was getting a divorce, Jesse Unruh called me out of the blue and said we have founded a national organization whose mission is to improve State Legislature and it’s private-sector-based. It has a few legislatures involved, but most of the people come from organized labor or from Common Cause or they come from the League of Women Voters…they’re academicians, they’re newspaper people—would you like to talk to us about working for us? And I said sure why not, I’m available. Interestingly enough, they had a terrific job and now I’ll hit the road. The job was that they had received grant #3 from the Robert Wood Johnson Foundation and that grant was to create in ten states, what was called a Modeled Committee Staff Project in Health. These would be ten states that had no history of using professional staff in the legislature. So they were really dependent on the Executive Branch of the government for information, and they were states where traditionally the legislature was viewed as kind of like the board of directors and the Governor was the CEO and the CEO kind of proposed that the Legislature disposed and it was—rubber stamp is the term often used—and we picked those ten states on purpose because we wanted a demonstration that would be real. Not to go to a state like Illinois or California or New York that already had staff and a long history of having staff. But to really go to states where there was a clear agenda where there were health issues—public health issues in the state that needed to be addressed. This was a terrific program. I was hired to be its manager, I had a staff of 20 people in 10 state capitals and out of this program we passed the first HMO enabling legislation in the country. In nine of those states we passed the first EMS legislation creating statewide EMS systems, and a whole host of other very innovative—certificate of need legislation, area health education center legislation, all of those things very important at the state level. The purpose of this project of course, was to try to demonstrate to people that the legislature could do much more to fulfill its equal branch, as it were to the executive or to the judicial, in terms of making policy of the states. Legislature’s after all, the place where they grant you your birth decree and your death certificate I mean, so from the day you’re born to the day you die, states do a lot to control the quality of life for people who live there. I rose through the ranks of this organization, became its executive director and at one time was leading a staff of people who were working in 30 different states. We were working on alcoholism, drug abuse, on juvenile justice issues. Our mission was not to lobby the state but was to give them the professional tools. They selected the staff ultimately, we prequalified them, they worked for them, but they had to agree to certain process improvements and the way the legislature worked. Both the minority and the majority party had to sign the contract. They had to work as joint committees, not as separate committees you know, working across purposes with each other. They had to have citizen involvement. They had to have hearings, that way we’d be able to see all of that. I got very interested then in sort of, the cause—I guess the best way to say it—legislative improvement. That was my first big philosophical undertaking, to try to convince people that how the laws get made are as important as what laws get made because that process affects all the laws. And if one interest group can somehow or the other steamroll a legislative body to get legislation passed, two years later another interest group can steamroll it back the other way, something that will be important when I talk about one of my largest clients later on, and the National Congress. So, after a period of time, funding began to change for organizations like this one. The Congress passed much stricter tax laws, so that where we used to get a lot of soft money from the Ford Foundation or from Carnegie, as opposed to grant specific money, dried up. And in addition to that, we had a contract from Ford to try to merge the three significant membership organizations made up from the legislatures themselves. There was a leaders organization, there was a rank and file member organization, and then there was a staff organization for all fifty of the state legislatures. And our contract was to merge them all into what today is the National Conference of State Legislatures, NCSL which is the trade association for America’s 50 legislatures. Once we had finished that contract we decided, the board did—I think, using very good judgment—to go out of business. Unruh, I think, said it best he said, ‘you know we used to say that the legislatures of America were the sleeping 800lb gorilla and our job was to wake him up.’ And he said, ‘but now that I look back on it, I think the further job remaining is who’s going to civilize them now, now that they’re awake. How are we going to civilize them?’ I decided then to become a consultant. The industries that are most regulated at the state level are those that are clearly again; alcohol, tobacco, firearms and insurance. And I had developed fairly good relationships with some of the professional organizations who were involved in the regulation of insurance at the state level and one of them wanted to create—in the ten federal regions—they wanted to create a public affairs capability. They wanted to put public relations people there to work with their lobbyists in a way to shape public opinion with regard to the environment, which decisions were made about a state regulated insurance. So they gave me my first contract as an [insurance] consultant and I organized a public affairs program for the Alliance of Insurers, and as a result of doing that—it’s funny I’ve had good fortune in this way—the other two trade associations they were the stock companies, the mutual companies and then the independent companies, they all used more or less what are called independent agents to sell their insurance and those are small family businesses usually with the big eye. Their problem was that they were losing market share to what are called the direct writers, where the sales force is actually employed by the insurance carrier itself. And the reason this was important is because the marketplace in which insurance was being sold—property casualty insurance we’re speaking of specifically, which has great societal consequences. The issues of redlining for instance, grow out of property casualty insurance as does gender-based rating for automobile insurance grew out of that industry, so there were a lot of societal dimensions to what they do and to the way they do their business. They were concerned because as their market was changing, there were these undercurrents of unrest and it was sometimes important in states—out West in particular—to have to run a campaign. Somebody would put on the ballot an issue instructing the commissioner of insurance in their state to change the way automobile risks were rated, to eliminate gender bias in it at all. And so the companies would have to decide then, are we going to fight that or are we going to go along with that—what should be our decision? But what was changing it most was technology. Increasingly the companies wanted to sell more than just insurance. They wanted to be able to sell financial services. They wanted to be a financial services company. That’s why today you will find Prudential for instance, one of my earliest clients used to be Prudential Property and Casualty, today the entire company is just call Prudential Financial Services. That marketplace was changing so they wanted somebody to devise a plan that would keep the independent insurance agents strong and help them to recover market share, and I gave them a proposal to do that, which basically was to run an integrated advertising and public relations campaign across all the fifty states. I raised the funding from the carriers, about 25 million, pledged by the carriers. And then the independent agents themselves pledged another 5 million, so we had 30 million to start with. I came to New York, hired an agency, and picked the spokesperson. The spokesperson was Raymond Burr. It was his first client product that he’d ever endorsed and we used his image obviously both his Ironside and his Perry Mason in the advertising and I wrote the tagline that was used the—more than one company agent—to try to play up the credibility of the independent agents. During that time I got to know Chester Burger. I had met Chet before at a program for the insurance industry at which he was a speaker, we’d become friendly with each other and I needed a place to work while I was in New York and in fairly short order Chet reorganized my priorities. I began using his office and then he asked me, he kept saying, “What will you do when Perry Mason is through?” You can only do Perry Mason for so long. And I knew he was right about that, because what I discovered is that I have a genuine love for, I guess the pursuit of new business, the pursuit of a project, the pursuit of a challenge. I was good at building up an organization, I was good at finding grantors to support it, I’m good at recruiting people, good at selling an idea, but I wasn’t so good at just doing the routine maintenance of stuff month after month and year after year. And I knew he was right because I was becoming rather bored of it. For one thing I learned how large the ego of somebody like Raymon Burr can be and when you have to worry about whether the scotch bottles in his room are the right size or not, after a while you started thinking you know…I think there must be a more sane way to make a living than this. I had a contract, I wasn’t an employee of the organization and in time I just let the contract go and I pursued a contract with the lodging industry, who were interested in what amounted to, built around Memorial Day, national vacation week to promote travel. And so I stayed in Chet’s office and I put that program together and it was fun I just assembled the resources, got the ideas going, actually got a proclamation out of the White House through the Congress to make this National Travel Week. It’s travel month now, the month of May. And Chet and I became good friends and he began to ask me if I wanted to work on a project. Help him with a project, and I did. I learned a lot from him and I enjoyed the association a lot. In time I became a partner in his firm and as he anticipated retirement he asked me to take over as the CEO of the company and I did so and eventually I bought out his interests in the business and he left and so that would have been in 1991 when I changed the name of the company, at his insistence in fact from Chester Burger & Co. to Arnold Consulting. Since he was not going to be remaining in the business but was of council, he said he didn’t really want to have his name I guess, just existing in perpetuity in a business that he wasn’t responsible for. His very good advice to me was, and he said besides that you’re selling yourself, you shouldn’t be selling yourself using my name on the door, you really need to put your name on the door and do it that way. And that’s the story of how I got to be at least to 1991 and I’ve continued to do pretty much the same thing. We built Arnold Consulting Group up. At one time I had around 30 people, all of them senior consultants in the same way that Chet had always done it. He never wanted to bring anybody to work on a client who hadn’t had a lot of time in place and had basically been there and done that, because what he wanted to sell for a client was that we hear you, we understand what you’re dealing with, we’ve dealt with it before. We understand it and our people will help you solve your problem. His way of doing that was to always listen well to what the client said and then assemble a team of people from within the organization that had relevant experience, and then wait for the light bulb to go off, which always would. He was not big on promoting. His idea wasn’t that you get the client in the room and then you beat up on the client by how great your people are and who all you’ve done this for. He’s much more the kind of person who would say, as he always did in his proposals at the end of the proposal. But why take our word for it, here are a list of people we’ve done similar work for and while we don’t usually disclose whom our clients are, I have their permission in this case to use their names. Feel free to speak with them and ask how we did, whether or not we helped them. And he was always after us never to be self-promotional. If you have a meeting around the table to discuss a client’s needs which is usually called a request for qualifications meeting to say, how are you qualified to help me? Chet would always take the lead but he was always very controlling about not letting somebody say, ‘oh well I’ve done that before…we know how to do that...here’s who we’ve done that for.’ Chet would always say, “Well I seem to hear you saying that you have a problem about getting your senior management’s attention and, James you’ve had some experience with that haven’t you, how would you handle this?” That way he would keep you from starting to be self-aggrandizing or self-promotional which he didn’t want because he felt it was a turnoff to clients. And he put that in virtually everything he did and this all became very formative to me because it directed really the way I thought about how to do a business. In Chet’s world you began every letter with the word ‘you’. It had to be the subject of the first sentence in the letter because he wanted us always to have the ‘you’ perspective of the client or the person you were writing to. And I think rightly so. He would say, “You know if you have to write the first sentence and ‘you’ is the subject of the first sentence then you have to say something in the first sentence that will be of value to the ‘you’ that you’re writing to.” And he would say that’s what I want you to do. And all of his materials, whatever brochures that he had or anything, rather than going through the material saying, our mission…our purpose…our clients…our people, he would always say, we don’t want to say anything like that. This is not a brochure about us, this is a brochure about how we can help you so if anything it should say, ‘Clients we have served’ not ‘our clients.’ And that helped really to shape my view about what a consultant does. Now, the business I’m in and the business that Chet was in is very different from what a public relations agency or firm or an advertising agency would do. We don’t represent clients in a public forum. We’re not their advocate in a public forum. We work in fact, internal to the organization that we’re working with, with the top management of the organization to help them do the three things that management consultants do, which is to devise a strategy, to put the right structure in place, to carry out the strategy with the right systems there to support the structure and the strategy. So for us this means deciding what the problem or the problems are that the organization faces. What the best strategy is to meet that problem. Sometimes it involves changing the people, sometimes it involves realigning the people, sometimes it involves the fact that what the communications people are doing is not related to the business of the organization, that’s a little bit scary. One of the things that I noticed in working with Chet is that Chet was very good at getting people to talk about what was on their mind. And he had a very effective way of doing this with the CEO. He would always ask them to say—well, tell me a little bit about your business, how do you make your money? And he had always very carefully researched the company, he never went in anywhere without having done all of his homework. And he would have a reason for doing this and he might say, but now wasn’t there a problem with the plant that you have at Niagara Falls? —Didn’t I read once that you had a problem there? And he would get them talking about this and then he would say—now how did the PR people handle that? He would ask in that way to get them to talk more because what he wanted to do was to have them feel like first of all, this was somebody who listens and pays attention and is interested in me and what I need and what I want. And he always tried to put it into the best, most positive construct that he could and maybe the second business call I ever went on with Chet was to Firestone Tire & Rubber and Firestone had a new CEO and the CEO had come out of the automobile industry because Firestone’s base of clients were the big three in Detroit and then the U.S. government, for selling their tires. They didn’t deal with the public very much. And this was the kind of assignment Chet liked. The new CEO, a man named John Nevin, decided he wanted to get into the aftercare market with cars and that meant he wanted to buy a chain of existing auto service centers that had been owned at that time by the JCPenny Company, JCPenny wanted to get rid of them. So there were 1,700 of these service centers around, whereas the Firestones were all dealer franchises, the existing Firestone stores. And the Firestone stores just depended on Firestone promotion to drive business to them. So now suddenly he owns a chain of what amounts to retail outlets and Firestone had not been a retail company, and he’s very unhappy with the way things are going. So as he describes to us his problems, it turns out he’s a former journalist and one of his problems was, he says, nobody in this place can write. They send me stuff up here that if in Philco, when I was running Philco for Ford, he said, if somebody had sent something like that to my desk, I would have written a note across it that said ‘you’re fired’ and sent it back to them. And he said, I don’t think anybody down there can write, I also don’t think they can proof, and he said I need help here. So the first thing I’d like you to do is figure out, am I right or wrong? Can these people write and I just don’t know it or what? I don’t think they know what to expect out of me, and of course that was true. The people who were there had been in place a long time and they were terrified of the new CEO and they didn’t get any direct feedback from him. They didn’t know why he just wouldn’t use the stuff they sent him. They weren’t communicating with each other. We spent time talking with them, and then Chet came back up and he said to Mr. Nevin before we left, “Well, I think we can help you, I’ve spent some time talking to the people in your public relations shop and I think we can help you. It may result in some dislocation of resources and some changes, “If that’s alright with you, I’d like to send you a proposal.” Mr. Nevin said that’d be fine and Chet said, but let me ask you one thing before I go because I always like to find something positive. Is there anything that the public relations people do that you like, that you approve of; I’d like to know what that is. Mr. Nevins thinks about this for a minute and he finally says, you know if I’m going to be making a speech or if I’m going to have a press conference or anything, we always have a glass of water up there on the podium for me, and it doesn’t have any ice in it. And he said that’s just the way I like it. And he said that’s good. So as we were leaving Chet said, “We’re going to have a real problem with this one.” He said, I don’t know that he really knows what it is he wants out of the public relation department, he sees them as a bunch of writers and he doesn’t like the way they write and the thing he does like is that they meet his personal need to have a glass of water. Here’s a guy who doesn’t really—his expectations are much too small for what he should be getting, and he doesn’t know how to use them. And of course he was right. As we got into the case it became clear that what had happened here as we would all see quickly today is that this company had reinvented itself when it bought these 1,700 auto service centers and tried to morph them into the already existing brand. It was basically an original equipment manufacturer that suddenly had a consumer-based business but nobody had explained any of that to the communications people, nor did they know they were supposed to be doing anything any differently. Mostly they worried about three or four magazines, they sponsored the Firestone 500 and they carried car activities, golf tournaments and so on, and that’s what had been expected of them in the past. So, Mr. Nevin didn’t know how to explain his changed expectations, they didn’t know how to read the tealeaves, and it was really a case of my watching Chet sort of do his alchemy in this, which was to basically in time, propose that a special position be created for the person who had been running corporate public relations, that they recruit someone who had the background and the skills to be able to deal with the retail side of the business and they would have therefore rebuilt the staff in the organization. Well, I learned a lot just from working with him on that case, and I can say that as I continued to work with him throughout, really the 80’s, I continued to learn. But most of all I just learned again and again and again how important were the principles that he operated on, and the way he saw things functioning and focusing. So I’ve enjoyed a good experience and a good career in this and it’s given me a chance really to make a difference in some very big companies and some large organizations, by simply learning to listen, being very good at identifying problems, trusting my intuition sometimes, and always remembering, I think the most important rule of Chester Burger is that—nobody is going to pay you a lot of money to tell them what they’re doing wrong. They already know they’re doing something wrong and mostly they have bits and pieces of what it is. They know it’s not working and if you feel like your mission is to get all self-righteous and start lecturing them or telling them how wrong all of this is or how bad all of this is, you’re going to turn them off. And he said, “My goal always is to make a change; my goal is to have something be better after I’ve been involved there and I know a part of that is psychology. It’s not by making people feel inadequate or off the track as much as it is by getting to the meat of it, which is—what can we do about this? And what can we do to improve this? And making concrete suggestions.” Often in Chet’s reports and things, the recommendations would be the beginning of the report, and then what consultants called the verbatim—the excerpts, some interviews, and the findings that we got—would be almost be like an appendix at the back, because he didn’t want to begin a review of a project by digging into everything that was wrong. So, that became my guiding light as well. I would always look to say, what are we doing here that’s good but now what can be done better, what can we do to improve it?