21. Public Relations Today and the Outlook for the Future

Page Speech from December, 1937


Page reassures his audience that the company’s good reputation and honest business dealings provide reason for the company to welcome a recent investigation by the FCC. At the time of the speech the findings of the investigation were pending.

This speech highlights a recent investigation by the Federal Communications Commission on the communications industry. Page explains the company’s welcoming response to the investigation and the confidence he and Mr. Gifford have in the company’s honest business dealings. Because the Bell System operates with both integrity and regard for the public welfare he sees no need to worry about the outcome. The investigation is completed and will be reported to Congress.

Key topics:

  • Company philosophy – Dallas Speech
  • Reputation
  • Regulation – Industry/Government
  • Federal Communications Commission (FCC)
  • Finances – financial gain/loss
  • Customer Service – good service


Page Principles:

  • Tell the truth
  • Listen to the customer
  • Remain calm, patient and good-humored
  • Realize a company’s true character is expressed by its people

Public Relations Course

New York Telephone Company
December 13, 1937

That which we call public relations may seem to some a mysterious cure for what ails us. In spite of its mystery, I have noticed in recent years a very considerable increase in the number of businesses that desire to take such a cure. In the last four or five years, the number of people from other businesses who have come in to talk to us about public relations, asking what it is, how it is done, what it is good for, what it will do, and other similar questions—have doubled or trebled. And books and magazine articles on the subject appear with greater and greater frequency. The question that is most often asked us is, “How is it that in the Bell System, all the operating people have certain kinds of ideas and carry out certain policies?” The answer to that is, of course, the general training and the general interest of our employees.

A review of a recent book had in it something that interested me. The book was about Governor Hutchinson, British governor of Massachusetts just before the Revolution. The review stated that the people of Massachusetts had convicted Governor Hutchinson of treason against the state which they anticipated forming.

That process of reform, so strikingly stated in the review, has been exactly the process of reform that the American people have continued to practice on both individuals and business ever since. Whenever the public has an idea that they would like to change a large business and make it perform in a certain way, the public convicts the business of not having performed that way before it was told. The only safeguard for those of us in a large business, therefore, is to keep a pretty careful watch on the way people’s minds are running, figure out the coming public attitudes, what the public decisions are likely to be and then be ready for them. We must try not to be in the position of being convicted of treason. We must obey the rules even before they are passed.

The Bell System has more or less of a license to run the telephone business in the United States, or a large part of the United States, but this license is a constantly changing one. There is the Constitution and under it the Bell System enjoys a lot of legal rights, but if we depend en those, we are likely to get convicted like the governor. He was within the law, but the law was about to be changed. We are somewhat in the same fix. Anybody who does business with the public is in a public business and has got to take account of the way the public wants the business done.

We have been very fortunate in the Bell System in having a high command that saw pretty well where the public’s mind was going. Mr. Vail was about the first person to realize that regulation was necessary, and he was there before the public began forcing him to be there. Mr. Gifford’s Dallas policy is just the same kind of thing. Another example was the decision that this business was a communications business and not a utility. This saved us a great deal of trouble –perhaps being included in the “death sentence.”

The job of the Bell System fundamentally is to give the public more and better service, and cheaper rates if it can. If it can give more for the same money, this is equivalent to giving the same thing for less money. It may seem like a contradiction that the system gives customers more for their money, and at the same time gives the employees more pay for less work time. Yet that is actually the particular thing, which an institution like the Bell System is supposed to do. If you will look at the System’s history you will see it has done this.

At the same time, the System has given the people who own the business or lent money to it about the same rate of return for thirty or forty years. That is, they have had very considerable security with almost the same returns. Of the three groups, the consumers have had an increasing return, the employees have had an increasing return, and the investor has had the same return plus security.

Now this is the job of management. Management in the Bell System is everybody. In a recent speech, Mr. Gifford said that workers and management are largely the same people in America, only in different stages in their careers. I think that is true of America in general terms, but it is particularly true of the Bell System. Management ordinarily means the people who decide things and the people who represent the company. That means practically everybody in the business, because all Bell System employees, from the President down, meet the public, decide something when they meet the public, and represent the company.

We have very few people who have no decisions of their own to make when they are dealing with the public. It is particularly true of the public relations of the Bell System that they are in the hands of everybody in the System.

That being the general picture, where do we stand at present this is a pretty fair time to take a look because we have been passing through a depression and very hard times, times that try men’s souls, not to speak of their temper. Perhaps as good a way to judge where we stand is to take the FCC investigation as a test.

In 1933, when Mr. Cooley was good enough to ask me to come over here to address a similar group, I said something about investigations. This was before the FCC was established. This was the way the picture appeared then:

“Having implicit faith in what the Bell System has done and what it is trying to do, there seems to me no particular cause to be disturbed about the fact that the government is going to survey the field in which we operate or that it may desire to reorganize the regulatory bodies and even change their functions so that we report to a new commission. Personally, I should hope that if any change is made regulation would not become so centralized as to tend to centralize telephone operation. The degree to which the Bell System has been decentralized with responsibility in the smaller units, has been a great help in allowing these units to function in a more pleasing manner to the public.”

“The service rendered in New York City and the service rendered in a small town in Missouri are not the same things. You have two different kinds of public. Decentralized operation has enabled us to meet these conditions. The centralization of regulation would not make our technical operation more difficult but it would make it more difficult for us to render a pleasing service and for that reason I should hope that we would not have such centralization. In this I expect I am speaking ahead of the proper time, for no one as yet has officially suggested more centralization of regulation.”

That was four years ago and I still think this is the only cloud that would particularly worry us. I still hope that centralization will not occur. In speaking of this last fall before another similar group, I said:

“I am asked a great many questions about what effect the Securities and Exchange Commission has on us and the Federal Communications Commission and the Social Security Act and many other new attending circumstances of our life. They are all-important, but remember they are just as much subject to the changing scenery of public pleasure as we are. They are signs of it exactly as our changing activities are signs of it. They are important symbols, but after all they are symbols.”

“The fundamental thing is the public desire, and whatever these institutions are now you may be sure they will be different two years hence, just as we will be. Our job is to adapt ourselves to this part of the changing scene now and in the future and to all the other parts of the changing scene. Our job is to run the communication business for the American people in whatever state of mind and money they happen to be at the time, and be on hand at the next stop ready with whatever they want when they get there.”

I am not sure that there has not been considerable change in the public mind on several subjects during the last six or eight months, and if so the direction of our relations with the FCC may be modified by this changing state of mind of the public.

Let’s go back and look at the history of what happened. At the beginning Mr. Gifford issued a statement and said in effect, “We welcome the investigation. There are no skeletons in our closet.” That was really one of the greatest compliments that the head of any business ever paid to the people in it. What he said was that his intentions had been to have the business in good shape, and that he was willing to risk his good reputation and go on the stand as a witness and testify to his confidence in what all of the employees had done. In a decentralized business that is a vote of confidence in a lot of people.

The investigators started out to see if somebody in the Bell System had committed some immoral act, had deviated from complete honesty. Mr. Becker was looking for a scandal, even if it were only a little one. But he had no success in that. It does not seem to me unreasonable that a government should every once in awhile investigate in detail an institution which serves one of the great services of the nation. However, to do it on an ex parte basis at a time when there were more or less head hunting expeditions going on in other fields is not the most constructive way to do it. It is however the most severe test of the Bell System’s public reputation. Now, as a matter of fact, if the Bell system had not enjoyed a good public reputation it would have been investigated early in the investigating craze. If we had been a shining mark, it would have started with us before it did. The Bell System was almost a “natural” to start on, being the largest business in the United States and a monopoly at the same time. The fact that the investigation started later as an indication that the System was not a shining mark for attack but that it had a good reputation. Moreover as the investigation went along, the very little interest that the public took in the various investigation reports was an indication that the general public mind held the Bell System in reasonable esteem, and that good fortune has followed us up to the present.

The investigation itself is now completed; the public has taken comparatively little interest in it; and next the FCC will make a report to Congress. Now as to what suggestions the FCC will make, I have no idea. But I still go back to the statement that I made when I began, that I am certain that the Bell System has been run, not only with honesty, but with great care and thought for the public welfare, and regardless of whatever report anybody could make – provided we have an opportunity to discuss it before a committee of Congress – I see no reason for us to be disturbed about the matter.

There is one thing I think will be very helpful to keep in mind, and that I think we will need as we go along in the future. That thing is good humor. It is one of the best stabilizers we have. Some of you who are classical scholars will place the saying, “Whom the gods would destroy they first make mad.” When people lose their tempers they usually lose the right direction at the same time. Now the Bell System has gone through the depression and has gone through all these disturbing times, and has maintained its good humor. This has done a great deal to maintain morale inside the organization and maintain our reputation and character outside. Anyway, it makes life a lot pleasanter, and I recommend it.

But if we stand pretty well, and I think we do, we cannot just stand still. Going back to our first analogy, it is true we have come to the present point in our practices by keeping in step with the changing direction of the public’s mind. But the public’s mind will go off in some new directions from here, and we have got to find out these directions and be there.

I want to take a minute and make one observation at this point. I don’t think there would be any scandal if the Alexander Graham Bell family had made great fortune out of the telephone business, even as much as thirty or forty million dollars. I don’t believe that would be considered immoral. Bell had done so much for the American people, and that amount of money might not be considered an unreasonable recompense for the greatest invention of mankind. But I am sure that as long as the Bell family didn’t happen to make a great fortune, it has been a great deal easier for the System to get along without unfavorable comments. Since the original inventor didn’t make a great fortune, it has been because of very wise management on the part of the Bell System that nobody else has.

Now what are our fundamentals? They are much as Mr. Cooley said. They are more or less outlined in the Dallas policy. They include good service, they include reasonable rates, they include fair wages and salaries, and they include a fair return to capital. Good service, as you know, is absolutely essential. Just after the war, there were serious problems in furnishing telephone service. What has happened to the service since? Good service is taken for granted in the United States today. I mean good technical service. We are a mechanical and ingenious people. Most of the things we make are well made. Light and power do not fail. Your automobile runs. You don’t even have punctures any more. And good telephone service is the basis of the Bell System’s reputation.

At the same time, I think you get more public approbation from polite, friendly, interested service, than you do out of a good technical service alone. The reason is that most Americans are reasonably efficient, but not all of them are reasonably polite. Politeness is a more unusual thing, and you know we get more comments about the extra service features that our employees give, than we do about the excellent, practically perfect, mechanical job of rendering service.

In discussing our public relations, either politeness or any other part of it, I don’t want to make it appear that we are talking about a cloak, or a special method. I am not presenting any vague theory. I am not talking about stage management. I am just talking about character. The thing we are trying to do is to be the kind of employees who want to serve the public, who want to be friends with their neighbors, who have a pride in their own profession—one of the best professions in the world—and who want to see that this profession is held in high esteem by other people because it deserves to be. To be a good neighbor and a good citizen—not a kind of Pollyanna, but one who uses his brains and makes his service pleasing and effective to his fellow men—that is what we are trying to be.

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