Mounting a united government relations attack. If you want to capture the Capitol, you had better make sure you tell everyone what you are doing. Steve Lilienthal reports

When the Orphan Foundation of America holds its annual fund-raising dinner this summer in Washington, the room will be packed with government affairs representatives from corporations willing to help a good cause.

When the Orphan Foundation of America holds its annual fund-raising dinner this summer in Washington, the room will be packed with government affairs representatives from corporations willing to help a good cause.

When the Orphan Foundation of America holds its annual fund-raising

dinner this summer in Washington, the room will be packed with

government affairs representatives from corporations willing to help a

good cause.



But community relations consultant Scot Marken believes too many of

these companies will pass by greater opportunities to help their own

reputations by helping others.



Suppose they started an employee volunteer program to mentor scholarship

recipients about their career choices. Suppose they sponsored the

scholarship students’ study in areas that are of interest to their

company and hired the students over the summer to work as interns and,

after graduation, possibly employees. Suppose that, in the city where a

company has a plant, its congressional representative and community

leaders attended a ceremony in which a recent college grad who had been

helped by the fund presented a scholarship to a deserving high school

senior.



Marken sees too many companies failing to realize that their good work

for a good cause can pay much bigger dividends. There is a missing

link.



’The message needs to be communicated throughout the entire company,’

insists Marken, president of Coalescence, a Miami community relations

firm.



That is starting to change. More corporations are coming to understand

that when reputations are at stake, efforts in government relations,

public relations, community relations and corporate philanthropy should

not be isolated entities.



These companies are bringing the functions closer together. In some

cases the integration is formal, putting (at least) government and

public relations in the same department. In other cases, it’s a more

informal melding of the disciplines.





Reporting structures



A 1998 report by the Public Affairs Council, ’Effective Public Affairs

Organizational Structures,’ which surveyed 70 US companies, found that

’effective public affairs organizations have integrated functions ...

the principal activities of both public relations and government

relations are under one management.’



The council’s 1999 ’State of Corporate Public Affairs Survey’ of 223

companies showed that ’while a majority of the survey companies have not

formally consolidated public relations and government relations, a

significant majority of the companies do report highly or fully

developed coordination between these functions.’



At Union Pacific, the arrangement is formal, with government and public

relations under the same roof. Bob Starzel, senior vice president of

corporate relations, oversees state government relations and

communications.



He sees the relationship as symbiotic: ’Many times people read a local

story quoting our PR spokesman and they call that spokesman

directly.



He then is doing community relations work,’ he says. Starzel recalls a

stricter line of differentiation between communications and government

relations when he was with Southern Pacific, before its merger with

Union Pacific. ’The boxes were more rigid. There was less

coordination.’



One reason for the traditional distance between government and public

relations has been that GR work often goes through the general counsel’s

office. But as Ed Block, the retired AT&T corporate communicator, points

out, until the 1970s the legislative process in both Congress and state

legislatures was much more of an ’old-boy’ network and frequently

allowed matters involving a company to be handled behind closed doors.

There was less need for coalition building. ’If a congressional

committee chair gave you his word, that was it,’ recalls Block. He adds

that news outlets back then weren’t as interested in business stories as

they are today.





The crucial links



Of course, companies did PR, government relations, community relations

and philanthropy then, but often failed to draw the crucial links. The

media- and activist-driven environment corporations confront today is

propelling the smarter ones to integrate these functions.



Take the expensive lesson learned by Shell Oil. Government relations did

its job in preparing support from leading British government officials

to sink an obsolete North Sea oil rig. Four years of preparation had

been done to determine the environmental and economic impact. But, as

Edmund Burke notes in his book Corporate Community Relations, a small

team of the oil company’s community relations specialists became

involved only six months before the scheduled sinking. The resulting

protests from environmental groups caused Shell to dismantle the oil rig

on land, costing an extra dollars 200 million and untold damage to its

reputation. Now, Shell takes communicating to local communities very

seriously.



But for too long, too many corporations have failed to grasp the

interdependence between good communications starting at the local level

and government relations.



Donna Lucas, CEO and president of NCG Porter Novelli, knows from

experience - her dad, Joseph Lipper, had both public relations and

government relations in his portfolio at Aerojet. But what she has

witnessed, she says, has often been the opposite.



’There have been times when I come into a room because the government

relations people (at a potential client) bring us in. And I’d ask,

’Where are your communications people?’ And they’d say, ’They don’t deal

with this issue.’ Well, they might not deal with the issue

legislatively. But they will be the ones who communicate it.’



Grasping that need is only the first step. Porter Novelli co-founder

Bill Novelli recalls the difficulty in trying to pull together special

task forces at CARE that cut across disciplinary lines. Every

organization has its ’high priests,’ he says, and CARE was no exception.

’There was definitely resistance to integration. Everybody says things

ought to be integrated, but it’s easier said than done.’



In 1992, Sears found itself confronting accusations that its mechanics

were hiking charges on auto repairs. As The New York Times reported, the

company’s first response was brought forward by lawyers who not only

denied the charges but claimed they were politically motivated.

Eventually, Sears’ chairman apologized in an advertisement and announced

new policies.



Ron Culp, Sears’ senior vice president for public relations and

government affairs, had the latter function added to his PR department

only recently.



Previously, it had been part of the legal department and, as Culp notes,

’There were six floors between us and even more when it came to

integrated efforts. We operated in separate corporate silos, seldom

working together or even discussing issues that might share common

ground.’



Then, last September, the merger occurred - a move that Culp credits to

CEO Arthur Martinez. Culp sees a dramatic change as boundaries are

broken down. Several members of the government affairs staff have been

moved to the PR department and representatives of the two staffs now

deal with each other on a daily basis.



The PR staff members are now assisting their government affairs

colleagues in monitoring state government activities. Culp says it

reduces the burden on the GA staff and increases the depth and knowledge

of the PR pros.





PR benefits



Other benefits come to PR too. Community relations had been part of the

PR department, and when separated never really worked with government

affairs. Says Culp, ’We were doing good things in the community, but in

the past didn’t say, ’Should we invite the mayor, the city council, the

community leaders to a store opening?’ Now we do.’



That cross-benefit has also been felt at the National Association of

Food Processors, where separate executives had once run govern-ment

relations and communications. Downsizing occurred before Kelly Johnston,

its current executive vice president of government affairs and

communications, arrived at the trade group in late 1996. But the

integration appealed to Johnston, whose background in politics causes

him to favor a tight link among communications, policy and politics.

’One of the benefits of downsizing is that the squeeze forces you to do

more with less,’ he says. ’Now lobbyists think like communicators and

communicators think like lobbyists.’



The global marketing communications and government affairs division at

information services giant EDS in Plano, TX, has obtained good PR and GR

from its Jason Project. The program showcases the company’s technology

to the public, potential customers and policymakers while promoting

science education. It takes promising students on expeditions, such as

exploring the Amazon rainforest’s ecosystem, broadcasting the projects

live on the Web. Many local communities and schools incorporate the

project into their curriculum.



Randy Dove, EDS’ DC-based executive director of government affairs, says

that, although many of the issues EDS contends with concern trade and

taxes, there is a benefit to its community outreach. ’If a member or

(congressional) staff has read or seen something about Jason, they’d

realize that EDS is doing its bit to help get kids interested in

education. It adds to their impression of EDS as a company.’ More

importantly, many of the good comments that members of Congress hear

about Jason come from people in local areas who have seen it on the

Web.



Dove adds, while government affairs and PR work well together at EDS, he

knows professionals in other organizations who are ’frustrated’ by the

lack of coordination between the two.



Integration even extends to philanthropy. No longer are dollars given

strictly because the board or the CEO has a favorite pet cause. Giving

is being linked to causes that reflect the company’s strategic

goals.



Nick Franklin, senior vice president of public affairs at PacifiCare,

put it bluntly: ’We don’t want to give money to groups wanting to build

sandcastles.’



But Franklin is an enthusiastic proponent of integrating PR and

government relations and takes pride in his company’s philanthropic

achievements.



A healthy share of the dollars 2.9 million that the PacifiCare

Foundation donated last year was devoted to combating diabetes and to

helping sick children obtain the medical care they need.



The AOL Foundation - whose parent company is concerned with government

regulation of the Internet - directs its giving to initiatives such as

alleviating the ’digital divide’ by providing grants that promote new

thinking on how online technology can assist education and empower

disadvantaged communities.



The importance of linking government relations to communications is

appreciated by the more sophisticated PR agencies in Washington. It’s an

understanding that influence is not bought but earned over time.



’It’s not about fund-raising - that’s overemphasized,’ says Paul

Johnson, general manager of Fleishman-Hillard’s Washington, DC office.

’Members of Congress will be more trusting and willing to consider

support of a good corporate citizen. It’s a lot harder for them to say

’I will take your position’ to a company that does not play by the

rules. Those that have been slow to adapt suffer the consequences.’



Says Neal Cohen, executive vice president and managing director of APCO

Associates, Washington, DC: ’I doubt that many companies (in the past)

would have viewed community support or philanthropic support as a

priority or that it might be viewed positively by the news media or

politicians. Today I see how a lot of these things are working

together.’





Mustn’t be formal



Several experts emphasize that integrating these functions does not

necessarily mean doing it formally, and some companies do take that

tack. There may even be advantages to it. For example, the Public

Affairs Council’s 1998 report found that it allowed for concentration on

individual objectives.



The report also talked about the difficulty of finding leaders to manage

both functions. Still, the council said, when the two are separate the

managers should get to know one another and find ways to be mutually

supportive.



In the case of Southern California Edison, public affairs and corporate

communications are in separate departments but until recently the

respective heads, Bob Foster and Tom Higgins (now promoted), had a close

working relationship, forged through mutual travel and work on projects.

They and their departments often work together in a team approach

favored by the CEO.



America Online also keeps the functions separate. But government

relations and PR developed a close working relationship starting in

February 1995, when the company’s first in-house lobbyist, Bill

Burrington (now senior vice president of AOL International) and the PR

department had to fight legislation to curb Internet pornography that

the company considered to be overly restrictive. Now Kathy McKiernan, a

former White House and Capitol Hill press aide, is assigned to

communications but her job involves serving as a liaison with the public

policy department.



Kathy Bushkin, AOL’s senior vice president and chief communications

officer (who is on the AOL Foundation’s board), relates that McKiernan

’works closely with government relations, attending their meetings,

tending to handle media requests regarding policy. She helps to craft

the messages regarding policy.’ David Eisner, one of the communications

department’s vice presidents, handles AOL’s strategic philanthropy and

development of third-party relationships.



Building and lumber products company Louisiana-Pacific offers a good

lesson in the importance of coordination. When Ward Hubbell came to the

company over two years ago as director of corporate affairs, the

department handled both corporate and marketing communications and there

was a separate, fairly weak government affairs operation. But when doing

projects, the communications staff tended to simply follow orders from

above. ’It was the opposite of being siloed,’ relates Hubbell. A person

could do media relations one day, marketing the next. ’They were utility

players,’ says Hubbell of Louisiana-Pacific communicators.



Even though Hubbell’s department has the same number of employees today,

the lines of responsibility are much more clearly defined. Government

relations and PR are both under his wing. ’I can only speculate but

there were probably a lot of lost opportunities and some overt damage to

the corporate reputation,’ concedes Hubbell.



But when Louisiana-Pacific wanted to stop its timber operations in a

national forest, the vital role between PR and GR became clear.

Environmentalists favored the withdrawal. The locals and Alaska’s

politically powerful congressional delegation were concerned about jobs

and the impact on communities.



There were a lot of audiences to deal with. ’It was a balancing act,’

says Hubbell. Both the PR and government relations staffs worked

together to ensure the right messages were being used. ’We wanted to

make sure that what we were saying to the national media was consistent

with what was said to the local media,’ explains Hubbell. The company

eventually left without significant damage to its reputation. Had there

not been that coordination, it could have been a very different

outcome.





Eliminating turf problems



Raymond Hoewing, principal of Hoewing/Consulting and a faculty member of

George Washington University’s Graduate School of Political Management,

says he would prefer to have the PR and government relations functions

in one department because it eliminates turf problems. But even if that

does not happen, Hoewing thinks technology such as e-mail can help

deliver greater integration despite the box charts. ’You may not need a

structural reorganization because of technology,’ he suggests.



Not everyone agrees that technology is the answer. ’I think there is no

question that technology is fostering improved communications and is

breaking down silos in organizations,’ says Harlan Teller, head of Hill

& Knowlton’s corporate practice. ’However, don’t underestimate the

people equation - if you have a head of PR and a head of GR who see no

reason to communicate, no amount of e-mail, intranet traffic or any

other interactive medium will bring those people together. It is really

up to the individuals to make integration happen.’



Hoewing says that PR and government relations often operated in the past

as if they were engaged in a cold war. But, like the Berlin Wall, it

appears that, one way or another, the old barriers to coordination

between PR and government relations will keep tumbling down.





CURRENT FUNCTIONS WITHIN PUBLIC AFFAIRS DEPARTMENTS



Federal government relations 87%



Business/trade assn. memberships 84%



Issues management 83%



State government relations 83%



Grass-roots/grasstops 81%



Local government relations 79%



Political action committee 75%



Direct corporate contributions 73%



Public policy group relations 70%



Community relations 61%



Public interest group relations 58%



Regulatory affairs 55%



Public relations 54%



Media relations 54%



Employee communications 49%



International public affairs 43%



Employee volunteer programs 40%



Internet 38%



Corporate foundation 35%



Educational relations 35%



Advertising 28%



Environmental affairs 22%



Stockholder relations 18%



Institutional investor relations 13%



Consumer affairs 13%.



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