Client Profile: UPS delivers on plan to restructure its PR - Now a publicly traded dollars 27 billion transportation powerhouse, UPS is well aware of the power of PR as a corporate tool. But it endured a rather rough lesson to reach that realization. Tony

Sometimes the tortoise does win the race. A little more than a decade ago, few companies would have seemed less prepared for 21st-century dominance than United Parcel Service - especially when compared to arch rival Federal Express.

Sometimes the tortoise does win the race. A little more than a decade ago, few companies would have seemed less prepared for 21st-century dominance than United Parcel Service - especially when compared to arch rival Federal Express.

Sometimes the tortoise does win the race. A little more than a

decade ago, few companies would have seemed less prepared for

21st-century dominance than United Parcel Service - especially when

compared to arch rival Federal Express.



UPS was intensely traditional, sheltered from much of the market’s

buffeting because it was privately held and highly unionized - even the

company’s traditional brown color seemed drab and mundane compared to

FedEx’s eye-catching white and lavender.



UPS lagged even further behind in the PR arena. Where FedEx seemed to

almost manufacture positive coverage, UPS’ PR department was almost

nonexistent, lacking staff, strategy and tactics. ’As recently as the

late ’80s, they had only one person in their PR department. Their

response to every inquiry of every kind from any place was, ’No

comment,’ even if you were just asking when the company was founded,’

says one trade journalist who covered the company for years.





Wake-up call



Thanks primarily to a billion-dollar a year investment in logistics and

information technology, UPS began seriously catching up in early

1990s.



But acceleration in the PR arena was quite a bit longer in coming. ’You

had a company that until five or six years ago was embryonic when it

came to public relations,’ the journalist says. Then in 1997, UPS got a

rude wake-up call, courtesy of the Teamsters.



While UPS insiders admit the company’s PR performance during the strike

was less than stellar, journalists say it was a near classic example of

media mismanagement. ’Their handling of the strike in 1997 was abysmal,

disastrous; apocalyptically bad,’ says one business journalist. ’They

had no plan. Their top management people had no appreciation of the role

the PR folks could play.’



’They came up with a message every day, and the CEO would change it six

times a day,’ the writer adds. ’That’s one of the reasons they were so

horrifically perceived during that disaster.’



The PR team at UPS - not well versed in crisis management - was caught

between a rock and a hard place, according to Ken Sternad, VP of public

relations at UPS. ’When the strike started, the chairman (James Kelly)

made it clear that we would not fight back by attacking our own

employees, the Teamsters,’ he says. ’We were not going to use the kind

of attack tactics that perhaps were being used against us. We were not

going to attack the union leadership because the only result there might

be a few more points in the PR war, but if they delayed the strike by

even an hour it was not worth it.



’With those kinds of strategic imperatives and the fact that we were

small, we were not prepared, and we were not used to being aggressively

proactive in our message. It all showed,’ says Sternad, a 22-year UPS

veteran. ’The results were very, very bad for the company on all

fronts.’



UPS insiders say the company went through a rather wrenching

self-examination after the 1997 strike. In effect, the extent of the

damage done by the strike convinced UPS higher-ups of PR’s true power as

a corporate tool.



Since then, the company has become a textbook example of how to

transform a PR also-ran into a major player by taking a series of highly

focused, intensely concentrated steps involving everything from

increasing manpower levels to giving PR itself a more important position

in the corporate hierarchy.



’Serious construction’



’Over the last three years now, you’re talking about serious

construction,’ says Norman Black, manager of national media relations.

PR staffing levels are up from under 10 to almost 20, Black says, and

adds, ’We now have five teams that attack PR.’ And those teams operate

in a proactive rather than a reactive fashion.



Black says the only thing that has remained the same since 1997 is

Sternad, who was, and still is, in charge of UPS’ public relations. ’We

have become much more aggressive and strategic in drilling the message

points about who we are and where UPS is going, and why we’re relevant

to so many parts of the business worldwide,’ Sternad says. Ink doesn’t

just happen, he says: ’You don’t just appear on the cover of Forbes

because someone felt it would be nice to do a story on you.’



At times, UPS followed the rules during its revamp. Other times, it

simply wrote its own. A common prescription in such situations is to

bring in high-powered talent from the outside and thrust it into the

corporate structure. But UPS has a tradition of promoting from inside,

and luckily, it also had some strong talent in-house. ’This guy Ken

Sternad, he’s a home-grown, inside-the-company creation, but he’s a very

smart, very strong guy, and a key reason why UPS has improved so much

since the disaster of 1997,’ the trade journalist says.



Like at many big companies, titles matter at UPS. ’Up until 1997,

Sternad had the ear of the chairman, but he wasn’t a VP,’ the business

journalist says. ’He had the ear of the chairman, but if you don’t have

the VP title inside of UPS, you’ve got no juice with anybody else in the

system.’



Outsiders, such as Black, were chosen for some PR positions. And UPS did

do one very traditional thing after the 1997 mess: it fired its PR

agency, Edelman, and brought in a new outside consultant,

Fleishman-Hillard.



’Edelman had been their agency for 15 years, and it was a classic

fossilized agency relationship. They were nice people, but they said

’Yes sir, whatever you think,’’ the business writer says. The

relationship with Edelman wasn’t completely severed, however; the

company still helps UPS with some of its international efforts.



Revamped and restructured, the UPS PR department is still far from

perfect.



The newly-public company is highly decentralized, and different branches

frequently send confusing and sometimes discordant messages. ’There’s no

effective one-stop shopping’ for information about UPS, one journalist

says. An even bigger challenge is its entry into entirely new territory

- investor relations.



Learning how to win in the media and financial marketplaces isn’t an

easy task. But logistics and PR executives seem confident UPS can do

both.



’People in logistics are saying that FedEx is in trouble and UPS has got

the game,’ says Art Avery, president of logistics consultancy Avery and

Associates. How times have changed.





UNITED PARCEL SERVICE



PR Chief: Ken Sternad, VP of public relations. Sternad oversees five

teams and reports directly to UPS chairman James Kelly



PR team: Norman Black, manager of national media relations; John Flick,

manager of international media relations; Susan Rosenberg, manager of

marketing and the Olympic partnership; Peggy Gardner, reputation

management; Steve Soltis, executive communications program External

agencies: Fleishman-Hillard in the US. International PR is handled by

local agencies.



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