Edelman's stirring call to action is worth answering

Just as with inspirational leaders such as IBM's Jon Iwata, when the head of the largest PR agency in the world speaks in depth about the profession and his vision for the future it is also usually worth listening.

Just as with inspirational leaders such as IBM's Jon Iwata, when the head of the largest PR agency in the world speaks in depth about the profession and his vision for the future it is also usually worth listening.

Richard Edelman did just that this morning in a speech to the Marquette University College of Communications, positing a theory about the “License to Lead” he feels is essential if business and government are to regain the trust they have lost in recent years.

The decline in trust is highlighted in Edelman's annual Trust Barometer, which showed trust in business fell from more than 50% in 2007 to the mid-30s% in 2009. In financial services, the decline was even more marked, from 70% in 2007 to 28% in 2012.

CEOs were the fourth-most-trusted source of information in 2007, now they're second from bottom of a group of 10. Edelman calls these trends “an historic crisis for capitalism.”

As for government, it is now the least-trusted institution in the US for the first time. That's the same in 17 out of 25 countries surveyed across the globe.

Edelman cites the collapse of trust in Japan following last year's nuclear disaster and the rejection this week by Citigroup shareholders of CEO Vikram Pandit's $15 million pay package as just two examples of events that epitomize this erosion in trust in what is now a stakeholder not a shareholder world.

He says the “License to Operate” that business once enjoyed has disappeared. He takes Professor Michael Porter's new “Shared Value” business model and extends it into a new approach called “License to Lead” by “gaining the informed consent of constituents, providing value beyond traditional performance objectives, and being held accountable through a new level of transparency.”

He suggests four principles for companies to earn this license to lead and provides examples, mostly from Edelman's own client list of course, to illustrate the points: substitute principles-based leadership for rules-based leadership (don't prioritize profit above all else, for example, GE), tackle the big issues of our time head on (fracking and Apple's supply chain issues), embrace radical transparency (publish benchmarks warts and all, such as Unilever on sustainability), and prioritize stakeholders differently (let the people be heard first, especially employees, for example at Starbucks).

In line with the recently released Arthur W. Page Society principles, Edelman wants the CCO to lead this revolutionary change in behavior, moving beyond simple counsel to partner with the CEO on strategy and execution, forging the closest relationship in the corporation.

It's a stirring call to action and one that clearly will require big changes in corporate behavior. But it's a fantastic outcome to aspire to, and a model the most progressive companies and organizations are already adopting.

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