After the departure of founder Ross Perot, Electronic Data Systems
(EDS) lost much of its luster. The company missed revenue projections
and clients, and few people recognized it as a pioneer in the field of
information technology outsourcing.
Then three years ago, the board of directors hired CEO Dick Brown. Known
as a corporate trouble-shooter, Brown had most recently led England's
Cable & Wireless. He set out to reinvent the EDS brand, going beyond the
steps often taken by new CEOs, such as cutting staff and
Forward thinking cures anonymity
Brown started with a new advertising campaign strategy: cats and
squirrels were the stars of the firm's splashy Super Bowl ads. In 2000,
a "cat herding" commercial featured cowboys wrangling unruly felines. In
2001, stampeding squirrels chased Spanish daredevils through the
streets. The ads employed metaphors to communicate that EDS is full of
"smart people who can solve problems," explains global communications VP
The company spent about $6 million on the squirrel ad, which
served as a springboard for greater PR efforts. The $50,000 PR
spend netted 450 million news impressions about the ad, which was seen
by 130 million football viewers, Mattia says.
The company has not always been so forward-thinking about
When Nancy Voith - now manager of Americas communications - joined EDS
in 1979, management wanted her to become a technical engineer despite
her PR background.
Back then, the company had 6,000 employees, $300 million in
revenue, and no communications staff. Media calls were handled by
"whoever answered the phone," says retired PR exec Bill Wright, a
veteran sales employee who formed the first small communications
department in 1979, the year Perot mounted a rescue of the hostages in
The regimented company valued individuality, and executives cloistered
themselves in offices along the arch that connects the two halves of the
company's headquarters, recalls industry analyst Dean Davison of META
EDS was formed in 1962 by Perot, a future presidential candidate. He
quit IBM because the firm didn't like his idea of offering data
processing management services. He went off to start his own firm. "It
was a traditional good-old-boy Texas company," says Davison.
General Motors, still a major client, bought EDS in 1984, and Perot
exited soon thereafter, taking the EDS identity with him. From the
public's perspective, "Ross Perot was EDS, and EDS was Ross Perot,"
"It was the anonymity of the company that was a marketing problem," says
Wright. EDS then hired Fleishman-Hillard in 1990 to help build a new
image in Perot's absence. "The common belief was that Perot was still at
the helm," recalls Fleishman's Texas president Janise Murphy.
The agency worked for EDS until 1994, but soon after Brown's
appointment, Edelman was hired on a multimillion-dollar contract. The
company uses Hill & Knowlton in Canada and other regions.
Brown's arrival has also had a huge influence on corporate culture. Open
communication policy helped, but the amount of executive turnover has
made an impact, too. At a meeting of EDS' top 125 leaders in January,
META Group's Davison says about three-quarters acknowledged joining the
company since 1999. The guard changing was affected with few indications
of work force anguish, however.
"It wasn't that Dick Brown pulled the plug and purged dross," Davison
points out. "He said, 'This is a new ball game.'" By and large, those
who didn't want to play left of their own volition. For example, global
communications VP Mattia, hired from Ford in August 2000, is the third
person to hold the top PR job under Brown.
Communication is everything
While PR-leveraged commercials may be the most visible signs of EDS'
change in communications philosophy, Brown's focus on internal dialog
has been more acute.
To shift corporate culture, Brown coined a term EDS' computer-minded
employees could understand. He instituted "social software," the tools
of which include biweekly e-mails to all 125,000 employees from Brown
himself, and regular management meetings.
The CEO and his staff have responded to thousands of employee
Two-way communication not only keeps everyone informed, it helps keep
change-wary middle managers on track. "The level of clay you find in any
organization quickly gets eroded," Mattia says.
EDS' in-house communication staff now numbers 125, a quarter of which
have been hired in the last year. Most recently, Mattia began hiring
staff in places like New York to have people on the ground in major
Nevertheless, the company's complexity has long posed communications
challenges. Brown consolidated more than 40 business units into four
basic lines: information solutions (IT outsourcing), business process
management (which includes customer relationship management),
E.solutions (the electronic commerce division formed when EDS swapped
assets with MCI WorldCom in 1999), and A.T. Kearney (a management
consulting firm acquired in 1993). EDS added a fifth division this
spring after acquiring Structural Dynamics Research Corp., a company
that makes computerized manufacturing design software.
Explaining it all to reporters isn't easy. "That requires some serious,
coordinated briefing of the press so that they're not looking at one of
the elephant's legs and thinking they understand the whole company," the
retired Wright says. "If we could ever get them to our facility where we
could literally show them what we were doing, it would be a little
EDS did just that on New Year's Eve in 1999. It threw a Y2K party for
journalists to show how it vanquished the millennium bug. "It was a
smart thing to do because it helped them show off their technology,"
says Dallas Morning News reporter Leah Beth Ward.
More recently, EDS made a big splash at the November COMDEX trade show
in Las Vegas. EDS scored a prime exhibit location and a keynote for
Brown by providing network services for the show. To entice attendees to
stay over for Brown's speech on the last day, the company hosted a party
the night before, featuring performances by Macy Gray and the Bare Naked
Mattia organized some 50 interviews and three press conferences during
Overall, the remaking of EDS has been dramatic. "I think they are poised
to give IBM a run for their money," says Linda Cohen, a Gartner Group
analyst. Employees are energized and customer focused. Profits are
EDS has acquired a major airline-IT outsourcing business from Sabre
Holdings, landed a hefty Navy contract, and negotiated a hardware
services partnership with Dell.
Although she thinks future messages should be less abstract and more
substantive than cat herding, analyst Cohen agrees that EDS' new
emphasis on communications played no small part in the company's
turnaround. "You don't buy stock from a company you've never heard of,"
ELECTRONIC DATA SYSTEMS
Chairman & CEO: Dick Brown
VP of global communications: Tom Mattia (reports to Don Uzzi, SVP of
marketing, advertising, communications, and government affairs)
Director of corporate PR: Jeff Baum
Director of global community affairs: Debbie Snyder
Director of business and IR: John Clendening
Manager of executive communications: Brooker Thro
Manager of Americas communications: Nancy Voith
IR VP: Myrna Vance
PR agencies: Edelman is agency of record; Hill & Knowlton used in Canada
and some parts of Asia and Latin America Agency budget: About $2