If the hi-tech industry were a society ball, Texas Instruments would stand out as the grand dame in a roomful of debutantes. But to Wall Street, the electronics pioneer is once again a sweetheart blushing with profits.
If the hi-tech industry were a society ball, Texas Instruments
would stand out as the grand dame in a roomful of debutantes. But to
Wall Street, the electronics pioneer is once again a sweetheart blushing
Goodwill abounds at TI, especially since the company unveiled new chips
last month to make cell phones and Internet devices run faster and use
less energy. Its stock jumped over dollars 170, a four-year high, with
profit margins projected to reach 25% this year. And TI’s PR team played
no small part, opines analyst Will Strauss, president of Forward
Concepts in Tempe, AZ: ’The technology is so esoteric that otherwise
(Wall Street) wouldn’t understand the significance.’
Today, TI plays gracious host to reporters. The company generally
responds well to inquiries, makes top management and engineers available
and aggressively promotes itself and its products. But those who knew TI
back when recall the company’s days as, at best, a media wallflower.
TI’s history stretches back to the wildcat oilfields of Texas. Founded
in 1930, the company used reflection seismology to find black gold.
World War II brought military radar and electronics contracts. Through
the 1950s and ’60s, TI introduced groundbreaking gadgets like integrated
circuits, transistor radios and hand-held calculators. By 1980, TI
employed nearly 90,000 people and had its fingers in everything from
missile guidance systems to toys. But it didn’t have its finger on the
pulse of public opinion.
Who needs PR?
Quasi-military secrecy influenced by defense contracts, combined with
technological arrogance and a distrust of reporters, made PR a foreign
concept. TI didn’t feel much need to communicate with reporters or
investors because it reaped financial bounty from products that sold
themselves, explains Stan Victor, a 13-year TI communications veteran
who left in 1998 to start his own consultancy. ’They had a corporate PR
person whose job was to not communicate to the media,’ Victor says. TI
didn’t go out of its way to coddle customers, either; it expected them
to faithfully buy the technological marvels it produced.
The company took employee relations more seriously, publishing an online
newsletter as far back as the ’70s. Individual product divisions
sometimes practiced good media relations, too. ’However, if a bad quote
appeared in (trade publication) Electronic News and was attributed to a
TI manager, the feeling was that that manager could get fired,’ Victor
Financial information was released at annual shareholder meetings, and
reporters were assigned escorts who handed them sealed envelopes at the
appointed time. Rob Lineback, now editor of Semiconductor Business News,
recalls the confrontational mood of one such meeting: ’I was told to
leave my tape recorder, camera, guns and knives at the table.’
Top management began to realize the need for improved communication
after a few fiascoes, such as the decision to stop producing home
The effect on TI’s stock grossly outweighed the business segment’s
Chairman Mark Shepherd and CEO J. Fred Bucy didn’t understand why stock
prices fell so far, so they hired PR legend Chester Burger to assess
TI’s communication needs.
Burger’s team recommended creating a corporate media relations office,
and Jerry Junkins did just that when he became CEO in 1985. Junkins hit
the editorial board circuit, landing on the cover of Fortune in
TI’s external communications improved in noticeable increments, Lineback
says. But even into the early ’90s, vestiges of its secretive past
’You always did feel like you were dealing with the dark star,’ says
Wall Street Journal reporter Evan Ramstad. ’You never quite knew what
the defense business was doing for its bottom line.’
Winds of change
TI’s fortunes began waning in the mid-90s. As stock prices dipped, the
company found itself a disparate conglomerate in a sea of hungry,
single-minded competitors. The company broke itself down to build itself
back up. With Junkins at the helm, TI sold off business units, acquired
companies that complemented its core strengths and entered joint
ventures. After Junkins died suddenly in 1996, new president Todd
Engibous accelerated the process. In 1997 alone, TI bought three
companies and divested itself of nine divisions, including its defense
operations. The company put most of its eggs in the digital signal
processor (DSP) basket, a move that has paid off, with TI now owning 47%
of that market. DSPs are the engine for wireless phones and other
digital devices, analogous to the microprocessors in PCs.
While TI’s overall workforce shrank to about 33,000, its internal PR
staff has bulked up to 90, with more hires expected. The communications
function reported to the chief legal counsel for several years but was
consolidated in ’98 under the leadership of Terri West, SVP of
communications and IR. Her division oversees IR, PR, employee
communications, marketing communications, advertising, speech writing
and Web development. Environmental PR and public affairs - including
government relations - are handled separately by SVP Win Skiles.
Also in 1998, TI hired Golin/Harris as its first ever agency of record.
Previously, the company jobbed out projects to Temerlin McClain and
other firms, a practice it continues on a smaller scale. G/H works
closely with TI on all US media relations activities. Worldwide media
relations director Donna Coletti says most programs are developed
in-house but implemented jointly with G/H. The agency even used its
relationship with TI as the foundation for new Dallas and Houston
offices in ’98. Golin now employs about 20 people in Texas and has
expanded to serve other clients.
’Our goal in life is to support the businesses,’ says VP Jean Wilkinson,
TI’s worldwide communications manager. Not surprising in a company run
by engineers, TI places a heavy emphasis on PR research. ’We are really
using the research to show management our results,’ Coletti says.
Those results have been impressive of late. Indicative of its more
trustful attitude, TI confidentially briefed several key customers,
analysts and trade journalists in advance of its February chip launch
and used their responses as testimonials. The PR team far exceeded its
goal of attracting 5,000 customer participants to its Webcast
announcement. Timely follow up resulted in key placements quoting
Engibous and other executives.
The PR campaign also served as the launch pad for TI’s first
business-to-business TV ad campaign, a dollars 20 million effort. ’They
are pretty confident about who they are right now,’ the WSJ’s Ramstad
Still, TI and its PR team have their work cut out for them. Lucent and
Motorola are teaming up to develop rival chips, and Intel is building a
stronger market presence. But for now, Texas Instrument’s image,
reputation and profits are riding high, and its dance card is full.
PR chief: Terri West, SVP of communications and IR Internal staff: 90
Corporate PR leaders: Jean Wilkinson, VP and manager of worldwide
communication; Ron Slaymaker, VP and manager of IR; Donna Coletti,
director of worldwide media relations; Gail Chandler, manager of
corporate strategic communications; Win Skiles, SVP of public
External agencies: Golin/Harris (since April 1998) and project work with
1999 financials: dollars 9.47 billion revenue, dollars 1.4 billion net