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.
Thanks primarily to a billion-dollar a year investment in logistics and
information technology, UPS began seriously catching up in early
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
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.
’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
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,
’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
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
’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