Business, governments, NGOs, and media recently converged on Davos for the World Economic Forum to discuss priorities for the coming year. In 13 years, I have seen many cycles at Davos, everything from the dot-com exuberance of the late 1990s to the recent financial collapse and cautious recovery period.
Each year, I leave energized and further convinced of PR's central role in explaining how and why business exists.
Financial strength and a celebrity CEO are no longer enough. Trust and social purpose have tangible value in advancing corporate reputation - and PR must help business chart a different approach.
Edelman's 2011 Trust Barometer, released in Davos, suggests corporate reputation is now premised on four top factors: quality products, trust, transparency, and treatment of employees. This quartet far outranks financial performance, which sits at the bottom.
Trust also greatly influences the actions the public takes toward a company - most stakeholders believe bad news about a "distrusted" company after hearing it only one or two times.
But a new trust is emerging, with a rise in preference for experts as spokespeople, including academics, technical specialists, and CEOs. Two years ago, CEOs were in the bottom three for credible spokespeople, but they rebounded to be in the top three - still, they cannot be the sole public face of a company.
Information ubiquity changes the PR playbook. More than two- thirds of people must be exposed to a message three times or more to believe it - 14% in the US have to see a story 10 times or more to believe it. And while newspapers and TV are still the most trusted information sources, media relations must consider search engines the first source people turn to, then mainstream media. A company can't just put a message "out." It must put it "everywhere."
There is also movement toward shared value. Three out of four people say corporations must create shareholder value that aligns with society's interests. Nine out of 10 feel companies benefit from operating in ways that help society: business wins when society wins.
Stakeholders want business to lead again, but differently from the prior decade. CEOs should be private sector diplomats and forceful advocates for strategies that encompass profit and purpose.
Transparency is the new normal, explaining how and why - not just what - business plans to address major world issues. Communications must en- compass mainstream, new, social, and owned media, encouraging a robust dialogue with stakeholders to guide and tell the story of this new approach.
Richard Edelman is president and CEO of Edelman.