Portraits of the "Most Admired" Companies: How Public Relations Helps Build Corporate Reputations

Article excerpt

To be recognized as a leader by your fellow business leaders is a coveted honor. Practitioners at these exemplary corporations reveal their role in building award-winning reputations.

What role does public relations play in helping a company win the admiration of its peers? More specifically, how did some of the leaders in FORTUNE magazine's recent survey of corporate reputations use public relations strategies and tactics to attain their enviable positions? PRJ asked top public relations executives at several "most admired" companies these questions. They also discussed their roles in setting and/or implementing corporate strategy. Most emphasized the importance of the CEO as the main communicator of a company's positions and policies to many target publics.

FORTUNE published its rankings of "America's Most Admired Corporations" in the Feb. 7, 1994 issue. The rankings were based on responses from 10,000 senior executives, outside directors and financial analysts who evaluated the largest companies in their industries. The list of companies was drawn from the FORTUNE 500 and FORTUNE Service 500 directories. Up to 10 companies in each of 42 industry groups, a total of 404 companies, were rated on eight aspects of reputation: quality of management, financial soundness, use of corporate assets, community and environmental responsibility, quality of products or services, value as a long-term investment, innovativeness, and ability to attract, develop, and keep talented people.

"First, a company needs to provide quality products or services, have good management and make a profit," observed Ken Sternad, director of public relations for United Parcel Service of America, Inc. (UPS). The Atlanta-based trucking firm ranked 10th in the survey. "But a lot of companies do that." Thus, in his opinion, those achievements are not enough to make a company stand out. "Good commercials and direct mall build awareness," Sternad continued, "but they have a limited impact on senior executives."

These executives can be influenced, according to Sternad, and public relations plays a major role in the process. "Their opinion comes from what they've heard about that company, what they know about that company's ability to manage," he said. "Very clearly, in a poll like that, public relations is a critical element. Public relations builds understanding among our customer base and various publics about the company's goals, mission, the quality of its services and products, and its people."

To explore the ways in which public relations can contribute to a winning reputation, PRJ interviewed top practitioners in seven of the 10 highest-ranked companies in the survey (in rank order): Rubbermaid, Inc. (1), The Home Depot, Inc. (2), Microsoft Corp. (3), 3M (5), Motorola, Inc. (6), J.P. Morgan & Co., Inc. (8), and UPS (10). (Walt Disney, tied for sixth, and Procter & Gamble, tied for eighth place, declined to participate. Coca-Cola, tied for third, was unable to respond by the deadline.) We asked the practitioners how--and how much--they contribute to their companies' reputations, whether they function as implementers or strategists, and to what extent their counsel is sought and appreciated by top management.

Wide range of opinion found

Even in this small universe, we found a wide range of opinion. Some practitioners are cautious about taking credit for their influence, saying that their role is--and should be--to communicate the company's messages to various publics, creating awareness and understanding. "Most public relations people play a role in assisting management to articulate strategies, policies, philosophies, and mission and value statements," said George F. Thompson, director of corporate communications for Rubbermaid, the Wooster, OH, diversified plastic goods manufacturer. "I would not look for any sort of elevation of this function to a policy-making position."

Others, however, say that public relations can contribute more by actually helping to develop the message. …