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Stay The Course
By Richard Edelman

General
china_stock_market

Edelman President and CEO, Richard Edelman, on the stock market reversal in China which has led many to question the stated GDP growth rate of 7 percent, and the strategy of moving from an investment-based economy toward a more consumption based model.

The stock market reversal in China has led many to question the stated GDP growth rate of 7 percent and the strategy of moving from an investment-based economy toward a more consumption based model. At the same time, the Brazilian economy has officially moved into recession, with drop in GDP of 2 percent in the second quarter. And Russia earlier in the week decided to blacklist a few more Western brands, this time from P&G, with flimsy excuses on product safety. Meanwhile, the U.S. economy is chugging along at 3.5 percent growth in GDP in the second quarter. This may lead some in the agency business to reorient investment to the safer developed world; that would be a drastic error. We have to stay the course.

There are a few important trends to recognize that are now confirmed for PR agency managers.

First, the spending by U.S.- and UK-based multinationals will be concentrated in fewer markets. For example, in Europe, the focus is now on the UK, France and Germany, much less in Eastern Europe, especially Russia. In Asia, there is a bit of a pull back from the smaller markets in Southeast Asia (Vietnam, Myanmar).

Second, there is a gradual move by the developing market multinationals into global markets. Those developing markets that are too small to hub MNCs outwards will be more of a challenge for building a sustainable enterprise.

Third, there is room for a marketing focused business in developing markets that relies on local brands in their home bases. The local brands are going to have an advantage in the more austere economic times.

Fourth, there will be a change in the trust landscape. The reputation of government from Brazil to Mexico to China to South Africa is sinking fast. The corporate sector and brands will have to pick up the slack.

Fifth, many of these markets are ahead of developed ones in digital, having made the leap direct to mobile devices. For instance, there is much to be learned from the Unilever* mobile radio play in India which offers a certain number of free songs after an advertisement.

Sixth, all of us have work to do in incorporating senior Asian and African talent into senior management. We also have a long way to go in having creative that is led by developing markets.

I agree with Sir Martin Sorrell’s comments in the Financial Times earlier this week tied to his release of earnings. He reaffirmed his commitment to China and his confidence in the developing markets overall. We will continue to invest in talent, in growing the local MNCs into global relationships and in making a bigger play in digital. If some of the world’s biggest marketers are going to have nearly three-quarters of their revenue from developing markets by 2020, that is a good enough signal for me.

This article originally appeared on 6A.M., Richard Edelman’s blog on trends in communications, issues, lessons and insights.

*Edelman client

Written by: Richard Edelman, President and CEO at Edelman

Connections: The 2015 State of Employee Engagement

Employee Engagement
Connections_Aug15

We recently conducted two studies to explore what Internal Communications and Human Resources teams are actually doing to measure engagement and convert it into competitive advantage. What’s working and what isn’t? And how can we improve?

By Dr. Andy Brown, Executive Director, London, and Christopher Hannegan, Executive Vice President, Chicago

It’s hard to deny that engaged employees are a key competitive differentiator. Creating deeper connections with employees, across organizations and with the wider world are important for business success. We recently conducted two studies to explore what Internal Communications and Human Resources teams are actually doing to measure engagement and convert it into competitive advantage. What’s working and what isn’t? And how can we improve?

To read our five key findings, you can view and download our August edition of Connections below, or here.

If you’d like to hear more about our Employee Engagement offering, please get in touch.

Samsung Innovation Museum
By Richard Edelman

Culture, Technology
samsung_tech

President and CEO of Edelman, Richard Edelman, speaks about his pilgrimage and experience at the Samsung Innovation Museum in Seoul.

I was in Seoul for the past three days. While there, I made my first pilgrimage to the Samsung Innovation Museum on Monday afternoon. It is located in Suwon, part of the massive Samsung Digital City complex, with about 40,000 engineers and researchers working on the next generation of products.

The first floor of the Museum is a true walk down memory lane. There are pictures of the first grocery store, opened by the Lee family in 1938. The first generation was involved in retailing then — the trading of dried fish. The electronics business began in 1969, with its first products in television, refrigerators and washing machines. In the 70s, the company diversified into semiconductors (with its first 64k chip in 1983), then entered telecommunications in the 80s. To watch Elvis Presley on a black and white TV was a blast from the past; so was the VCR and tape deck.

The most poignant photos in the museum were of a Samsung TV on sale in a Los Angeles store, dusty and ignored, at a price point far below competitors on the higher shelves closer to consumers. Apparently, Chairman Lee, seeing this on a store tour, called a company-wide meeting in Frankfurt. He delivered a stern edict, “Change everything at the company, except your wife and kids.” In short, Samsung was going to improve its products, raise its price point and market itself as a leader instead of a discount brand.

The second and third floors of the museum are a window into a future of technology that is exciting and alluring. The Internet of Things allows you to check into your hotel on the way from the airport via your mobile phone. You then bypass the reception desk and go straight to your room. The door opens with a key enabled by your cell phone. Or your phone enables you to assess what is in your refrigerator and remotely order orange juice and yogurt from a local retailer for delivery timed for your return from work. The 100-plus inch wide ultra hi-def curved television is simply stunning in its clarity and magnitude (I dream of watching my beloved Chicago Bears play in a Super Bowl on that screen one day). The medical devices include an ultrasound machine that shows, with great clarity, a fetus at three months, a vast improvement over the grainy black and white photo I saw of my youngest at that age just about twenty years ago.

The essence of this company is a never-ending desire for improvement and achievement. There is no cult of personality, no honoring of individual engineers or marketer. Truly at Samsung*, it is a team game, a global game and, yes, a family game, where the only expectation is to do your best every day to deliver amazing customer experiences. I can only hope to instill the same kind of self-effacing and decent culture at Edelman, where we serve our clients with all we have. I am honored, along with my Samsung team colleagues, to have worked on this business for the past twenty years; it is a great partnership.

This article originally appeared on 6A.M., Richard Edelman’s blog on trends in communications, issues, lessons and insights.

*Edelman Client

Image: Sean Pavone / Shutterstock.com

Written by: Richard Edelman, President and CEO at Edelman

Heatherwick’s City
By Richard Edelman

Culture, Innovation
london_Bus_Heatherwick

President and CEO of Edelman, Richard Edelman, had lunch with Thomas Heatherwick, urban visionary and architect, whose work is transforming London, Abu Dhabi, Singapore and soon, New York City. He reflects on his iconic and ambitious projects.

I had lunch yesterday with Thomas Heatherwick, urban visionary and architect, whose work is transforming London, Abu Dhabi, Singapore and soon, New York City. I managed to meet him through mutual friends after seeing an exhibit of his work at the newly re-opened Cooper Hewitt Museum of Design in Manhattan. He is a sprightly, vivid and talkative character, with ambition and vision to match.

He has 170 people employed at his office in King’s Cross in London, fully half of whom are in the “making of things. I don’t know how you can really design without building the products. You have to get your hands onto the concrete and metal,” he said. His most obvious contribution to modern-day London is the London Bus, which is gradually replacing the historic Routemaster. The Cooper Hewitt exhibition has a partial bus on display, with rounded edges to reduce the perceived size of the vehicle and bench seating with an attractive pattern. The new bus consumes 40 percent less fuel than its predecessor, through eco-design and by using a hybrid diesel and electric engine. He also designed the iconic Olympic flame for London 2012, with detachable petals, each of which traveled around the world to participating nations prior being re-uniting at the Games.

He is in the midst of fundraising for a fascinating project, the Garden Bridge across the Thames River in London. It will be a pedestrian bridge with twelve parks and 250 different kinds of trees. The City of London and various families have contributed to a foundation; about ₤13 million more needs to be raised by the end of the year in order to break ground, with completion expected in three years. “This will be London’s version of New York City’s High Line. It will attract millions of pedestrians and associated projects at either end of the bridge,” he predicted. The public face of the bridge is Joanna Lumley, a former actress best known for her role in a James Bond movie; she has been working on this idea for almost 20 years.

His team is hard at work on two projects in New York City, including a huge sculpture in the midst of the Hudson Yards project in Midtown and an urban riverside park that is built out into the Hudson River called Pier 55, next to the new Whitney Museum in the Meatpacking District. This pier has a combination of recreational, entertainment and classic walkways. “It adds an important bit of green space into a deeply urban environment,” he noted. “It will also have venues for music, dance and theater.” These projects follow on the Al Fayah Park in Abu Dhabi, which aims to provide a relaxing environment for residents and visitors, while sheltering them from the broiling sun. The Cooper Hewitt exhibition shows a model of the park, with cracked pieces of desert raised on columns as a dome, with plants and trees underneath.

I would like our clients to engage with Heatherwick on his various projects. I love to stroll around Millennium Park in Chicago, underneath the giant aluminum bean (the Cloud Gate) by Anish Kapoor, to take selfies of the reflection, to watch kids run in and out of the water spray. I see the next step for large family philanthropy or corporate/brand sponsorship as being urban renewal, to step into the shoes formerly occupied by government, now unwilling and unable.

This article originally appeared on 6A.M., Richard Edelman’s blog on trends in communications, issues, lessons and insights. Image by UKTI.

Written by: Richard Edelman, President and CEO at Edelman

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