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Communicating outside our borders.

Communicating Outside Our Borders

The Global Public Affairs Institute, located at New York University, was established last year to address the growing need for greater knowledge and skills in the multinational management of corporate affairs.

The founder and chairman of the institute is Loet Velmans, retired chairman of Hill & Knowlton, Inc., the international public relations/public affairs counseling firm. Velmans has worked all over the world counseling management and boards of corporations and other institutions on major financial, labor and environmental issues.

The president of the institute is Edward Block, retired senior vice president, public relations, AT&T. He was responsible for all corporate communication during AT&T's expansion into international markets.

The institute provides seminars, courses and other resources in international public affairs and public relations. It draws its faculty from New York University, other universities in the US and abroad, as well as from the executive ranks of leading multinational corporations.

The following is an excerpt of an interview detailing the mission, goals and concerns of the chairman and president of the institute:

JTL: Mr. Velmans, what led you to the idea of forming the Global Public Affairs Institute?

VELMANS: I was the first international employee of Hill and Knowlton. When I joined the firm in 1953, I was just thrown into the deep end. I had to devise programs outside the borders of the United States. I lived for 19 years for H&K in Europe. Then I came back and became CEO. I had this rather unusual experience... I was told by clients to just go and help them in challenges that they face in foreign cultures. So I worked all over the world in my 34 years with H&K. As the world became more specialized, companies such as H&K started to set up offices in many countries. The people with broad exposure were no longer fashionable nor as effective. A local office took care of clients' subsidiaries, local challenges or programs. So when I retired, I said to myself--and I thought about this before I retired--that there should be a more systematic approach for public relations executives of corporations and counseling firms to learn more about what is going on in their own field outside of their own borders--and how to cope with corporate problems that arise there.

Hill and Knowlton had its own internal programs of transferring executives into another country, bringing them back and sending them to a third country. But that was all tinkering in the margins. There wasn't really a systematic approach. Nor was there with any of the major multinational companies, at best it was sporadic.

I also was convinced of the need that if you want to operate on an international basis, you don't reinvent the wheel all the time. You should have people with experience rather than starting from scratch.

So how do you build up a body where this expertise can be found and where companies can send their people? That's how the idea began.

JTL: Mr. Block, what got you interested in supporting and playing a major role at the Institute?

BLOCK: I was head of public relations for AT&T. We formed in Europe two strategic alliances with Philips-Netherlands and Olivetti in Italy. I was struck by the fact that the executives of Philips were multilingual. They were knowledgeable both culturally and politically in many ways.

Olivetti is a slightly different company. What caught my eye immediately with Olivetti was that as I toured their in-house public relations and advertising operations in Milano, the entire department was multinational. They had Brits, Americans, Germans, Asians, even a few Italians. Clearly they have been in this business for a long time. As I compare that kind of public relations department to the one I was in charge of here in the US, ours was larger, had a bigger budget, but we were entirely an American operation. I had almost no one working for me that had any experience abroad.

What really struck me was that AT&T had to change. American companies that have any aspirations in continuing as major players in a global market in a multinational work place need to know a lot more than we know now.

One last thought: I started off during that period of time assuming I was the only dumbbell running a major public relations department of a US company. But as I talked with my peers in other corporations, hoping to learn from them, I asked questions, how do you do this, how do you do that -- I discovered I was not the only dumbbell. It is rare for a large PR department in a US company to have any capabilities outside of the domestic field.

JTL: What does the institute's training program hope to achieve among its participants?

VELMANS: To give the executives a greater sensitivity to, and awareness of, dealing in their fields outside the US; it has to be different, and how it is different and what one should be aware of and what one should do.

BLOCK: To encourage a network of companies and corporate PR executives with similar interests.

JTL: What are the main problems that global US corporations face?

VELMANS: One of the main problems is that we do not have enough people qualified to deal with the issues because they haven't been trained.

There's always a problem when you are a guest in a foreign country. As long as you contribute to the welfare of that country, you are basically okay. But the moment the economy of the country has a setback, the government of that country will make greater demands on you. It will ask for more taxes or become more restrictive. The backdrop of the political and economic climate influences the company's very existence. It may go well for 20 or 30 years, but occasionally a problem arises. Now, how do you sensitize management to minimize the shock of the crisis and to be able to communicate well?

JTL: Why is it that most major American multinationals place little value in the formation of a multicultural corporation communication group? Why is it more relevant today?

VELMANS: If you don't have a toothache, you skip going to your dentist every year. You'd have forgotten about it unless the dentist sensitized you to the dangers of not seeing him. A corporation has other priorities. It is always looking to the best possible scenarios, to its future growth. It's not looking toward its next disaster. When a crisis hits, then it says, "Why didn't we do something about it two or three years ago?" But then it's too late. It's the same: preventive medicine.

BLOCK: In my view--and I am not a professor of business nor a historian--there are a couple of principal reasons.

Many, certainly not all, of the American companies that have significant penetration in markets outside the US got there right after World War II. They had a great advantage. The United States' economy came out of World War II as the biggest, most advanced, most productive in the world, undevastated and untouched by war. So we had this huge machine to produce goods the world wanted. In many countries, there simply was no alternative because of the ravages of war.

Many of these companies had a second huge advantage because of the USAID program--the military as well as economic aid in Europe and other countries. We were pulled into these markets by USAID. Many of these aid programs, as you know, had strings attached. Country A will get so many millions of dollars for farm equipment or whatever they need. They had to purchase US equipment or some portion of it.

Many companies had proprietary technologies. Probably, the clearest example would be IBM. They were the only game in town in mainframe computers.

So my view of it is that we didn't have to be very smart in operating in other countries. Those were somewhat simpler times than now. Basically, when you went abroad you were in the manufacturing or market side. You created a subsidiary company for that nation. It was run by nationals in that country and a few expatriates. They tended to their business and there were not really any great problems.

Of course now, you have regional economies, and more and more so, regional problems. You have far more government regulations, plus economic and environmental issues.

The biggest thing is that US companies today are in parity with their non-US competitors. They have to be smarter and better because they are not the only game in town. You can buy non-US equipment as good as that which is made in the US.

Competition is real for the first time now for US companies. Obviously, others have caught up with us in technology and surpassed us by some measure in productivity. So it's much tougher to get in. It's a more complicated situation. US executives have to be more knowledgeable about their markets and operations abroad today than in the past.

JTL: Last year's first training program was considered a success based on the evaluations made by the participants. Was there any impact on any of the participating companies' public relations operations?

BLOCK: Only two of the companies represented last year are not represented now. One thing that had happened is that we started a process in these companies--now they will send people for years to come to these courses. The people who experienced the course last year clearly went back to their company and said, that's for us, let's sign on.

Can I point to anything, for example, whether General Motors has done anything differently this year than they would have otherwise? Maybe, but I am not aware of any.

JTL: Please describe your current training program.

VELMANS: It will address international public affairs issues, such as--how do you deal with Japanese bureaucracy if you are a US company in Japan? Everybody's talking about Europe in 1992. What is the government's relative role in Brussels? How is it different from lobbying in Washington? What are the mechanics and processes?

In fact, half of the training program is issues and the other half is how you practically deal with these issues.

BLOCK: The structured program for the week is a mix of how-to sessions largely in which the business executives are the resource, and a mix of conceptual, issue-oriented modules in which academics provide the resource.

The majority of the modules are lecture, panel-discussion types except for the cross-cultural module which is an interactive, role-playing session. In this session the participants are given tasks to perform, to role-play. There are a lot of discussion periods in which the implications for corporate communication and public relations managers are discussed.

JTL: Why is the institute based at New York University?

VELMANS: We could do this project several ways--I could do it on my own or with friends and my peer group. But I felt it was important to have an academic connection so that it would clearly establish it's a bona fide program.

I also wanted to be sure that we have a strong academic input, that it wasn't just businessmen talking to one another, but that we would have business school professors, social anthropologists, economists, who would, all from their points of expertise, address the communication issues that the public relations and public affairs executives might face. I was fortunate in finding in NYU a very strong response and sense of partnership.

JTL: Does the institute offer any management counseling services?

VELMANS: The institute is strictly a nonprofit organization. It is only in the business of training executives.

JTL: What are the requirements to be invited as a member?

BLOCK: First of all, the companies have to be multinational. If they were not, why would they be interested?

Second, the five-day training program is not cheap. If you are a member, it is $3500 per week and $4000 for non-members.

JTL: Are foreign executives eligible to participate?

VELMANS: We have no foreign companies that have signed up. But we have had expressions of interests from several non-US companies and we hope by next year we will have some. We do have US corporations sending non-US staff members to participate as students. But the focus of the training is US companies doing business abroad.

JTL: What are your future plans for the institute?

VELMANS: We want to do some serious work in scholarly research on some of the communication issues. We want the institute to ultimately offer a graduate program in global public affairs and public relations. It would be the first of its kind in the world. We would like to make this center more than just a pure management institute.

Our charter would be to determine what role communication plays in integrating the subsidiaries in a foreign culture. The emphasis is always on communication.
COPYRIGHT 1989 International Association of Business Communicators
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:interview with Global Public Affairs Institute founder Loet Velmans and president Edward Block
Author:Lopez, Joe T.
Publication:Communication World
Article Type:interview
Date:Jul 1, 1989
Words:2150
Previous Article:Minority hiring shows problems in corporate America.
Next Article:1992: meeting the communication challenge.
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