Fast Company

The Power of Public Relations

In an economy where every company wants to be recognized as a thought leader, Pam Alexander and Andy Cunningham are reinventing how you get your message out.

It's the first night of COMDEX, the biggest IT trade show in the world. More than 215,000 geeks, nerds, and high-tech execs have gathered in Las Vegas to hear moguls predict the future and to check out the gadgets that will create it. Bill Gates, the most powerful man in the world's most powerful industry, is about to give the keynote address to 7,000 people at the Aladdin Hotel on the Strip. Outside, there's a line of people stretching four blocks long, all clamoring to get into the packed auditorium.

But as Gates approaches the stage, something is missing. Or someone is missing - in fact, a number of someones. Quite a few important members of the technology press corps - Stephen Manes from the New York Times, John Clyman from PC Magazine, Gina Smith from ABC News, Jason Pontin from the Red Herring, Theresa Carey from Barron's - are unaccountably absent, even though their red press badges would let them slide into the auditorium, in front of the teeming masses.

If you want to find these heavy-hitting technojournalists, just go up the road to the Hard Rock Hotel, where they're partying at an elite soiree thrown by Alexander Communications Inc., one of high-tech's most influential PR firms. There you'll see 350 of the media's top reporters, pundits, and analysts being lavishly entertained by 30 of Alexander's employees, who carefully introduce them to executives from 18 of Alexander's choice client companies: rising stars such as MangoSoft Corp. and Encanto Networks Inc., along with established winners such as Hewlett-Packard and IBM. The host, Pam Alexander, is conspicuously absent from her own gala, much like a latter-day Gatsby, but her awesome industry clout is clearly on display. She's picked a time slot directly opposite Bill Gates - and she's managed to upstage him!

In the marketplace of ideas, the conversation has gotten extremely noisy. At COMDEX, for example, some 10,000 new products are on display. Virtually every surface in Las Vegas, from taxicab roofs to hotel-room bills, is layered with marketing for some company's booth. With so many journalists, analysts, and players in one place, COMDEX is a PR person's dream; with such brutal competition for their attention, it's a PR nightmare. How do you rise above the din? Is it even worth the effort?

Pam Alexander's approach to COMDEX, and to PR in general, involves the precise organization and incredible discipline of a military operation. With the proper combination of a soft touch and an iron will, she believes, her firm will not only rise above the clamor but also command the attention of the industry's biggest stars. And the turnout at the Hard Rock seems to prove her right.

But in an economy of competing business models, there is another school of thought. Andrea "Andy" Cunningham of Cunningham Communication Inc., one of Alexander's main competitors in the Silicon Valley high-tech PR scene, sees in COMDEX evidence that traditional public relations is close to a breaking point. Cunningham's 13-year-old firm has offices in Palo Alto, Phoenix, Cambridge, and Austin, and employs about 130 people. It boasts such clients as Cisco Systems, Novell, Sprint, two Motorola operations, the IBM Consumer Division, and parts of Hewlett-Packard. Cunningham's vision: It's futile to practice PR the old way.

"Ten years ago, our job was to manipulate people in the press," she says from her perch on a futuristic black chair in her bright, airy office in Palo Alto. "It wasn't that hard to do - there weren't that many of them. For every company, there were maybe 20 or 30 print and TV types that you had to influence. If you had enough charisma and made relationships with them, it was fairly easy. Today you have to communicate with 300 people about every client. It's just not possible."

In Cunningham's view, the new economy is the new cacophony: "Today you get an article in, say, Fortune, and a week later, it's meaningless. In fact, we got this incredibly great article for Cisco in Fortune. It was called 'Cooking with Cisco.' It was a really hot article. Less than a week later, everybody had forgotten it because something else came out after that. Business Week did something, and somebody else did something else." The only way to escape this ratcheting of news and noise - this spiral of ever-increasing volume, ever-decreasing impact, and permanently lost control - is to reinvent PR, says Cunningham.

Welcome to the new world of public relations, where hot startups and hot venture-capital firms are matched by every-bit-as-hot PR shops. According to the Bureau of Labor Statistics, the industry is on a roll: Public relations will be among the fastest-growing professions in the United States from now until the year 2005. And within the field, the technology arena is by far the fastest-growing sector - fueled in large part by startups, whose biggest expenditure is often for PR.

But the irony is that a field concerned with image suffers from an embarrassingly poor image of its own. Long regarded as a "female ghetto," PR still gets tagged with the stereotype of the know-nothing "flack" who mechanically repeats ideas that she doesn't really understand. At a deeper level, public relations carries the image passed down by Edward Bernays, the field's founding father: In the 1920s, he conceived of the profession as a way for powerful elites to manipulate a gullible public. Pam Edstrom, chief public-relations specialist for Microsoft and executive vice president of Waggener Edstrom Inc., says of her own firm's image, "I give us a D-minus. The shoemaker's children have no shoes. Our clients have beautiful handcrafted boots. We go barefoot."

Yet firms like Alexander's, Cunningham's, and Edstrom's are quietly changing the rules of the PR profession. Unlike their predecessors, these firms don't rely on legions of low-paid young women who merely take journalists out to lunch. Indeed, they're owned and run by women. And these smart, well-educated, ambitious women operate fast-growing businesses that do far more than craft public statements and put out press releases for their smart, well-educated, ambitious (and still mostly male) clients. To be part of Alexander's or Cunningham's stable has become another coveted qualifier for a startup, like having the venture-capital backing of Kleiner Perkins or Hummer Winblad.

As the roles have changed, so has the script. Alexander offers one model: the PR firm built on intense personal relationships, a knack for networking, and a laserlike focus on the convention circuit - combined with military discipline and computer-backed precision. Cunningham offers another: the values-based PR firm straight out of Jerry Maguire, limiting the number of its clients to offer more personal service, bringing truth into its clients' often-insulated world, representing the anti-PR firm in a world of overheated hype.

The Power of Relationships

"I just need to use up this film," says Pam Alexander as she coaxes John Markoff of the New York Times to step into the photo she's about to take. Her pitch seems plausible, certainly, and innocent enough to be credible. But Markoff must realize that he's the target of a grand master of schmooze. He's the dean of technology reporters, perhaps the journalist whom high-tech PR people would most like to influence. And here's Pam Alexander getting him to pose alongside two other powerful figures: Stewart Alsop, venture capitalist and irascible pundit, and Bob Metcalfe, Ethernet pioneer, columnist - and a client of Alexander Communications. Alexander cheerfully pals around with these three consummate insiders as if she were a high-school class president, eager to capture golden moments for the yearbook. Alexander may be outside the frame, but make no mistake: She's staging the picture.

All of this low-key, high-stakes persuasion is going on during a break at yet another high-tech powwow - the elite, invitation-only Forbes/Gilder Telecosm conference, held at a luxurious resort in Palm Springs. The conference is a Pam Alexander work-in-progress. She and four of her associates are here on a dizzying variety of missions. They have their usual agenda: to facilitate conversations between corporate clients, on the one hand, and key reporters, analysts, and industry insiders, on the other. But that's table stakes. Alexander is also doing PR for a dozen or so of the attendees, from venture capitalist John Doerr, who's talking up the Technology Network (a political-services organization that he cofounded), to Charles Brewser, head of MindSpring Enterprises Inc. (an Internet service provider), who's here to talk about the future of telecommunications. Alexander is also in charge of PR for the conference itself.

But for Alexander, managing multiple agendas is the only way to do PR. In fact, her 24x7 work life seems to represent one woman's manic attempt to refute Andy Cunningham's contention that it's no longer possible for a PR person to influence the ever-proliferating media hoard. She started her agency 11 years ago in Atlanta, where she had worked in marketing for a mainframe-software company. In 1991, when her clients at Hewlett-Packard said they needed an agency with a presence in the Bay Area, she opened a San Francisco office. Now the agency employs about 120 people there and at its offices in Atlanta and Denver. Clients run the gamut from six different parts of established giant Hewlett-Packard to fresh startup MangoSoft, from media titan Ziff-Davis to media upstart Herring Communications. The firm took in $12 million in revenues in 1997 and expects to make $20 million in 1998.

While her agency is hardly a one-woman show, Alexander sets the standard for the kind of "relationship-building" that most PR people pay lip service to but that few truly master. How legendary is her networking prowess? One rival PR executive jokes about creating a video game to train people in the art of working a room - with the final round consisting of a head-to-head showdown with the world champion: Pam Alexander.

But behind this good-natured gibe is a serious side effect of Alexander's approach to PR: She draws a considerable degree of envy and resentment from rivals who cynically attribute her success to buddy-buddy personal connections rather than to professional brilliance. What her critics fail to see is what goes on behind the scenes. To focus on Alexander's prowess on the conference circuit is to underestimate her multilayered strategy and her hyperorganized way of sharing information about the industry.

Alexander and her employees are unrivaled as both attendees and promoters of high-tech conferences. They represent five such events as well as two publishing companies with highly active conference units. But their approach to these social events is strictly business: They set specific performance goals for every conference, log endless hours in preparation, and go all out when the event takes place. Each Alexanderite who attends a conference drafts and circulates two sets of goals: his or her own objectives for the event, and those that the firm is pursuing for the client. "It may sound kind of detail-oriented," Alexander says, "but when you go into a conference environment, you get so sucked into everything that you're learning, you end up leaving the conference going, 'Gosh, I missed those opportunities.'"

The conferences serve a number of larger purposes. For one thing, they let Alexander demonstrate the kinds of lucrative relationships that she can orchestrate among her corporate clients. "The value of working with us should be not just what press coverage they're going to get but also the business relationships - not necessarily with customers, but with potential partners," she says. "We always try to facilitate that."

For another thing, the conference circuit helps make her agency a real participant in the high-tech conversation, rather than just a megaphone for already-established messages. To that end, Alexander not only represents the Technology Network, Silicon Valley's new political group, but also serves on its board. The strategy of representing and attending conferences, putting on dinner parties, and generally acting as a social secretary for the techno-elite ultimately gives Alexander an information edge: "The issues discussed at some of these top-level conferences appear in the business and trade press a few months later," she says.

The Alexander model is built on "overcommunicating." At Gilder's Telecosm, for example, at least one Alexanderite per session was charged with taking notes and emailing the highlights to clients who couldn't attend and to the Alexander offices. The firm brings the same discipline to its tracking of the media. It maintains a database with active records on more than 25,000 people at more than 6,800 organizations: market analysts, online publishers, financial analysts, venture capitalists, industry pundits, and business journalists. The Alexander intranet makes these data available to the firm's people everywhere, and about 50 staff members access the information daily. Each client gets a targeted "key contacts" list of 50 to 500 media people - with detailed printouts describing their interests and preferences.

Internal communication keeps Alexander Communications up to date on an expanding cast of characters. "A lot of this is very time-sensitive," Alexander says. "You want to get the word out immediately. Typically, what we do is type up a conversation as it's happening. If you wait until the end of the day, either you forget something or something doesn't get done."

This kind of techno-enhanced hustle is an Alexander hallmark. "We bring an intensity and a sense of urgency," says Alexander. "There are so many niche publications coming out. There are so many opinion leaders in so many different segments. To do an effective job, you need to be on top of that. With the rise of the noise level, communications people like us are more active than ever in setting the agenda. We influence what gets discussed in the industry we serve."

The Power of Values

It's 9 a.m. the morning of COMDEX, and while the Alexander forces are rushing to guide their clients through the nonstop extravaganza unfolding in Las Vegas, the week is getting off to its usual calm beginning at Cunningham Communication in Palo Alto. In a conference room, some 30 staffers have gathered for a weekly ritual.

"Good morning, Palo Alto!" chirps Bob Finlayson, the staffer who has just that moment been chosen to lead this meeting. "Good morning, Bob!" the others respond. For the next 20 minutes, people talk about their latest accomplishments. The Novell team has gotten today's San Francisco Chronicle to run an article on the network that Novell has set up at COMDEX. A long-time client that had threatened to cut ties with the agency has seen the error of its ways, and the account team has just received a peace offering of chocolates and fruit.

If Alexander is a well-oiled machine, Cunningham is a finely kept garden. The firm prides itself on having values that go beyond chasing after the next media "hit." Visit the Cunningham Web site, and you'll see a carefully articulated statement of the company's purpose. Attend a Cunningham meeting, and you'll see that purpose lived out in the way people talk and work together - and in the way they discuss their responsibility to clients.

Later that week, a group of Cunningham's senior executives meet to craft "messages" for AlphaBlox Corp., a new company whose launch is a few weeks away. The challenge: How to position a product that has to appeal both to IT managers and to line managers? A half-dozen Cunninghamers gather in Sesame Street, a conference room equipped with croquet mallets, a hula hoop, and a huge toy box - all surrounded by a circle of cushy chairs that sit low to the ground. But while this is a creative space, the work done here isn't child's play.

As the Cunninghamers work the problem, the inherent conflict becomes clear. Positioning AlphaBlox as a way to give line managers the information they need to operate more independently might lead IT professionals to fear a loss of their power. Language is critical: Business and technology types use the same words to mean different things. So the Cunninghamers argue the nuances of "customization" vs. "personalization," "made to order" vs. "custom fit," "just in time" vs. "time to market."

What's most notable, however, is what isn't discussed: No one talks about analysts and journalists. The focus stays on the customer: The firm sees little point in worrying about reaching the right "influencers." Its job is all about direct contact with the client. There's a lot at stake for AlphaBlox, says Ron Ricci, a member of Cunningham's executive staff: "This boils down to how this company will spend $5 million or $10 million in venture money. This company is counting on Cunningham to figure that out."

In one corner of Andy Cunningham's office is what passes for an ancient artifact in Silicon Valley: a squat Apple Macintosh, circa 1983, its plastic discolored, its design familiar yet odd. It's one of the first prototypes, a rough-draft machine that was never released. As manager of the PR team that helped launch the Mac, Cunningham was at ground zero of an explosion.

The vintage computer is a fitting memento, since the Mac unleashed a powerful trend - desktop publishing - that turned public relations into an entrepreneurial cottage industry, wide open to new ideas and new players. In 1985, Cunningham celebrated her own launch and, with just $4,000 in startup capital, began working solo out of her house.

Thirteen years later, she employs 130 people at Cunningham Communication, which has grown by an average of 30% annually since that first year. And she's so well known that her business card gives her name as just "Andy." The firm's annual revenues rose by more than 40% in 1996, to $16 million, and in 1997 hit $17.5 million. But Cunningham now says that the old ways of doing PR are as obsolete as the old economy - and that it's a good thing.

The job of public-relations consultants, Cunningham says, is to tell a company's management what its many constituencies are thinking. The PR person needs to out-report the best reporter - to talk to journalists, analysts, stockholders, and customers in order to understand the marketplace better than any of those audiences possibly can. The payoff comes when the PR person can convey the constituents' messages to executives at the highest levels of the client company - and then demonstrate to those constituents how their input has helped inform top management's decisions. "You can get all of your stakeholders to participate in your success - but most companies don't involve them," Cunningham says.

PR people have another new function: To be the bearer of bad, but always honest, news. "If the shareholders aren't buying the stock because they don't like the new CEO, or if the products are really good but the service really sucks, we're the people who bring that information to the table," says Cunningham. "We keep people honest. I run a company myself - a small company, compared with our clients - and I know that people lie to you when you're the CEO. Nobody tells you the truth. I pride our senior consultants on having the ability and the guts to tell CEOs the truth."

If PR is about changing behavior instead of polishing an image, then what makes a great PR campaign? According to Cunningham, it involves taking on problems that the client company is criticized for without either glossing over them or denying their existence. Take the case of Firefly Network, which produces Web sites that build communities around shared interests. Firefly falls right into one of the hottest controversies on the Web: the battle over privacy. You can't have the personalization that community requires unless consumers give away information about themselves and allow a site to watch what they do online. But what happens to all that private information?

"We could have gone the way of every other company: 'Consumers are pretty dumb.' " says Saul Klein, Firefly's senior vice president of brand and strategy. But influenced by Cunningham, Firefly adopted a model of open communication with customers. Its Web site states explicitly what the company will or will not do with information that customers volunteer. It also provides a way for them to have that information deleted at any time. In short, the company directly addressed the biggest criticism that could be leveled against it - and ended up with a lot of positive press coverage and a big voice in the debate over privacy standards.

This approach to PR makes the fit between Cunningham and its clients a matter of utmost importance: It doesn't work with every high-flying startup, and most companies don't measure up to the firm's standards. While a traditional agency of its size would serve as many as 50 clients, Cunningham works with just 12. And while it has received more than 300 inquiries from would-be clients in the last two years, it has added new clients very selectively: In January 1998, for example, it entered a joint venture with two other firms to handle worldwide PR for Oracle, the database giant.

To be sure, Cunningham account executives still talk to journalists and analysts on their clients' behalf, much like people at any other agency. But to Andy Cunningham, the new direction in PR is clear: "The job of PR people in the future is to find communities of knowledgeable people and to communicate with them," says Cunningham. "It's to make them aware of the product, listen to what they have to say, and move that information back and forth. It's a position of influence for people who like to be influential."

The Power of PR Pros

Andy Cunningham and Pam Alexander represent opposing views on the role of PR in an era of media proliferation. But they agree that there is a new model for PR in the new economy: PR professionals need to become informed participants in the industries they serve. They need to collect and analyze vital information about their clients. And they need to find new approaches to image-making.

In developing a corporate image, says Andy Cunningham, PR has to emphasize substance over style, real change over a superficial makeover. PR, she says, isn't public relations - it's personal reinvention. "Doing the new public relations is like serving as a physical-fitness trainer for companies that want to shape up the right way," she says. "We get in there and help companies with their exercise routines, their diets, their habits - all the stuff that will make them a better company. That's a huge change from what public relations used to be: 'Here, just wear a dark pin-striped suit, and you'll be fine.'"

Katharine Mieszkowski katharinem@fastcompany.com is a senior writer at Fast Company. You can reach Pam Alexander http://www.alexander-pr.com and Andy Cunningham http://www.ccipr.com on the Web.

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