Ketchum Global CEO Rob Flaherty’s CIPR International Lecture: The End of Illusion

Last week, Ketchum’s CEO, Rob Flaherty, gave the keynote speech at the annual CIPR International Maggie Nally Lecture at the Palace of Westminster in London – the home of the U.K.’s Parliament. In his speech, Rob spoke of “The End of Illusion,” the shift in power from institutions to individuals, which makes people more difficult to trick, both in our personal lives and in the world of business. Please see below to read Rob’s full speech.

Rob Flaherty Speech“Good evening. It is a tremendous honour to be asked to deliver the annual Maggie Nally Lecture. Thank you.

I am here this evening to declare the end of illusion. I’ll discuss the profound implications for our profession, our companies, our brands and ourselves as individuals. And since this is CIPR International, I’ll make sure this is a global view.

But before I get into that I want to acknowledge an important anniversary. An anniversary of a vote in this House of Commons.

On this very evening 232 years ago, Feb. 27, 1782, the House of Commons voted to end the war with America. You remember that war? Against the 13 colonies?

A few days later the King was empowered by this Parliament to negotiate peace with the United States. A couple of weeks after that, Prime Minister Lord North resigned, the first British Prime Minister to be forced from office by a motion of non-confidence.

So, if we all had glasses, I would ask you to charge your glasses and toast the Members of Parliament who sat in this building all those years ago. I’m pretty sure that if that vote hadn’t happened I wouldn’t be standing here today. Or, at the very least, my flight would have been shorter and my accent would be very different.

That vote played a significant role in both the British and American version of one of our grandest illusions: the illusion that countries have created around their nationalism, their exceptionalism and their global Empire. Spain had its time, so did France. The British Empire. You remember the American Century? Now the rise of China. Some of that dominance is real, but some is carefully crafted illusion.

Which brings me to my core observation: Illusions have been around for a long time. Some are beneficial and essential. Some are very dangerous. Some exist at the geopolitical and societal level. Some illusions are within the world of business, corporate reputations and brands. Some are in our personal lives.

But the current confluence of new social technologies, globalisation, changing expectations and extreme transparency has led to a shift in power from institutions to individuals that virtually eliminates the ability to sustain an illusion. I, for one, welcome the change. I strongly encourage you to embrace the change. Whether you do or not, the end of illusion requires a fundamental transformation in the role we play as counsellors and requires new solutions for this new era.

So let’s look at this in three parts: a brief history of illusion, evidence of the end of illusion and solutions for the post-illusion era.

A Brief History of Illusion

A brief history of illusion… The dictionary defines illusion as the state or fact of being intellectually deceived or misled. That may be accurate but it’s too uniformly negative in my view. Many illusions deliver very positive results.

Sometimes, positive illusions are just plain fun. Shakespeare was literature’s greatest illusionist. “Oh, you fooled me. I thought he was a she. That’s funny.”

The world of magic is all about illusion. About a mile north of here, almost exactly 110 years ago, the master illusionist Harry Houdini performed what he described as his most difficult trick ever.

It was March 1904 during a matinee performance at the Hippodrome. The London Daily Mirror had challenged Houdini to escape from a special pair of handcuffs – handcuffs that had taken Birmingham locksmith Nathaniel Hart five years to make. Houdini escaped, after about an hour, with a little help from his wife. (But then who hasn’t maintained an illusion, or delusion, with a little help from a loving spouse?)

So even 110 years ago the media was trying to debunk illusionists. But 4,000 people and 100 journalists loved being tricked by Houdini.

Throughout history, leaders of every kind … leaders in government, leaders in religion, leaders in business … in every human endeavor … leaders have, with mixed results, attempted to create an illusion.

In ancient Japan and China, the masses believed their supreme leaders were literally gods with super powers. They were hidden away in palaces, shrouded in secrecy. That wouldn’t work today. You’d be getting Twitpics and Vines and MixBits and Instagrams from inside the royal chambers. We’d see the Emperor throwing eggs from a palace parapet or drag racing his Lamborghini around the Forbidden City. The behaviour of Prince Harry in Las Vegas would look like a sideshow.

In Europe there was the Divine Right of Kings. The Monarch was answerable to no one but God. In the modern era, it’s challenging to maintain the illusion you have a personal relationship with the Almighty if your cellphone gets hacked and your pornographic messages to your mistress make front page news.

In today’s era of intense scrutiny, always-on-the-hunt media, and always-on social media, as a leader it is next to impossible to maintain an illusion, of victory or defeat. There’s no hiding.

So let me ask you: Throughout history, who would you put in an illusion hall of fame? Heroes and villains. Can you think of any people in history, for example, who, yes, created an illusion, but the world was better for it?

My favourite example, fitting here in the House of Commons, is Sir Winston Churchill and his radio broadcasts that inspired the British resistance. As you know better that I do, Churchill was at times personally pessimistic about Britain’s chances of victory against Hitler, but he used his unparalleled rhetoric to rally public opinion against a negotiated peace and prepare your country for a long war. The House of Commons, which ignored him throughout the 1930’s, was electrified and cheering when he delivered the “finest hour” speech here in 1940. The illusion of strength and willpower that Churchill created built a bridge through to late 1941 when the US finally joined forces with the Allies to collectively defeat Hitler.

Two-hundred-and-thirty-two years ago, Prime Minister Lord North may have failed to maintain the illusion that the sun never sets on the British Empire. In those days, it took weeks or months for news that Lieutenant General Lord Cornwallis had been defeated by the Americans and French at Yorktown. Some historians think the Prime Minister resigned too quickly because the tide of the war in the colonies had shifted. Perhaps with better communication, the world would look very different today.

Of course, any complete Illusion Hall of Fame or Hall of Infamy would have to include those who created dangerous or deadly illusions. Who would you include? I would probably include all of the dictators throughout history who maintained a stranglehold on their people by creating an illusion of their power and right to lead.

A more specific name that comes to mind is Joseph Goebbels, the Reich Minister of Propaganda in Nazi Germany who put his propaganda skills to use to create virulent anti-Semitism and convince Germans to embrace total, aggressive war. Those were malignant, metastatic illusions.

We could probably spend the rest of the night talking about good illusions versus bad illusions. To a certain extent, probably most of us live in an illusory world of our own making. I keep a few old jackets I like because I know I’m going to lose that 10 pounds that will let me get back into them.

Illusions are all around us. At times that begs the question, is everything an illusion? Relationships? Religion? Currency? Currency is certainly an illusion – propped up by a collective willingness to believe in a tangible standard that no longer exists. As the Nobel Prize-winning economist Milton Friedman said, “These pieces of paper have value because everybody thinks they have value.” Currency is such an illusion that the Bitcoin or virtual currency market – which hit a speed bump this week – is starting to be taken seriously by the big global banks.

The wonderful British poet Samuel Coleridge created the phrase “suspension of disbelief.” Coleridge said that if “human interest and a semblance of truth” could be written into a fantastic tale, the reader would willingly suspend judgment concerning the implausibility of the narrative.

As citizens, as consumers, as community members, we suspend our disbelief and almost deliberately fall for illusions all the time.

But it’s getting harder to pull the wool over our eyes.

The End of Illusion

Which brings us to a cascade of evidence that we have reached the end of illusion.

Everywhere in the world, social technologies are accelerating the shift in power from institutions to individuals, everywhere from Beijing to Cairo and Kiev to London, Pyongyang to Peoria.

I was in Shanghai two weeks ago and they are still talking about the horrible Wenzhou train derailment that happened a few hours south of Shanghai in 2011. It was a watershed moment in the history of illusion in China. You may recall, two high-speed trains carrying 1,600 people collided, 40 people were killed and 200 injured. Global leadership in high-speed rail is a national priority in China. This was the first fatal crash of a high-speed train. Initial statements blamed it on lightning in the area. Then, the train cars were buried just days after the crash, preventing a proper investigation. Ten years ago it might have ended there. But that week in Wenzhou there were many people with their cell phone cameras running. People took to Sina Weibo, their hybrid of Facebook and Twitter, to voice skepticism and demand a further investigation. When the official investigation was released six months later, officials cited faulty systems as well as a series of management failures that led to the crash.

Here’s something that startled me when I was there in China: some companies are saying that they are increasingly managing two voices for their brands. One voice, on state-run media is more controlled and sanitized. The other voice is much less controlled, more free-wheeling and casual. This is their brand voice on social media, such as Renren and Weibo. Think about the implications and potential issues with that.

As you know, social media played a central role in unmasking the illusion of power in the opening rounds of the Arab spring two years ago as regimes in Tunisia and Egypt fell to protesters who fuelled their assault through Twitter and YouTube.
The events in Kiev over the past two weeks were at the very least accelerated because the protests in Independence Square were streaming live on the Internet. The end of negotiations was announced by the Polish foreign minister via Twitter. Just this Monday, Ukraine’s acting Interior Minister announced the warrant for the arrest of President Yanukovych on his Facebook page. Transparency, speed, access, a rapid shift in power. All signs of the end of illusion.

Closer to home, let’s look at the recent floods across Somerset and the Thames area. What can these events tell us about the waning power of governments to persuade a public that it has done the right thing? What do these events tell us about how the public consciousness decides who to believe and trust? And what can we learn from the floods about how the public make judgments about who is correct despite their non-expert knowledge and the inescapable force of nature.

In the US, it is no longer possible to build the kind of Camelot illusion the Kennedy Administration maintained in the early 1960s. As hard as many American politicians try to create the family values illusion, it’s tough to do when you’re tweeting inappropriate pictures of your private parts around the world.

President Obama swept into office in 2008 on the promise of a new Camelot.

“Yes we can.” “Yes we can.” “Yes we can.”

It was mesmerising theatre. I believed it. “Yes we can, America. We can be great. We can get over all the petty infighting. We can fix things.”

For all intents and purposes, President Obama created a powerful illusion. Unfortunately he may not be able to turn that illusion into reality. The gap between “yes we can”, and what reality may prove to be, is increasingly difficult to close.
There’s a more pedestrian but very entertaining bit of political theatre you might be familiar with. It is playing out in Canada.

By all reports, the mayor of Canada’s largest city, Toronto’s Mayor Rob Ford, is 380-pounds of bloated bombast and disarray. He makes Boris Johnson look like a GQ model.

Anyway, despite being from a very wealthy family, Mayor Ford was elected on a simple, one-plank platform. Stop the gravy train. Reduce costs.

The stop-the-gravy-train campaign was very effective. If this had been in the pre-social media era, Mayor Ford might have gone down in history as a Canadian Harry Truman. Plain spoken, conservative man of the people, digging out waste and holding people accountable.

But unfortunately for the good Mayor, in today’s world there are cameras and microphones everywhere.

Rumours started circulating last year that pictures of him smoking crack cocaine exist. There were denials for months. “I am not a crack addict,” he proclaimed.

A video of him smoking crack was reported to exist. “I can’t comment on a video I haven’t seen or doesn’t exist,” he prevaricated.

Toronto’s police chief said he had the video and it shows the mayor smoking crack.

“I smoked crack,” the mayor then admitted. “Probably in one of my drunken stupors. I’m human. I made mistakes. I’m sorry. Forgive me and let’s move on.”

Clearly it’s just about impossible for a public figure to have a separate private life.

Our own research at Ketchum shows a stunning disappointment with political leaders across the world. We do an annual global survey on perceptions of leaders and leadership.

The level of disappointment in our political leaders in the 2013 survey was striking. Just 21 per cent overall said political leaders are effective. Here in the UK that number was only 12 per cent of leaders are effective. Does that sound about right? In South Africa it was 11 per cent, and France 9 per cent. You’d think you could poll higher than 9 percent just from relatives of politicians alone.

It seems impossible for that to get any worse but 40 per cent of us expect we’ll have even less confidence in politicians this year. In that context, it becomes easier to understand why a crack-smoking drunken leader is acceptable. We don’t expect any better. Perhaps we never did, but these days the public’s cynicism is fed everyday by rumours, gossip, terrible quotes, backbiting, and more polarising politics.

We wonder why voter turnout is so low in so many democracies. The answer is clear. A large percentage of the population thinks democracy is an illusion. “Hah, you fooled us. We thought voting actually meant something.”

I’ve been picking on political leaders, but leaders in business, religion, charity and in local communities all got failing grades in our research.

On the religious front, regardless of your opinion on the Catholic Church sexual abuse scandal, it certainly is one of the most powerful examples that power has shifted from the all-controlling institution to individuals and groups. I think it is quite striking that the United Nations Human Rights Committee investigated the Catholic Church. And its highly critical report was immediately available to all online.

And on the business front we could probably spend the whole night sharing examples of business leaders who profess one value, and then who act in a directly contradictory manner. They say: “Proudly Made in our Country,” and outsource their jobs to India. They donate to children’s charities in one market and employ child labour in another. They claim staff are their greatest asset then downsize by half. They claim environmental responsibility as a fundamental value, and blithely pollute in pursuit of profits.

The thing is, not only do they get caught today. But their disillusioned consumers punish them where it hurts. Sales. Our research found that overwhelmingly, consumers who are unhappy with an organisations’ leadership will buy less from that organisation or will boycott it all together. There is a concrete, bottom line consequence from saying one thing and doing another.

Solutions for the Post-Illusion Era

So now we come to the point when I should be prescriptive with solutions for the post-illusion era. Here are four ways to respond to this new reality.

1. Embrace Transparency
2. Focus on Character
3. Unite Public and Personal Personas
4. Mind the Gap

Number One: Embrace Transparency.

Stop fighting it. Make it part of your business strategy. Make it central to your offence, not just defence. Use it to your advantage to listen and improve. The feedback is gold. As I like to say, the most valuable media in the world is the only kind you can’t buy. Yes, actual conversations between people. Real-time feedback.

Here’s an extreme example: Last year I met Vineet Nayar, the CEO of HCL Technologies, the Indian IT services company with 85,000 employees. He told me that he has so embraced transparency that he posts the results of his annual 360-degree review online, comments and all, for everyone to read. Would you do that? Would the CEO of your company?

Of course, now that kind of constant feedback and transparency is increasingly out of your hands. My performance is reviewed on an ongoing basis on where — in addition to reviews of the employee experience at Ketchum, they rate the CEO on a scale of 0-100.

Another example: An increasing trend among our clients is to develop Conversation Suites to listen in real-time to Tweets, blog posts, Facebook comments and all other forms of online feedback. The best among these suites have two notable aspects. First they are truly global. You can search right down to the neighbourhood level all over the world. And, second, they are doing this listening in a way that is very visible and transparent within the company. They install giant screens in central locations at major corporate facilities around the world. Initially some people at these companies were concerned that negative comments would be so visible. But, as you and I know, they were already visible to millions online. So why not do something about it?

Number Two: Focus on Character

Since everyone is going to see everything, those of us in the reputation business have to focus more on actions than words, more on reality than illusion. Another way of saying this is that we have to focus on the character of the company and its people. What people actually do, day in day out, even when no one is watching.

The question is have we raised a generation of counsellors that are ready and able to counsel on corporate and brand behaviour even more than words and communications? Think about that. The average public relations practitioner comes into the field with a communications or marketing degree or enters through the journalism field. Few enter after studying business more broadly or from the management consulting ranks. It is a serious learning and development challenge in our field.

To help, the Arthur Page Society, which is another professional association for senior public relations and corporate communications executives, developed and published a landmark report called Corporate Character: How Leading Companies are Defining, Activating & Aligning Values.

The report suggests that in a world transformed by social media, ‘big data’ and radical transparency, your behaviour has to match your narrative. Your products and services must perform as advertised. You must treat employees, communities and the planet in a way consistent with your stated values.

I won’t go through all 10 Arthur Page recommendations. They are available in the report on the Arthur Page Society website. But let me tell you about some of them.

First, the majority of the companies they studied are actively examining and defining or re-defining their values – the guideposts for their behaviour. And they are making this a company-wide discussion. Because employees are more likely to embrace values they “own.”

Second, this process of defining values actively engages the C-suite and involves the CEO. A genuine, strong commitment from the CEO and leadership is essential. If leadership is not clearly, authentically and consistently committed to values, there’s no reason for anyone else in the organisation to be. And this is at times a high-stakes game because it’s not a value until it costs you something.

Once values have been defined, the report suggests, educate and train your employees about your values and the behaviours required to live up to them, and create formal recognition and rewards. Otherwise, you will only create the illusion of having values.

Then there are some areas in their recommendations where our communication skills play a big role. The report suggests that a company give values clout through consistent and far-reaching communication. Reinforce and reward those values continuously through role models and great story telling. Share the stories so everyone knows what behaviour is expected.

It comes back to us, then, the public relations professionals, to push our leaders to live in the real world. In my view good communication teams must now exist to change the way companies operate – not just communicate.

Number Three: Unite Your Public and Personal Personas

How many of you have ever received one of those Christmas family newsletters. You know, the page or two about the past year, perhaps with pictures of young Clare winning the equestrian event and all of us skiing in the Alps? Do you like them? In the States we call them “Brag and Gag” letters.

To me they are an example of illusion creation at the personal level. Think about your friends on Facebook. There are some that tell it like it is, but there are many that manufacture the appearance of a perfect life with air-brushed pictures and happy people all around.

Increasingly, as individuals and company executives the gap between our business life and personal life is closing. And if the two are very different, it will cause problems. We see this in celebrities’ lives, we see it in politicians’ lives. Now that scrutiny is coming to our business lives.

We live in a world where what we do on our ‘personal’ time is viewed, liked and shared by those who we spend time with on our ‘professional’ time. The idea of a private life, or in fact privacy, is an illusion as well. So our advice, eschew hypocrisy. But even more than that, don’t give in to the inclination to manufacture an illusion that won’t stand up to scrutiny. Your neighbours and current or future employers are watching.

What this suggests is that your social media policy as a company and your values education has to include how people behave in their off time. Some of you may debate that, even after all we have discussed here. But it is worthy of discussion.

Number Four: Mind the Gap

Our last recommendation brings all of this advice together and is inspired by the sign in the London Underground: Mind the Gap.

Mind the gap between actions and words, between stated beliefs and actual behaviour. Between brand promise and brand delivery. And it starts at the top. I think every CEO and CMO should have a Mind the Gap sign in their office. Indeed, I think the Chief Marketing Officer title should be changed to the Brand Performance Executive – more responsible for promise-keeping than promise-making.

Stephen Waddington and Steve Earl’s book Brand Vandals has some great advice in this area about brand behaviour and the behaviour of leaders when their brand gets into trouble.

From the book: “Behaviour has the greatest impact on the damage done. Behaviour will also have the greatest overall impact on how damage is minimised and potentially turned into a positive. The way leaders behave in responding to brand attacks not only singles out their leadership qualities but puts any deficiencies under the most brilliant of spotlights. They must be seen to act quickly, responsibly, fairly, decisively, ethically, morally and with utmost commitment to upholding the truth. That wouldn’t be a bad checklist for a day at the office, would it?”

In this new age of the empowered individual, we are in for a lot of radical transparency. For leaders today, there’s nowhere to run, nowhere to hide.

To me, that means there has never been a more important time to be a communication professional. I believe it is now our duty, as post-illusionists in the era of cynicism and scrutiny, to help organisations and individual leaders live credibly in the real world.

It’s a little ironic that so much of the extreme transparency that brings about the end of illusion is enabled by technology. Because, of course, technology has also always been a great facilitator of illusion, whether it’s the illusion of power and control, or the illusions created by the media and entertainment industry that we love to consume.

Related to technology and its role in illusion, today is the anniversary of another significant event in British Parliament, although this one took place over in the Red Chamber. On this date in 1812, just 202 years ago, the magnificent British poet Lord Byron gave his first speech in the House of Lords. He spoke in support of the Luddites.

You remember the Luddites. They were the artisans who opposed the mechanisation of weaving. Some smashed the machines that they feared would replace them. They wanted to maintain the illusion that they could maintain the status quo and prevent the industrial revolution.

But the Luddites couldn’t halt the advance of technology. Nor can we.

I was fortunate to be able to attend the proceedings of the World Economic Forum in Davos earlier this month. During one session, BT Group CEO Gavin Patterson was talking about the threats to privacy that were represented by the Edward Snowden affair and its fallout. Mr. Patterson said his customers cannot be guaranteed 100 per cent privacy when using the internet or mobile devices.

The illusion that anyone has privacy or security of information in the digital age is a fallacy. The illusion that you have privacy of person when you travel about – especially in London – would require a heroic suspension of disbelief to maintain. There are cameras everywhere. And facial recognition software. But are we choosing to believe it?

Let me close by telling you about another Houdini illusion. Houdini used to make an elephant disappear on stage in front of an audience. The master illusionist would bring the elephant on stage and entertain the crowd, getting the great pachyderm to perform all kinds of tricks. Then he would announce his intention to make the animal disappear. He’d count to three, fire a gun, and the elephant would vanish before their eyes.

The trick was done with a spring loaded backdrop that exactly matched the one behind the elephant. But this one would snap into place between the elephant and the audience. Houdini counted three and fired the gun. Reflexively, the audience members closed their eyes in response to the flash and bang of the gun. In that instant the spring-loaded backdrop would snap into place. To the audience it appeared the elephant simply vanished.

A great technological illusion. And a great metaphor. How often have companies, brands or leaders tried to use distraction to make the elephant in the room disappear?

Well today the elephant in the room is the end of illusion and the requirement for all of us as professionals to rise to the challenge. To raise a generation of counsellors as adept at advising on actions as words. To eschew illusion and embrace transparency. If we do this, I think it can position our field to bring much greater value to our organisations and I look forward to joining with you to respond to the challenge.

Before I stop – and I think there is plenty of time for questions – I do want to thank our host, the Chartered Institute of Public Relations International, especially Eva Maclaine. And my friend, colleague and CIPR President Steven Waddington.

I’m especially honoured to be delivering the Maggie Nally Memorial Lecture, and to be in the company of the incredible speakers who have preceded me. One of the most successful business books of the last year is called Lean In. It was written by Sheryl Sandberg, the chief operating officer of Facebook. In it, Ms. Sandberg advises women to lean in to their careers – to fully engage. Good advice for men too, though it deals with challenges and behaviours that are unique to women.

Maggie Nally was obviously ahead of the curve when it came to leaning in. The Institute and our profession have all gained from her initiative. So let me also express my appreciation to Ms. Nally and her family, who made this talk possible.

Thank you.”