Two pieces in the January/February issue of Harvard Business Review focus on the importance of customers, and both--I think--make the same mistake.

The first, by Roger Martin of the University of Toronto, makes the case that companies have been focused on shareholder value for the past three decades, to the detriment of their shareholders--an argument with which I have a good deal of sympathy.

Martin draws on some historic data showing that shareholder returns actually went down during the "shareholder value era" (which he defines as stretching from 1977 to 2008) to make the case that "to create shareholder value, you should instead aim to maximize customer satisfaction."

I think Martin is on to something, but I would make the case that companies should in fact be focused on the needs of all stakeholders: employees, customers, shareholders and--in today's hyper-transparent social media age--communities.

Martin touches on this possibility, but dismisses it in a sidebar that argues "there can be only one goal," or more specifically that companies "can maximize only one variable." That may be true, but it doesn't prove that customer satisfaction is the one variable that companies should be maximizing. More important, it doesn't prove that maximizing a single variable is the best approach to creating a successful, sustainable business.

Indeed, in arguing for a shift from focusing exclusively on shareholders to focusing exclusively on customers, it seems to me that Martin is simply creating a new variation on the same mistake. (Consider: Martin makes the case that focusing on customers will create a better return for investors; I could make a similar case that focusing on employees will create a better experience for customers.)

Managing the conflicting demands of multiple stakeholders is, it seems to me, what makes management challenging and interesting. Any attempt to reduce that task to a single dimensional is an over-simplification.

In the second article, Roland Rust, Christine Moorman and Guarav Halla (University of Maryland, Duke University and consulting firm Knowledge Kinetics respectively) make the case that companies need to reorganize their marketing to put "cultivating relationships ahead of building brands."

Again, I think the authors are half right. The idea that there needs to be (and for many companies, already is) a focus on relationships is relatively uncontroversial. But I'm not sure why the emphasis is exclusively on customer relationships. To my mind, companies need to reorient themselves around managing their relationships with all of their key stakeholders.

There is a function in most companies dedicated to that idea. Now what's that called again....

Public relations ranks among the 50 best careers of 2010, according to U.S. News & World Report, which should be good news for all of those wishing good riddance to 2009.

U.S. News expects the public relations industry to rebound strongly this year, and so do I. Every major trend--the rise of social media, declining public confidence in major institutions, increased transparency--suggests that building stronger relationships between organizations and their stakeholders will be vital to any success those organizations (be they corporations, governments, or non-profits) enjoy in the coming decade.

If you want more reason to believe that the immediate future is bright, two articles in the mainstream media--one on either side of the Atlantic--suggests that public relations is gaining a little respect from those on the other side of the media divide.

Paul Argenti has an impressive piece in the FT--drawing on the ideas presented in his new book--on the new communications challenges facing companies in the 21st century. "In addition to rethinking the definition of communication, the best companies are rethinking its structure," he says. "There is a greater need for integration, collaboration and partnership among corporate leadership, human capital, finance, sales and legal teams."

It makes an interesting companion piece to this article in Forbes by the Reputation Institute's Roger Johndrow, which examines the role of the "chief reputation officer" asking who should fill that increasingly vital role. (It should be obvious. It's a tribute to the PR industry's ability to undersell itself that it isn't.)

But likely growth is not the biggest reason I'd put PR at the top of the list of the best careers.

Public relations, done right (and it will have to be done right in the high-pressure, high-stakes decade ahead of us) aligns the behavior of organizations with the expectations of the society in which they operate. It's hard to think of any function more vital to solving the problems we currently face.

This is a decade for public relations people to finally demonstrate the value to the organizations that employ them and the world in which they live.

Thinking a little more about my post on the difference between measuring communication and measuring public relations (and yes, I know I spend too much time worrying about trifling semantics) I am struck by the fact that in our industry the people who are most likely to be practicing public relations are also most likely to call themselves corporate communicators, while those who practice mere communications eagerly embrace the term public relations.

Part of this stems from what appears to be genuine confusion about the terms: I have, in the past, received press releases from firms claiming that they are broadening their services beyond public relations to include marketing communications. It has always seemed obvious to me that marketing communications (typically, communicating with consumers) is a sub-set of public relations (building relationships between an audience and all its publics or stakeholders.

Whence the confusion?

The origin of the problem is that it has always been possible for anyone to hang out a shingle claiming to be offering public relations. Over the years, many of those who were in fact publicists, whose service offering began and ended with media relations, decided that public relations sounded better. So they started to claim to be public relations people, thus beginning the devaluation of the term public relations.

In response, many serious practitioners of genuine public relations--particularly within corporate America-- decided they needed a different term to describe what they did. So they cast about for an alternative term, and a majority of them settled on corporate communications. (The last time I looked at the membership roster of the Arthur W. Page Society, for example, I don't think there was a single senior in-house professional with the words "public relations" in his or her title. Someone will doubtless correct me if I am wrong.)

In addition to the desire to distance themselves from the publicists-pretending-to-be-PR-people, however, I wonder if there was not in fact some pressure inside corporations for the function to actually become corporate communications rather than public relations. Which is to say, I wonder whether most companies are not, in fact, far more comfortable communicating (by which I, and they, really mean disseminating their message) than they are relating?

That may have been the case 20 years ago, when the change in nomenclature took place. But it cannot be the case in the new social media age: communicating (at least the half of it that communications departments typically engage in: talking) is not a particularly useful skill. Relating is. Maybe it's time to reclaim the words "public relations" and, more importantly, the philosophical principles that underpin those words.

Entergy Corporation's vice president of communications Arthur Wiese, writing at the Arthur Page Society's Page Turner blog, makes a strong argument for the integration of public relations and government relations.

Discussions with his peers led him to conclude that in most corporations the functions "not only operated separately in most companies, they rarely even conferred with each other." That was in contrast to his experience at the American Petroleum Institute, where "I was in charge of not just communications in the narrow sense but opinion research, coalition-building, grassroots organizing, community relations and advertising – all the building blocks of a well-integrated public affairs program except lobbying itself. All these functions should be seen as complementary tools for achieving a common goal... to mold public views and public action to further the interests of the company, its shareholders and its employees."

Wiese makes a strong argument, and the only quibble I have is that it doesn't go far enough.

Public relations is about building, maintaining and leveraging relationships between an organization and its publics, or stakeholders. Government is an important stakeholder for most companies, and so yes, government relations is a part of public relations. But so is investor relations. So is customer relations. So is employee relations.

Unfortunately, the public relations function has become Balkanized in most organizations, the result--in many cases--of weak senior public relations pros losing out in turf wars with stronger counterparts in other departments. And so in many corporations, investor relations reports to the CFO; employee communications reports to the head of HR; customer relations is part of marketing; government relations is part of the legal department; and PR is reduced to whatever is left: sometimes little more than media relations.

But in today's complex world, these functions can't operate at full efficiency if they are kept at arms' length from one another. The stakeholder groups overlap and interact--employees can be very powerful advocates in the government affairs arena, for example--and simply cannot be managed in isolation.

It's hard to imagine a public relations department contributing fully to the success of an organization as long as these functions remain separate.