Holmes Report 29 Oct 2011 // 11:00PM GMT
Perry Yeatman’s experience at Kraft is a signal reminder of the potency of a strategic, overarching public relations vision. Yeatman, recently named to the Holmes Report's Influence 100, oversees a department that includes every aspect of corporate affairs across the full global range of its operations, navigating critical societal issues such as hunger, obesity and sustainability.
At the Holmes Report’s ThinkTank Live conference in Washington DC, Yeatman sat down on stage with Paul Holmes to discuss her views on issues management, the role of communications within an organization, and the challenges that face the public relations function.
What are the big issues that take up your time, and how much have a political/policy aspect?
Almost all of the issues that take up our time are societal debates. If you look at our priority issues - it would be hunger and obesity, and sustainability. We are also deeply involved in food safety and diversity. None of these things is going to be solved by one company or one industry. These things only happen if you line up the private sector, the public sector and civil society. Historically we have not had that opportunity as much as we have today. Now people are recognizing that the issues are too big. Therefore we need to figure out how to play together. And be transparent about it.
And what is the balance between being proactive on issues, and being reactive to external events?
In many ways, we really were “born” five years ago…like a $40bn startup. We had been a division of Altria for approximately 20 years. When we became fully independent, everything changed in terms of public expectations. We went to our first Davos and set out our first proactive global external affairs agenda…laying out what we were going to say publicly about what we were striving to achieve. Previously, we did a very good job managing public debates, but I wouldn’t say we were leading them. For me personally, Kraft Foods is definitely a proactive company at this point.
You mentioned Altria. Did that background at Kraft motivate or inform some of the changes you have made? There are some people who look at the tobacco industry and say that the food industry could be next.
The number one thing we took from Altria is an understanding of the deep and profound impact that corporate affairs can have.
You talked about the holistic stakeholder landscape that you deal with. There is still, in a lot of organisations, a fairly sharp dividing line between the marketing function and the corporate affairs function. I wondered what the relationship between those functions was within Kraft, and whether marketing folks understand the importance and primacy of what you do?
I would say we have a healthy tension and respect for each other. I don’t think it is about the primacy of corporate affairs over marketing. It doesn’t mean it’s always an easy relationship. Kraft was probably not in the lead in the marketing space for those who followed us five years ago but we have really stepped it up. We don’t always agree - social media is a great case in point. On a Facebook page or Twitter, that’s where you get consumers and citizens completely crossing over. Collaboration is important and you’ve got to keep each other informed. For example, marketing runs ads past corporate affairs. It’s not perfect but I think it’s a very good relationship.
Expectations from the outside world have changed dramatically. They expect you to be the guardian of their health, and not exploit third world farmers in the process. The other thing that’s changed with the emergence of social media, is companies have either lost control or lost the illusion of control over their brands. How have you seen that change within Kraft?
For many years when it was all about ‘send the right message’. It was one-way. Today, and I would say it affects corporate affairs and marketing, brands and the perceptions of brands live with consumers and citizens. We have no consumers who are just consumers - they may be a regulator or a media person. You cannot pretend as if you are only going to talk to them in one channel. I think it’s extremely exciting. It actually gives you real-world feedback and insight - before you had to pay for that. Now you get it whether you like it or not. And it’s happening while you are sleeping. On the downside, it can spin out of control much faster than before. The trick is to be able to engage authentically and to be able to do it in real time. It has made the skills of corporate affairs more important.
One thing people have been surprised by is how many really passionate consumers they have. How have you experienced that dynamic at Kraft?
An example. We had someone looking for a mayo jar because she wanted to bury her husband’s ashes in it. There is an almost unbelievable passion about the brands and in so many different ways. We used to develop say 500 recipes in five years. Today, we get thousands of recipes in a few months from consumers engaging with each other and us online. The way we’ve used it is to take consumer passion and make them brand advocates. We use it in innovation too. It’s free market research. We actually get consumer insights from our people too.
Once you’ve found and engaged with those people - have you been successful in taking that enthusiasm around the issues that you care about, either by using them almost as lobbyists or by getting them involved in hunger, obesity and other issues?
On the grassroots stuff, mostly we do that with employees. But on the issues we care about, right now we are running a campaign called ‘Huddle Up for Hunger’ - it’s all about engaging consumers to help us fight hunger. They go online or buy a product and we will make a donation to Feeding America.
You mentioned you weren’t a revenue contributor but that you a very bottom-line focused. What kind of metrics do you use to measure that and how satisfied are you with them?
Yes, I refuse to be called overhead. We’re either helping the company make money or save money. That’s our purpose. But it’s not simple. It’s a perpetual discussion and it hasn’t been cracked. But what we do is look at business outcomes. Usually I try and boil everything down to, it’s either going to make us money or save us money. Through government relations and public policy work, we’ve saved hundreds of millions of dollars for the company worldwide. On the growth side, there are now a number of products sold based on their sustainability credentials. To enable that, we looked at how we could improve the livelihoods of farmers, and then came up with consumer propositions that would help pay for that. We have been able to create propositions that have created huge brand growth. That is leading to revenue.
Do you find those claims resonate more in Europe?
I think they do. Full disclosure, I am married to a European who has been advocating this for years. There are a lot more Europeans who understand the ‘real price’ of food. People there are willing to pay more or make a choice based on their social values. These issues are coming to America. But let’s be honest, anywhere in the world, consumers are not going to make that choice if they don’t like the taste of the food. So that is job one.
How do we institutionalise the corporate affairs discipline? How do we get senior management to say ‘get corporate affairs into the room because it brings a valuable perspective’?
One of the things we did about six years ago was to define what disciplines make up corporate affairs. Once we defined them, we talked about the business value each would create. We then pulled all those functions together. But the biggest problem is that it is still too much about the individual. People ask me if I think you have to be a direct report to the CEO? I am not. But for me it’s about access and influence, not reporting. We also need to build more leaders coming through the ranks who can talk government affairs as well as they can talk financial communications. The problem is in our profession much of the expertise is siloed, particularly on the agency side. We need to do a better job of moving people around and developing multi-discipline talent if we want to have them ready to take on the top jobs when we leave. Then the succession is not a fight. It’s clear.
Any final words?
There are three things I have spent the bulk of my career advocating for. One, I believe all the disciplines of corporate affairs should be together – from coms to government relations. Two, I firmly believe the only way we are going to succeed long term is through global understanding and global engagement. And the last thing is I believe that business can be a tremendous source for good. Now I’m not going to say every business has been a source for good. But, conceptually, as a way of creating jobs and revenue and taxes, I think business is a tremendous source of good in the world.