The Public Relations of Lobbying

Influence is the common denominator between public relations and lobbying. One influences opinion, and the other, government.

While these disciplines sometimes work in tandem, they are separate and distinct. In New York, however, that may not be the case. The New York State Joint Commission on Public Ethics (JCOPE) earlier this year issued an advisory opinion that expands the definition of lobbying to include aspects of public relations.

The lobby of the House of Commons. Painting 1886 by Liborio Prosperi.

The lobby of the House of Commons. Painting 1886 by Liborio Prosperi.

Whoa nelly, says the Public Relations Society of America (PRSA), the nation’s largest and foremost membership organization for public relations and communication professionals, which blasted JCOPE in a statement, saying the opinion “will lead to more confusion as to what lobbying is, circumvention based on the ambiguous standards articulated, and less trust in government.”

While the current advisory opinion is being challenged in court, JCOPE’s new interpretation of the New York State Lobbying Act, ambiguous as it may be, says consultants engaged in “direct” or “grass roots” lobbying on behalf of a client must comply. Believe it or not, this includes traditional PR tactics, such as message development, drafting press releases and contacting media.

The definition of a lobbyist usually revolves around compensation. According to the National Conference of State Legislatures, there are more than 50 versions of lobbying laws in states and territories,  ranging from definitions of lobbyists to payment thresholds for compensation or reimbursements.  New York’s current threshold is $5K annually.

Excluding media was probably a good “PR play” by JCOPE, no pun intended. Just think of how top-tier outlets like the New York Times and Wall Street Journal and hundreds of others would react if they had to register as “lobbyists?” It also would be interesting to learn how a reporter would feel if he or she was included in a PR firm’s “disclosure” for its “lobbying” activities.

The reality is media outlets frequently meet with public officials. But should a person who simply set up a meeting between a client and an editorial board qualify as a lobbyist? Common sense says no. The difference is that editorial boards have their own guidelines and choose what they cover or report on. Lobbyists, on the other hand, go directly to the source to sway opinion.

PR practitioners basically are connecting the dots, middlemen so to speak. Aside from helping point stakeholders to pertinent information, or connecting people with similar or disparate points of view, we help clients define messages and better articulate their narratives. But it’s always the client’s message, never that of a PR firm.

– George Medici, gmedici@pondel.com

Visualizing IR

Data visualization has received a lot of attention in recent years, helping investors connect the dots on otherwise cryptic numbers by presenting a compelling visual.  The problem is, not everything should be presented as a visualization.  You know what I’m talking about … those “SmartArt”-happy PowerPoint presentations that attempt to demonstrate how everything is like a funnel.

The good news is that more experts are surfacing to help guide management teams to create visualizations that demonstrate a company’s performance.  In certain ways, there is a parallel to be drawn here with a spiritual guru helping a subject ingest a hallucinogenic that leads to salvation.

I’m not suggesting that IROs need to eat Peyote to make a compelling visual. But Arif Ansari, associate professor of clinical data sciences and operations at the University of Southern California’s Marshall School of Business, makes a compelling argument about mind-altering practices that could, in fact, lead to better data visualization.

When I interviewed Ansari for a recent IRupdate story, he told me to close my eyes and think about how I could depict some aspect of my business visually.  He sharpened his point by using the acronym “OPEN MIND,” which stands for identifying an “Opportunity, Pain point or need, Engaging, Nailing down a hypothesis, and Monetizing Insights with New Development.”

The first two times I attempted Ansari’s method, I came up with nothing but a bunch of gobbledygook, and then on my third attempt, all of the stars aligned and my mind presented the perfect visualization.  NOT!

OK, there is no bullet proof method when it comes to visualizing data effectively.  Perhaps seeing it done right is a good place to start.  Following  are a few examples:

  • The Coca-Cola Company’s “Annual Review,” which highlights the company’s achievements for the year, is an example of how to select visual images after narrowing in on a target audience.  In this case, retail investors.
  • Procter & Gamble provides a visual overview of the company on its IR website, including how the company creates value for shareholders, a table that breaks down reportable segments, percent of net sales, percent of net earnings, categories, and brand names, as well as circles that convey parts of a whole for business segments, geographic regions, and market maturity.
  • Colgate-Palmolive’s 2014 annual report utilizes slide shows and videos to highlight the company’s brands, strategies, and growth. The company also provides a visual description of its sustainability practices, in addition to financial charts that are animated when scrolling down the page.

– Evan Pondel, epondel@pondel.com

From the Mouth (Pen) of Warren Buffett

This weekend, Warren Buffett’s highly anticipated Chairman’s letter was published in the Berkshire Hathaway annual report.  Below are some of my favorite quotes from the nearly 30 page missive.  The Wall Street Journal, which notes that the annual letter is “among the most widely read — and most widely discussed — dispatches in the business world” shared a list of their favorites as well.

  • When talking about Berkshire’s acquisitions. “I’ve made some dumb purchases.” You’ve got to love a leader who tells it like it is.
  • When talking about acquisitions in general (attributed to Charlie Munger). “If you want to guarantee yourself a lifetime of misery, be sure to marry someone with the intent of changing their behavior.”
  • When talking about activism. “To be sure, certain hostile offers are justified: Some CEOs forget that it is shareholders for whom they should be working, while other managers are woefully inept. In either case, directors may be blind to the problem or simply reluctant to make the change required.” Buffett goes on to say that Berkshire “will not engage in unfriendly takeovers.”
  • When talking about investments. “Woody Allen once explained that the advantage of being bi-sexual is that it doubles your chance of finding a date on Saturday night. In like manner – well, not exactly like manner – our appetite for either operating businesses or passive investments doubles our chances of finding sensible uses for Berkshire’s endless gusher of cash.”
  • When talking about computers and online activity. “I now spend ten hours a week playing bridge online. And, as I write this letter, “search” is invaluable to me. (I’m not ready for Tinder, however.)” The fact that Warren Buffett even knows what Tinder is, is impressive.
  • When talking about GEICO Insurance. “All the while, our gecko never tires of telling Americans how GEICO can save them important money. I love hearing the little guy deliver his message: ‘15 minutes could save you 15% or more on car insurance.’ (Of course, there’s always a grouch in the crowd. One of my friends says he is glad that only a few animals can talk, since the ones that do speak seem unable to discuss any subject but insurance.)” No real lesson here, just some great humor.
  • When talking about GAAP versus non-GAAP. “I suggest that you ignore a portion of GAAP amortization costs. But it is with some trepidation that I do that, knowing that it has become common for managers to tell their owners to ignore certain expense items that are all too real. ‘Stock-based compensation’ is the most egregious example. The very name says it all: ‘compensation.’ If compensation isn’t an expense, what is it? And, if real and recurring expenses don’t belong in the calculation of earnings, where in the world do they belong?” I’m sure many agree.
  • When discussing poor returns.  “… and we are now paying the price for my misjudgments. At other times, I stumbled in evaluating either the fidelity or the ability of incumbent managers or ones I later appointed. I will commit more errors; you can count on that. If we luck out, they will occur at our smaller operations.” So refreshing for a leader to admit to his mistakes.
  • When discussing the Berkshire annual meeting. “Charlie and I have finally decided to enter the 21st Century. Our annual meeting this year will be webcast worldwide in its entirety.” This is great news for those of us who cannot make it to Omaha (40,000 did last year).
  • When still discussing the Berkshire annual meeting. “Our second reason for initiating a webcast is more important. Charlie is 92, and I am 85. If we were partners with you in a small business, and were charged with running the place, you would want to look in occasionally to make sure we hadn’t drifted off into la-la land. Shareholders, in contrast, should not need to come to Omaha to monitor how we look and sound. (In making your evaluation, be kind: Allow for the fact that we didn’t look that impressive when we were at our best.)” And, “Viewers can also observe our life-prolonging diet. During the meeting, Charlie and I will each consume enough Coke, See’s fudge and See’s peanut brittle to satisfy the weekly caloric needs of an NFL lineman. Long ago we discovered a fundamental truth: There’s nothing like eating carrots and broccoli when you’re really hungry – and want to stay that way.” I think I love this man!

– Laurie Berman, lberman@pondel.com