Jon Iwata
Senior Vice President, Marketing and Communications, IBM
September 14, 2009
Chicago, IL

To download a printable version of this speech, click here.

"Authenticity and Differentiation"

Thank you, Maril, and good afternoon everyone. Bruce, congratulations. It's a privilege to share this day with you.

I am truly humbled and astonished to be here. No one is more conscious than I of what an honor this is… and of how unusual it is for it to be bestowed on someone at this point in his professional journey.

It's not that I haven't been at this game for a while. I celebrated my 25th anniversary with IBM earlier this year. It was a nice moment as these things go. We had a little gathering and my boss, Sam Palmisano, presented the standard certificate and congratulatory letter signed by him. I read it, and said: "Thanks, Sam. This letter is exceptionally well written."

Well, unless he has other plans for me, I don't plan to retire anytime soon - and I'm not ready to take a valedictory lap. But I want you to know how deeply touched I am by this honor.

When IBMers receive recognition, it's almost always because of three great things they have going for them.

The first is, our families. Like all of you, my work demands much of me, and my wife and our three children have been so supportive of my life as an IBMer. I am grateful for that, and happy that my wife, Shigemi, is with me today.

The second thing going for IBMers is... IBM. The kind of work that has been noted this afternoon is certainly being done in other companies, but those efforts sometimes go unnoticed simply because they're not as visible as IBM. Working on a world stage is wonderful, most days.

The third factor is, unless you're one of our Nobel Laureates, nothing of note gets done in a big place like IBM by an individual. If the Page Hall of Fame could induct teams, this year's honor would go to the great team I'm privileged to lead.

IBM believes in what we do. The fact that so many IBM communications alums - Roger Bolton, Harvey Greisman, Angela Buonocore, Tom Mattia, Paul Bergevin, Bill Hughes, Ann McCarthy, Dave Samson, Peter Thonis, Jim Finn and many others - the fact that people of this caliber have gone on to distinguished careers is evidence of IBM's commitment to our profession. (And… we apparently have a problem retaining talent.)

* * *

Not long ago I read Vartan Gregorian's autobiography. Early in his career, he received some sort of accolade. His humility compelled him to downplay it, but it didn't work. A colleague told him: "You're not so great as to be that modest."

So, please allow me to be immodest for a few minutes and presume to offer some thoughts about our profession at a time of great change… because I choose to believe that the Honors Committee is using this year's award to signal a moment in the evolution of our profession. It is an acknowledgement not of prior accomplishment… but of a whole new set of challenges. It's not about the past - mine or the Page Society's. It's about all of our futures.

The Authentic Enterprise is one expression of the challenges we face. I would like to acknowledge and thank my co-chair, Valerie DiMaria, and the 19 members of the task force that produced and endorsed The Authentic Enterprise, which was released at this conference two years ago.

I really believe in what it says. Most importantly, I really believe in the picture it paints of the world into which we are moving.

When we began our work, at the request of Roger Bolton, who was president of the Society at the time, it felt like groundbreaking, intellectual heavy lifting. Today, the paper reads like "no duh."

• It is obvious now that societal expectations of companies have never been higher, and that the ability to scrutinize corporate behavior 24 hours a day has never been more powerful and pervasive.
  
• It is obvious now that globalization has not only arrived, but that it is about far more than chasing sales in emerging markets and the movement of work to different parts of the world.
  
• And certainly we now recognize that the ways in which people get information, create knowledge, shape perception, and build and maintain relationships -- all of that is changing in our time, too.

It now occurs to me how these forces are related. As humans and as a planet, we have never been more connected - economically, socially, culturally, technically. But through a series of shocks received since the start of the new century - 9/11, global climate change, H1N1, the global financial meltdown - we are realizing that being connected is not enough. And if we don't change, people and nations will disconnect or we will continue to suffer devastating systemic failures, one after another.

The world's systems and models must evolve. So, too, must the corporation - and those who lead it, and our profession.

From the start, the intent and hope of our work - as commissioned by Roger and carried forward by Maril -- was not merely to observe the forces of change. It was to describe and suggest the ways in which our profession could change.

Managing multi-stakeholder relationships… embracing new digital methods… the intentional management of trust… All of these priorities for the Chief Communications Officer of the future are essential, and they point us to new kinds of work - perhaps new, formally recognized job responsibilities… the contours of a new profession.

I want to comment on one of the calls to action -- defining and instilling company values - which is what we're all talking about at this conference. I believe "values" is misunderstood by some… and misunderstood in the same way the notion of authenticity is often misunderstood.

We could certainly have written a paper on The Ethical Enterprise… or The Socially Responsible Enterprise… The Virtuous Enterprise… The Good Enterprise… or the Unindicted Enterprise.

Joking aside, the importance of legal compliance and ethics - of doing the right thing -- cannot be denied. But though necessary, they are not sufficient. I would suggest that they are just table stakes. It's been often said that "great companies are good companies." True. However, good companies are not always great companies.

Great companies are not merely successful. They are unique. Whether it's in their products and services, or how they manage their people, or the experiences they provide their customers, or the way they identify and capture new market opportunities. In some way, what they have chosen to do they do differently from - and better than -anyone in the world.

To me, this is what authenticity means. It is about unique identity. And it is about actually being that unique thing you have chosen to be. Viewed in this light, authenticity is a powerful competitive advantage.

Similarly, values, as described in our work, are not the same as codes of conduct. Every corporation - and every member of every corporation - should "value" ethical behavior and compliance with the law. They should respect the environment and contribute to the communities in which they live and work. But such values, if adopted by all enterprises, become by definition commodities, not differentiators. The value of values, in my view, is in expressing what makes each enterprise unique.

This first hit home to me, not two years ago, but 27 years ago.

I was an undergraduate at San Jose State's School of Journalism and Mass Communications in 1982. I was there because I had been smitten by the work of Woodward and Bernstein during Watergate, which happened when I was a teenager growing up in California. Like so many, I thought it was noble to uncover truth as a profession. So I was all fired up to become an investigative journalist.

To fulfill requirements for elective classes that year, I signed up for a public relations course taught by Dennis Wilcox. I figured I would hold my nose and sit through this thing, looking at my future opponents with a mix of disdain and pity.

But then I was assigned to do a report on an unfolding national drama -- Johnson and Johnson and its handling of the Tylenol crisis. Like so many others, I was astonished by J&J's actions. I'm pretty sure I remember seeing a black and white photo of J&J's executive team, led by Jim Burke, and there, literally with a seat at that table, was Larry Foster.

As we know, the debate around that table was not about litigation and liability, or whether to meet stakeholder demands, or to comply with the government. The crux of the debate was - What was the right thing to do as J&J… consistent with its values as codified in its famous credo?

The result of that debate? A quintessential moment of authenticity in business.

I realized that uncovering truth may be noble, but building truth - having a seat at that kind of table, in that kind of company - well, that was for me. I changed majors that semester.

To be here, 27 years later, in the presence of Dr. Wilcox and to know Larry Foster is surreal. You both changed the trajectory of a young man's life.

Two years later I was at IBM. That year, 1984, In Search of Excellence was a bestseller. IBM is mentioned throughout that book. We were in that same year Fortune's Most Respected Company in the world.

When I received that job offer from IBM, I cannot tell you how it made me and my family feel. It was such a privilege to be invited to join something so successful, so admired.

Only seven years later, we were on our deathbed. We reported what were the largest operational losses in industrial history, had our credit rating dropped to one notch above junk. We were worried about making payroll. Our CEO stepped down. And most painfully, for a company that had never had a single layoff -- despite the Great Depression, two world wars, countless recessions, and radical changes in technology -- we eliminated 200,000 jobs in three years.

When you go through something like that, something that destroyed the fortunes and livelihood of so many, when you are humiliated so publicly, it changes you. And you think about it for a long time, as I have.

What went wrong?

Lots. But to me, it comes down to this. Unlike J&J, we had not been true to what we said we valued. Because if we had truly valued innovation - as we say we do -- we would not have allowed others to capitalize on new technology, including some of our own inventions. If we had truly valued our client's success, we would have listened to them and responded. If we had truly valued the people of IBM, we would not have so utterly failed them through inaction.

You see, the breakdown of our values system had nothing to do with ethics or virtue. Nothing so high-minded. We simply had forgotten what had made IBM unique for nearly a century. We looked and sounded like IBM, but we were not authentically IBM.

Some corporations die because of malfeasance. But I suggest that many more decline because they have not been true to their corporate character. This is why, to me, values are less about virtue than competitive advantage. It is values as the basis of business strategy.

I have sometimes heard people say that the effective CCO is the conscience of the corporation. I know what is meant by that compliment, but I hope that that responsibility is not delegated to one person at any company. For me, I would rather be known as the steward or curator or driver of IBM's corporate character.

I am fascinated by the differences in what companies value. We've heard about some of those differences in our conference already. Some companies value innovation and risk-taking, others security and risk-mitigation. Some companies value revenue growth, others consistency of earnings and cash. There are several great automakers in the world, but they don't value the same things. Some value quality, reliability and safety, others value beautiful design and precise engineering. There are many great employers in the world and they share similar characteristics. But some value team play while others reward individual achievement. I'd like to think both Apple and IBM are great places to work, but my guess is our cultures are a little different. You get the point.

For great companies, this is not the work of "positioning" or messaging or story-telling alone. For great companies, what they value defines who they are - and they methodically and intentionally align their operations and cultures to be that.

All of this may explain why our profession and adjacent professions are simultaneously transforming and coming together to form something altogether new.

Last year IBM put together marketing, communications and corporate citizenship. Some believe that this was in response to all the changes in the external environment - the need to speak with one voice across advertising, sales promotion, events, websites, the media, analysts, bloggers and the like.

No question, there is value in message consistency - especially now, with the diffusion of media -- and of managing multi-stakeholder relationships as urged by The Authentic Enterprise paper. But you don't need to go through all the work of structural integration to achieve this kind of alignment.

I believe the most powerful advantage of putting these teams together is that we have combined our culture and our brand. To be clear, this is not simply external and internal coming together, treating employees as a stakeholder or as brand ambassadors. This is putting experts in the workplace and experts in the marketplace on one team, and making our values the foundation of both our culture and brand.

Bill Nielsen, who so deservedly is in the Page Hall of Fame, a mentor, friend and someone I'd like to be when I grown up, once quoted Lincoln, who said: "Character is the tree, reputation is the shadow." I love this.

I'm afraid that too many people in public relations, marketing and advertising spend more time manipulating the shadow than tending to the health of the tree. (This is not why I switched majors 27 years ago.) In the world that is rushing toward us, that approach, if it ever worked, can no longer do so.

One day soon, every employee - and every retiree, customer, business partner, investor and neighbor associated with every company - will be able to share an opinion about that company with everyone in the world based on firsthand experience. The only way we can be comfortable in that world is if every employee of the company is truly grounded in the corporation's values.

At a minimum, this will allow us to sleep at night. But the game will inevitably shift, and leading companies will figure out how to use their fully empowered workforces - workforces expert in communications -- for competitive advantage.

Today there are more questions than answers.

• The work of definition is so often overlooked. Defining our companies' values - why people should buy from us, work for us, invest in us, welcome us into their communities and nations - this work is hard. It's not easy defining a corporate character that is both differentiated and enduring.
  
• Systematically identifying and closing the gaps between what we say we value and what we truly are yields to management rigor. I believe it will be hardened into a management discipline, and I hope it will become the responsibility of CCOs. We cannot and should not "own" this… but we can lead it.
  
• Policies and frameworks must be developed to guide the responsible and strategic use of the emerging global digital commons. Corporations, by and large, are still using it as a messaging channel, instead of leveraging its unique capability to empower the workforce and support collaboration - among employees, yes, but through the firewall, too.
  
• And since increasingly people do not separate their opinions of a company's behavior from their opinions of that company's products and services, I believe that the "marketing of the corporation" will become the overarching mandate of what we today know as marketing, corporate communications, and public relations. This startles some of my colleagues in traditional marketing. When I say our role is to 'market IBM' they say, "I think you meant to say our job is to market IBM's products and services." No, that's an aspect of our work and it may consume 90% or more of our resources. But that work begins with defining IBM… the fundamental reasons why people should buy from us, work for us, invest in us, listen to us. And then we must, as Arthur Page would have said, "prove it with action."

I'm eager to dive into the work of figuring out new models and methods and skills in the years ahead - at IBM, and with all of you. I believe it points us toward a new profession - one that is built solidly on the values and the purpose articulated in the Page Principles.

I don't know how far we'll get… but given the leadership - and, dare I say it, the authenticity - of the people in this room…people whose example and friendship I value so much…. I couldn't be more optimistic, grateful and excited to take this journey together with you.

Thank you.