Yale professor Vikram Mansharamani, writing in a blog post for the Harvard Business Review, recently asserted that the era of the specialist might be coming to an end. Instead, he posited, the globalization of business and information means that the future may “belong to the generalist.”

This assertion aligns closely with my theory on disintermediation, which holds that the constant communication, 24/7 news cycle and endless social media interaction that serve as hallmarks of the modern age have eroded barriers between information and the public. In a world where the average citizen has an ever-increasing degree of influence on the economy, the political arena and the business environment, corporations must use all available tools and pathways to connect with and understand the general public.

Most businesses — regardless of industry — are driven by a “bottom line” of profit maximization and sustainable growth. However, a tunnel-like focus on that goal alone can be dangerous. A myriad of factors — chief among which is corporate reputation — have significant and measurable impacts on a company’s long-term success.

Here enters the generalist, who can cut through internal biases and provide counsel that considers all factors, perspectives, risks and opportunities — regardless of the industry or issue at hand. When dealing with the public, the same trends and principles apply across sectors, making the big-picture outlook that only a generalist can bring to the table an essential facet of sound decision-making.

Former Soviet chess champion and current Russian political activist Garry Kasparov affirmed this theory in a recent interview with the World Policy Journal: “The moment you expand the circle of people who participate in decision-making,” he explained, “you create a new political reality. What we are seeing is that the circle has been expanded from millions to hundreds of millions. We don’t yet know the consequences of the move from Gutenberg to Zuckerberg.”

BP is a classic example. Following the Deepwater Horizon oil spill — itself a perfect illustration of the decisions that can result from a dependence on specialists — the company’s community outreach and cleanup efforts were criticized and labeled by critics as insincere. Both the spill itself and the subsequent backlash against the company’s attempts to repair its reputation highlight the importance of roundtable decision-making that includes a variety of backgrounds and expertise.

Incorporating generalists’ knowledge about the public and decision-making is a key component of corporate success. As Professor Mansharamani affirms, “Our highly interconnected and global economy means that seemingly unrelated developments can affect each other.” The ability to identify those relationships in advance allows a company to not only anticipate and prepare for potential fallout, but also to provide leaders with tools to mitigate risks from the onset.

In a business environment characterized by competing viewpoints, active watchdog groups and large amounts of unfiltered information, any corporate decision can run awry very quickly and without notice. Some situations or announcements may be unavoidable, but companies should ensure, at the very least, that they have a respected voice in conversations involving reputation and business practices.

The generalist is a critical resource in that effort. An informed approach and heightened awareness of potential effects have a strong, undeniable impact on a company’s success and sustainability in today’s mutable and competitive world.

Special thanks to Jack Hughes, a vice president in Hill+Knowlton Strategies’ Ottawa office, for his insight and suggestions for this column.

Jack

Jack Martin
JMartinTexas@gmail.com
98 San Jacinto Blvd., Suite 1200
Austin, Texas  78701
512-432-1750

After spending time in London this week at H+K’s European headquarters, I wanted to offer my thoughts on the political and economic landscape in Europe.

Last week, the world watched as Francois Hollande won a critical victory over incumbent Nicolas Sarkozy in the French presidential elections. The French decision comes at a particularly tumultuous time for Europe, as eurozone countries attempt to balance financial solvency against the public’s fatigue with austerity measures. As is no surprise, the election has prompted a range of opinions and perspectives on how Hollande’s win will affect not only France, but Europe and the world at large.

Nicholas Burns, professor of the practice of diplomacy and international politics at Harvard University’s Kennedy School of Government, re-affirms France’s role as a crucial player in some of the world’s most important challenges, including the eurozone crisis, NATO and Middle Eastern affairs. With that in mind, and in conjunction with rising unemployment rates, unpopular austerity measures and a stalling economy, Burns warns that France’s new leader does not have an easy road ahead of him.

Hollande ran on a platform of public trust, assuring voters that things in France would, in fact, change. Throughout his campaign, Hollande positioned himself as the anti-austerity candidate, and was careful to avoid the idea of the inevitability of tough reforms. This strategy seems more in line with like-minded European leaders such as the UK’s Cameron and Italy’s Monti. Hollande employed a high-risk strategy, promising voters several measures that observers are unsure he will be able to deliver. It will be interesting to see how the presidential transition in the eurozone’s second-largest economy will play out in the face of these challenges.

Much speculation has focused on the Franco-German partnership that lies at the center of the European Union and the euro currency. This partnership, which was previously nurtured by German Chancellor Angela Merkel and French President Sarkozy, created a unified approach to dealing with the eurozone crisis, in spite of criticisms from their respective countries and members of the EU. Some experts, including Vladislav Belov, head of the Centre of German Studies at the Institute of Europe, believe that Hollande will continue on this unified path. Belov believes that Hollande has been wise in his approach to this crucial relationship, making his first official meeting as president one with Merkel. Belov goes further, saying that France’s ambition to keep a leading position relies on the understanding that, without a strong partnership with Germany, the country will only suffer economic and political losses.

In addition to maintaining France’s relationship with Germany, Hollande will also need to consider his relationship with the French public, especially given the upcoming legislative elections in June. Because Hollande needs a socialist majority in the French parliament in order to implement his policies, it is crucial that he court voters in the coming weeks or risk his influence being severely diminished.

With German presidential elections approaching in 2013, Merkel faces a similar challenge of maintaining a strong relationship with her voters as well as the European community. In recent state elections, Merkel’s party, the Christian Democrats, suffered a critical defeat — a likely reflection of public dissatisfaction in Germany.

Niall Ferguson, professor of history at Harvard University, believes that Merkel’s “German prescription of austerity tax hikes and spending cuts in the teeth of recession is losing political credibility with every passing week.” Due to the shift in European politics as well as in her own country, Merkel may be in danger of being isolated and losing the authoritative edge she once had. Both Hollande and Merkel have found themselves in the challenging position of balancing their political careers, their allegiance to their countries and the well-being of Europe as a whole.

Of course, the looming concern for both Hollande and Merkel is Greece’s financial insolvency. With the country facing a mounting debt and an uncertain leadership situation, its problems have resonated heavily across both the continent and the globe, with international stocks showing a sharp decline in response to the potential exit by Greece from the eurozone. It will be interesting to see how this will spread to the economies of other nations as well as to their respective political landscapes. Frederic Neumann, co-head of Asian economics research at HSBC in Hong Kong, believes this will have a significant effect on developing economies, saying, “Things look very shaky in Europe and the U.S. economy is decelerating. The last thing we need is for the emerging world to downshift. Unfortunately the data today points in that direction.”

There is no doubt that what plays out in Europe over the next few months will have a lasting impact that cuts across geographies, economies and politics. France and Germany are but two countries in a European electorate that has signaled a clear desire for change — ruling coalitions in Italy, Greece, Holland and Spain preceded them with defeats at the hands of a restless public.

And the U.S. will also soon be faced with some difficult choices. Looming in December is the expiration of the Bush tax cuts and payroll tax cut, the approach of the debt limit, and the activation of automatic cuts mandated by a previous budget agreement.

U.S. leaders should take note. A combination of austerity fatigue and anti-incumbent sentiment in the public is proving dangerous for European leaders focused solely on slashing spending and reducing deficits — in spite of some strong rationale for it.

Whether the European public views austerity measures as ineffective, or believes they should be balanced with growth measures that create jobs and build confidence, it has shown no hesitancy to make its displeasure known. But in an increasingly interconnected world, Europe’s problems are the world’s problems, and the European public is the world’s public. And governments, corporations and institutions everywhere must listen.

Jack

Jack Martin
JMartinTexas@gmail.com
98 San Jacinto Blvd., Suite 1200
Austin, Texas  78701
512-432-1750

Not long ago, professional critics — whether they reviewed food, film, books or consumer goods — were highly valued by the public. This elite group of opinion leaders was responsible for distributing reviews through traditional channels such as newspapers, radio and television. Now, while the opinion of some experts still carries weight, the era of the celebrated critic appears to be over.

This shift away from conventional critics comes as no surprise to me. Given the public’s access to new and dynamic tools with which to voice its opinions, the traditional review system is becoming less relevant. True, corporate clients are often thrilled when their product receives an official stamp of approval from trade experts, but the consumers who inundate review forums are equally important today. And it’s not just products receiving feedback — quality of service and general character have also become key metrics. Even the largest of marketing campaigns have difficulty covering up flaws in quality if consumers take to the Web to share negative reviews.

Everything that companies do, make and sell now gets communicated instantly across the globe, leaving little room for error. This transparency fosters a different operating environment, where companies are no longer able to cut corners without risking the inevitable consequences of losing valuable profits and customers. International brands, such as Procter & Gamble (a Hill+Knowlton Strategies client), are beginning to heavily invest in digital communication across their global markets to develop social media and build campaigns based more on consumer engagement.

The popularity of consumer-based sites such as Yelp, which boasts over 25 million reviews, allows consumers to bypass traditional channels of communication and increases transparency between consumers and brands. Similar sites — including China’s dianping.com and Europe’s Qype, which have both gained momentum in recent years — have cropped up all over the world. This development helps to highlight consumers’ heightened demand for transparency and interactivity when making decisions about which companies to trust and support.

And the change isn’t limited to crowdsourced websites like Yelp and Qype; some companies, like Amazon.com, allow and even encourage purchasers to provide feedback directly on their own sites. Even social media sites, including Facebook, LinkedIn and Twitter, serve as enablers of public opinion. These sites are especially important to international corporations like Coca Cola, which has successfully created a “peer-like” presence on social media to facilitate open communication with consumers around the world.

Seeing this change unfold sparks a question in my mind: What caused consumers to shift their trust from experts to communities of peers?

I believe the answer lies in the growing role of a phenomenon I’ve discussed many times here — disintermediation in today’s society, where the public relies increasingly less on advice from “expert” thought leaders. Consumers now expect more from brands, demanding authenticity on all fronts. Truly open markets require information from all sources, not just the crafted narrative that corporations want to share with the public. Smart consumers don’t have to wait for the latest edition of Consumer Reports or the newspaper’s review section to form an opinion, but instead instantly access public feedback for advice and insight.

The seed of democratization has continued to spread to social media and consumer review sites, shifting the relationship between the public and companies. It would be wise for companies to take note of this developing trend and find innovative ways to create a dynamic and interactive dialogue with their audiences.

Jack

Jack Martin
JMartinTexas@gmail.com
98 San Jacinto Blvd., Suite 1200
Austin, Texas  78701
512-432-1750

Throughout my career — in both politics and business consulting — I have repeatedly emphasized how research is an integral part of the equation in engaging with the public. That view has never changed and is in fact a driving force behind the evolution of Hill+Knowlton Strategies today. As you may know, H+K recently announced the launch of Research+Data Insights, an independent division of the firm that will provide primary research and data analysis to clients. The launch of RDI is yet another illustration of how important research is to measuring and influencing public opinion, as well as of the growing need for people who can interpret data and make it useful in the public domain.

We are now at the peak of the information age where data, as Gary King, director of Harvard University’s Institute for Quantitative Social Science, describes it, has become a “revolution that will sweep through academia, business and government.” King says no area will go untouched. I couldn’t agree with him more. This ever-growing mountain of data, and the power to analyze it, is transforming the way people work, as well as the “stories” companies are crafting for the public.

Public policy expert and University of Toronto professor Richard Florida coined the term “creative class” to define a class of professionals that adds value to the economy through creativity. Whether they work in business, design, strategic communications or any other number of professions, members of this creative class work to make data relatable and universally understood.

Extrapolating on Professor Florida’s idea, I believe there is actually a much larger group of people in the creative class — but I’d refer to them as the “narrators,” those who serve as the interpreters of our data-laden generation.

Taking the U.S. as a small slice of the world, it stands to show that the industries that rely significantly more on communications and the need to interpret data tend to thrive and develop at the greatest rate. According to my rough calculations using data from the Bureau of Labor Statistics, approximately 75 percent of the total U.S. workforce — 110 million people — is employed in industries such as management and professional occupations, as service workers and in sales and office positions that require narration as a skill.

The people who make success possible within any business are the narrators. They are not only communications and marketing experts but also social media analysts and those at the forefront of production and digital solutions. The class of narrators spans business sectors, from health care and law to financial, retail and sales professionals. All have a role in shaping a company’s message and the resulting public conversation. These individuals are becoming increasingly important, particularly as industries become more automated and dependent upon technology. When jobs are outsourced to machines that are not capable of collaborating creatively or interacting at a personal level, narrators rise even closer to the top of corporations.

With over 90 percent of data available in unstructured forms such as pictures, videos or analytics, a specific knowledge of strategic communications and creative thinking is required to transform that information into narratives that resonate with key audiences. Narrators create interactive, data-driven narratives that allow companies and campaigns to share ideas and shape public perception. With the disappearance of traditional intermediaries who “translate” and filter information before it reaches the public, the narrators are more crucial than ever.

It is no coincidence that the companies, politicians and social movements that refine their narration skills to communicate with the public are those that experience the greatest success. Take, for example, Starbucks and GE, which have built their reputations on telling their stories and not only improving corporate responsibility, but including that as part of their stories.

I have always believed that we must maintain a balance between research and creativity, but I’ve also found that the two cannot be considered separate. As an increasing amount of data becomes available, we must be able to transform that mass of information into useful material that effectively narrates a message capable of shaping public opinion, regardless of the industry.

Jack

Jack Martin
JMartinTexas@gmail.com
98 San Jacinto Blvd., Suite 1200
Austin, Texas  78701
512-432-1750

As we look forward to 2012, it’s clear that this will be a year of action and change. Over the past year, we have begun to see how public sentiment and political affairs shape and drive global economic performance. Given the ongoing shifts in public opinion, the upcoming U.S. presidential election and the growing ability of individual citizens to make their voices heard, I believe we will see the economy improve more quickly and soundly in 2012 than others have forecasted.

I’ve talked with you previously about the use of social media to influence events around the world, from the Arab Spring to Occupy Wall Street. In these situations, the global public was able to manipulate the media and incite change by cutting out the middleman and embracing democratization in its newest form. Its efforts were so successful that TIME magazine named “The Protestor” as its Person of the Year. That trend has continued to grow and evolve, and politicians with presidential aspirations have begun to take notice.

In the U.S., Mitt Romney has shifted away from promoting himself as a strict conservative, choosing instead to allow candidates like Ron Paul and Rick Santorum to jostle for votes among the far-right base. This tactic, coupled with continued allegations that Romney isn’t a “true believer” in Tea Party principles, could benefit the candidate from Massachusetts in the fight for the Republican nomination. The general public has grown tired of strict ideology of any kind, and Romney will be served well by focusing less on the party line and more on how competitive he could be against an opponent like Obama, whose most recent approval rating was only 47 percent.

This complex interplay between public opinion and politics was also evident in Republican Speaker John Boehner’s handling of the payroll tax cut, which demonstrated the capacity of a mobilized public to organize against political rhetoric and bring about immediate change. In that situation, Congress’s low public approval rating — which hovered near 11 percent at the time — helped dictate his surprising decision to agree to a short-term extension.

President Obama, meanwhile, has decided to make Congress his issue of choice. This strategy is well timed, as the economy has been improving and is likely to continue doing so to an increasingly stronger degree. According to the Wall Street Journal, the unemployment rate has dropped to 8.5 percent, the lowest since February 2009, and 1.6 million jobs were created in 2011. The global economy is clearly trending in an upward direction, and consumer confidence is journeying in the same direction. A poll by CNN and ORC International, for example, showed a significant decline in the number of people characterizing economic conditions as “very poor,” which had reached 51 percent as recently as November.

I think it’s worth asking—what is at the core of this growth? It seems clear in today’s environment, as explained by something I call the “Martin Curve,” that the public is currently playing an unprecedented role in influencing our economic fundamentals. The public — which today is broadly defined — has access to more information than ever before, and, as a result, public mood has become a leading indicator for the economy. By evaluating public sentiment on a variety of issues, we can better assess the overall health of the economy and determine where it might be headed.

For instance, during the financial crisis of 2008, when the public lost confidence in financial institutions and markets, the economy spiraled downward at an alarming pace. Now, with unemployment and financial performance showing steady improvement, the feedback loop is moving in the opposite direction.

The economy is the issue of the day — as demonstrated by the Pew Research Center’s report that the U.S. economy was the most prominent story in the American news media over the last year — and is likely to remain so for the foreseeable future. As U.S. markets continue to strengthen and grow, we may also see a dynamic shift in the same direction in Europe and other markets.

As we continue to monitor these developments, it’s important to remember that social and traditional media sources are currently enjoying an unparalleled amount of influence over worldwide political and economic developments. As the global public becomes more confident in the economy, its mood is likely to impact both economic and political outcomes on a significant scale.

If public sentiment indicates a strengthened economy, which it does, what will that mean for a Republican nominee’s chances in the general election? Such a candidate will be unable to rely on a faltering economy to differentiate himself from President Obama, thus changing the fundamental tone and substance of the campaign season.

No matter the outcome, this election will be an unquestionable demonstration of the growing relationship between public opinion, economic performance and political outcome.

Jack

Jack Martin
JMartinTexas@gmail.com
98 San Jacinto Blvd., Suite 1200
Austin, Texas  78701
512-432-1750

As many of you know, I am completing my first year as global chairman and CEO and am looking forward to sharing with you all, as friends and colleagues, our latest news. This has been an exciting time for the firm, as just last week we launched our new name and brand—Hill+Knowlton Strategies.

Changing the name of the firm was not a decision made quickly or lightly. It came after much thought and consideration about the direction in which this firm is headed, and more importantly — about how to best serve our clients in a changing world.

Throughout my travels this past year to our various offices, I have enjoyed interacting with our teams from China to Latin American and Dubai, and I plan on visiting even more this coming year. It has been encouraging to see evidence of our growth and success with significant client wins and office expansion. Currently, H+K Strategies has 86 offices in 46 countries, which fosters the ability to tackle global issues with a local perspective.

We have had the great fortune of seeing success both internally and externally, with the value of our largest 50 clients having grown 20 percent over budget. Additionally, the numerous awards H+K Strategies received throughout the year help to demonstrate our high level of talent and commitment to providing the best quality strategic advice and execution.

Our clients increasingly acknowledge that there is an element to their business that must continually interact with the public. Our goal at Hill+Knowlton Strategies is to make sure that we can provide wisdom to those clients so that they understand the public and the public understands our clients. Launching the new H+K Strategies is part of that goal.

In conjunction with the brand launch, we broadened our array of services to include more defined digital and research offerings as well as a business advisory group to be rolled out at the beginning of the year. With all these services at hand, we are prepared to start the upcoming year in an exciting direction.

As I’ve said here many times before, creating a thoughtful conversation with the public, which is now connected 24/7, is vital to any organization’s reputation and success. No longer is the public a behind-the-scenes critic — rather, today it is an integral part of every business’ bottom line.  Living in a time where social trends are changing and developing at such an amazing pace, we have made it our priority to recognize those changes and respond to the public accordingly.

I believe that we owe it to our clients to approach their interactions with the public with enthusiasm and passion — and demonstrate that outcomes truly matter to us.

This past month, The Holmes Report issued its 2011 Global PR Agency Report Card. The write-up on our firm recognized H+K Strategies’ new direction, acknowledging our investments in our talent, our global practices and our regions. The piece paints an optimistic future for H+K, and I have no doubt that our future is bright.

Here are some of the most recent awards we have won this year:

PRWeek Awards
Hill+Knowlton Strategies (October 2011)

• Highly Commended: Marketing Communication Consumer (annual fees more than £100k)
• Finalist: Technology

Public Relations Society of Kenya Awards for Excellence

Hill+Knowlton Strategies- Kenya (November 2011)

• Best Public Sector Campaign- Work with the Truth Justice & Reconciliation Commission
• Best Use of Technology Campaign- Nokia Apps Store
• Best Event of the Year- Airtel launch in 16 countries
• Best Public Affairs Campaign- Anti-counterfeit campaign with Nokia

PRSA LA PRism Awards


Hill+Knowlton Strategies- LA/Irvine (November 2011)

Winners

• One-Time Media or Special Events – Corporate/Brand: $100,000 or More Budget
Twentieth Century Fox Home Entertainment Shatters Guinness World Record with Back-to-Back Jack Bauer in “24″ DVD Launch Event
• Entertainment Programs – One-Time or Special Event
Twentieth Century Fox Home Entertainment Shatters Guinness World Record with Back-to-Back Jack Bauer in “24″ DVD Launch Event
• Entertainment Programs – Personality, Series, Music, Film or DVD
Twentieth Century Fox Home Entertainment Shatters Guinness World Record with Back-to-Back Jack Bauer in “24″ DVD Launch Event
• Special Purpose/Creative Materials – Logo/Identity Design
Curbside Value Partnership: Helping Hispanics Recycle: Why the Curb Matters

Award of Excellence Winners

• Consumer – $100,000 or More Launch Budget
Twentieth Century Fox Home Entertainment Shatters Guinness World Record with Back-to-Back Jack Bauer in “24″ DVD Launch Event
• Public Education-
Curbside Value Partnership: Helping Hispanics Recycle: Why the Curb Matters
• Multicultural Communications Program – Association/Gov’t/Non-Profit Organization
Curbside Value Partnership: Helping Hispanics Recycle: Why the Curb Matters
• Special Purpose/Creative Materials – Teaser or Other Collateral
Curbside Value Partnership: Helping Hispanics Recycle: Why the Curb Matters

Asian Pacific SABRE Awards

Hill+Knowlton Strategies-China (November 2011)

• Food and Beverage: Trophy- California Almonds Integrated Marketing 2010-2011 
Almond Board of California

Hill+Knowlton Strategies- Thailand

• South-East Asia: Trophy- Ford Fiesta Launch in Thailand
Ford Motor Company Asia Pacific and Africa with WPP X Team

Gullkorn: Norwegian PR Industry Awards


Hill+Knowlton Strategies Gambit- Oslo (November 2011)

• “Enterprise Profile of the Year”- The “Youth Bank #1” campaign for major Norwegian bank DNB
• “Enterprise Profile of the Year” Nomination- “Teach First Norway” project in collaboration with Statoil

Lars Erik- president of Hill+Knowlton Strategies, North East Central Europe

• Honorary Award- Recognition for dedication to PR business and the Norwegian trade organization NIR

2011 GEMAS Effie Mena Awards


Hill+Knowlton Strategies- Dubai (November 2011)

• Finalist on shortlist- Recognized for work with Proctor&Gamble on global launch of new Ariel

European EMMAS


Hill+Knowlton Strategies- London (November 2011)

• Winner of ‘Most Innovative Use of Tech in Global Mobility (Knowledge)’- Expat Explorer Survey for HSBC International Bank Ltd.
• Highly Commended in ‘Thought Leadership – Best Survey or Research study of the Year’- Expat Explorer Survey for HSBC International Bank Ltd.
• In addition, the technology team was selected as a finalist in the technology

PRCA Awards

Hill+Knowlton Strategies- London (November 2011)

• Finalist in Technology Category- Work on Intel Remastered
  

2011 Middle East Public Relation Association

Hill+Knowlton Strategies (November 2011)

• Best Practice Award: Government Communications- “From Friday Prayers to the Farm”
• Best Practice Award: Use of Social/Digital Media- “A Better Tomorrow for Egypt”

EIKON Awards


Hill+Knowlton Strategies- Colombia (November 2011)

• Regional Golden EIKON Award: Events Catergory- Team leading Fruco, Unilever’s dressing brand

Professional Council of Public Relations of Argentina


Hill+Knowlton Strategies- Argentina (November 2011)

• Nomination for Best Young Professional of the Year -Marcelo Benavides, account director in H+K Strategies in Argentina

2011 Ethnic Business Awards

Hill+Knowlton Strategies- Australia (November 2011)

• Sponsor of 2011 Ethnic Business Awards presented in November in Sydney.
  

European Excellence Awards 
(December 2011)

Hill+Knowlton Strategies- Germany

• Finalist on shortlist- Project for Nord Stream: Evaluation Essential for Building Europe’s Most Complex Infrastructure Project, in the Evaluation category.

Hill+Knowlton Strategies-Poland

• Finalist on Shortlist- project for AstraZeneca Pharma Poland: Educational program about mental illness ‘The Way To Myself’ (Droga Do Siebe), in the Poland, Russia, Ukraine category.
• Finalist on Shortlist- Work with Polska Unia Onkologii (Polish Union of Oncology),GSK Commercial—campaign: National Program for Teenagers titled “I’ve got the answer for cancer” (Mam Haka Na Raka), in the Health category.

Hill+Knowlton Strategies- London

• Finalist on shortlisted- Work with Visa Europe on the Visa Europe London 2012 Expenditure and Economic Impact Report, in the Travel & Tourism category.

 Best holiday wishes to all of you and Happy New Year.

Jack

Jack Martin
JMartinTexas@gmail.com
98 San Jacinto Blvd., Suite 1200
Austin, Texas 78701
512-432-1750

I’ve written here often about the surge in technology and social media that has created a world where information is not only readily accessible, but where the public is able to make its own judgments using the information source of its choosing. But while this ease of access has enormous benefits, it comes at a price. With the public watching 24/7, nothing can be done in a vacuum. We see this becoming increasingly relevant in the world of politics, which we recently witnessed in the case of the euro debt crisis.

The euro zone’s troubles have been well documented in the last few weeks, beginning at the European Union summit in early November — an event that produced what was believed to be a prime bailout plan that would avert a crisis. But after numerous twists and turns, the situation in Europe remains tumultuous. So far, many political and economic forces have affected the direction of the crisis’ resolution, but a critical factor has been each country’s leadership.

For instance, Germany, the financial powerhouse of the EU, came into the euro debt crisis with a leader, Chancellor Angela Merkel, who had less than favorable public approval ratings.  On the eve of the EU summit, a German Infratest poll revealed that only 20 percent of Germans were satisfied with their government’s handling of the crisis. Despite this lack of faith in her government, Merkel then did something that seems rare in today’s environment. She took a leadership role in not only advancing her decisions but also in selling them to her constituents to make the necessary resolutions for the euro zone. From a strategic perspective what she did was risky, but it appears that the German public has fallen in line with her actions. According to an FG Wahlen poll taken over the weekend, Merkel’s handling of the debt crisis is now backed by 56 percent of Germans, up from 45 percent in early October.

However, other European leadership has not been quite as successful in handling the crisis — the two main examples being Greece and Italy. In Greece, former Prime Minister George Papandreou’s every political move was constantly scrutinized by the Greek public as well as the global media. Greece’s difficulty in managing its national affairs appears to be due in part to its leadership. Papandreou highlighted his inconsistency in handling the bailout process when he proposed a national referendum on the bailout and a mere four days later retracted his decision. Unlike Merkel, it appears Papandreou was unable to convince his public and government of his ability to steer Greece in the right direction in its time of crisis, ultimately resigning for his actions.

On an equal but different note, Italy’s leadership has suffered a similar fate. It has been reported that Berlusconi’s numerous economic faults have left the public unhappy and the economy staggering. Those reports show that he failed to invest in schools, universities, innovation or research, and instead spent 20 years building up a national debt of $2.6 trillion. For nearly all of the past decade, the Italian economy has not grown faster than 1 percent annually, which could have been attributed, at least in part, to Berlusconi’s lack of interest in public concern. And this week, Berlusconi was forced to leave office due to intense national and international pressure. Advocating a new direction for Italy, U.S. President Barack Obama and French President Nicolas Sarkozy suggested the country name a strong, credible figure to lead Italy out of its economic downturn. Germany’s Chancellor Merkel even showed concern over the fate of Italy at a party conference in Leipzig, where she said, “I hope that confidence in Italy is restored, which is crucial for a return to calm throughout the euro zone.”

Though there are many financial lessons to be learned from the euro debt crisis, there is an additional key takeaway in terms of public sentiment. The media has focused on European leadership and its integral part in this crisis, causing extreme uncertainty on the part of the European public. Dissatisfied, the public is now looking to stronger leadership and change to manage their economic future. Over the last few weeks, we’ve seen events unfold at a rapid pace, which in decades past may have taken months to come to fruition. The democratization of information has allowed the European public to demand answers and see concrete results on a faster basis. This, combined with a decline in the power of traditional institutions as intermediaries, has created a forum for the public to voice its opinion, be heard — and most of all, instill change.

Jack

Jack Martin
JMartinTexas@gmail.com
98 San Jacinto Blvd., Suite 1200
Austin, Texas 78701
512-432-1750

Earlier this week, I shared with you my thoughts on the Occupy Wall Street movement and its effects on the current economic and financial climate around the world. I would like to take a step further now and discuss how this rapidly growing movement will impact the upcoming United States presidential election. By looking at this, it may forecast what we could begin to see around the world. Where although the Wall Street protesters are making headway, there may be another consideration found in people’s unrest with the government.

President Obama has been criticized by his base for being too soft on Wall Street. Add to that the failure of the administration to achieve overwhelming public support for initiatives such as healthcare reform, environmental regulations and deficit reduction. These two ingredients have contributed to Obama’s steadily declining approval ratings.  Now, with Occupy Wall Street gaining momentum, the President and the Democrats have, by default, stumbled into a ground swell of support for their policies. Trying to capitalize on this new wealth of support, it would not surprise me to see the Obama campaign echo some of the anti Wall Street sentiments.

In fact, at a recent speech at the Martin Luther King Jr. Memorial Dedication, President Obama shared his thoughts on the Occupy Wall Street movement.

“If [Martin Luther King, Jr.] were alive today, I believe he would remind us that the unemployed worker can rightly challenge the excesses of Wall Street without demonizing all who work there; that the businessman can enter tough negotiations with his company’s union without vilifying the right to collectively bargain.”

So it appears to me that Obama is foreshadowing his stance on what could become a key election issue.

Interestingly enough, it may not be that simple. At this point, pursuing the Occupy Wall Street agenda may not be the only strategy. If you take a look at a recent Gallup poll, we see that Democrats have become more evenly divided on whom to blame for the financial crisis. According to the poll, 46 percent of Democrats blame Wall Street, while 49 percent see the U.S. government as being responsible. Additionally, 28 percent of Independents blame Wall Street, while 65 percent hold the U.S. government accountable. The combination of these two demographic groups and their unrest with the government gives an indication as to why you might see some resistance in politicians around the globe relying solely on a strategy of blaming the financial industry or some equivalent of “Wall Street”

To my point, we are now seeing the President criticizing Congress, coming very close to calling them “do-nothings.” In an October 6th White House press conference he stated,

“If Congress does something, then I can’t run against a do-nothing Congress. If Congress does nothing, then it’s not a matter of me running against them; I think the American people will run them out of town, because they are frustrated, and they know we need to do something big and something bold.”

These criticisms may be in hopes of garnering support from those Democrats and Independents who are, in fact, frustrated with the government.

So then, how does President Obama run against the Republican candidate?  Let’s assume for a second that the nominee is Mitt Romney, which is not a forgone conclusion. Looking more closely at Romney, a very successful businessperson who comes from the much-respected Bain Capital, it is not difficult to suggest that this association be rolled into a description of “Wall Street” in the rhetoric coming out of the Obama campaign.

Once this begins, you could conceivably see in the 2012 election that the Obama team essentially tries to make the election a referendum on Wall Street and the Republican Congress’ intractability on economic issues by attaching Romney to both groups. I would be willing to bet that in the research being conducted now on how to make the best contrast between Mitt Romney and Barack Obama, someone is going to come running in to the room with a poll that shows a link between Romney and the perceived “excesses” of the past, with the pitch that, if advocated, would generate support for Obama. Add to that Congress’ current 13 percent approval rating and Romney will likely want to have his campaign headquarters on the North Pole to stay as far away as he can from Washington and his supporters in Congress.

Although rallying against Wall Street may be gaining momentum, things are not that simple. We should watch to see how President Obama incorporates the public’s frustration with Congress into this strategy. In this day and age, when democratization and disintermediation have become increasingly relevant, it is important to gauge the public’s changing perspective in order to stay in the game.

Jack

Jack Martin
JMartinTexas@gmail.com
98 San Jacinto Blvd., Suite 1200
Austin, Texas 78701
512-432-1750

Now in 85 countries and on five continents, we have seen “Occupy Wall Street” emerge from the grassroots level and grow into what can be considered a global “movement.” This raises a number of questions that I’d like to consider with you here. First, what is Occupy Wall Street and, more importantly, what is it not? Second, what are its prospects as a movement? And finally, what is its potential impact on policy in Washington and around the globe?

Does this type of protest sound familiar? It should. The “Tea Party Movement, ” which had its origins in conversations across the country in response to “Obamacare” in early 2009, had a direct impact on the U.S. Congressional elections of 2010, giving Republicans control of the U.S. House. We’re still feeling the effects of that change, most recently with the drawn out and bitter fight over raising the debt ceiling and among Republican presidential contenders vying for favor with the Tea Party.

On a global scale, the Arab Spring comes to mind, with some saying it may have planted the seed of inspiration for these protests. Tens of thousands of frustrated Egyptians flocked to Tahrir Square to express their grievances and organized a campaign that overthrew their government. Though that case may be more extreme than the Occupy Wall Street protest, instances like these make people believe that they can make a difference.

These movements have their roots in two trends you’ve been hearing me talk a lot about lately, the first being the democratization of everything. Oddly enough, the democratization of everything applies to politics as well, where we’ve seen a decline in the power of political parties since the Buckley v. Valeo Supreme Court ruling in 1976. Both the Tea Party and Occupy Wall Street movements are signs of increasing democratization of even political movements.

Coincidently, the second relevant trend I’ve been talking about – disintermediation – applies as well, with people increasingly rejecting major institutions. America’s lack of trust in institutions is crossing over into the political realm. Instead of turning to various media outlets, the government, or political parties, people are beginning to seek out information for themselves.

At our core, we are a center-right nation. We have a fundamental cultural belief in the free enterprise system. Although Occupy Wall Street and the Tea Party are on opposite sides of this divide, they are utilizing the same “take to the streets” tactics.

There’s a Venn Diagram, created by blogger James Sinclair, making its way around Facebook which highlights a belief about the intersection of big government and big business. This may indeed be a unifying theme. However I believe we should be careful before jumping to the conclusion that these two movements will be aligned in a major way going forward.

Through its “organization,” Occupy Wall Street could have a real impact on public policy in Washington.

To date, the U.S. Congress has been at somewhat of a stalemate on issues affecting Wall Street. House Republicans are reluctant to engage in the dialogue about taxes on the “super rich”, etc., citing concerns about jobs and the economy in the broadest sense. These lawmakers are resisting the notions put forth by President Obama in the American Jobs Act as it relates to raising revenue.

On the other hand, Democrats and the President have been trying to gain a foothold and save what they can from their recently proposed jobs act, which has been inexplicably rejected by the Democratic-led Senate. Interestingly, in spite of this rejection, the public appears to be in agreement with the basic tenants of the act. According to the latest Gallup poll, 57 percent of Americans want their members of Congress to vote for the jobs bill created by President Obama.

So, will the “Wall Street Rallies” give life to what is otherwise a stranded proposal? If it does, it will be almost by coincidence. Don’t underestimate the threat of a “haves” and “have-nots” society and the trends of democratization and disintermediation.

We should watch closely and see if the situation escalates to include broader proposals that affect Wall Street and the financial industry around the world, i.e., taxes, further restrictions on pay, a discussion of revisiting Glass-Steagall, which would re-impose the separation of commercial and investment banking, and other such measures.

As we are starting to see, Occupy Wall Street is spreading globally. This past weekend protests took place in Rome, Berlin, London, Sydney, Tokyo, and Hong Kong. Although the protests represent a variety of messages, they were united in their frustration with the widening gap between the rich and the poor, and with the financial industry. It will be important to observe what comes of these demonstrations and what impact they will have on the global financial system.

In the end, however, the high unemployment rate of 9 percent that many Occupy Wall Street protesters blame on Wall Street may be the reason that the movement has yet to make an impact on public policy in Washington, where politicians are afraid to hamper economic growth with any policy that might further roil the financial markets.

Jack

Jack Martin
JMartinTexas@gmail.com
98 San Jacinto Blvd., Suite 1200
Austin, Texas 78701
512-432-1750

Leadership (noun \lē-dər-ship\) is not a new word, yet I wonder if Washington, and the European Union for that matter, is suffering from people’s belief that we are in dire need of someone, anyone, to begin exercising its meaning – the capacity to lead. Maybe the reasons they feel it doesn’t exist is because they feel present leaders are not leading, or that people have simply stopped listening.

The recent wild swings of the stock market may signal something a lot more serious than a lack of confidence in Fed Chairman Ben Bernanke’s newest effort to stimulate the economy by driving down long-term interest rates and worries about containing the European debt crisis: they may point to a perceived lack of leadership everywhere, as Americans cope with a 9 percent employment rate and no apparent prospects for improvement.  Clearly, the rhetoric and quick fixes are not working. We are losing faith in our current leaders and have stopped listening, not because of what they are saying, but because of the notion they are not leading.  This at a desperate time when people so desperately need someone to do so.

The Dow dropped 2.5% shortly after the Fed statement that “there are significant downside risks to the economic outlook.”  Both stocks and commodities tumbled, Treasury yields dropped to a record low and, over concern that central banks have run out of tools to prevent another recession, the Dollar Index climbed to a seven-month high.

The steady stream of negativity regarding the European fiscal policy, and lack thereof, has helped drain confidence in the institutions whose task it is to lead the developed world out of recession.

By now, everyone knows that President Obama’s job approval rating, which is in the low 40’s and has been since June, are dangerously poor for someone who faces reelection next year. He is not able to impose his will on a Congress where the GOP minority in the Senate can thwart many of his proposals and where a GOP majority in the House just says “no.” His initial big jobs program speech on was cheered by partisan Democrats weary of his efforts to negotiate with the GOP, but practically everyone agreed from the start that much of it will never be adopted. Presently, the Washington Post-ABC News poll shows the President is leading congressional Republicans 49 to 34 percent when it comes to the public’s trust when it comes to creating new jobs. Although it is an improvement from September’s numbers when it was a 40 percent split, is it enough to get him reelected?

Recently, House Republican Majority Leader John Boehner — who struggled to hold together the GOP caucus during the debt ceiling fight — saw his caucus break ranks openly when the House voted down, 230-195, what was supposed to be a fairly routine spending bill. Democrats voted against it because they thought it didn’t have enough money for disaster relief victims, but a significant number of the most conservative Republicans also voted against it because it didn’t cut government spending enough. Boehner later got the bill through the House, but this back-and-forth suggests that more bitter, drawn-out fights over spending and taxes will erupt again this fall. It’s as if both parties in Congress see more gain from continued fighting than compromise, which is interesting in light of the latest Washington Post-ABC News polling that shows 42 percent of Americans are fed up with Congress’ shenanigans.

So what does the American public, weary of economic gloom and fearful that they will not come out of this recession anytime soon, see when it looks to Washington? Do they see a president who spent too much time trying to win support in Washington for his programs, rather than first securing the support of the American public? A House with a Republican majority that can stop legislation it doesn’t like, but can’t pass much of anything it really wants — when it can actually agree on what its own members want?

The public sees a Federal Reserve doing financial things it doesn’t understand, but deepens their pessimism because what they have been hearing lately from the Fed confirms the economy will get worse before it gets better. This gloomy outlook is a shared by executives participating in the 2011 McKinsey Global Survey, which reveals many believe their home economies,  as well as the global economy, will show no signs of improvement for at least the next six months. Europe appears divided over how much help to provide countries, especially Greece, which are struggling with heavy debt burdens.

It’s a remarkable moment in history. A political stalemate and a perceived lack of decisive leadership in the world’s largest economy is making a bad situation worse, not just for Americans, but the global economy as well. This stagnant moment is a perfect opportunity for a new bold and different type of leadership. The type of bold leadership shown by Warren Buffet’s business insight, Bill Gates’ ground breaking philanthropy, and Steve Jobs’ revolutionary approach to receiving information.

Given the present mindset on leadership, it is not surprising that the people who are in the public’s eye the most seem to have the lowest approval rating. In the 2011 Gallup Poll on Confidence in Institutions, Members of Congress and big business’ approval ratings are under 20%.  Media pundits are barely better with an approval rating under 30%. So who does the world trust? The military leads in trust with a 78% approval rating, followed by small business (64%), the police (56%) and organized religion (48%).

From the information I’ve gathered the description of the bold leader the world is waiting on would look a little like an Army general, who is also a minister, whose spouse is a part-time school teacher and small business owner and who used to be a policeman … any ideas?

Jack

Jack Martin
JMartinTexas@gmail.com
98 San Jacinto Blvd., Suite 1200
Austin, Texas 78701
512-432-1750