Walker & Dunlop, Inc. (WD) Earnings Call Transcript & Summary

Good afternoon, and welcome to today's Walker webcast. I'm Susan Weber and joining Walker & Dunlop's CEO, Willy Walker. On today's webcast, it's Russell Dubner, U.S. President and CEO of Edelman. They will discuss communication strategies, social media and why Americans are looking to corporate America for policy, solutions and leadership coming out of COVID. Thank you for joining us today, and now over to Willy.

Thank you, Susan, and welcome, everyone, to another Walker webcast. It's a glorious spring day here in Denver, after getting a flash snowstorm day before yesterday. It's the final week -- it's the final day of Q1, and it's uplifting to think about the arrival of the spring, the celebration of Passover and Easter. The reopening and getting to the other side of the pandemic. I went back and looked at one of the daily videos I sent out to my Walker & Dunlop colleagues last spring. And in it, I was talking about potentially being back in the office by early June. Amazing how wrong I was. And also to think about how little information we all had at the time about the virus how to protect ourselves and vaccine development and deployment. I had someone write me yesterday saying, she'd listened to every Walker webcast either live or on replay over the last year, and how thankful she was for the insight and information this weekly discussion produces. Firstly, thank you, Lynn, for your very nice e-mail; and second, thank you to all the listeners who join us every week. Our numbers have grown dramatically over the past month with tens of thousands of replays of the Walker webcast being watched on YouTube. We actually had over 50,000 replays last weekend of my discussion on the housing market with Diana Olek of CNBC and IV Zelman of Zelman Associates. Big thanks to the Walker & Dunlop marketing team for all their fantastic work on this, and to my guests, like Russell Dubner today, who bring amazing insights and perspectives to this weekly dialogue. Final note before I begin, the Biden administration is unveiling its enormous infrastructure package today, which calls for trillions of dollars of investment in bridges, roads, airports, clean water, job training and much, much more. One area that the Biden administration could have an immediate and significant impact on both the building and retrofitting of environmentally friendly buildings is to have the regulator of Fannie Mae and Freddie Mac reintroduce their green lending programs and remove green lending from the annual multifamily lending caps. From 2016 to 2019, Freddie Mac provided almost $60 billion in green advantage loans. While from 2012 to 2019, Fannie Mae issued $75 billion of green bonds. Combined, these lending programs saved 8 billion kBtus of energy, 7.9 billion gallons of water and prevented 541,000 metric tons of greenhouse gas emission. The environmental benefits from these lending programs were immediate and dramatic, and they should be reinstated in concert with any infrastructure bill. So now on to Edelman and to my great guest today, Russell. Edelman is a global communications firm that partners with businesses and organizations to evolve, promote and protect their brands and reputations. Over 6,000 people in more than 60 locations around the globe deliver communication strategy that allow their clients to lead and act with certainty. Russell Dubner is the CEO of Edelman's U.S. operations, a role he has held since 2014. Previously, Russell was President of Edelman, New York. Russell went to Franklin and Marshall College, where he played soccer, also wrestled and also played tennis, has an MBA from Columbia business school. Russell started Edelman in 1992 and is in his 30th year with the company. He sits on the Boards of New York leadership center, Gen Next Foundation and the Center for Urban Future. So Russell, you and I actually have a number of similarities. We both went to small liberal arts colleges to play D3 athletics, and then went on to IV league business schools. We are both fathers of 3 boys. You are the owner of 2 golden doodles. We have one and are about to get our second. We both lived in London about the same time in the early 2000s, even though we didn't know one another back then. And you now run the U.S. operations at one of the largest global communications firms. Take us back for a moment to graduating from Franklin and Marshall, and why you joined Edelman, which at the time was nothing close to the global powerhouse it is today.

Well, first, Willy, thanks again for having me on today. Yes, when I -- it's a great question. Back then, Edelman was not the leader it is today, but the leaders of Edelman were still the Edelman family, and they are an ambitious bunch. And Dan Edelman and Richard was on a mission, knew that communications had a large role to play at the head table, and that ambition is contagious.

Was there anything you talked about -- Dan and Richard, was there anything in your background, from either a leadership or an education standpoint, that you think made you stand out to them back in the 1990s that they said, "Hey, Russell's got legs."

Yes. Look, sometimes, to place it too well, where that kind of drive, ambition, hustle appeal deeply to me because it fit my work [indiscernible], how I look at the world. And I think early days, some of my first client engagements, we did a bunch of work for the government of Mexico around the time of NAFTA. And here, we had this premium assignment working with the White House Task Force on NAFTA after just graduating from college. And to be able to coalesce a team that were a set of former journalists, a set of people who are really sort of publicists and looking at a campaign and bringing that together and end up being sort of a campaign quarterback, I think it showed them that not only do I have the hustle, that I could coalesce team. So I think at the moment, and then after our success there, I naturally thought, well, how do we build a playbook? How can this be something that we could take to other clients, which can help us grow in international public affairs, doing inward investment work for Israel and some for Brazil and the like.

So early on, some of the brands that you worked with were Church & Dwight, Danone and Energizer. I didn't know that Church & Dwight owned Arm and Hammer, Pepsodent and Trojan brands. Talk to me for a second about how you work with a company that is trying to sell baking soda, toothpaste and condoms with regard to a unified branding strategy?

Sure. Well, I mean, I think, first, you start with the fact that each of those products as a particular audience that they want to energize. But with something like, say, the Arm & Hammer, it's also sort of a master brand because the baking soda can get applied to a whole bunch of different applications. And so what we'll do is look at what is the need of those potential consumers, and then overall, how are you potentially positioning the parent company, which is more the case with, say, Unilever where that purpose-driven brand. And interestingly, this summer, we still do a lot of work for Church & Dwight. And looking at their Arm & Hammer brand, we created almost a summer camp, a virtual summer camp for young moms and their children and with the enemy being moms not getting time during COVID. And so it's an instance where you're proving the utility of the brand by giving kids activities of all of the ways you can use Arm & Hammer with showing them that there is a creativity and that we know the problems they face. So those are the kinds of programs, and we were able to garner 5 million views of the content because it wasn't selling, it was really engaging people and helping them in a fun way, creative way to solve a problem.

Talk about the difference of trying to work with the company to promote a specific product like which you just talked about with Arm & Hammer versus someone like BCG or PwC, 2 of your -- of the clients that you worked with, where you really -- you're talking about, first of all, service is not an actual product; and second of all, in the case of BCG, specifically, you can't even talk about what they've done for whom. So how do you go about selling that type of a service versus, we all kind of get -- okay, let's figure out who the target audience is on Arm & Hammer and go promote that product?

Yes. It's a very different problem set. One takes the example of Arm & Hammer, it takes a certain kind of creativity to stay relevant with an audience. And for BCG or PwC, it takes a different kind of creativity. So when we started work at BCG, maybe it was 10 years ago. Admittedly, today, we do work for McKenzie, but [indiscernible] was the main client, who's today the global CEO. And his ambition was to make BCG seen as an institution, not just a strategy job. And so part of the challenge there is, how do you show up, where do you show up. And so for them, someone's helping them for partnerships like we did with TED. So there is an BCG at 10. That's now lasted 10 years, where BCG shows up with their TED talks, and it forced them to change how they delivered their story telling and created a mechanism for them to do that. Another piece is making sure that you're adjacent to the people who have the most influence to bring forward your best ideas, and they were actually medicine brand back then, and giving them in the right mix and the right -- showing up at the [ mill kings ] of the world and the like. For someone like PwC, it's different. PwC is very much about leading with their action to. So Tim Ryan, who is our client, who heads the U.S., is a very bold leader. And with Tim, he is very willing to step out and lead, for instance, on diversity and inclusion and created an organization and kind of gifted that outside of PwC around CEO action and has been really bold also about upskilling, seeing the challenges that are coming down the pipe and investing big dollars in the firm, he's doing that globally. And so a lot of building the brand is around their action, in addition to their thinking about what's changing in the economy and how CFOs are grappling with the next stage post-COVID.

If we rolled the clock back, Russell, to, I don't know, 2000 and thought about PwC and BCG, for example, and how much of their media spend was in traditional media. I remember distinctly walking through Heathrow Airport year after year when we were living over there and seeing all the PwC signs on the wall. And so there is that typical kind of billboard spend that they would do in an airport, but clearly, online media has basically consume the media world. If you think back to the spend of someone like PwC in 2000, and maybe PwC isn't the right example, but someone like that in the professional services space, how much is their media spend from traditional media back in 2000 to now online media shifted over the last 2 decades?

I think professional services and like companies having to look at their spend and say, okay, I have this pot of money. What really matters to my customer and their influencers now? Where are they going to find that relevance and connection? And so what you've seen is that, yes, there still are the golf sponsorship and alike, but the places where they get more residents could be around really useful thought leadership and so that there is a digital targeting and engagement strategy around publishing. And so each of them have become their own publishing and media company. So they've employed some top former journalists who are part of their team. And the dollars have shifted from traditional marketing to marketing that is of substantive value. And that -- some of that shift you'll see in terms of digital and digital spend, some it's on the substance itself, and some of that is also around convening. Who do you bring together to talk through and to solve. So I think the shift has been pretty dramatic. And I know, for instance, some of those firms are looking today at, again, what are the returns? How are we getting our customers engaged? And are they in areas of common interest? So yes, it's a very different formula in part because the customer is looking for more substantive engagement.

I listened to Richard Edelman on a webcast that you all did right after the election, talking about that the media, the lack of trust in the media today is at an all-time high as far as distrust in media. And at the same time, media companies are making money hand over fist right now. And then I heard you just say that a lot of these larger firms are actually on their online media, bringing a lot of capabilities in-house. And so as you think about the media landscape over the next decade, is it that people start to create really their own [indiscernible] and internal capabilities? Or do they continue to rely on third parties as both the channel as well as the creator of content?

Yes. I mean, look, the way I like to think about this is that the media ecosystem is often -- parts of it are dying, and then there is a vibrant new ecosystem that's being born. And you really need to track where that is and where your employees, where your consumers, where your customers are finding that trusted information. And so what's been shifting here is that you'd see both traditional media, parts of it doing well, other parts are really sucking wind. And you've seen this huge entities of journalists from a lot of the top [indiscernible] taking dollars from billionaires and alike to prop up some of those media properties, right? On the flip side, you'd see the greatest trust is in company media. And so in fact, our research has shown that company as media is more credible and trusted than the media itself. And so yes, I think company has their own media property as producer is really important, but so is also the fact that you have influencers today, which aren't just the celebrities that are paid. We engage influencers in a technology marketing contact, in a B2B engagement, understanding the sources of influence through social largely is also a huge part of the game. I almost have to think of this as what's happening in media is sort of a hollowing out of what was the middle. So you have the big players who are doing well, and then you have sort of the sub-pack newsletter types that are also very focused and value. And what a company needs to do is figure out how appeals in both and how do you fill some of those gaps.

How does Edelman kind of manage and understand the whole new media, online media space? For instance, my kids on Snapchat or on watching YouTube people, they're these YouTube stars. They're the Snapchat personalities who -- I get some news feed that says that just yesterday or the day before, some young woman tragically died who was some Snapchat star. I didn't even -- had no idea who she was. How do you want to manage and monitor that to build up the knowledge base at Edelman to be able to come to companies like Walker & Dunlop and put forth who you really need to try and promote this service or this brand is this person?

Yes. So it's part science and part of it is an art. On the science side, we've been looking at what are the most trusted, broadest sources of information from traditional media, and we have been using and investing in their technology and changes that have happened and how, what we call Comms Tech, the Communications Technology, just like a change in ad [indiscernible]. It lets you have a much better sense of which outlet, which individual has the most strongest voice, most veracity around a particular topic set. The same kinds of technologies can be applied to influencer. Then you really need to know who that person is. So we have a whole team that what they do is really study what's changing, study who right matches for the brand, and then does some of this is just really being done at a hand-to-hand level and looking at who those creators might be. There is that kind of work we do for a brand like Xbox. People are so enthusiastic about Xbox. You don't need to pay anybody to communicate about Xbox. I mean just ask my kids and how excited they are and want to get their hands on the next one coming out. Nonetheless, how do you still inspire the right creators? How do you make sure there are diverse voices that are coming through? And they're really smart about making sure they know who those diverse voices might be and making sure that they get engaged in a way that inspires them to create. So some firms who went to like a social media marketing that focused on influencer, they would say, pay these people these dollars and they'll produce this content for you. And we take a much more hybrid approach because we think there is a lot of authentic enthusiasm that you can get through creativity. So that's the basic gust.

So sticking on your comment about Xbox and your boys and one of my boys, in particular, has the same, I would call it, a propensity not an addiction. Although I think my wife would call it addiction to the Xbox. But you've done work with Activision, and one of the interesting things in the work, as I heard you speak about your work with Activision was to embed something in -- that is both experiential and authentic. And you talk a bunch about sort of the experiential world, both in retail as well as in using a video game, but that also has something that is authentic to it. Talk about those 2 sort of qualifications that make communication and ad strategy so effective if you can get both the experiential and the authentic?

Yes. So it's a great observation. I think in the case of the work we did for Activision when they're about to release a new sort of Call of Duty, was really about engaging the gaming community where they were, right? It's pretty hard to get the community to want to switch when they're so enthusiastic about what they're immersed in. And so we took that insight, and we created the first Snapchat integration, and so we disguised it as a software upgrade or download. And so that when some of the top gamers were going through, they could discover it. And once it was discovered, it gives them a chance to start decoding it. And then the enthusiasm around solving the problem of like, well, what is this gift that's coming in from Activision, blew up. So by the time they did the launch, it already had tens of millions of people participating in understanding what might be coming and getting energized by it. So it's authentic to them, authentic to the community, social media platform, they're already deeply engaged with. And so that's when you thread that needle, then you don't need to spend a lot of money. You just need to get the creative and the execution right to blow out that kind of enthusiasm.

So that makes great sense in the kind of the video game world. Talk about the work you did with REI on the #OptOutside campaign, and why that was so effective?

Look, I think that one too is one of the lightning in a bottle moments. And with the work with #OptOutside, at the time, there is an [indiscernible] alumni, who was the Head of Comms. And he called me and said, "Hey, we think we might have something here. We could really use your help." And we think we have a notion about how we want to define our enemy." And the enemy being really the -- this notion of being the first indoor species that -- we in America, in particular, are spending too much time inside and how can we get people to understand that REI isn't about just [ equivalent and about floating, ] but we are about helping people access the outdoors and how important that is. And so they came with this notion and what you have, we had to figure out of them, it's okay. So what's the brand act? How do you get people to understand you really mean this. This isn't about marketing, this is about your mission. And so what we all landed on was this notion of closing down their stores on Black Friday. And to take that hidden profit on one of the most popular shopping days got people's attention, got the media's attention. And then once that started steam rolling, what they did is to gift this idea out, right? So to get -- again, more people to be willing to participate. So got -- governors started raising their hand and saying, we're going to open our parks for free on Black Friday, isn't that interesting? Other brands said, we're going to do something similar. Instead of holding tight, we opened up. And each of those things we just would naturally work in tag team with the team at REI keep evolving as we change. And then there's been subsequent chapters. So when it's really mission driven, then an organization like REI will say, "Okay. So the next chapter is about access to the outdoors for women. Why aren't women featured in the same way in catalogs." And so they had to do some self-reflection and make changes around that. Now their focus is around black and brown Americans. And what are we doing to make sure that the outdoor is successful to them. And so the brand and the perceptions of the brand and trust in the brand took a very, very big bump around this. And so -- but ultimately, is really true to who they are.

So as I think about what you -- to help promote REI in getting people outdoors, you could also have just done a really poor job of ruining Activision. But I know that would not have been well received by Activision. You also have worked on Tough Mudder, Russell. And I'm sure many listeners don't even know what Tough Mudder is, but I find the Tough Mudder brand to be something of a cult brand. Can you can you explain that and how you all worked with such a -- what I would view as sort of one of these almost overnight brands that took on a life of its own.

Yes. We worked with Will Dean in sort of when you're going from having momentum to becoming something of greater scale. And so what they were looking for from us is, how do you build a story that can be self-sustained? You need [ to pose ] the markets where they're bringing their experience and how do we look at this from a social strategy perspective to make sure that it's getting the right shares, the right visibility, the right loyalty. And what does it mean from an intermediate perspective? So you can only do national media around the same story so many times. And so how do you find a different twist there, but also how do you bring it local? Because ultimately, they needed to get the ticket sales in those markets. They needed to get the local teams that were being set up. We still did some super interesting and fun things nationally, and we got the morning shows. We would literally set up a Tough Mudder obstacle course for them to run through and kind of started revealing the obstacles early and making that a reveal moment. And for a brand like them, once they got up and running and internalized what would it take, something that they took on themselves. But it was super fun to be a part of companies that are on that fast rise, and how do we help them scale their growth.

So on that, a lot of our listeners, there are plenty of listeners today who work for big companies that have big global brands, and there are plenty of people who have much smaller either footprints. They own a couple of commercial real estate assets somewhere. They might own a mortgage brokerage firm somewhere or they might be in the private wealth management space and just have their own business that they're trying to promote. As you think about kind of strategies for building brand, what are the core tenets? If you sit down with a client who says, "okay, I don't really have much of a brand today, but I've got to kind of start somewhere." As you think about someone like Tough Mudder who kind of caught a little bit of lightning in a bottle because of what they were building, but it was a very, very small company when it first started with its first race and then built from there. What would you say to somebody listening today as it relates to how do you go about trying to establish a brand?

Well, oftentimes, there are a handful of core questions that a leader or a company needs to be able to answer for itself. What are you really going to be known for? Who am I in this market? And how I set apart? And how are you living that? How is that showing up? And that requires creativity, and it requires some courage and being bold behind that conviction. And oftentimes, what we look at is also to lead is there some deficit in the marketing in competitive field that you can fill. And sometimes, for us, that deficit that we look for is around imagination and some of the deficit is around trust. And so for us, when that intersection happens, that's the most interesting where you might find that we're doing -- this problem is a much larger organization, but someone like Petco, who is a great client of ours, they saw this opportunity to fill a gap in trust related to healthful pet foods and helpful and access to the health and wellness for pets and pet parents. And so sometimes seeing those kinds of gaps also give you the inspiration to go and to build your brand in a way that you can feel energized and authentic.

And how much on that, Russell, is -- I mean, as you use that Petco example, how much of the marketing or branding around that has to do with the products and services versus Petco as a company? Because I think one of the things that I've seen you talk about extensively is just that it is not only trust in the product or the service, it's also trust in the company. And we're going to get to the Edelman trust barometer in a moment, but as you think about that, could Petco go and address that market opportunity, but not sort of wear that on its sleeve every day?

They -- so the leadership team there, both Ron the CEO and Tariq, who heads marketing and Dave Hallisey, who had Comms, they think about this in a very integrated way. They think about consumer engagement, the corporate brand, and they also think about their marketing and understand that the core the belief that they have deeply for both their employees and for their consumers really does need to show up regularly in the marketplace. And embodied by the CEO, they'll also through their actions. So for instance, when -- recently, they were communicating about their recommitment to pet health, part of what we did was take actually all the shock collars out of all the Petco stores, saying there is a different way. You have to realize that the emotional health of your pets is real. Dogs -- I believe all pets, I don't know, but feel to the same degree that humans do. So there are ways that you can be training. So what's the right way to do this? And so sometimes it's the removal of things. It's kind of like the work we get for CVS on the quitting smoking, the removal of things to redirect to the positive is also part of what helps a brand like their's stand out and know that the 2 pieces are deeply and intricately linked. And then they have to stand for that. Otherwise, for your grooming and for veterinary services, you might not go there. And that also holds true during COVID, how you show up for your employees. What do you do for them? How are you present for them? Because they have to feel that and know that you're behind your brand 100%.

Talking about the shock collar and the removal of the shock collar. I got woken up at 12:30 last night by our dog, by our puppy, and he was barking. So I thought he needed to go outside to relieve himself. So I let him outside, and he would not come back inside in it about 12:45 at night, running around outside, trying to grab them and bring them back inside. I was sitting there saying, I need to get a shock collar. But fortunately, that thought passed quickly by about 1 o clock in the morning when I finally got them back inside.

Yes. [indiscernible] biscuit.

I tried. Believe me, I pulled out some good fillet, some tenderloin to try and lure him back inside, and he's smart enough not to take that. So Russell, when you talk about building a brand locally, one of the things you've also -- and something that Edelman does a ton of is, you also work on crisis management with companies. And as you have said, you can build a brand locally, but when you have crisis management, it's a global issue immediately. Talk for a moment about the work that you all do these days with crisis management. And I want to dive into a little bit more specifically where people are asking for the most help. But address that for a moment as it really -- like as you think about Edelman's work on both communication strategies and branding as well as crisis management, what -- do you all disclose what percentage of your work is on sort of the crisis management side versus on the general communications and branding side?

Yes. Well, I mean, first, I think the point that about a crisis being global is, it has the potential to be global. It can be a local issue that can become global now because of the nature of media. And oftentimes, early stage in what could be a crisis, like is this an incident? Is this actually an issue we could intercept? Or is this something that is as large as a material breach to trust? And there are different dynamics that come into play if it's, in some ways, a breach of the company's values and what they say they stand for. And you need to really get the full sense of what's happening, but there's also, again, a science around this. And you can see by ring fencing and understanding from a social media, geo located, how fast is this moving? What kind of participation and likes -- and from a media perspective, what the trajectory might look like and using some predictive techniques to understand that. So I just think it's important like there are gates that you go through as you're deciding what this is, and then there are decision sets afterwards -- and the decision, what are you going to do about that? So for us, crisis is a big business in part because protecting a company's brand and making sure that you retain the trust within the organization, it's still very, very important. And the breakdown of that for us is, sometimes it's -- it could be related to an audience like the financial community. If it's material to them, then it becomes -- it raises it up to different kind of problem set. And for others, it might be, specific to consumer set and alike. But overall, our -- the corporate affairs work that we do overall for an enterprise is about half our business and the work we do promoting brands is the other half. So we're very much ambidextrous.

And on that, as you think about those companies that have either in place a crisis management kind of plan because they've been working with you for a long period of time. They've sat down and talked to you about, well, if this happened or this happened and the ability to respond to that versus someone calling you up. We get done with this webcast and, heaven forbid, I got to call you this afternoon and say, Russell, Walker & Dunlop had a breach of our technology, and we've got to figure out damage control on that, and we haven't worked with you on that specifically. How much more effective are you all? And are the companies in dealing with those crises, if they have been working with you on the issues previously versus just calling you up cold and saying, we got to get at it?

Oftentimes, there are issues that if you planned ahead, you can intercept them and lead on something as opposed to having bite you in the a**, right? And so if you do enough of that scenario planning, if you imagine the potential downsize of, say, a technology, right? There is work at a plant of hours done where they saw the issue of [ deepfakes ] coming. And so what can they do to make sure that there are actions in place and that they're making sure that their technology is going to be used in ways that aren't manipulative to society. And so I think, again, if you're waiting around and that comes and bites you, you're going to find yourself on your heels, your -- what could be a moment in time where you have ethics, and you've made your decisions in a coherent way. Instead, you're on your back foot. And as soon as you're in that defensive posture, it becomes very difficult to reestablish unless you're making actual changes or you're able to refute it effectively. So to me, the best value is to be able to see these things in advance and turn what could be a crisis into either an issue you manage or a leadership position. We had something like a cyber breach -- I don't know, simulation builds muscle memory. So we do the simulations and make sure that the management teams and others know how they're going to respond and what the escalation points are. Nonetheless, when it hits, it hits. And it's for all of these other broader stakeholder concerns that don't need to be a crisis where it's most valuable.

You mentioned to me previously a client, which will obviously go unnamed, but you all were working with, where they thought that there was, if you will, just an HR issue, but as you all engaged and started to kind of peel the onion, found out that there was something that was sort of endemic in the business that was kind of rotten. And right now, that company is working in the spin-off of that division. Can you shed a little light on that?

Yes. Look, I think sometimes what we get called in to do is some of the things that the lawyers would prefer not to do, right? So we'll come in, and we will go through and say, here is what is publicly available about you and your problem right now. Here is the likelihood, if this was discovered, what it could mean for you because of what you stand for or how your leadership will be evaluated based on these decisions. And so oftentimes, these discussions will be at the Board level, and the Board will want to understand, if this happens, how will this likely play out, and there was a recommendation from us. We stopped at whatever the recommendation of what action, but we make sure they understand. We put that mirror up to them in the most likely scenarios and show them where they aren't sort of living up to the promise that they share with their employees and with others. So the instance that you're talking about a company can go and/or the border leadership can go to the point of saying, how are we going to "spin" this, which is something that we don't participate in. It could be defend this or do we need to take action? And sometimes that action becomes much more clear. We've had a CEO in a discussion like this actually volunteer to step down, say "I get it now. This makes sense. I need to step down so that the organization to move forward."

So after the election, I was watching the webcast that you and Richard Edelman did. And in that as you all were giving people advice on sort of how to play the uncertainty after the election, and how corporate leaders ought to be engaging with people. And basically, I think one of the things you said was, for right now, you probably want to lay low until there's a little more visibility on what the outcome looks like. And then -- but you're going to need to jump in at some point, and show leadership and show support of the overall system and what have you. But one of the things that Richard Edelman said was that trust used to be top down, then it went horizontal and now it's local and focused on employers. Why do you -- for a moment before we dive into the trust barometer and the survey that you all do, why do you think it is that institutional trust has gotten degraded in the United States, particularly, as much as it has? And why has it gone from a top-down to a vertical to a true local and literally the 4 walls we all work in every day?

Yes. Well, we've been studying this for over 20 years that trends with trust. And we've seen decline of trust in advertising. Early days, as we talked about before, we saw the rise and fall of trust in social media. And then after the financial crisis of 2008, the fall and then rise again of trust in business. But what has happened as of latest, people don't know both from an individual perspective and from an institution perspective, who to trust. They don't trust, unfortunately, religious leaders, they don't -- media and government. I think that some statistics is about 57% of Americans believe that a leader or journalist, a politician and the like are going to either mislead or provide misinformation. And so they're not sure where to turn. So the one place that you really decide wholeheartedly yourself of where you should turn up is your place of work. And so -- and employers are the only ones that we think about it in confidence and ethics. And if you think about that 2x2 in the upper right, business is the only one that's in the upper right now. And so when you're looking around who's voice do you here, who can play this role of being a unifying. Increasingly, it's local with your employer. I'm sure it's also local as we're doing work around the vaccine front for a range of clients, local spreads from there. But that is generally still the best source outside of the scientist. So I think it's almost by process of elimination of other institutions failing that business and your CEO, your employees are likely -- 80-plus percent of them trust more in you than any other leader.

So how do you all advise business leaders on communication and most particularly, communication on some of the trickier issues that are out there today because the politics in America are so divisive today, that if any leader sort of carries his or her political beliefs on their shoulder, they're likely to sort of turn off 50% of the people who work for them, given the numbers in the last election. So as you all work with business leaders and saying to them that their voice is so important and their leadership is so important, at the same time, how do you also advise them to stay away from that third rail of displaying or talking about their own political beliefs?

Yes. Look, the -- being pro human is different from having a political view. We do advise our clients to try and keep -- to be [ arrested ] from political ranker and to really rely as much as they can on living their values and examining that. Now sometimes, that will mean there are organizations we've worked with who didn't think that they would be willing to stand up and be heard on an issue. And after finding their voice, they realize that they need to take new actions. And so -- but you don't want to go in and just be responding as best you can. Just like in the topic of the issue management to be a trusted leader now means to understand where is the place you really want to lead. You can't lead everywhere. And where are the places that you will be an active supporter? And where are you going to let it pass you buy? And spending time being -- figuring out the path to be a trusted leader for succession planning is something that increasingly our clients are asking us to help them think through.

So as you think about that -- talk for a moment about the -- you all just did a big campaign. You actually won an award from PR Week on -- where you work with Dove on their pledge for paternity leave. Talk for a moment, Russell, about how you all came up with that? And why that was so impactful as it relates to both promoting the Dove brand, but then also acting in an area that was so important from a social standpoint?

Yes. So I mean, Unilever is one of the most progressive companies in thinking about that combination of profit and purpose. And we've been working with the Dove brand from the inception of the real beauty concept, right? So we were at the table, helping to define that concept and how it came to life. In this instance, it's Dove Men+Care product. And when we were talking to them about, well, what's their enemy? What can they stand up for? What are they going to stand to be a voice for? And who can they be a voice for? And ultimately, we gained a lot of energy around this idea of the new parents and fathers, given the change in the family construct, and the need for parents to be able to tag team in different ways that paternity leave was something that a lot of people didn't have access to in the ways that you might assume. And first, what Unilever always does, we deal with them and say, okay, are you standing for the brand and for this issue in the way you should. They've then made changes in how they're approaching their own paternity leave, and then they became a real advocate. Not just an advocate in marketing, but really advancing a -- almost like a social justice and making sure that this opportunity was something available in multiple states. So we ended up doing sort of grassroots and public affairs work with them in multiple markets to change what those policies were and also get companies to reconsider. And then that's evolved from there right? So then they look at the different rules of fathers today for role models for black and brown Americans and the Father's Day not experienced by those who are incarcerated. So give -- they gave them a deeply authentic way to stand up, to be heard and to represent a voice that otherwise wouldn't have been able to push an important topic like that forward. We're really proud of that.

So as you think about -- Yes. You guys won a great award for it. As you think about where we go from here and the great reopening, if you will. I watched a speech you gave back in 2011, where you asked to project forward 10 years and give a sense of where the world would be in 2021. And you said I can't look really further than 6 months ahead. So I'll give it a stab. And one of the things you interestingly said, and I don't think you had a pandemic in your thinking at that time, but you said that there is going to be a melding of Facebook and FaceTime. And that people are going to want to be doing Facebook at one moment, but then also FaceTiming and interacting with other people, and that experience has got to be at the core of it. And that was 10 years ago, and right now, as we come back out of all this, that was a very prescient thing to have said, Russell. But talk for a moment as we get back out of this Zoom world and start to engage with customers and with our employees again and engaging in the old world, how is that going to change from a communication and from a PR standpoint?

Yes. Well, look, first, our research -- our most recent research is showing that America is still in a state of trauma. And as much as we want to believe that because the vaccines are rolling out and because there is a sense of enthusiasm, the new season, as you said from the start that it's spring time and we want to be positive, that we have to recognize that 2/3 of Americans are still in pandemic mode. And so there is an undercurrent of optimism. We've seen it with the consumer confidence and it's hit its peak since the beginning of the pandemic. But still, there is a pandemic mode that people are in. So I think we need to look at their willingness to go back to certain workplaces, to travel. And most of those things I would surprise, they are pushed further off into this year than I would have suspected. Now things can change, things are fluid, but you need to recognize that. And so nonetheless, there are people who are trusting in the vaccine, who are trusting in science, and we're going to be more willing to take action. And so one of the things that we're encouraging our clients to do so. For instance, I was talking with a group, we do a lot of work for the Hawaii Tourism is, how do you get to those people? I can get to the people that trust in the science, the people who trust in the vaccine and who believe in the brand of Hawaii, that mix of -- what they can experience there, but also the pull to the Hawaiian culture and being a participant in its revitalization of the islands and be a positive part of it. And so I do think there are ways that business can accelerate a successful return. I think some of that's about encouraging vaccination, not requiring, but encouraging and rewarding it. There is some fun stuff that Krispy Kreme did around that, giving everyone doughnut who wanted to get vaccinated. And it's really building that sense of trust and making sure that people know that they are going to be safe on the way back in. I think we will probably find ourselves as I understand it's been in China and other markets, then a burst and a boost. And the s** drug, rock and roll and flinging back into experiences that people have been missing for so long. I think it will be an interesting moment for, you mentioned the Trojan brand, I think that they'll have a fun moment where people actually allowed to be with one another and go back to a more normal life. So I think there is going to be a little delayed response. So people are still in pandemic mode, the trust builds. And then I think whether it's the experiential kind of work that we do, our clients like the Hiltons and Hawaii Tourism and Uniteds of the world, they're going to see a steep incline.

So as the CEO of a firm that's based in New York, you've had your workforce at home and you're in a very sort of -- one of the things that I heard you say was that if you want to come to Edelman and work on a team, you better be ready for constant change because you're constantly trying to revitalize brands, be forward-thinking, what have you. And so you're one of the most creative types of companies that exist, and you've been remote for a year. A, how has the creativity level kind of maintained itself, if you will, inside of Edelman, working for clients in a remote fashion? And then second of all, your thoughts as it relates to bringing your team specifically back to the office in Manhattan?

Yes. Well, I've been amazed with the creativity that our team is able to marshal remotely. I mean, I came in really concerned and skeptical that we'd be able to do the kind of strength and work that we do in-person. The team has been absolutely phenomenal in steeping themselves and what's changing, what the tenor of conversation is and finding ways to then get steeped in the topic and make sure if it's -- we've been doing some work lately that's around injustice -- environmental injustice that entered cities versus suburbs and how do you address some of those problems. And people just get so deep into it and find a way to be ingenious. But still, I do think that and we fundamentally believe that you get better ideas when people are bumping into each other, and you have that ability to balance the ideas around and to massage them together. So as we're thinking about the office, whether it's -- where we've got 14 offices in the U.S., when -- and I think one of the beauties of this is, when everyone is nowhere, you're able to collaborate across in a way that you might not have done before. And so everyone knows each other in different ways and different context, which is fantastic, but we'll need those touch down meetings. We'll need those places where people can gather less for individual work a more for inspiration, more for ideas, more for learning. And so that's what we're thinking through right now is to make sure that, that's the sort of energy you get from the office without losing power of being able to collaborate across expertise in different markets.

And so from a timing standpoint on when you think you'll have your teams back in your 14 offices in the United States, what's your thought about that?

Yes. Look, we've -- throughout this, we've looked at guidance from local health authorities. So we didn't make an edict across the firm. So for instance, in New York, Chicago, D.C., we are accessible and available. It's not open, per se. But we have some of our employees who really need to escape to be able to focus, and as long as they are following the health guidelines and doing all the things necessary for social distancing, we've kept those doors open, except when the health authorities are advising us not to. So we've really been following that both in kind of shutting down and then being in this hybrid state. So I suspect we'll follow that. My guess is that it's probably going to be September time, where we're really going to see more of the population return, feeling confident and feeling comfortable that they can safely be in the office. Though I suspect they're not going to be in the office in the same way that they were before and with the same frequency, and we're going through -- we just finished a whole bunch of polling of our employees and doing sets of workshops to make sure we really understand the experience of the future that is going to be most productive for them and for our clients.

And as you, if you will, are advising CEOs -- and when I say CEO here, this could be a CEO of an entire company, it could be a CEO of a group, it could be a CEO of a team. But as you're advising people who are leaders on how to communicate as we get back to it, you mentioned be empathetic, understand that many people are still in crisis mode from this. Give a cheat sheet, if you will, as it relates to a leader, trying to get back to the normal and wanting to sort of get back on track, and at the same time, being understanding about really what's going to evolve over the next 6 months.

Yes. We've talked through the COVID era about -- first of all, as a leader, what do you want to be known for doing in the time of COVID. Make sure you're almost doing that future forward planning and making sure that you understand this is the law that will be created around your action or lack of action during this moment in time. And part of that is tone, and part of it is really listening. So CEOs are the Chief Empathy Officer. And just because vaccines are rolling out, people are not ready to return back. And you have to keep an ear to the ground to understand where your employees are not just through surveys, but really to listen to them. So Chief Empathy Officer remains paramount. The next part of it is really making sure that your people can see themselves in you as a leader, and that you're modeling the behavior, not just talking about the behaviors that you expect. And the last part is really being the source of energy, and you have to be that optimist and show people that post-COVID, we're going to be what kind of company. With any disruption comes an opportunity, if you look hard enough. Of course, there are companies that haven't made it through this, that didn't have the cash, and that's a totally different story. But how are you coming with an equal part of optimism, realism of now and optimism for tomorrow. So that's really the path that we see and knowing where you want to lead because these societal issues and the expectations are high, and that should be in viewed across those 3 areas.

And as you think, Russell, about the really forward-thinking companies that you all work with, from both a ad strategy and also from a communication strategy. Don't need to mention them by name, but where are they focused today as it relates to that combination of the societal issues that we're dealing with; the positioning of their brands, if you will; and also what their companies stand for? Because all of these issues, I think -- what I've heard you say today during this webcast is, no one of them -- you could have the best ad campaign possible for a given product, but if you don't stand for something or not thinking about the societal issues, you aren't going to be able to go sell that actual product. And it sounds like you literally, every -- if you want to be successful in the paradigm of the future, you need to be able to focus on those 3 different fronts simultaneously. Am I hearing you correct?

Yes. If -- one of the things we talk about is that trust is sort of the foundational currency now for the stakeholder capitalism era. And if you start with that thesis and understanding that if your trust [indiscernible], we've seen it in the multiples that companies have. We've seen it in their market cap. We've seen it in the willingness for employees to stay and be an advocate. We've seen it in sales and around growth. And so these pieces that we've been talking about really come together, and our most progressive clients today have digested that. And so they're no longer grappling. They've built some muscle memory, and now they're really looking at what is both the concrete action and creativity that we can infuse together around those kinds of changes that kind of trust-drives-transformation. And of course, you have to do your ability and dependability are still foundational for driving that trust, but purpose and integrity are of equal importance.

Well, Russell, W&D has worked with Edelman for many years, and the work we've done together has been hugely valuable to us. And so I thank you and your team for all the work we have done together, and I thank you personally for joining me today on the Walker webcast. It's been a fantastic discussion and really insightful on where companies need to be at this time. And it's a very, very important time. I mean, I think everyone always says, we hear in elections. This election is the most important election ever, and that's not -- they're all important. But this time seems to be somewhat unique, and it's clearly uncharted territories. There is nothing normal about all this. And so getting your input in these transitional times is super, super helpful and very insightful. So thank you very much for joining me today.

Thank you so much, Willy. We really, really appreciate the forum. And look, succeeding tomorrow is going to demand trust from leaders. So being able to impart some of this wisdom and our learnings from our clients is part of our pleasure, but also our duty.

Well, terrific. Thanks, everyone, for joining us today. We'll be back next week with the CEO of Booz Allen Hamilton to talk about cybersecurity, about exploration of space, the U.S. space command and a bunch of other things that Booz Allen has focused on. So have a great week. Thanks, everyone, for joining us. And Russell, thank you again for taking the time.