SPONTANEOUS INDUCTION

The new PR account, the largest signed since her fledgling agency was set up, was supposed to transform the business and bring it mainstream.  It would require new staff and, if the plans ran to plan, a lease on a larger office by the middle of year two. She’d even thought about re-branding.  Instead, the experience was undermining her confidence and making her question her entrepreneurial ambition.

An induction represents an investment by both parties in a successful, long-term business relationship

In the excitement of having been selected against better-established agencies, she’d neglected to set clear expectations with the new client and push for a full induction to the client’s business.  Once work was underway, her contact (the marketing director) didn’t view it a priority.

“He said we should focus on getting some quick wins under our belts and that we’d pick up what we needed to know about the business over time.  In any event, he’d be able to point us in the right direction,” she said.

Within six weeks, he was at home tending his geraniums, having agreed to ply his trade with a competitor.

“Without being embedded in the day to day business issues and knowing who was who and what was what, we were floundering a bit.  We didn’t know the executives well and struggled to get time in their diaries. We weren’t getting briefed and opportunities were passing us by without an inside steer or engagement from the client,” she admitted.

By the second month, with no replacement marketing director on the horizon, the writing was on the wall.  “I knew that the results we were achieving didn’t justify the fees.  I was professionally conflicted.  I couldn’t reduce the fees because I had salaries to pay.  We felt increasingly unwelcome whenever we entered the premises,” she said.  A few weeks after that, the client gave notice to terminate.

“That gave me three months to find replacement business.  We’ve replaced some but not all of it yet.”

A new relationship between a PR agency and a client can be a very exciting time.  The future is paved with opportunities to enhance both  businesses.  But the independence that an agency brings to the table won’t deliver results without an understanding of the business, a range of relationships with subject matter experts and an inside track.

Similarly, a client that doesn’t understand its account team won’t ever truly exploit the professional service it is investing in.

An induction is not a cost to either side. It represents an investment by both parties in a successful, long-term commercial relationship.  Public relations is a human discipline.  The humans have to understand and engage each other for it to work.

“The shame is, I knew this,” she said, adding:  “Now that a little bit of time has passed, the team can admit to me that they didn’t really enjoy the experience.  On the plus side, it’s a lesson none of us are likely to ever forget or repeat.”

“I still have moments of regret at leaving a secure environment to create my own destiny.  I suppose I’m stressed but not defeated,” she said, as we said our goodbyes.

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SHAMING THE SHAMELESS

“Lack of transparency” is generally seen as a bad thing, but transparency has its downsides too.  Serial non-executive and life peer Baroness Kingsmill sees transparency as a key contributor to the rapid rise in remuneration of executive directors in public companies.  The same ambition gene that elevates the ultra competitive to the top is also an Achilles heel; they just can’t cope with the knowledge that someone is earning more than them.

It’s certainly effective, this genetic motivation. Directors of FTSE companies saw their total compensation rise by 55% in 2009/10 and a further 49% in 2010/11, despite the worst recession in living memory and pay freezes for everyone else.  Income Data Services, the employment research service, has described executive remuneration as ‘gravity defying’.  It’s a shame David Cameron can’t find a way to apply the same rocket fuel to grow the UK economy.

New report from the High Pay Centre

Baroness Kingsmill was speaking at ‘Business Behaving Badly’, a High Pay Centre debate to coincide with the publication of a new report: ‘Business Matters; Morals Matter’.  Sandwiched between two business journalists and a senior trade unionist, the Baroness admitted she was on the panel as token apologist for the excesses of some senior executives.  She was also quick to point out that we should separate ‘banking’ and ‘business’.  “Bankers have done terrible things … but most business boards care,” she said.

The High Pay Centre is not alone in being unhappy with excessive pay at the top of British business and the growing pay chasm between executive directors and the rest of the organisation.  Part of the Centre’s strategy is to lobby for greater equality of pay between the Board and the shop floor and to shame the worst examples of excess.

Fellow panellist Stefan Stern, former Financial Times columnist and now director of strategy at PR firm Edelman, pointed out that’s it difficult trying to ‘shame the shameless’.  He’d also like to see an end to Corporate Social Responsibility departments.  “Responsibility should be part of the ethos and not a department,” he said.  That’s a compelling argument.

Nils Pratley, financial editor at the Guardian, highlighted the difficulty that directors face should they want to voluntarily forgo a lucrative bonus, pointing out that businesses are reluctant to allow one executive to opt out because it sends a bad message to the market the next time they need to attract the services of a new senior executive.

For most people, it’s exasperating to see the ever increasing pay packages awarded to CEOs at a time when thousands of staff are losing their jobs and the rest are starved of pay rises to help earnings keeps up with inflation.

City fund managers are also complicit, Pratley pointed out.  These anonymous figures manage institutional investments in major British businesses and earn pay packages similar to the highest paid CEOs.  We know what CEOs get paid because transparency requires that this information is public.  Lack of transparency makes it very difficult to know exactly what fund managers get paid.

For me, it’s less an issue of what a CEO gets paid and more what they do in return for the package. With growth in short supply, most CEOs are continuing to deliver shareholder returns by cutting staff, offshoring operations to cheaper markets and, where possible, increasing prices.  These are the ‘tough’ but relatively easy decisions to make.  If growth is achieved by introducing compelling new products and services or engaging staff and customers better, I find it a less troubling development.  But making decisions that help shore up the balance sheet in the short term at the cost of long term sustainability of the business is something else.  There are also clear issues of staff morale and leadership that should be aired but don’t always get a full hearing in this debate.

Ultimately, if the people who own the business are happy with what the CEO is paid, and no laws are being broken, I’m still not convinced the rest of us have a genuine right to challenge their decisions.

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THE ONLY WAY IS ETHICS

According to the 2012 European Communications Monitor, 60 per cent of communications professionals have faced an ethical challenge at work during the last 12 months, the majority of them ‘several times’.  It’s a growing problem. Either the communications department has taken to hiring lots of overly sensitive types, or something ominous is going on. What’s happening that’s so terrible that so many comms folk are feeling professionally compromised?  Are they being asked to lie to journalists or investors, to stall and defer paying supplier’s invoices or have they been asked get nakedto recreate a photograph of a naked royal in Vegas?

Brand values: guiding decision making in tough times

We’ve all been involved, at one time or another, in business discussions that left us fearing that the company’s brand values had either been mislaid or traded in for something less demanding.  As the economic fog continues to outstay its welcome, it’s understandable that businesses will sometimes consider actions that wouldn’t get a hearing in happier times. Should prices be raised, simply because they can and quarterly targets look optimistic?  Maybe the IT system investment should be deferred, even if customer service levels diminish?  Or perhaps components can be sourced from a cheaper supplier, despite the shortfall of the cheaper supplier’s human rights record?

Running a successful and an ethical business when trading conditions are disagreeable is a tough gig.  Cutting moral corners might be the only way to stay afloat, to win a key contract or remain competitive.  Rather than feeling compromised and going home and kicking the cat, the comms team, as key guardians of the company’s brand and corporate reputation, needs to remind the business of its brand values and explain the long-term reputational risk of ignoring them for short-term gain. Have you ever heard a CEO complain that lower cost competitors can get away with doing things that his premium business would be crucified for?  Me too.

But they’re the standards the business set for itself.  It’s the promises made to customers, employees, investors, suppliers and other interested parties.  If they’re no longer affordable in the long term, they might need redefining.

Business decision-making should be guided by the values the business stands by.  When faced with a decision-making dilemma, clearly expressed values provide a reliable and consistent guide. If you’ve claimed customer service as your main market differentiator, a proposal that would undermine service should be rejected.

Similarly, if you have identified your people as your greatest asset, or operational safety at work or environmental leadership as core beliefs, they should remain core – even when the cost of sticking with them impairs short-term commercial return. Customers that have chosen you for your values will not tolerate your failure to live up to them, whatever the weather and difficulty of doing so.

If members of the comms department feel compromised, it’s likely other functions do too. With no end in sight to the economic headwinds, now might be a good time to reaffirm the business’ core values and remind everyone what those values are and why living them every day, and reflecting them in every business decision, is core to the business’ long-term success.

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