Sorting Out the Best From the Rest12 years, 7 months ago
The global economic downturn provides a tremendous opportunity for the best PR agencies to add value to their clients, while for lacklustre agencies the prospects are poor. By Fraser Hardie.
Already 2009 is shaping up to be a year of unrelenting bad news. But let’s not lose the plot. There is a difference between sentiment and performance. As one retail boss put it recently: “we are in recession; we’re not in Armageddon.”
As always early in the year the newspapers have been overflowing with predictions. Some have even had the decency to print their and other experts’ forecasts for 2008. Red faces all round…. but also much muttering of “unprecedented times”... “no one could have foreseen this”. And so the bell tolls over the body of capitalism.
Back in the real world good businesses are doing fine (obviously not as well as in the good times but not as badly as the media would have it) while those taking problems into the downturn are the first to stumble and fall.
Where does PR sit in all of this mess? Well, the same rules will apply to agencies as to our client businesses. Those with consistently strong organic growth records, good management and a clear focus on customers, value and their product (or the talent they sell) will remain strong and take market share.
Those who, against the cycle, continue to invest – in people and knowledge – will underpin their value and will be sharply differentiated from the majority, who will not.
The virtues of independence
That’s why it’s a great time to be a strong independent because it allows you to play a long game without the holding company finance director breathing down your neck every other week. It ensures that you keep your focus on the things that matter – high quality and consistent client work and getting the best talent motivated and armed with the right knowledge in the right place at the right time.
Personally I’m excited by the potential value that communicators can add in the next few years. We’re operating in a world where sentiment has become dramatically detached from the underlying business realities. Deeper understanding and trust are the only things that can close the gap.
It is delusional to assume that the market simply responds to hard deeds and numbers. There are a thousand shades of grey that make up the cloud of sentiment around a company. Too often advisers hide in the mist.
For as long as I can remember communications folk have complained about not being at the top table. But how many can really stake a claim to be there? How often can they point to the value they create or the genuinely lasting commercial legacy they leave?
Right now – almost more than any other time – what we do can deliver competitive advantage. That’s a great opportunity for us. It’s the reason why we should be able to earn a place at the heart of business management.
But the harsh reality is that the ticket to influence comes from delivering significant work. Not significant in terms of the volume of creative applause; significant because it materially improves the commercial prospects of a business.
Communications should differentiate and transform reputations. It should lead to change that can be valued because it creates a hard reputational dividend. Because it allows companies to expand faster, gain access to resources previously unattainable or simply to be more valuable in the eyes of investors. That’s what should make communications strategically important.
Great companies are very clear what they are and what they stand for. They deliver progressively by continuously improving and challenging the status quo. They don’t settle on a successful formula. They refresh and rebuild through the cycle. They never take for granted their place in the hearts of consumers, investors or their employees. It’s part genius and part perspiration.
Look at the best board directors and leaders who run great businesses. They use a clear narrative to differentiate what they do and they are more highly valued because of it. They understand risk and happily accept it when the rewards are right. It is not about being cavalier with reputation assets; it is about being less conservative about chasing a return on the money invested in managing those assets.
Time for some risks
The time for communicators to take some risks is now. In the rubble of financial market collapse and recession there lies an opportunity, not just to rebuild broken or dented reputations, but also to fast-track transformation.
However, it means we need to change. We need to develop strategies that genuinely place communications at the heart of business management. That means taking a much more robust approach, changing our language and improving analytical standards. Being faster and having more belief. And, it means developing and deploying talent differently.
It will be interesting to see how a downturn sorts out the best from the rest; who will be prepared to be counter-intuitive? My bet is that a new order will emerge and some grand old agency names will be consigned to history.
Fraser Hardie, Senior Partner of Blue Rubicon. In 2008 Blue Rubicon became the first PR firm to win PR Week Consultancy of the Year three years running.mail the author
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