Advertisements
 

Poor old Diamond Bob – a martyr to Barclays’ brand values

June 28, 2012

BarclaysA lot of people are accusing Barclays Bank and its chief executive Bob Diamond of racketeering. Acting like white-collar gangsters, in other words. They say the bank and its principal directors colluded in serial distortion of the interbank rate, Libor. What this means in plain English is that they beggared us – the saps who are their customers – with artificially inflated interest rates on loans and mortgages  – in order to enrich first themselves, through bigger bonuses, and then their shareholders, through bigger dividends. Barclays has been fined a total of £290m by the regulatory authorities on both sides of the Atlantic. But it’s the thin edge of a very thick financial wedge. Once the lawyers get weaving on behalf of aggrieved customers, who knows where the liability will end up?

Martin Taylor, a former Barclays CEO himself, summed it up best on this morning’s Today Programme. He said that Barclays had engaged in “systematic dishonesty” between the years 2005 and 2009. While he didn’t explicitly link Diamond – who then happened to be head of BarCap, the division most closely tied to the scandal – with the gigantic swindle, he did say that chief executives set the cultural tone of the businesses they run. Implication: Diamond should retire to the discreetest room in his penthouse suite and make good use of a service revolver. Diamond – Taylor implied – may, or may not, have colluded in such corrupt dealing practices; but because they happened on his watch, he was at very least grossly negligent.

Now I know what I’m about to say isn’t going to be popular, but I’ll say it all the same. Was Bob so very wrong in what he did – or rather, for the sake of any legal eagles looking in – er, what he didn’t do? I mean, at least Barclays Bank co-operated with the investigative authorities, whereas other banks did not. Barclays is paying the price of being first to fess up: a media Exocet amidships.

Then again, the bank took not a penny of public money in the wake of the Lehman Bros collapse. All right, it was pretty stupid to allow such an unredacted and inculpatory email trail to get into the hands of the regulators. But at least you won’t hear any trading floor intercepts along the following lines: “Dude, thanks a billion in Treasury credits. I owe you big time. But not as much as I owe the taxpayer. Come over after work and let’s break open the Bollie.”

I’m not sure the same will be said of RBS and Lloyds. Both were big recipients of taxpayers’ bail-outs, and both – along with HSBC, Citigroup, JP Morgan, UBS, Deutsche Bank and others I probably don’t even know of yet – are, so it seems, up to their gills in interest-rate-rigging mire too. Poor old RBS. Talk about reputational damage: it’s not only guilty of systemic incompetence with customers’ direct debits, but of “systematic dishonesty” in charging them higher interest rates as well. Will this publicly-owned company owned by the public ever recover?

But I digress. Bob’s is the head that everyone wants to stick on a pike over Tower Gate. That’s because everything about Bob is Big and Boastful. Biggest salary, biggest bonus, biggest ego. He is, in short, the archetypal arrogant, swaggering, fat cat.

And as such, he has been entirely consistent with Barclays brand values over the years. Do you not remember Barclays brand ambassador Anthony Hopkins telling us how, if you weren’t big, you were nothing in banking circles? You don’t, do you? So, here as an aide-memoire is a superbly-crafted ad by Leagas Delaney, dating from 2000:

Sometimes, you see, advertising really can convey complex, uncomfortable, inner truths – without the client even noticing. Bob did, of course. He’s been a part of Barclays’ cultural furniture since 1996. He took the message very seriously indeed and acted out the part. What a brand martyr the man is!

Advertisements

After all that, Joel Ewanick awards $3bn GM global media account to – Carat

January 24, 2012

It seems the keeper of the world’s third largest advertising budget is a bit of a tease. Only the other day Joel Ewanick, General Motors global chief marketing officer, was telling us that, six months into the review, he simply couldn’t make up his mind about where to place GM’s $4.26bn advertising budget. Agencies on tenterhooks. Could there be a last minute reprieve for them?

Aegis Group chief executive Jerry Buhlmann: $3bn Carat win should bring a smile to his face

No there could not. Actually, Ewanick had long since decided to give the largest chunk under review – the $3bn global media planning and buying business (bar India and China) – to Aegis-owned Carat. You read it here first, as long ago as early December.

If there was last-minute anguish over the decision, it more likely related to brinksmanship over Carat’s fee and the administrative nightmare of reducing a media roster of 40 down to a single agency.

That said, another part of the review may prove more of a poser for him. Ewanick has yet to pronounce on who will win creative duties for the mega-billion dollar Chevrolet account (it’s GM’s biggest brand, accounting for over half of vehicle sales). Omnicom-owned Goodby Silverstein & Partners looked safe with the bulk of the account since it was hired on Ewanick’s personal say-so soon after his arrival at GM. But there is talk that IPG agency McCann-Erickson – which already handles Chevy in India, China and Latin America – is destined to become the first Chevrolet global agency of record (ie, the senior partner).

We can only hope that, for the sake of embattled McCann Worldgroup chief Nick Brien, this rumour turns out to be true.

Because there is little solace to be found elsewhere. Universal McCann’s Latin American media business – sizeable and, more importantly, booming – will now be moving to Carat.

It could be worse though, Nick. Biggest casualty by far of the media consolidation (and indeed of the general review) is Publicis Groupe. PG’s media unit Starcom MediaVest has held the dominant US slice of the business since spring 2005 (back then, way before Lehman Bros and Chapter 11, it was worth $3.5bn a year).

Until now, PG has had a very strong year, mostly at WPP’s expense. Starcom managed to wrest the $600m Novartis account from MEC and its Digitas unit recently won the $1bn Sprint telecoms business. But the crushing GM media loss comes on top of other, collateral, damage. Big Fuel, the social media agency which Publicis seems to have acquired partly at Ewanick’s behest (it certainly came highly recommended) has overnight been reduced to a shell of its former self. By the self-same Ewanick’s unhelpful decision to move the GM account – about three-quarters of its income – elsewhere. Gives a new meaning to “Le Défi Americain”, doesn’t it?


BP brand plunges from Deepwater to Ground Zero

May 11, 2010

I’m beginning to feel sorry for Andrew Gowers. Having had an exemplary career at the Financial Times, he had the misfortune to become its editor. In the wake of a complex and expensive libel case, he was ‘let go’  by senior management in 2005. With contacts like his, why worry though? A glittering future in PR beckoned.

And so it proved when he became head of communications at blue-chip investment bank Lehman Brothers London. How was he to know that, in two  short years, he would be at the epicentre of the global financial meltdown? Never mind, pick yourself up, dust yourself down and move on to…BP. Weeks later, the Gulf of Mexico explodes into uncontrollable life.

Avoiding reference to Jonah, I’ll confine myself to the observation that, for a man with Gowers’ peerless experience of crisis management, he seems to have been pretty slow on the uptake. Yes, he’s been indefatigable on the airwaves, mainly pointing out that it’s not all BP’s fault. Which it isn’t: try the Swiss-based company which leased the rig to BP, and the US maintenance outfit which passed the defective shut-down valve as fit for purpose. Also, BP is only a two-third investor in the oil well. But no one wants to hear about that; certainly not President Barack Obama and the American people.

What Gowers, and his colleagues, conspicuously failed to do was mobilise their chief executive fast enough. The oil rig explosion took place on April 20. BP may not have known the leak’s rate of flow, but it certainly knew this was a very serious industrial accident indeed. Yet it was not until three days later that the company released its first statement from group ceo Tony Hayward and, as far as I can make out, not until May 3 that Hayward himself made a broadcast public statement.

Did it really take that long to determine this oil spill is quite possibly the worst man-made ecological disaster to date? Not in the minds of journalists who – like nature – abhor a vacuum, and fill it with speculation. And not – crucially for any crisis management specialists these days – in the social media space, where any half-way decent speculative theory gets magnified a gigafold. Does Gowers or BP viscerally understand this? I suspect not. Until very recently, if you had looked up “BP Oil” on Google you would have found hundreds of references to the incident – on blogs, Twitter, YouTube and the rest, but almost none seeded by BP itself. Does BP imagine its investors take no notice of all this? £19bn knocked off the share price suggests otherwise: they will get their information wherever they can.

Credit where credit is due, Hayward is now cleverly framing the disaster as a common threat, with BP in the front line of resistance. His language has an appealing Churchillian ring to it. But the initiative may already be lost.

Of course, from a corporate standpoint, BP’s caution is entirely understandable. Make light of the disaster while it is still unfolding and it projects an uncaring image which will do endless damage to the brand later. Rash admissions, on the other hand, will expose it to years of litigation, with its toll on management focus and corporate profits. No one knows this better than Hayward, who has spent three years cleaning up the company’s reputation and settling claims after the March 2005 explosion at  BP’s Texas City refinery, which killed 15 workers and injured about 170. Corporate negligence ill fits the image of a company that has struggled hard to position itself as environmentally friendly with a cuddly logo and a $4bn alternative “Beyond Petroleum” energy initiative.

And yet all that misses the point. The speed of mass communications these days no longer permits – if ever it did –boardrooms to dictate the pace of events. Another fine example of crisis mismanagement, admittedly on an infinitesimally smaller scale, reinforces the point. Johnson & Johnson is rightly considered a model in consumer marketing circles for the way it dealt with the 1982 Tylenol scare, in which seven people died after some pain-killer capsules were laced with cyanide. But now it has come a cropper, after the US Food and Drug Administration warned that some of its proprietary over-the-counter medicines for children (including Tylenol) had too much active ingredient in them, and thus failed to reach the acceptable public safety benchmark.

Although there is no evidence of anyone being harmed, and J&J acted promptly and efficiently in organising a voluntary recall, it failed to explain itself to anxious parents, who have become increasingly restive. They quickly availed themselves of Twitter, Facebook and various parenting blogs to express their frustration at not being able to get a straight answer out of the company about what was going on. This is only the latest of a number of poorly explained recalls, which could have catastrophic knock-on effects for the company’s reputation. As one parent, quoted in the New York Times, put it: “Another recall for baby Tylenol. Well no more baby Tylenol, back to generic brand.”

Although J&J can scarcely blame the forces of nature for its self-inflicted disaster there are, nevertheless, parallels with the BP situation. In both cases, the companies seem obsessed with procedures and asserting internal control, which conveys the unfortunate impression that cover-up rather than communication is the ultimate agenda.

As I commented in my blog post on the Maclaren baby pushchair crisis last autumn, a bunker mentality is the default company reaction in these situations, and it’s actually disastrous. True, some crises are worse than they seem; acting upon them could aggravate their severity, whereas left alone they may quietly subside. But can you really afford to take that risk? Suppose this is the big one, the corporate reputation-wrecker?

Whatever you do, don’t hide behind PR flunkies and hope it will go away. Get the chief executive out there early, personally engaging with the media. Maclaren didn’t do that, with disastrous results for sales in its main market, the USA. BP and Toyota eventually did, but I bet they wish they had wheeled them out earlier.


%d bloggers like this: