Sep 04, 2009
Perfect Storm – Part 3
Posted by: aviceroy In: thought leadership
Porter Novelli CEO Gary Stockman Joins President, Global Business Operations and CFO Anthony Viceroy to Reflect on the Pitfalls and Possibilities of Turbulent Times
From the global financial crisis to the meteoric rise of social media, the past eight months have been a season of unprecedented change. As there are some signs that the crisis may be easing, it seems a good time to assess what happened. Over the course of a comprehensive and wide-ranging conversation, Porter Novelli’s CEO Gary Stockman and President, Global Business Operations and CFO Anthony Viceroy offer insights and analysis on how the agency managed to not only weather the turbulent times, but also find the inherent possibilities in the crisis and emerge stronger than ever.
In part three of this four-part series (read part one here and part two here), Stockman and Viceroy focus on the needs of clients—how some needs have changed and others have intensified—and how some brands’ ability to connect with consumers during the crisis created tremendous opportunities.
So, shifting to a more external focus: What is the primary concern of clients during turbulent times?
GS: I think it really comes down to three words, “measurable results now.” And if you can achieve those results at a lower cost, that’s even better [laughs]. I think that’s the mantra these days. Every client’s business is getting the same level of scrutiny and feeling similar pressures to perform. It really is about who can help deliver tangible, measurable results and do it this quarter, next quarter and beyond.
Some would argue that would drive a mindset of safe bets and short passes. How do you address these very real client concerns while still inspiring confidence and bold action?
GS: It could indeed drive people to short passes and safe bets. But what I would prefer—and what I am seeing, actually—is people thinking more creatively and more innovatively about how you deliver measurable results now. Because, as we were talking about earlier, there are new weapons at our fingertips that did not exist during the last downturn—digital and social media and other approaches that we can use to reach and motivate stakeholders to take action. The question is, how do we leverage those weapons innovatively? If necessity is the mother of invention, I think turbulent times should be the mother of innovation in communications.
AV: The concern of clients today is no different than it was five years ago. It has just been magnified. Clients are looking for the greatest value—growing their brands in a cost-effective manner. Our clients are asking the same question that we have asked of ourselves—do you view this economic downturn as a crisis or as an opportunity? And many of them, like us, are viewing it as an opportunity. Of course budgets are tight, but they do understand that this is a golden opportunity to spend smartly in key areas that will help their brands gain market share. One day we are going to come out of this, and when we do, we will all need to ask, how much brand value and market share have we gained?
Is there a point where it is more prudent for a client to pull back and weather the storm?
GS: There are cases for which that’s the right recommendation; particularly when continuing to push a brand would actually weaken it or damage it. Some approaches and some campaign concepts that seemed terrific a year ago seem anachronistic now. I think there are luxury brands that have to be particularly careful about being out of touch in the way they communicate.
AV: And you have to look at the individual situation. What’s more important to you, market share or cash flow? Provided you are not in a cash flow situation, my personal belief is that you should always be trying to gain market share. And the time to do it is when opportunities present themselves. So, looking at your competitive landscape—when everyone else is zigging, maybe you should be zagging. Again, this is a true philosophical difference between what we believe here at Porter Novelli and other firms. We have not viewed this once as a crisis. We have really seen it as an opportunity to make strategic hires, to talk directly to our clients about what they need and explain to them what should be keeping them up at night. Not everyone is doing every single project with us, but I think this is really how you build relationships in this type of period. Clients really respect the fact that you’re putting their brand first.
It seems there needs to be real sensitivity to the zeitgeist, and there seem to be no easy answers to anything—it just requires a lot of thinking.
GS: It does require a lot of thinking and it requires sensitivity. Take Hyundai as an example, and look at their buyback guarantee. They created an opportunity from the downturn and as a result they have picked up tremendous market share. By not only offering a financial incentive—you lose your job, we buy the car back—but also demonstrating empathy and sensitivity, they came up with something that felt right to people.
That’s a great example of something very traditional in its approach. It doesn’t have anything to do with digital or social media. Has there been a sea change in the perception of social media, where it is no longer regarded as a silver bullet or a magic trick as it was a year ago? Does it now require a much more strategic approach?
GS: Yes, I think that is a very good way of characterizing it. If there was a time when all that mattered was how you said it, today it matters more than ever what you say, whom you talk to and when you talk to them. It is not enough to use social media to spout nonsense; you have to have substance and good concepts and creativity.
AV: That’s why I view us as a client solution service. Because ultimately what we need to be thinking about is how to create sustainable value for clients and help them grow their brands and manage their brands more effectively. I think social media is another way to do exactly that, but next year there will be another medium. Porter Novelli has demonstrated that it is not about embracing one medium. It is about figuring out strategically which media will best serve clients’ needs and help them grow their brands.
My personal belief, and one that is really embedded in this organization, is that you have to be direct with clients. It’s not about selling to clients anymore. It’s about having direct talks of, “Here is what is going on; here is what you need to know.” Because clients know what they know—the real value to them today is the insight you give into what they don’t know.
Have there been any occasions where you have been surprised by the response or reaction of a client to the economic downturn?
AV: There have not been any negative surprises. We have picked up a lot of Fortune 100 company business from our competition by putting tremendous focus on our digital and social media capabilities, and on services that they felt made a difference. So again, an attitude of playing to win as opposed to playing not to lose really comes across when we are dealing with clients.
But are there types of clients who are particularly endangered by a turbulent global economy?
GS: I don’t think there is one category, but I think all clients need to look at the strategies and the messages that they have been using or are contemplating to make sure they are in line with the current zeitgeist and people’s sensitivities. I think empathy and understanding of what your target audience is going through are really vital during a down economy. And appearing insensitive and out of touch is a real danger if you are not paying attention.
AV: Truthfully in today’s news where everything is 24/7, you could argue that every client is vulnerable. You could see brand equity evaporate within seconds based on a negative story or something that gets on YouTube.
So do you think social media presents as many dangers as opportunities?
AV: Well, I think the benefits clearly outweigh any risks associated with it. But like any risk, it must be managed properly. Social media is here to stay; it is clearly being embraced by many and I would say it has been a great area of success for us. But it does get interesting sometimes [laughs]. Right now in corporate America, what we are seeing is the ability to try to understand how social media impacts brands and how to use it in a socially responsible way.
Conversely, what opportunities does a down economy present—for clients, as well as for the internal development of talent and strategy?
GS: A couple of things. One is that the economy can serve as a real catalyst for change. There’s a clarity and a focus that come from a downturn. You can’t afford to have things live in a gray area or to wait and see, so it prompts decisions to be made much more quickly and ambiguity to be resolved faster. In a lot of organizations, a downturn acts as a catalyst for changes that should already have been made. The second area is talent. During a downturn good talent can be more widely available, and smart companies will take advantage of this to add great people.
AV: The opportunities are endless. In an economic downturn, there is no better time to look at the organization from head to toe. If there ever is a time when people are going to get comfortable with change, it is in an economic downturn. Most people will not want to change when everything is going great. But in a downturn, they tend to expect and embrace change more quickly. So when you have a challenging economic environment, you have an opportunity to look and ask, Are we managing talent the right way? Do we have the right people? What further value should we be bringing to clients? How do we get great collaboration? How do we exploit the global footprint that we have? So when you start going down the list, you see many ways to think strategically, and you discover great opportunities for the company and its talent to do more.
Check back with PN.com next week for part four of this four-part series. Next week, Stockman and Viceroy discuss the dramatic convergence of public relations, communications and marketing, and what they found most inspiring throughout the economic crisis.