Long before it became fashionable, Kevin Thomson of MCA (Marketing & Communications Agency) was preaching the importance of internal communications. Why is it, he kept on asking, that we talk endlessly about external markets, researching them, segmenting them, appealing to them, and then turn to internal markets (staff) and simply tell them to get on with it?
You can learn more about the realities of business from two simple lists in Thomson’s book, Emotional Capital, than from any formal management tome. The lists identify elemental human emotions such as obsession, determination, love, pride, desire, trust, fear, anger, apathy, greed, anxiety and envy, which course through the veins of every business. Emotions that management theorists never seem to mention and which somehow become invisible in nice neat charts depicting organisational structures, reporting lines and communication channels.
Thomson is one of a band of pioneers who have helped us realise that these ignored emotions are often more real – in terms of their effect on business success – than buildings, products, strategies and financial accounts.
Management isn’t about turning dials on machines that deliver a return on assets. For a start, you have to accept the messy truth that people and emotions make organisations – not assets and strategies.
WPP’s Martin Sorrell is correct to see an opportunity here. By buying MCA and merging it with Banner McBride, he is trying to create a leading consulting practice in this field. Just one warning – when it comes to this subject, even the best consultants are little better than the blind leading the blind.
The fact is, themes such as aligning internal and external communications, branding inside as well as outside and building “inside-out” brands, are taking us into territory that is forcing just about every established profession – not just marketing – back to the drawing board.
Once you stop thinking about companies as machines and see them as communities of people, internal communications has to move beyond its old, mechanistic role of sending orders out to the troops and embrace touchy-feely realities. This is critical for improved staff motivation, imagination, commitment and “buy in”. In addition, human resources has to evolve away from its role as a tool in a command and control environment, and become brand recruiters and motivators – to make the phrase “living the brand” a reality.
Organisational structures also need to change. Springpoint’s Fiona Gilmore argues in her book, Warriors on the Hire Wire, for a type of organisation that places brand strategy and direction at the heart of the company. Once this strategy is adopted, every other function (product and venture development, distribution development, finance, research and development, pricing, communications, customer care centres and promotions) needs to implement and express it in its own particular way.
Helena Rubenstein, managing director of Leo Burnett offshoot The Lab, argues that few companies have properly identified – never mind addressed – the core challenge of the modern age: how can you align the three intangible assets of brand, culture and knowledge, so that they work in synergy?
If she’s right, most senior managers need a root and branch overhaul of their priorities and so do investment bankers and other corporate advisers. What is the point of a process of diligence in mergers and acquisitions which utterly fails to take into account people, culture and brand? These are the only things that will decide whether the system works or not.
The intangible challenge for finance directors is well known – can they come up with an accepted methodology for valuing “brands”? And when they’ve done that, can they do the same with “culture”?
Arguably, the internal management challenge is even harder. Management accounting guru Thomas Johnson – inventor of key concepts such as activity based costing and activity based management – argues that the management accountant’s role of identifying costs and setting financial targets is damaging to most companies. He suggests that the obsessive drive to meet such targets tends to damage the very relationships that generate good results in the first place.
Johnson argues in his book, Profit Beyond Measure, that quantitative measures can describe the state of a company, but he says: “Using such data to control or regulate the progress of the system only jeopardises its long-term survival. The task of management in a business organisation should be to nurture relationships.”
Consultants Chris Macrae and Peter Fisk agree that outstanding brands of the future won’t only send the same messages to internal and external audiences. Communications is not the be-all and end-all. Real alignment, they say, only comes when the organisation creates the best possible win-win relationships, with (and between) each key party – employee, customer, supply chain partner, and so on – to form what they call a value exchange network.
An integral part of this process are the brands. They help to articulate win-win relationships, recruit people to contribute to them and embody and communicate the resulting message. Macrae calls this “Big B” branding as opposed to “little b” branding – that focuses on constructing a selling message/communications mask for a product.
Whether we look at internal communications, human resources, corporate strategy, organisational structures, finance and accounting, or branding and marketing, the same underlying pressures exist. In each case the “B” word – in its Big B sense – keeps on cropping up.
Branding is moving beyond its role of creating and communicating successful selling propositions. It has set itself a greater task: the creation of successful organisations in which successful selling propositions are just an ingredient. As yet no one has worked out how to do this. But it is a task that demands a completely different type of agency or consultancy. Acquisitions like that of MCA show recognition of this reality.