Karan Chadda

Global digital marketing and communications leader

Brand

No one cares about your diamond

In 1849 the Treaty of Lahore was signed. A 10 year old boy, who also happened to be the Maharaja of Punjab, lost his kingdom to the British government and a very special diamond to Queen Victoria.

The then Governor General of India, Earl Dalhousie, played a central role in obtaining the diamond. Once the treaty had been signed, he wrote to a friend declaring, “I had now caught my hare.”

Dalhousie believed, having captured one of the East’s most venerated gems, he was going to be a hero of the Empire.

When news spread of the Kohinoor’s arrival in Southampton, Britain was gripped. People clamoured to see what was, at the time, the largest diamond in world.

The first opportunity for people to see it was at the Great Exhibition. There was a great rush, but the crowds left disappointed. Newspapers reported that it didn’t really sparkle. It was overrated.

A lot work went into fixing Dalhousie’s gift.

First, the organisers cut off all natural light to the diamond and shone lamps upon it at specific angles. Reports came back that although its lustre was much improved, visiting the Kohinoor was a hot, close and arduous visit. Some viewers fainted.

It was then decided that the diamond be cut. In the process it lost almost half of its size, but it shone like never before. At last the diamond was fulfilled its promise. It went on to be set into jewellery and has sat in the crowns of three different queens.

What did Dalhousie get wrong? He misunderstood his market. In the East, the fashion with precious gems was to leave them as natural as possible so you could appreciate the beauty of nature’s creation. In the west cutting and polishing gems to bring out their lustre was the thing. It was about getting the most sparkle.

Dalhousie was mesmerised by his product, but he ignored the audience. They weren’t impressed. It’s an instructive lesson: he failed to understand his market so even the world’s largest diamond did not impress.

Do you know if you’re capex or opex?

The brutal logic used in accountancy is a useful tool for understanding where you fit in your clients’ eyes. If you understand how you’re seen, you can deliver a better service and achieve greater growth.

Take the concept of breaking expenditure down into two buckets: capital expenditure (capex) and operational expenditure (opex). Broadly speaking, capex is money spent buying, building or maintaining assets, and opex is money spent on running the company.

Why are these two definitions useful? They help you understand what a client sees when they buy your services.

Advantages and challenges

For instance, if you’re a law firm that specialises in mergers and acquisitions, then a client might see the money they spend on you as capital expenditure. It’s money they only spend because they’re building their business. If they stop investing in growth through acquisition, they’ll probably stop using you. If they delay investment plans, then your planned fee income will be delayed too. The advantages of capex are that it normally has specifically identified budgets associated with it and there is a clear business objective (e.g. buy that company).

However, if you’re a public affairs specialist working with firms in heavily regulated industries, you’re probably operational expenditure. Your clients will need a dialogue with legislators and regulators, either through you, your competitors, a trade association, internal capacity or some mixture of all of these.

The big advantage from opex is more stable and cyclically defensive income; you’re a necessary expense for the business. The challenges typically come from greater or more constant scrutiny: why does this service cost this much? Where can savings be made? Efficiency gains in opex tend to accumulate over time. If costs can be cut by 10%, then future costs have also been cut. It is a perpetual saving.

P&G’s $100m saving

Let’s take a real world example, Proctor & Gamble (P&G) recently cut its digital ad spend by more $100m and claimed to see no detrimental impact from the move. At the same time, P&G’s CEO said the company was investing in new digital capabilities.

In effect, that $100m is an opex efficiency saving, meanwhile capex on digital marketing continues. So some agencies will be growing their business with P&G, others will have lost a lot of income.

How do clients see your firm and how are you using that knowledge to plan and grow a stronger business? Contact us to have a chat about capex, opex and how marketing can help.

Why you don’t get leading potatoes

What consultancies can learn from potatoes

Buying a potato is simple, right? You go to a shop, pick up a spud, pay for it, and you’re done.

But that’s how it always happens. Sometimes you buy one potato. Sometimes you buy a bag of them. Sometimes a sack. Then there’s variety. Some people buy plain old baking potatoes. Others will buy Maris Pipers or King Edwards. Foodies might opt for heritage varieties, or different coloured ones, or sweet potatoes.

And still we’re not at the end of the choices available. You might buy oven chips instead of potatoes. But what kind? Fries or chunky chips? Wedges? Peeled or skin on? Curly fries? Smiles? Alphabites? Or why bother with an oven at all? Why not get microwaveable chips? Or just go to the chippy and buy steaming hot, fresh out of the fryer chips?

There are many more potato options, but let’s stop here. The point is that for whatever type of potato product you want, it’s out there. Someone is producing a potato in whatever form you want.

Producers will tightly specify the types and form of potato they’re selling and then market them very specifically. They’ll talk about the benefits, whether that is crisper chips, better flavour or convenience. By clearly defining their offer, they make it easy for customers to understand what’s being sold.

But consultancy isn’t potatoes, is it? It’s bespoke. Consultants treat each client differently, providing a solution based on a client’s needs. You can’t define it like a potato.

Well, it’s true that services can be harder to define. But harder doesn’t mean impossible. You can define which sectors you support. You can say which services you offer. Many consultancies think they do this, but what they actually do is list every possible sector they could work in and every conceivable service a client might want.

Many consultancies, whether they’re offering PR or legal advice, shy away from tightly defining what they do because they’re scared of losing potential clients. But this fear leads to an opaqueness that deters customers.

It manifests itself in two ways. One is the long list of services and sectors on consultancy websites. These lists are supposed to show clients you work in their sector, but actually they’re just hard work. Who wants to look through a list of 20 things to see if what they want is on it?

The second manifestation is bland language. We’ve all seen consultancy websites dripping with industry-specific jargon. The tell tale sign is often an opening line describing a firm as “leading”. A potato would never be described to customers as leading because a potato knows what it is.

Kumbaya Capitalism

Modish proponents of Purpose have distilled snake oil from a worthy idea.

From its noble beginnings, Purpose has fallen. Like Corporate Social Responsibility (CSR), good intentions have not become good deeds. But, whereas CSR was misused as a way to polish up a company’s image, Purpose is bandied around as the solution to everything from lack of trust in corporations to avoiding the hard truths of business.

The idea that businesses have a wider duty than to generate returns is nothing new. Quaker founded businesses such as Cadbury and Rowntree were thinking about their workers as well as the bottom line back in the 19th century. That thinking wasn’t limited to Quakers. In India, Jamsetji Tata helped not only to build India’s industrial base but its culture of corporate philanthropy too.

The current trend towards having a purpose began with brand consultants talking about companies having a noble or higher purpose. The idea being that you work on something greater than yourself and, in doing so, you create a brilliant company (i.e. we don’t make cars, we help people see the world). For those developing brands, this was a great idea. Brand development is all about what a company is and how it goes about doing what it does.

Responding at the speed of emotion

But then purpose started to trickle into the hands of marketers and PRs. Conversations went from being about having a purpose to demonstrating purpose. Latching on to the vogue-ish idea that emotion sells, purpose was used to anthropomorphise corporations. All of a sudden companies cared deeply about you, wanted to know you and wanted you to love them.

The touchy-feely stuff is great but it ignores two fundamentals of business. The first is that businesses cannot respond at the speed of emotion. It’s all well and good being loved, but when it turns out you’re ripping down forests or involved in sweatshops or underpaying staff, you can’t fix that problem faster than people will stop loving you. Relationships require an instant response and most businesses aren’t set up to deliver that.

Purpose before profit?

The second problem is that the markets don’t buy emotion. Unilever, the standard bearer for a new way to do business, learned this lesson the hard way. When Kraft Heinz came in with an offer to buy the firm, management had to offer shareholders a lot of concessions to avoid being sold, including greater cost cutting and a sharper focus on profitability. The brutal truth is that whatever your purpose, you still need to make money.

Simon Sinek and other modish TED talkers will glibly tell you to, “start with why.” But that advice is delivered out of context. Because along with your why, are other whys. Your investors’ why might be to get a good return on their investment. Your customers’ why might be because you’re the cheapest or most efficient or coolest. You can’t run a company in a vacuum.

Google famously seeks to organise the world’s information and make it universally accessible. A noble goal. Imagine how far it would have got if it didn’t make mountains of cash by dominating digital advertising. Too many people talk about putting purpose before profits, but by weird coincidence most of the companies used as examples of purpose make a healthy profit and have been doing so for quite some time.

And there’s the rub. Corporations are like wealthy city-dwellers going to minimalist retreats, singing kumbaya and being mindful, all the while ignoring the inconvenient fact that their expensive spiritual weekend was paid for by selling things for money.

So beware the snake oil salesmen with their kumbaya capitalism. True purpose must run through every fibre of your firm. It should inform what you do and how you do it. Those decisions are made in the boardroom, not the PR department.

Getting on with getting on

Last night, I was part of a panel discussing career progression for BAME PR practitioners. The event was organised by the Taylor Bennett Foundation who do excellent work on diversity and, right at the outset, I’d encourage you to help fund their work.

The discussion was wide ranging but centred on some core areas.

A double whammy of Imposter syndrome

It came up towards the end, but I’ll start with imposter syndrome because it was probably the most personal of all the issues raised. Often, when we talk about diversity or careers in general, we discuss things in quite a broad way and there’s a risk that we fail to fully appreciate that we’re really talking about people’s lives.

Someone asked a question about the challenges of not easily fitting in at work and, by choosing a career that’s not traditional within your community, not necessarily fitting in at home either. There is no simple way to address this but the feeling that you don’t really belong is almost universal. If you read a few autobiographies, whether they’re by sportspeople, business people or politicians, you’ll see countless references to fears of not fitting in at work, or with lifelong friends or at home.

The only solid advice on tackling this is to talk to people and let them know how you feel.

Social diversity

This issue cropped up repeatedly. It’s great that we’re getting more BAME candidates into the industry but are we mainly getting the middle class ones? PR is a pretty middle class profession anyway, so where’s the change going to come from? The idea was mooted that we should be more aggressive in pursuing greater social diversity, for example, instead of applauding those who pay interns, perhaps we should call out those who do not. Naming and shaming isn’t something that fills me with joy, but I think it’s a good idea in this instance.

Unconscious bias

There were questions about whether recruiters and those for whom they recruit are susceptible to unconscious bias. Of course, we all are in some area or another but perhaps the hiring process needs addressing. Are terms like “good cultural fit” being interpreted as “people like me”? It’s a thorny issue but one that can be addressed by employers explicitly demanding more diverse shortlists.

Mentoring and support

The importance of mentoring, building networks (of friendship and support) and helping others was emphasised. It’s important to note that your mentor needn’t be the most senior person you know. If you’re an account executive, an account director who you admire could be a great mentor and really help you focus on progressing your career.

Having a network doesn’t mean you have to start networking. It’s the support element that’s important. You should have friends in the industry who you help and who can help you with advice. This is also goes a long way to tackling imposter syndrome.

Good advice for all

You’ll recognise that much of the above is not rocket science nor particularly specific to BAME PR practitioners. It is just good advice.