When local boy Roman Geiser, Burson-Marsteller’s Swiss CEO, was catapulted into the stratosphere as Chief Operating Officer for EMEA, I just had to make the twenty-minute train ride to Zurich to interview him.
Roman represents the future of our trade. His quality of thought is becoming more common – though far from common enough – across the in-house and agency world.
He embodies how PR is maturing as a business under a new generation’s leadership as it enters its Golden Age.
His take on things ranges from radical ideas for repositioning Swiss banks, to questioning the effectiveness of the S in CSR. He’s prepared to think big about what disintermediation could do for his clients, while staying alert to the possible downsides for society as a whole. He is cleverly nuanced about social media (a tad over-enthusiastic for my taste, but there you go).
He joined the agency world seven years ago. His background was as a public affairs lobbyist for an umbrella organisation of Swiss businesses. Then he was hired by Jäggi Burson-Marsteller, a formerly family-owned business based in Zurich and Bern, which was bought by BM, Young & Rubicam.
So, as he readied himself for his journey as a PR agency EMEA COO, I asked him to give us an insight in to his business and thinking. Here’s the outcome:
Strategy, evidence and today’s market
PS: I’d like you to describe what the recession has done to your clients, to explain how well your business in EMEA has fared.
RG: It really depends market by market and positioning by positioning of each unit we have in our organisation. In Switzerland, we work for industries such as energy, pharmaceuticals and food. If you take those three industries, they’re doing pretty well in the recession.
We see a clear trend to specialisation and focus. The mid-sized agencies in this market – those offering 360 degree service – have an issue. Clients either want an agency that really understands their business, or an agency with functional or specialist expertise, for instance agencies that are 100% specialised in digital media and social media. So there is a need for all agencies to find a sweet spot.
We see a certain cautiousness. There’s a psychological impact on even healthy businesses. Investments are taken more slowly than before.
Some services have become commoditised. However the more strategically an agency is positioned the better it is protected from the crisis. So offering product PR in the fast moving consumer goods area, for example, has become a low margin business. Or even doing financial communications around standard transactions like public offerings has become internalised by banks and commoditised.
That means the higher up the value chain you are, and the better the quality of service you offer, the better off you are during the crisis. Services like doing press releases, or just media relations in multi markets – those are not services where you can differentiate your brand. They are really price-based discussions which put your margins under pressure.
Burson-Marsteller is known in the industry as being extremely strategic. Of course, all agencies claim that!
PS: What exactly does ‘strategic’ mean?
GS: If I take the Swiss example, we are very successful in healthcare. We have a team of scientists here. We have four medical doctors and a professor at Rockefeller University. You need that kind of calibre to really bring evidence to the table to provide analysis. Then you can have a discussion with the client based on “This is the existing mindset and this how we get to where we want to go”. For me, that insight and knowledge and in-depth analysis based on qualitative and quantitative research is evidence-based. And it starts at the beginning of a project.
Froth on the boom’s coffee or the caffeine in the latte?
PS: Do you agree with me that PR was guilty of putting the froth on the late boom’s coffee? Or put another way, if bankers have had to say sorry, do we need to, too?
RG: I understand where you’re coming from. One of the key reasons to have a PR agency, or a trusted advisor, is to bring critical faculty to the table and to ask the right questions. And, for sure, in certain industries the PR industry profited from the hype and we were part of the overall economic system. At the same time, I believe there were great attempts to warn and also to support CEOs in their function.
PS: To warn?
RG: Yes to warn. You like to quote Dr Leslie Gaines-Ross on your blog. She recently highlighted how the trend from celebrity CEO to credibility CEO, more of “please show me” and not just the glamour stuff, began some four or five years ago. And that’s a kind of clear anti-hype warning that came from the PR industry itself.
Burson-Marsteller tried to engage the Swiss Bankers Association, for instance, in some pre-emptive reputational research during the boom. But what do you do when a decision-maker tells me “Thanks for your advice but we don’t have an issue”? That’s why I feel we did our job properly.
What kind of capitalism comes next?
PS: Will the new boom produce a different capitalism, particularly considering that the world’s most dynamic economies are going to be amongst its least democratic?
RG: I don’t think that there will be new models to capitalism. I mean, it’s a pretty well established domain, right? There will be a new global balance of economies being at the table as equals with with the US in some fields. That, I believe, is certainly more than a trend.
PS: Is there a new morality to capitalism?
RG: First, capitalism is not anti-moral. Second it’s been in practice for decades. So it won’t have a new shape or new dimensions in future.
I wouldn’t jump to saying: “Here is the new global regime with new power bases”. For instance, I still see the US, just by its historic capability for revitalisation, reinvention and innovation, as a strong leader and player in the future. But it’s interesting to see that the most recent growth and first signals for recovery came clearly from China, also from India, but basically from China, which is new.
We shouldn’t underestimate the power of the old economies. In a world which is getting much more complex, with multi-stakeholder management, with so many stakeholder groups having an impact on your business, that calls for managing complexity. And if you look at the continent which really has experience of managing complexity from language to cultures, it is Europe.
Where is PR headed?
PS: What are the three major three trends that will dominate the PR landscape over the next ten years?
RG: The key trend definitely is social media and digital communications and the shift of paradigm from mass media into more dialogue-oriented communications. That’s a huge shift. But its impact varies from market to market, culture to culture. For instance, Switzerland is highly digitalised, but it also values privacy. People don’t speak up on blogs here, as they do in the UK, and give their opinions.
Second, I would say, is the balance of purpose and performance in an organisation in order to build trust longer term. It’s basically the question of: “What is the purpose of a corporate, of a multi-national?”. It’s very often around employees. It’s around the products and the services for consumers. So it’s around the mission and vision of a company
The third trend is multi-stakeholder transparency in a globalised world. Companies operating around the globe need to demonstrate transparency and to explain themselves to many more stakeholders in the age of trend No. 1.
It’s not about structures but about leadership
PS: How will PR agencies change their business models and services?
RG: The first one sounds easy, but it’s extremely complex to make digital communication more than an add-on to your communications programmes. Very often you say “What could we do digitally? Do we do a website? And yes, there are new trends like Twitter. We need to offer that in our communications programme”. And that’s the wrong attitude. I believe digital or kind of low-cost media needs to become an integrated part of all communication concepts.
At the same time, you need to understand your business extremely well to see the limits of digital social media, such as in pharmaceuticals for obvious regulatory reasons. Going into it with a kind of hype attitude can be dangerous. It’s new, but it’s more than just a fad. But it’s not a revolution. It’s an evolution. It’s an evolution which brings the business more into the dialogue-oriented sectors of communications.
The multi-stakeholder global trend goes into new agency models, which I believe are going to be more international. PR agencies are still coming out of the first phase of family-owned businesses with very local business models. But we are becoming more digital and more international. Offering that service to your client becomes more and more important.
Of course, managing the matrix of markets and practices in agencies is extremely demanding. It needs people who like to work together. And it starts at the top. So if you have a management team or market leaders who like each other and work together well, you have the key ingredients for not working in silos any more. So there is no real ideal structural model. You can have all kind of bonus systems and financial incentives. But what is really needed is investment in a team that works together collaboratively and which produces success stories together. That’s the way to go.
What are reputations made of? A five point list
PS: How would you explain the success of Apple and Ryanair’s PR, both of which, for different reasons and in different ways, seem to do everything wrong, and yet seem to get everything right in terms of their reputation and business strategy?
RG: My explanation would be that it is always multi-dimensional. Let me list the top five elements that create great reputations for firms.
First, is how they develop talent and how attractive are they for potential employees. Take Apple. They are doing that extremely successfully.
Second is product and services of high quality. You can be as digital as you want. You can be as corporate responsible as you want. If you don’t get your product right, if you have a problem explaining your hedge fund to your target group because you don’t understand it yourself, you might ask yourself the question, “Is my product really a good product”. In the case of Apple or Ryanair, they have solid services, good products, which fit into very specific target groups.
Third, transparent leadership structures.
The fourth is financial results and performance. If you drive a business which is financially sound, you create the momentum for a sound reputation. And that brings me to number five.
The last one on my list would be CEO reputation. And here again both Ryanair and Apple score through the roof on that one.
It is the balance between these five factors creates a good reputation and trust. You do not need to be top on all five. But it’s always a dimension of those aspects. And other reputation studies maybe have a different ranking. But it’s those that I’ve listed which are the key drivers that count.
Time to ditch the S in CSR? And what is CR about?
PS: Is CSR a marketing tool or a genuine attempt to inject morality into capitalism?
RG: This really comes under my “purpose and performance” answer. Let me explain. I prioritise the concept of responsibility rather than the social bit of it. That’s because “social” is corporate giving and sponsoring. But corporate responsibility goes to supply chain management and to diversity in the workplace. It goes to labour standards in all kinds of countries. It goes to compliance issues, too.
If you take corporate responsibility or give that angle to CR as a communication platform, we are talking evidence-based communication. We are talking about content and not just about how you brand it or how you position it and how you make a better marketing tool out of it. It is really about how you run your business and how you act responsibly in the roles in which you operate.
Elevator pitch to put Swiss banking back on track
PS: Good to hear. I’ve always advocated dropping the S in CSR and also for promoting business sustainability much more forcibly than we currently do.
Now, moving on. Please pick an unpopular person, institution, firm or country and make an “elevator pitch” for it.
RG: I’d pitch the financial sector in Switzerland. And what I’d be pitching would have nothing to do with communications.
PS: Okay, go ahead.
RG: Behaviour drives communications and reputations. It’s all driven by behaviour. And the first behaviour recommendation I’d make to the Swiss banks would be not to base a product or the financial sector on a system of differentiation of tax evasion and tax fraud.
The only differentiation that matters is excellence in Swiss banking. There are huge assets which come with excellent banking and the positioning of it. So Swiss banks should not hide behind a smart legal differentiation of evasion and fraud. That’s not the way to go.
Second, nobody likes secrets. We do like privacy, though. Why is Swiss banking branded “banking secrecy”? It’s the protection of the individual and the protection of one’s privacy that matters. And that is a different concept.
My third point would be look at self-regulation. I say don’t wait until the regulators push their positions on you. Self-regulation can be a very healthy way to come out of the crisis stronger and to keep enough room for your core business.
My fourth is look at the products, because the banking products have become too complicated. There are many ways to shape products in more understandable ways. After all, good products, as we discussed earlier, are one of the key drivers of reputations. Products need to be much more transparent. Any risks in those products require a clear assessment of the portfolio. Sometimes in the boom years, the underlying risks were not clear even to specialists working in the field.
Power shifts in media – good news and not so good news
PS: Ask yourself the question I should have asked you.
RG: A point you haven’t mentioned is the role of old media, if you want. There is right now a power shift of who produces relevant content and who has the power to invest in content? And that shift goes from media to the PR sector. It goes to in-house PR, external PR. And as a PR man, I could say it’s a great strength. But as somebody who is socially or politically aware, I would say it can do harm to the balance of democracy, because media have an important role there. And sizing down all those newspapers, and taking away their ability power to do in-depth research is a problem.
At the same time you have big companies, PR firms basically involved in paid-content production. It doesn’t mean that the content is not correct, but it always presents one perspective in a discussion and I believe there still needs to be strong media to play a role in public debates.
Certainly, big corporate can become the media. Why not have Nike TV doing sports programmes? But I like the “competition of ideas”. If you want to have a competition you need a few players being part of that competition.
PS: Do you have any closing remarks?
RG: Yes. If you ask our founder Harold Burson what makes a great PR person he says “curiosity”. And I think it is fascinating right now to be a PR person. There are so many things going on. We are challenged more than ever before. There’s loads of opportunity. I think we can say it is a new age, as you say, a golden one.
PS: Thanks. Great stuff, if I may say so.