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Developing a Mittel-brand

posted by Matt Battersby

GE Capital (one of our clients) recently hosted a very successful event about midmarket businesses in the UK called ‘Leading From The Middle: The Untold Story of British Business’. The speeches (including one from Vince Cable) and panel discussions focused on how we can strengthen the UK’s mid-sized businesses that are currently providing much of the UK’s economic growth but still not performing to their full potential.

One interesting point raised was the impact of having no clear label or brand for mid-sized companies in the UK. This is unlike Germany where Mittelstand has become a globally recognised term for more than three million firms known for their family ownership, market niches and high-quality products. 

In the UK the closest term we have is SMEs (Small and Medium Enterprises) but this is much more associated with small or even micro businesses rather than the €20m-€1bn turnover companies in the midmarket.  We also have much clearer terms for larger businesses such as ‘multinational’ which again most of the population would recognise and be able to describe the characteristics of such a business.

Why do we not have a commonly accepted term for midmarket companies and does it matter?

One reason for the lack of a term may be that the whole notion of being ‘middle’ has little instantly apparent positive attributes. Whilst small may be beautiful and might is right, being middle is just, well, distinctly average. Add to this the slightly pejorative use of the term ‘Middle Britain’ and it’s perhaps unlikely that any use of the ‘middle’ label will catch on.

Another reason for the lack of a brand may be that midmarket firms themselves have a bit of an identity crisis. They seem much more likely to identify with their sector than their peers. A midmarket engineering firm, for example, is much more likely to think of itself as manufacturing business than a midmarket one.  The owner of a hairdresser, however, will likely readily identify him or herself as a running a small businesses. This may be one reason why there is a Federation of Small Businesses in the UK but not a Federation of Medium Businesses.

But these explanations assume that for a brand or label to successfully apply to a group of individual entities, the entities themselves need to at least recognise the label as applying to them and also want to identify themselves as such. This is clearly not the case as there are numerous examples of labels being applied to people or organisations that would not necessarily recognise the label as applying to them.

What I believe is clearer, is that a lack of a brand does make a difference for midmarket firms and creating one could bring benefits.

What’s your BRIC strategy?

Perhaps the most successful label to have been created in recent years has been BRIC, which was coined by Jim O’Neill from Goldman Sachs. In little over 10 years, the acronym for Brazil, Russia, India and China has not just defined a group of countries but a whole outlook on the global economy and politics. As Gillian Tett wrote in an article about origins and influence of the BRIC label, it “has become a near ubiquitous financial term, shaping how a generation of investors, financiers and policymakers view the emerging markets.”

Labels may often be too simplistic and downplay the differences between individual entities but they can be very powerful in focusing attention on the importance of the similarities. They not only reflect a current reality but can influence the future as well. How many companies have decided they needed a ‘BRIC strategy’ since the label was created?

Without a midmarket brand name, talking to or about companies as ‘midmarket businesses’ is unlikely to resonate as strongly as it could.  If companies do not think of themselves as a midmarket business, then providing midmarket initiatives, strategy or insights is unlikely to affect the change that is needed for them to compete even more effectively on the international stage.

 Creating a label

So what label or brand name might work for midmarket businesses? The CBI has clearly recognised the importance of creating one and have used terms such as ‘future champions’ and ‘Gazelles’. The advantage of these terms is they focus on common attributes of the midmarket firms rather than just their size. They are also positive labels which means firms themselves may be more willing to classify themselves as such.

Neither seems likely to become the universally recognised label though as most people would find it hard to identify what makes a ‘future champion’ or ‘Gazelle’ let alone apply it to companies they’ve heard of.

Made in Britain?

One thought is that more should be made of the ‘British’ brand. Many at the GE Capital event believed the ‘Made in Britain’ stamp still has significant value, particularly in developing markets and that perhaps UK businesses are too reticent in exploiting this. There may be a lot of truth in this but the term ‘British’ is unlikely to lead us to our midmarket brand name, not least because many firms, even in the midmarket, are foreign owned. Being British should likely form a key part of some business’s messaging but it is not the unifying label.

Given the increasing focus on midmarket business from the Government, CBI and the media, what is clear is that whoever can successfully coin a term for UK midmarket businesses is likely to make a name for themselves.

I’m afraid I am not that person (although I’m still trying). But perhaps there is a reason for that. Perhaps we aren’t ready for a midmarket brand name yet. As the term BRIC showed, labels only work when they group together common attributes and characteristics- when they define a pattern that people had not necessarily seen before but instantly recognise once they are made aware of it.

Perhaps the biggest problem is that too few midmarket firms are well known enough for there to be common attributes that the public would recognise. Labels work best when they group a certain type of person, country or companies that you know. Even midmarket companies themselves do not know many of their midmarket peers.

So yes let’s work towards creating Mittel-brand. But in the meantime, let’s also focus on creating the right environment for a name to be created organically. We can do this by better publicising midmarket firm success stories and building greater awareness amongst the public. Creating more opportunities for midmarket firms to network with their peers will also be important so they start to recognise how they are similar and share common interests. Who knows, once we can name more midmarket companies and they better know themselves, we may find that a label develops naturally and begins to change the way everyone thinks about this vital element of the British economy.

What PR was like in the B.G. era (Before Gorkana)

For many of us in the Financial & Professional Services team, it’s impossible to conceive how the world of PR worked before the digital age really got going. The idea of posting/faxing press releases, having to wait to read the newspapers every morning to know what was happening in the news, or keeping actual physical media contact books just seems alien.

Some of the older members of the team assure me it really did used to be this way though and earlier this week I found some evidence for it. While clearing out some of our filing cabinets, I came across a dusty, weighty tome entitled “Financial Press Facts: Forty-ninth Edition October 2003″. This, in essence was an analogue, print version of Gorkana – all the correspondents, on all the papers and trade magazines, and even the forward feature lists as well.

This is how PR looked before databases like Gorkana

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5 things we learnt from the i’s summer party

Last Thursday Jonathan and I attended one of the ‘i’ newspaper’s regular events for readers at London’s Transport Museum. i’s editor, Stefano Hatfield, gave a speech during the night which discussed both why he believed i had beaten expectations to date (it’s circulation rose again last month) and what the future held for journalism (he maintained that print has a future).

The speech itself was interesting but there were also a number of points of interest that we picked up from the night as a whole:

1. Demographics remain against newspapers: Hatfield talked enthusiastically in his speech about the number of young i readers he heard from and indeed had talked to on the night. Yet to my eyes the evidence painted the opposite picture – most of the audience was over 40 and a large chunk were 60+. The challenge of attracting younger readers to pay for news remains as difficult as ever.

H+K went to the i's summer party last week

2. Maybe people do care about Leveson: For a while now I’ve held the suspicion that most of the general public don’t really care that much about phone hacking, especially given the more immediate focus on financial constraints and employment prospects. However, the most common line of questioning put to Hatfield on Thursday was related to this issue. Granted, the audience was hardly representative (as noted above) but it still made me reappraise my view slightly.

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When is a bailout not a bailout?

After several weeks of speculation, the government of Spain this weekend confirmed that money would be accepted to help support the country’s banking system.

Spain’s politicians have been at pains to point out that this is not a bailout of the kind witnessed in countries such as Greece and Ireland where outside officials will effectively be making decisions about the countries’ public finances.

Spanish minsters have clearly been briefed to communicate the distinction as the following quotes from Mr de Guindos, the economy minister, in the initial Financial Times article indicate:

  • “What is being requested is financial assistance. It has nothing to do with a rescue”
  • “The conditions will be applied to the banks, not Spanish society”

I’d argue that Spanish ministers have effectively made their point but in a situation which continues to develop at pace, and where details are easily forgotten, they may well be lumped together with those who have requested funds before as the dust begins to settle on the decision. As a collegue pointed out, it could well be seen as an exercise in putting lipstick on PIGS

Why Ricky was the wrong person to win the Apprentice (and the others would have been too)

Several of our Financial & Professional Services team are avid Apprentice viewers and in previous years we’ve delighted in writing about the tribulations of the candidates each week (Michael Sophocles and Alex Epstein being two of my all-time favourites).

To my mind, this year’s crop have been less exciting and able than previous vintages, but that didn’t stop me from tuning in for the final last weekend. What I saw though was deeply disappointing.

The Apprentice claims that it aims to find an entrepreneur to “kickstart a company”, backed by the “nation’s most demanding investor” who is “willing to bankroll new business in tough times”.

For the Government, intent on job creation, actively promoting the entrepreneurial spirit and keen on encouraging the “industries of the future” that sounds like manna from heaven – what better shop window for the nation’s entrepreneurial talent than primetime television? Yet once the candidates revealed their ideas and business plans I noticed a distinct trend – for reference their ideas were as follows:

Ricky – a specialist recruitment agency for the pharmaceutical and biotech industries

Tom – a hedge fund focused on the wine industry

Jade – a call centre aimed at securing and selling customer leads on specific product lines

Nick – an online website for ordering recipe lists direct from supermarkets

My disappointment came when I realised two things – firstly, that with the exception of Nick, all the ideas were copycat businesses based on the jobs they already worked in (for example, Ricky is a recruitment consultant). And secondly, that all four of them are essentially service-based companies (again, with the possible exception of Nick).

Nothing wrong with that you say – the UK economy is built on services after all. Yes, that’s very true and services will continue to be the bedrock of the UK’s economy, because, well, we’re very good at it. But considering the Apprentice likely attracted over 7 million viewers on Sunday, surely the public and especially the Government (with its desire to reinvigorate manufacturing and high-tech industries) deserved better than to see a services clean sweep?

What’s in a (nick)name?

posted by Edward Jones

THIS POST IS BY JOSHUA GLENDINNING

The consequences of the loss of £2bn by JPMorgan Chase’s London office have continued to ramify. The US Justice Department and Securities and Exchange Commission have both announced that they intend to investigate the debacle which has inevitably led to calls for tougher regulation. The loss has also claimed its first victim in the form of the company’s Chief Investment Officer, Ina Drew, while serious questions have been raised about chief executive Jamie Dimon.

Meanwhile, eyes have also focused on the single trader regarded  responsible for the investments in unsafe credit default swaps. French trader Bruno Iksil, who worked in JP Morgan’s Chief Investment Office under Drew’s leadership, reportedly returned to his Paris residence on Friday while his employers struggled to deal with the financial, corporate and public relations storm he has created.

However, what truly captured the attention of the media was the epithet attached to Mr Iksil by fellow traders for the size of the deals which he carried out. The metaphorical ‘London Whale’ appeared to capture the imagination of the media much like his literal namesake did more than six years ago. Most of the major broadsheets pounced eagerly on the cetacean imagery, while the tabloids preferred Iksil’s other, more sinister nickname – ‘Voldermort’. Even the normally sober and reserved Financial Times couldn’t help but help but get involved by making a few distinctly fishy puns.

This certainly isn’t the first time nicknames in the financial services sector have captured the media’s attention. It wouldn’t be surprising if a significant proportion of the public were under the impression that the former head of RBS was called Mr The Shred given the media’s obsession with the epithet Fred Goodwin gained for his savage cost cutting. Figures with less notorious but equally amusing nicknames include Choc Finger, Chainsaw Al, The Gorilla. By contrast, the names of Jérôme Kerviel (whose rather boring ‘Five Billion Euro Man’ simply didn’t pass muster) or Kweku Adeboli (who failed on the nickname front altogether) haven’t lasted long in the public imagination despite the eye-watering sums they were responsible for losing.

Why do the media jump on these monikers with such gusto? Nicknames certainly add a splash of colour to what are rather complicated and dry stories involving incomprehensibly large amounts of money. Furthermore, the personalisation of such stories allows for an element of tangible understanding of a group of people whose lives are far abstracted from those of ordinary people but whose actions can have the most profound consequences.

Cameron needs to communicate a vision to leave a legacy

posted by Edward Jones

The Government, well, Number 10 actually, is in a quandary. On the one hand, there is a need for quick wins to move on from what has memorably been described, in the words of Malcolm Tucker, as an omni-shambles. On the other, the Prime Minister is presiding over a period of austerity. The two, unfortunately, are not compatible.

At first austerity measures were seen as essential to return to economic growth, but the implications of this are now starting to bite. The quick wins on their own are not sufficient to change perceptions. If Number 10 is to change perceptions, a coherent narrative, with stories that constantly reinforce what David Cameron is trying to do is required.

As Oliver Wright and Andrew Grice write in The Independent, Number 10 has been looking for good news stories across Government for Cameron to be personally associated with. The hope is that any good news story will move the agenda on from the current post-budget malaise. The problem with this approach is these stories, good though they might seem, fail to form part of a coherent narrative. They do nothing to alter the perception of the Government as overseeing economic hardship. 

The prospects for the average voter look bleak. Less money. More tax. Later retirement. That’s before you put it in the context of a class war. Philip Collins notes in his excellent article in The Times that Number 10 needs to communicate that all this pain is not for nothing. Collins should know the merits of communicating a long term ambition, having been present as Tony Blair struggled to come to terms with what his legacy ought to be. Cameron is now at this same juncture. Collins has written the basis of what Cameron’s narrative might look like:

“The first [pledge] is that we will restore this country to economic health. We will clear the horrible mess in the public finances that was left once the other side had finished its irresponsible partying. We will get Britain moving.

“The second commitment I can make is that the burden of austerity will be shared out fairly. By the end of this Parliament, it will be clear that those with the broadest shoulders will have taken most of the weight. We all have to make a contribution in accordance with our means. That is only fair.

“That leads to my third pledge. When prosperity returns to Britain, which it will, the hard-working families, those who are digging us out of a hole they were thrown into, will see the benefit.”

It is fair to say that the first point is well understood and well communicated. Credit where credit is due, the messages on this point were relentless and the Conservatives and George Osborne in particular should take credit for successfully undermining Gordon Brown’s economic record and mentally preparing voters for economic hardship.

Number 10 and the Treasury have acknowledged that the second point above is important, but they have been unconvincing in their attempts to convince the electorate that the burden is being shared equally.

The third element, which promises light at the end of the tunnel or, put another way, hope, has been non-existent.

Number 10’s communications can’t simply be seen through the prism of points one and two. Moreover, the economic legacy that this Prime Minister will leave behind will belong to George Osborne. The promise of a better future however is absolutely critical and has thus far been forgotten. If Cameron is to leave a legacy of his own, then he has to convince voters that under his stewardship a better future lies ahead.

The Life imitating art imitating life conundrum

THIS POST IS FROM MARIE CAIRNEY

Today Programme’s Jim Naughtie stood corrected this week when he credited Ed Miliband with coining the term ‘omni-shambles’ after he used it in PMQs to describe the Tories monthus horribilis. It was of course comedy writer, Armando Iannucci, who came up with the great summation in his painfully funny political satire, The Thick of It. So there is nothing new under the soundbite sun after all it seems but I’m wondering what does this say about art and politics when a piece of satire is hijacked by the brunt (or equivalent ) of the satirist’s joke. Does it make the joke even funnier or the reality even more tragic? Probably a bit of both I suspect. Does Ed have his finger on the pulse of popular culture or is his level of self-awareness so low that he can’t see what Iannucci’s mirror is reflecting. Or perhaps he just has a great self-deprecating sense of humour. Or perhaps, more likely, the sound-bite machine and LHQ racked their brains, had a brainfart and spat it out – oh how they must have giggled at the irony! Almost reminds me of a scene from a TV programme, what’s-it-called… ah yes, The Thick of It.

ps. LOVING Twenty Twelve on BBC2 on Fridays; The Thick of it for those with a more delicate disposition and who are adverse to proper swearing. Brilliant.     

Image from Metro.co.uk

Newsround – top tips for pitching success

Earlier this month, BBC’s Newsround celebrated 40 years of broadcasting news to children – to put that into perspective, the programme is longer lived than Eastenders, Top Gear and is closing fast on Top of the Pops’ original run. Newsround isn’t an ideal target for all (or even most) PR campaigns, but it does have a fantastic reach and for some pieces of work it’s a cracking target.

To that end, we’ve pooled the collective wisdom of the Financial and Professional Services team to bring you our top five tips on how to get your story on the five o’clock show. Several of us have successfully pitched Newsround over recent years, most recently for Aviva’s Street Dance for Change programme. So here we go:

1. Remember the target audience: Newsround is aimed at 6-12 year olds, which means your story has to be simple enough for a 6 year old to understand, but also complex enough to appeal to a fast-maturing 12 year old.

2. Use the child’s point of view: Again, given their audience, your story needs to take place from a child’s point of view – it’s not good enough simply for it to relate to kids. Street to School was an example of this – informing children about the dangers/issues they face.

3. Yes to celebs, but the right ones: Brad Pitt, Russell Howard and Joanna Lumley are great, but likely mean very little to a 6 year old. Using a celebrity to help communicate a tricky issue can be helpful but it has to be the right celebrity – it’s easy to forget that children don’t watch mainstream TV and films. Choose wisely.

4. Watch CBeebies: Knowing your Tracy Beaker from your Sadie J can be a great help. Selling a story when there’s a similar storyline running on another CBBC show really helps as we’ve found out – just like adults, kids relate to other things they see and read in the media.

5. Remember it’s a TV programme: Like all broadcast media, it really is about giving Newsround the whole package of different elements to support the story – a spokesperson to sit on the couch, a famous face to do something clever, a kickass video for them to show online; ultimately the more you put in, the more you’re likely to get out.

The acceptable face of economic debate?

posted by Edward Jones

THIS POST IS BY JOSHUA GLENDINNING

Angela Knight, head of the British Banker’s Association, is to step down after five years at the helm of the industry body. Knight has led something of a charmed life in what would be seen by many as an invidious position in an adverse political climate for the financial services sector. While the former Tory MP doesn’t garner respect from all political quarters, she is certainly admired by many within the financial services sector for her ability to speak on behalf of the industry. According to The Guardian, she has given over 800 broadcast interviews, and travelled over 14,000km to and from Brussels alone since 2006. For those working in the City, it has been preferable to have such a shrewd political operator speaking on their behalf rather than having to face the ire of public opinion themselves

Knight’s time at the BBA has been indicative of a broader trend within politics and the media. Despite frequent media brickbats, those within the financial services sector are often far better able to carve themselves positions of political and intellectual authority than many other would-be commentators. Ultimately, the BBA is little more than a lobbying organisation for its members and yet Knight has been able to assume an air of authority within the media which would not be accorded to many others in similar positions.

For example, Unite General Secretary Len McCluskey may have been making political waves this week but he is unlikely to be asked on most news programmes to talk on subjects that don’t explicitly affect his members. (Incidentally, for an interesting insight on the man who appears to have the ability to turn the government and subsequently the public into Corporal Jones from Dad’s Army, listen to Profile on Radio 4). Knight, on the other hand, has been frequently asked to discuss broader social and economic issues, as well as more obvious areas such as the reform of the banking sector.

The financial crisis (or perhaps Robert Peston) has increased public interest in the financial services sector to a level previously unseen. However, outside of personal finance, many commentators in possession of a sufficient degree of technical knowledge are also industry insiders. The adversarial exceptions to this rule (for example, here and here) lack experience at conveying their views to the new audience which has invaded their previously arcane and quiet cloister of political debate. Unlike construction, manufacturing or even many service industries, the products of financial services are almost entirely intangible and the sector is therefore assumed to be too complex or too boring for most people to understand. The upshot is that media discussion is divided between either popular yet infantile anger or sophisticated yet sterile analysis.

‘The acceptable face of British banking’ may not be missed by all, but the reputation she has built for herself is certainly instructive for any company or organisation wishing to make an impression on the media.