Communications Crossroads

In terms of professional and financial services, Communications is relatively immature. 

That’s not a qualitative assessment. It simply reflects the fact that whereas banking, accountancy or law stretch back to antiquity, and management consultancy was invented mid 20th century, Communications has only really existed as a defined industry (as opposed to publicity) for about 30 years or so.

The development of each separate professional and finance services market is broadly similar.  Firstly, there are specialist firms that are established and run by specific individuals.  There was once a Mr Ernst and a Mr Young, a Mr Goldman and a Mr Sachs. Clients expected to deal with those individuals. 

Gradually, these businesses developed in terms of scale, sometimes even crossing international boundaries, but the most common form of development was by service and product line.  Clients wanted multiple services under the broad heading of ‘law’ or accountancy’ and if configured appropriately, these businesses could scale their client relationships to increase their fees. They could also make life easier for their clients and extend cost savings such as shared back office costs. There was benefit on both sides. Hence sprawling behemoths now bestride the world. 

Of course, there are still specialist firms but they have taken the conscious decision not to expand and to by definition limit the scale of their revenue growth – and possibly make themselves vulnerable in the face of the ‘big guys’.

There have been moves to scale in the same manner in Communications.  There are now quite a few large, global concerns that compete across multiple geographies and lines of business. They tend to operate at an operational level with their clients, providing support in terms of B2B and B2C communications.  There’s nothing wrong with that.

So, what next for Communications?  More of the same?  Is bigger necessarily better? I don’t think so.

Communications is different.  It’s almost impossible to impose a framework on reputation.  Even a capital market transaction requires close attention to a huge multiplicity of audiences, from investors through to government and regulators staff and increasingly, public opinion. The internet and social media is the big game changer here.  Now that genie is out of the bottle, it’s impossible to go back.  Everyone has an interest; everyone has the ability to make their opinion heard.

From a client’s perspective, I see a market where the perceived value of communications and reputation has never been higher. Clients want help to guide them through a landscape that is increasingly full of reputational landmines.

Yet the ability to provide communications advice across multiple stakeholders at a strategic level is rare.  There aren’t many individuals or firms that can do this.  Partly because individual consultants tend to be mired in their own specialism (solely FinComms, solely Public Affairs) and partly because most firms make very good profits (thank you very much) without having to think very deeply about what their clients actually need.

In the twenty first century, what clients actually crave is an advisor who can think strategically across the multiple stakeholders that matter. Someone who isn’t driven by a need to always recommend the largest fee opportunity. In other words, objective holistic guidance.  That’s the future.

What do you think?