ANALYSIS: Internal Communications - Can outsiders rebuild internal operations? - When General Motors brought in GCI to fix its internal communications, many balked. John Frank reports on the unique problems facing PR consultants

When Steve Harris joined General Motors as VP communications in 1999, his mission was clear: revitalize the company's PR operations and help rebuild its brand reputation in an increasingly competitive market.

When Steve Harris joined General Motors as VP communications in 1999, his mission was clear: revitalize the company's PR operations and help rebuild its brand reputation in an increasingly competitive market.

When Steve Harris joined General Motors as VP communications in 1999, his mission was clear: revitalize the company's PR operations and help rebuild its brand reputation in an increasingly competitive market.

With that in mind, Harris came up with a plan that - even by his own innovative standards - is unorthodox. Anxious to improve GM's internal communications, he turned to outside assistance, bringing in noted specialist Gary Grates, president of GCI Boxenbaum Grates.

Based in Detroit, Grates will be the de facto head of internal PR while continuing to work for GCI. GM's internal communications staffers will keep their current roles but report to an outsider. Grates will report to Harris and other senior executives (PRWeek, January 22).



Risky business

What makes Grates' hiring so chancy? First, GM's 450-person PR apparatus has balked at working with outsiders in the past. For example, Harris' predecessor - who came form Levi Strauss - didn't last long in Detroit.

Many attributed his short tenure to a lack of experience in the car industry.

The US auto industry is a closed world in which people who haven't earned their spurs in Detroit can be shunned.

However, observers agree Grates might be different. For starters, he's been doing project work at GM since 1997, so internal communications staffers already know him and are familiar with his ideas. Grates also brings a stellar reputation as an innovator in the world of internal communications.

'He's the best in the business,' says Ron Culp, VP of PR and government affairs at Sears Roebuck & Co.

In addition, Grates has the backing of Harris, who notes that it's been three years since GM commissioned consultant A.T. Kearney to study how the automaker could improve its internal communications. One major result of that study was the placement of communications professionals in every GM facility to improve how employees hear about company news.

'We're building the GM voice,' Harris says. 'We just don't think that we're moving fast enough.'

Grates performed a communications audit for GM, and he impressed senior management and staffers during that assignment. 'We all think he's going to help move the needle for us,' says Harris.

Harris has had two years to reorganize GM's PR and put people he relies on into key positions. They are likely to give Grates the benefit of the doubt because he has Harris on his side.

But someone in Grates' position can often accomplish more than a company insider could in the same position, some observers explain.

'I think there's more heads of PR that are looking for innovative ways of breaking through the barriers within an organization,' says Culp.

'You have that mantle of objectivity,' coming in from outside, adds Craig Martin, an EVP and managing director in Ruder Finn's Washington, DC office.

'A lot of organizations realize they're not getting all the information they need' to make internal communications decisions, he says.

In other words, an outsider can have an easier time coming in and gathering such information, because many staffers don't want to bare their souls to someone they view as merely a corporate lackey.

Some PR people might even welcome outside help if they're feeling overwhelmed, adds Maril MacDonald, CEO with Matha MacDonald in Chicago. Her agency has handled communications work for the former Navistar, now called International Truck and Engine, where MacDonald once headed communications.

'If you come in and involve everyone, a lot of folks welcome help,' MacDonald says. 'The task is so enormous, it takes a lot of believers to really get the job done.'

Culp agrees, adding that an outsider also can see beyond the 'business as usual' mind-set of an internal department. That can mean someone from the outside can more accurately measure the effectiveness of newsletters and other tools, for example. An internal staffer might simply say such tools are needed because they've always been there.



'Noise' pollution

Grates himself is quick to note that 'certainly GM didn't hire us to get another newsletter.'

While not ready to talk about specifics, Grates says his goal at GM is to allow employees to cut through what he calls the 'noise' around them and get a true picture of where their company is going.

Unfortunately, these days that noise includes a slowing auto market, concerns about GM losing market share to foreign competitors and a 10% cut in the automaker's white-collar job force.

GM has also had its share of problems with unionized workers over the years. Harris made a major effort to address that, and the company's most recent contract talks went relatively quietly in 1999. Poor earnings and plant shutdowns could turn unionized workers hostile again fairly quickly, however.

With so many issues facing the company these days, Grates may find himself spending much of his time at its Detroit headquarters. Indeed, the more time he spends there, the more internal staffers will come to know - and perhaps trust - his opinions.

Nicholas Kalm, an executive vice president at Edelman Public Relations Worldwide and deputy general manager of its reputation management practice, says his agency once worked with a manufacturing client that required at least one staffer to stay on site for an extended time.

'It can be done,' he says. 'It's intense for the person (doing it), but it's a great way to put into motion the idea of partnership' between the agency and the client.

MacDonald, on the other hand, makes no distinction between her staffers and client PR people when working with clients such as International Truck.

For example. International's chairman once asked her whether someone was on her staff or his. And she never puts her firm name on internal documents or planning papers.

'It shouldn't be seen as something someone can just swoop in and do,' she says. 'It takes a lot of trust.'

Without that trust, internal people will either ignore the outside expert or work to undermine his or her efforts.

'As much as possible, you want to give people from all levels (within a company) a sense of ownership' of any plan developed, says Martin. If Grates can't achieve that at GM, 'it's going to be like shouting into a strong wind,' Martin says. 'If the culture is one that has not been very open, there's a barrier you have to get through.'

Because MacDonald helped guide the international division through major staff restructuring, she knows all about the concerns facing Grates - what PR practitioners euphemistically refer to as 'change management' issues.

According to MacDonald, the biggest challenge for an outside firm coming into a situation like GM's is to focus on the end result every employee should want to achieve - a healthier, more efficient company. 'If a firm comes in to work with a company, they can very much take on that mission,' she says.

Grates has only just started his missionary work at GM. One thing's for sure: the auto and PR industries will have a watchful eye on whether he will convert his flock to his way of thinking - or be sent out of town on a rail.





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