CORPORATE CASE STUDY: Cardinal Health looks to tell its tale after long silence

Although Cardinal Health became a top global company in relative obscurity, it is now on a full-scale brand-focused PR mission to build its identity and continue its growth.

Although Cardinal Health became a top global company in relative obscurity, it is now on a full-scale brand-focused PR mission to build its identity and continue its growth.

In 1971, Robert Walter founded a food wholesaler company, Cardinal Foods. Several acquisitions and more than a generation later, he remains CEO, but of a very different Cardinal. Today, Cardinal Health is a provider of products and services supporting the healthcare industry. It manufacturers and markets products for patient care, distributes pharmaceuticals and surgical laboratory supplies, develops drug-delivery technologies, and offers consulting services. Headquartered in Dublin, OH, the company employs more than 49,000 people on five continents, and produces annual revenues of more than $40 billion. It was ranked number 23 on the 2002 Fortune 500, and was named one of the world's best companies by Forbes last year. Shockingly, Cardinal has thrived at an astonishing rate - it recently celebrated its 15th consecutive year of 20% growth - in virtual silence. Last October, when Cardinal named Sari Macrie SVP of corporate communications, chief administrative officer Tony Rucci said it was the company's "first proactive attempt at managing its deserved reputation." At the time of Macrie's hiring, Cardinal had some in-house communications staff in place, but short of "regular media relations and sending out press releases," it had done very little in the way of getting its brand name out there, according to Rucci. "But when you become a $50 billion-projected company, visibility is necessary whether you like it or not." Building off the name Aware of the need for increased presence, Cardinal surveyed its constituencies and learned that customers feel there is value-added equity in the company name. In response, the healthcare service provider launched a $20 million (including advertising) awareness initiative to communicate its brand personality ("real, relentless, and robust") and promise ("partnership, innovation, and integration"). Last month, Cardinal called upon Ketchum - the company's first-ever agency of record - to join forces with DDB Advertising, Applied Research & Consulting, Enterprise IG, and Westhill Partners on the campaign. Although the initiative is a concentrated effort with a dedicated budget, Macrie notes that growing the Cardinal brand is at the core of all communications activity, internally and externally. "This is much more than an isolated ad campaign. Everything we do in terms of PR and IR is about reinforcing the brand at this point. Whether we are working on corporate reputation or media relations, it is all part of branding. There is no distinction in my mind," claims Macrie. At the time that Cardinal acquired the over 40 companies that now comprise much of its business, many were leading organizations with established brands. Concerned that disappearing brands would result in decreasing profits, Cardinal made its initial strategy one that allowed the various business units to go to market under their own identities. However, this resulted in confused customers, and a lack of understanding for Cardinal's breadth of offerings. Through research, the organization found that hospitals were not aware that Allegiance, Cardinal Distribution, Owen, and Pyxis were all operating under Cardinal's umbrella. Similarly, pharmaceutical companies did not understand that ALP, PCI Services, IPC, and RP Scherer all had the same parent. "We have number-one or number-two positioning in every business," boasts Macrie, "but despite this, most people didn't know it was us unless we were selling products directly to them." Starting on the inside The need to go to market under one name proved even more imperative when feedback showed that even its own employees had difficulty understanding the spectrum of Cardinal's capabilities. "The first focus has been on internal communications," says Anne Bouchenoire, director of global branding. "Cardinal is a complicated company to understand, so we're making sure everyone pulls together and thinks as one. The goal is to get each employee to act as a brand ambassador." Macrie adds, "Many of the integrated solutions we offer cross over business lines. Therefore, it's vital that everyone working for us understands all that we do, and not just their area of expertise." Lisa Fischetti, SVP and leader of the account for Ketchum, explains why now is the opportune and necessary time for Cardinal to make sure all audiences understand what it's all about. "When they were growing, being quiet was a competitive advantage because it allowed them to sneak up on the industry while no one was looking. But to continue that growth now, they must be visible so that customers know they can get greater expertise by dealing with one company that offers so much." However, gaining visibility for a brand has limited benefits unless those who are presented with it know what it really means. "Most people who know about Cardinal think it is only a pharmaceutical distributor. We must widen that perception," Fischetti explains. Dave Verbraska, Cardinal's director of financial communications and media relations, says that even among the informed investor community, the company has yet to be fully understood. "While we're probably best known in the financial community, I think there is an undervaluation even there." Contrary to common belief, over 50% of Cardinal's revenue comes from business unrelated to pharmaceuticals. It is essentially divided into two areas - products and services, and life sciences. The former is dedicated to distributing technology and automation solutions, while the latter focuses on pharmaceutical services that help bring drugs to market. This breadth of offerings positions Cardinal at a "unique vantage point," notes Fischetti. "Being in between the healthcare providers and the drug companies allows them to have an impact in offering solutions to the current issues the industry faces." Industry problems present opportunity Appropriately, those involved in Cardinal's communications initiative are using the industry's issues as a platform for exposing the brand. "We want people to see that Cardinal provides solutions to the wide range of challenges the healthcare industry is dealing with today," says Macrie. In response to the pressures pharmaceutical companies face to get drugs to market, Cardinal's communications team is working to expose the company's drug-delivery technologies. Zydis, for example, is a proprietary technology by Cardinal that allows medications to dissolve on the tongue. To assist with the problem of staffing shortages, Cardinal offers consulting services that help hospitals make efficient use of the workers they have, as well as offer suggestions for recruiting new talent. Medication safety and cost pressures are other issues for which Cardinal is positioning its brand as a solution. Verbraska describes the branding initiative as "a dream challenge for a PR person. This is a sound company in an otherwise unstable industry, but from a PR perspective, Cardinal is virtually unknown. Now that we are too big to be a stealth organization, we are in a perfect position to tell our story." Under Macrie's direction, Cardinal Health's communications activity continues to rise. Having already grown the in-house department since her arrival, Macrie is currently looking to bring two new staffers on board - a director of organizational communications and a director of corporate communications. Describing the stages leading up to launching the brand-awareness initiative, Macrie reflects, "I couldn't think of any other company of our caliber that has not been involved in some sort of concentrated effort to build their brand. Now the time is right for us." ----- PR contacts SVP of corporate comms Sari Macrie Director of financial comms and media relations Dave Verbraska Director of global branding Anne Bouchenoire Director of events planning Betty Blumenauer VP of internal corporate comms Amy White Director of employee comms Lisa Niquette

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