VIEW FROM THE TOP: Communications speaks volumes - Compaq UK chairman Joe McNally tells Ben Bold why communications is crucial to successful business

Since road-sweeping while retaking an A-level, to being sacked by

his father from his steel stockholding company, and ousted from meat and

bacon processor FMC Harris, Joe McNally's life for the past 17 years as

head of Compaq UK has sustained a less tempestuous period.



His previous incarnation as FMC Harris CEO, is a world removed from his

office overlooking the Thames.



McNally launched Compaq in the UK in 1984 with the modest sum dollars

40,000. Nurturing the brand from nothing into a strapping contender to

IBM is no mean achievement, yet it is something that McNally comes

across as modestly proud of.



In 1984 IBM had a heritage of 35 years trading experience in the UK and

was irrefutably the market leader. Compaq had launched in the US in 1981

and went onto the market via Nasdaq in 1983. During that year the

company turned over dollars 111m in the US, and at the time was heralded

as the fastest start-up company ever in US corporate history.



When Compaq set up in the US, one of its triumvirate of founders, Rod

Canion, decided that the aim for the company brand was to address what

he viewed as the industry standard - IBM.



So Compaq produced its PC portable - basically an IBM with a handle

stuck on that conformed to the IBM standard and would, therefore, be

compatible with application software such as Microsoft.



Following the brand's rise in the US Compaq's directors realised that

there was no point in concentrating on North America. So, in 1984, it

entered Europe, opening offices in Germany the UK and France.



Compaq initially targeted the big accountancy firms, which agreed to

take Compaq's portable as standard. McNally recalls the product was

'like a Singer sewing machine and weighing 35lbs.' He gestures from one

side of the room to the other: 'You could chuck it around. I mean, I

could throw it from there to there and it used to power straight

up.'



McNally's view of communications is that it is a vital component of a

successful business. Indeed, his latest role as chairman embraces the

concept of communication with the focus on his acting as brand

ambassador.



'We're hoping the corporation will see advantages and benefits from this

role and, who knows, one day we may have a chairman's role in the major

European countries as well. So it's a little bit of an experiment in the

short-term, but this is a very big company now and if we need to

continue to strengthen the management team, which I've done with (new

managing director) Rene Schuster,' he says.



'So, with my knowledge of the industry, the UK market, the mechanics of

Compaq, plus Schuster's attributes it's a pretty strong team. Much

stronger than if we just had one CEO.'



Prior to Compaq, McNally was unemployed. His technology background was

at ICL and Honeywell. He then worked at FMC Harris to gain some general

management experience - very quickly becoming chief executive of the

group. The company was subject to a hostile takeover by Hillsdown

Holdings, and one of its first moves was to remove FMC's first tier of

management.



'So I was somewhat unceremoniously placed on the street three days

before Christmas,' McNally comments.



Headhunters rang in January, and asked whether he was interested in

talking about opening Compaq in the UK. 'I remember asking, "what

product do they have?" and they said they're in the personal computer

business. I replied "do you mean the microcomputer business?" and I said

"no, I'm a mainframe man, I don't want to get involved in that rubbish,

that's much below my acumen".'



His initial reluctance turned to enthusiasm on visiting Compaq's Houston

HQ for a week in early 1984 and he quickly agreed to take on the

mantle.



So, how did McNally go about launching a brand into a market dominated

by a global player such as IBM? 'They gave me dollars 40,000. I had no

office, no staff, I had no lawyers, no PR company, no auditors, no

advertising company, no company car ... The UK now turns over pounds

3.5bn and is still the largest and most profitable subsidiary outside

the US. Overall number one in the PC market - taking over from IBM in

the late eighties,' he says.



'When I arrived I started off with a press conference. I'd already hired

an advertising agency - Ogilvy & Mather - primarily because we had used

them in the US. There was already some knowledge of the product as the

target market was reading US magazines.'



Differentiating itself from IBM, Compaq built a foundation of trust with

the initially wary dealers, and inspired complete confidence that Compaq

would not compete against them: 'We were accepted very quickly in most

of the major accountancy partnerships and then we brought out desktops

and received tremendous support from the investment banks.'



McNally managed to persuade his Stateside bosses to use TV advertising

and managed to employ the services of John Cleese.



'We spent a lot of time doing competitions, giving Compaq's to winners,

which John Cleese would present. We had TV going, various events going,

dealer meetings, etc, with Cleese as a pivotal part of that.' Within a

space of six to nine months, Compaq was suddenly a major player.



From a PR perspective McNally strongly refutes the idea of having a

single global PR agency: 'I believe, unlike America, countries in Europe

have different cultures, markets, people, philosophy ... so one for all

in my opinion doesn't necessarily work. Fortunately, though I was give a

free reign and chose A Plus (now part of Brodeur Worldwide).' This was

in 1984.



A Plus dropped Compaq in favour of IBM's European account in 1995 and

Compaq UK has since used Firefly.



McNally has some strong views about the profile of the CEO in the UK

compared to in the US.'There's no question about it - the

responsibilities and the remuneration in the UK bears no relationship to

the US equivalent.



With the responsibility we have to the shareholders, and the demands

placed on us the number of people that are dependant on that board of

directors in my opinion we do not get awarded accordingly.'



However, McNally observes that the situation is improving. 'Relatively

recently we are recognising the importance of meeting targets and

objectives, against which you have an equity stake yourself, so the

better the company does in theory the better you do personally,' he

says.



He also cites the increasing trend of UK chief executives appearing in

the media: 'Bonfield and Iain Vallance, Chris Gent, they're in the news

all the time. Even I get I the news occasionally, though not to the same

extent. There may still be an element of resistance on behalf of CEOs to

actually have interviews like this ... I don't know the answer to

that.'



Compaq hired its first UK and Ireland PR manager earlier this year

(PRWeek, 11 May). In April McNally hired the services of start-up Issues

Analysis, with founder Roger Haywood personally managing his corporate

communications.



'I took on Roger to try and promote more of the chairman's role in terms

of what Compaq was now trying to do, having added to the management

team.



All the operational responsibility I gave over to Rene Schuster. My role

is to help strengthen his team, but also to promote Compaq in certain

areas where we've been somewhat lax in the past,' he says.



'This involves making various departments in government aware of what

we're doing, strengthening our relationship with the CBI, the IOD, the

American Chamber of Commerce, etc. And to help promote the general image

of Compaq, as we've changed quite significantly in the last three years

from an extremely successful and dynamic PC company to a computer

solutions company.'



The idea is that he's going to get out and communicate to stakeholders,

and potential stakeholders, he says. 'I spoke at the IOD the other day

and I've been invited to speak at this year's Marketing Forum.'



McNally adds: 'Communications is absolutely key. Provided the message is

right, why not communicate by whatever media is available to you. It's

important that Compaq is seen to be successful with good products and

good customer support. How can you get it across other than by

communications?'



Compaq considers its people as a top priority. 'The size of the company

inevitably attracts, sadly, an element of bureaucracy and policies. But

my philosophy has always been that the three things that made Compaq so

successful were the product, the distribution channel and most

importantly the people,' he says. 'I had some very young, high-paid,

dynamic people working for me.'



'In the earlier days people really enjoyed being part of it, it was fun,

and the attrition rate in Compaq was probably for the first 12 to 15

years almost zero,' he says.



McNally admits that the Compaq brand needs bringing up-to-date: 'From an

awareness point of view there are still both clients and the media as a

whole who really don't appreciate what the new Compaq is really all

about. We still need to spend some time on our brand, because

notwithstanding the investment we've made in acquiring all these

companies, I don't believe the Compaq brand stands for what we'd like

the company to be seen as. We need to spend more time getting out and

telling people what we're about. I think to a certain extent we're still

hiding our light under a bushel.' So it's one of the major challenges

for Schuster and the team.



'I will help as best I can, but personally I think we need to rebrand

this company again because I don't believe it's right quite at the

moment,' admits McNally.



Compaq, however, appears to be a strong standalone brand and its

chairman a good communicator who is more than able to ensure the

company's continued success. 'In general terms, we never underestimate

the importance of communication - it's essential in this particular

business.'



JOE McNALLY - Compaq

1966-1968 Programmer, ICL

1968-1979 Sales manager, Honeywell

1979-1983 CEO designate, FMC Harris

1979-2001 Founder and managing director (UK); Vice-president; Chairman

(UK), Compaq



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