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
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
'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
'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
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
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
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
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
'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
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
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
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
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