INTERNAL COMMUNICATIONS: Practice what you preach - Do consultancy managers take their own advice on handling internal change? Gidon Freeman finds out

The global economic situation remains dire, with profit warnings

and downbeat trading statements competing for business-page space. There

have been job losses across the board. There have been obvious victims

of the technology and telecoms slump, such as BT's 13,000 pencilled in

redundancies and the exodus from former industrial behemoth Marconi. But

even in blue-chip old-fashioned sectors such as the postal service, the

rebranded Consignia issued a statement last month confirming the

likelihood of an expected 30,000 - or 25 per cent of UK staff - facing

the chop.

If the picture is bleak for the economy at large, it's bleaker still in

the media and marketing sector. Newspaper groups, magazine publishers

and, most pertinently, marketing services groups have shed staff like

used skin.

The biggest losers in the PR world are those whose businesses proved no

longer viable - Kable, Anderson Soames and Evus were among the early

fallers. But these were all small firms in niche sectors overly exposed

to one, or maybe two, big paying clients. For the top 20 global PR

networks the problem of survival is less pressing than that of

protecting profit margins - especially when management bonuses in

US-owned groups are often linked to this particular index of corporate


It is therefore especially embittering to note the culls that have

transpired at companies such as Ogilvy PR, Weber Shandwick,

Burson-Marsteller, Hill & Knowlton, Fleishman-Hillard, and Edelman PR.

Add these to the job losses at this and last year's PRWeek Consultancies

of the Year, Consolidated and Firefly Communications respectively, and

there is a grim tale to be told.

It is common knowledge that PR firms are bad at PR-ing themselves, but

the allegation that the industry doesn't listen to its own advice is

particularly hurtful when that advice focuses on communicating

internally through a recession and maintaining staff morale through

sound internal comms.

In the words of one leading change management or internal comms guru,

the PR industry is made up of 'cobbler's children' - so consumed in the

process of dispensing service to outsiders they neglect their own


This may be unfair. Given the extent of the job losses in PR - some

estimates say a shakeout of ten or more per cent is to be expected if

budget squeeze is happening as much as anecdotal evidence suggests - it

is surprising how little rancour appears to have been created by the

spate of headcount culls that rushed through the industry in the second

half of 2001.

The agencies themselves are reluctant to discuss the sort of painful

episodes that no manager enjoys. A dozen firms called PRWeek to enquire

as to the subject under the microscope in this piece, only to run for

the hills upon being informed of the question up for discussion - when

it comes to internal comms during restructuring, does the PR industry

practice what it preaches?

Those agencies that do speak openly about the restructuring process

maintain that everything was done by the book. Firefly axed almost ten

per cent of its staff - a mix of client handlers and administrative

people - four months ago (PRWeek, 12 October 2001). MD Claire Walker

says the two crucial messages to convey to staff are that there is no

shame in facing the chop and that there is a continued bond of trust

between the employer and the ex-employee.

If managed successfully and repeated, these mantras can minimise the

hurt and emotional damage caused by a process she describes, frankly, as

'deeply unpleasant'.

'It is crucial to communicate the fact that there is no stigma to being

made redundant. All staff needed to realise that outgoing people were

not "fired" - their jobs simply ceased to exist. So there was no stigma

attached to them either as people or as professionals. We organised cash

collections for presents and some departing staff had leaving drinks

organised by us,' she says. ' We still try to keep in touch with

everyone that was made to leave and the majority had found new positions

within two months. Others took the opportunity to go travelling.'

One of the most unsettling aspects of redundancy is the shame of being

accompanied from the building by a director, lest you pick up business

sensitive information on the way to the door. There was, Walker claims,

none of this at Firefly.

'Communicating the idea that there is continued trust is essential. They

had free rein in the office to collect their belongings, say goodbye to

their colleagues and friends, and collect and build their portfolio.

We helped some write CVs, gave computer and phone time to research and

make calls, gave access to our library and resources for research

opportunities, and access to senior staff members for counselling and

support,' Walker adds.

If Firefly is a texbook case of how best to utilise internal

communications precepts to soften the blow of redundancy - and the

volume of bitter calls to PRWeek from some agencies' departing staff was

mirrored by Firefly leavers' silence - it is a lesson many PR firms

refuse to learn.

Although few internal comms experts were willing to speak on the record

about this issue, one source says most of the fundamentals of good

internal comms are routinely ignored by the community that espouses them

so publicly.

'Communications firms provide their clients with some awesome internal

comms programmes, but fail to take the same care over their own,' says


There are, it seems, four basic principles to follow when laying off

staff: to be open and honest about the extent and cause of the problem;

to avoid overpromising about the ability of corrective action to remedy

the situation; to pay attention to the professional and pastoral needs

of survivors; and to offer 'placement support' for ousted staff to

assist them in relocating elsewhere. 'In general, PR firms are brisk and

harsh about it, with tales of people being forced from the building

quite common,' an industry source says.

Andraea Dawson-Shepherd, a board director at internal comms consultancy

Hedron - whose clients have included Lloyds TSB, the Inland Revenue, the

BBC and Cadbury Schweppes - has her own horror stories: 'I am aware of

extreme situations when people asked to do the cull are themselves

jittery about their jobs and have not been briefed on the extent of the

situation before they are asked to take the flak for most of what

follows,' she says.

Dawson-Shepherd says the key problem for communications firms is

misunderstanding the nature of internal comms: 'It is not internal

marketing, though it is often treated as such. If all staff have been

asked to make cuts in outgoings and have seen client budgets shrink in

the previous months, they'll lose respect for the company if they feel

they are being bullshitted.'

On the matter described by all internal communicators as The Golden Rule

- to be straight and honest about the problems your company faces - the

PR and communications consultancy industry appears to fare well.

Bill Quirke, MD of internal comms firm Synopsis Communications, says:

'PR companies are good at giving context so it doesn't come as a bolt

from the blue.'

This is not because PR firms are run by intrinsically more caring folk -

though they may be. It is because of the structure of such firms which

sees even the most senior managers in such a hands-on role that they

spend time handling customer complaints and running staff training

schemes in a way it is impossible to imagine the CEO of a FTSE 100

company doing.

But the key problem for PR firms is a lack of awareness of best practice

in this field. The list of firms that consulted with internal comms

experts before embarking on the process of retrenchment is a short one

(even if it includes some industry big hitters, such as Brunswick).

Quirke says PR agency heads get too hung up on being nice: 'Some try to

fudge the pain and assume that that is good practice in internal


Others come on all businesslike. They swing from one to the other when

the middle ground - a mix of openness, honesty, speed and compassion -

would be the most fertile.'

The economy is not yet growing at pace, though there are green shoots of

recovery popping up in some areas. Anecdotal evidence suggests

recruiters are slowly starting to hire again, and the growth in client

business can only speed up that process later in the year. It is likely,

therefore, that we have seen the worst of the redundancy splurge this

time around. But economic cycles being what they are, PR and

communications firms would do well to learn the lessons of this downturn

- the lessons they offer their clients - for the next time the

unpleasant business of job cuts strikes again.


No major global PR network has proved immune to the downturn.

Privately-owned firms such as Edelman PR Worldwide have been hit hard by

clients' nervousness in the face of an international economic


Edelman's UK operation is run by CEO John Mahony. Regarded throughout

the industry as a manager who cares more for people than processes, it

was especially galling for Mahony to have to reduce headcount at the

firm's Haymarket offices in London by 15, to just over 100 last


'The whole process was extremely painful,' he says.

The crucial thing, Mahony says, was to ensure the process happened

quickly. And by quickly, he means that with the exception of a handful

of office confidantes, the staff all learned of the scale of the

operation - ten per cent were to lose their jobs - and its impact within

the space of one afternoon.

'We gathered everyone together at 12.30 on the Monday,' he recalls. 'I

explained there simply wasn't the business to justify the staff count we

were carrying and that certain roles would not be carried forward. I

then called all those who were to leave in to my office one at a time.

By 5.30 I was able to send an e-mail to everyone apologising for hurt

caused but explaining again the rationale behind taking a deep cut into

our cost base in order to best survive and prosper.'

In order to retain the support of the survivors, the agency boss has to

be generous with those who move on and magnanimous with those who


The first part of this, Mahony says, is the most crucial: 'They hadn't

done anything wrong and that needed to be repeated again and again in

our communications.'

A second obligation, which helps reinforce the key message that axed

staff have not been fired, is to assist them in getting new jobs.

'The entire 125 staff were enjoined in the task of securing work for

those who moved on - opening our contact books, selling staff to clients

and recommending them on to rival agencies,' Mahony says.

With a success rate three months later of more than 80 per cent - Mahony

is as pleased as can be expected with what was always going to be a

difficult scheme to push through.

'For some it doesn't matter what you do - you can't please all the

people all of the time. But if the survivors inside the company get the

clear message that you only did what was necessary, they will try harder

to avert further rounds of cuts,' he adds.

The key, he says is simple: 'Tell 'em you're gonna do it. Tell 'em when

you're doing it. And tell 'em when it's done.'


John Smith (whose name has been changed to protect his identity) was a

senior board director at a top consultancy until being made redundant

last summer.

'Our internal communications advisers would not advise clients to call

threatened staff in to be told of their departure just an hour before

forcing them from the building,' he says.

'Clients would be warned to take into account the views and perceptions

of all internal and external audiences. The way my then agency did it

seemed to be that we would read about the impending job cuts in PRWeek

before being told of them by our own managers,' he adds.

Smith was at an external client meeting when he received a call from the

MD's secretary asking him to return to base.

Upon arrival, a senior board member - whom he had never met before and

who was based outside London - appraised him of the situation and told

him 'at the end of this conversation, you will gather your personal

effects and leave the building,' he recounts.

It left a sour taste in the mouth, as did the immediacy of the

announcement. There was no room for a formal handover of client duties

to remaining staff.

Those who remained at the agency informed him it was a full week before

a group meeting was called to explain to survivors the logic of the cuts

and to express the hope they would solve the emerging problem.

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