CORPORATE CASE STUDY: Royal Bank of Canada values "internal agency" model

The Royal Bank of Canada's comms unit underwent a reorganization that not only positioned it like an outside agency, but made it possible for it to provide expert strategic counsel.

The Royal Bank of Canada's comms unit underwent a reorganization that not only positioned it like an outside agency, but made it possible for it to provide expert strategic counsel.

There are few questions from the C suite that PR pros fear more than, "What have you done for me lately?" But it's a question that the communications staff at The Royal Bank of Canada (RBC) always seem ready to answer. When David Moorcroft took over as head of corporate communications at Canada's largest financial-services company, he looked around and noticed that a slowing economy had led many corporate chieftains to start trimming and outsourcing what he calls "non-core-value" functions. He felt that in order to spare his communications department from axe-wielding executives, he had to show that his department was providing a value-generating service superior to that of an outside supplier in both price and quality. "We looked at ourselves as a communications department and asked, 'Are we a nice to have or are we a need to have?'" says Moorcroft. "We realized a lot of what we did could be outsourced, and that we usually added the most value through providing strategic advice and counsel." RBC looked around and saw that most of its corporate PR counterparts at major firms were producing newsletters, magazines, and press releases, which Moorcroft felt were limited in value because they could be easily outsourced. He knew it was not enough to just provide these services for free - he wanted to assemble a staff of experts that included people who were not only knowledgeable about communications, but were also experts in the bank's business. Moorcroft decided that if the communications staff was really going to assume the role of strategic advisers, the PR department needed to rethink its structure. He settled on a model that recreated an external agency within the bank. It was a structure that he felt would allow his staff to become experts on the bank's business. They could therefore provide key counsel to the bank, while at the same time force everyone to pay strict attention to costs. His first step was to appoint what he called "account managers" to each business division. At each division, the account manager acts as the liaison between the division and the communications department - serving a similar function to an account manager at an agency. The goal was to make the managers the communications department's experts in each of the specific areas of the bank's business. "We realized that since we add the most value when we make informed decisions about the business, each account manager would focus on working with a specific division," says Moorcroft. "We're such a big bank now with so many lines of business, that we realized that it would be impossible for one person to be an expert in insurance, asset management, capital markets, and commercial banking. We needed our account managers to become our specialists." Enlisting comms 'foot soldiers' Moorcroft then decided that in keeping with his agency-based model, he would create so-called "centers of expertise." These would include communications foot soldiers that the account managers could have perform basic communications functions such as media relations, employee communications, and event planning. The idea is that account managers can manage strategy and costs while devising communications programs tailored to the needs of each business division. For instance, a bank executive who heads the insurance division informs his communications account manager that the division wants to actively promote its new product. Because the account manager has knowledge of the product from his close work with the insurance division, he would then be in a position to create a plan around the needs of that division. He could then help coordinate the effort using the bank's media relations, employee relations, and marketing professionals. "With this model, we marshal the communications resources on behalf of the client," says Moorcroft. "This makes it easier for the client because they have all these communications resources coordinated on their behalf. This is because the account manager truly knows their needs, and adds real value. Now, we have become a core part of the company because you can't duplicate what we do outside the bank." Moorcroft has become so fond of the agency model that he now refers to the bank as his "client." "We have this mentality that we are not part of the bank, but are a private firm within the bank, and the bank is our client," says Moorcroft. "Therefore, we have to earn the respect and the business of the bank every day." Culture of accountability This seems to be more than lip service, as account managers are evaluated on an annual basis by their business division, or "client." That evaluation comprises the biggest part of their performance reviews, and plays a major factor in determining their bonuses. This culture of accountability seems to pervade the department - especially when it comes to spending. Every year, each business division is given a communications budget. At the end of each quarter, Moorcroft meets with members of the different divisions to justify their communications expenditures. He prides himself on the fact that the department is often under budget. "David Moorcroft is one of the most bottom-line-focused PR guys I have ever come across," says Eric Starkman, president of Starkman & Associates, RBC's PR agency for US-based work. "I have known him for years, and he's never been interested in PR for PR's sake. Instead, he is always looking for PR that drives shareholder value." The account managers say they find that their role provides them with a new level of professional satisfaction. "I like it better because you are able to do more," says Graeme Harris, an account manager with the RBC investments group, who previously worked at one of RBC's main rivals. "Under the typical corporate model, you are basically restricted to your area of specialty. In this model, the business unit asks me for advice on their business decisions from the communications perspective. So, I'm viewed through out the organization as a strategic resource, not just the communications guy." Harris says that because he has a strong knowledge of the challenges facing his division, he is allowed to provide important input into decisions that are vital to RBC's business. He says his opinion on major issues is given significant deference. It's a marked contrast to his previous stint in the communications department of one of RBC's major competitors. "They ask for my opinion on major business decisions," says Harris, "as opposed to the model where the decision has already been made and they only come to me when it's time to communicate it." Looking from outside the bank, the unique model seems to have worked well. The reviews for the bank's PR are considerably strong, which apparently speaks volumes about a large Canadian bank. "Everyone knows Canadians love to hate their banks," says James Stevenson, a business reporter with The Canadian Press. "Yet I don't think it's any secret to say that Royal Bank has been the best bank in Canada in terms of communications with journalists and others. There seems to be a corporate culture that encourages discussion with people outside the bank." -------------------- Royal Bank of Canada Headquartered Toronto, ON, Canada SVP, corporate communications David Moorcroft Outside PR agencies Advance Planning (part of MS&L), Starkman & Associates PR budget undisclosed

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