The word ’virtual’ has become the word of the moment. It can convey
positive messages such as real progress in working practices embodied in
’the virtual company’ and ’the virtual network’.
The best known phrase - ’virtual reality’ - has been recognised as
having a multitude of beneficial applications such as working in
hazardous environments, cutting the cost of expensive and complex
training or simply having fun.
But, for good or bad, virtual is just that - virtual, not quite there,
intangible, unreal.
Nowhere is this truer than in the PR industry. In the boom period of the
late 1980s, it was not uncommon for PR companies to pitch for business
without the capacity to deliver. And, when the business was won, the PR
agency concerned would scurry around trying to find the people necessary
to deliver on the promises made. Clients convinced by the ’virtual pitch
team’, soon found the reality less than totally satisfying!
This practice had a number of harmful side effects, including damaging
the professional status of the PR industry, dramatically increasing the
rates of staff turnover through a rampant poaching process and, hiding
inadequacies in people investment by hyping salaries - often for fairly
mediocre performers.
In my view it is laughable for many PR consultancies to call themselves
a ’people business’ because they simply do not invest in people. The
industry average for training expenditure is less than half of one
percent of payroll.
Excellent companies spend between eight and ten per cent of payroll. It
is no coincidence that the PR companies that have performed best
throughout the recession - in many cases experiencing compound growth
rates of over 25 per cent - have all invested in training at levels way
above the industry average.
Not surprisingly, the recession of the early 1990s saw the feast
merchants enjoy a famine. Salaries were adjusted downwards and clients
intent on receiving better value, voted with their feet, resulting in
shrinking revenues for many consultancies. As an industry we should
practice what we preach. We would never advise our clients to use the
’virtual pitch team’. We would say ’invest in your people and only
promise what you can deliver.’
I believe consultancies should be contractually bound by service level
agreements which not only identify the activities and the expected
output, but also the key people on the team. This would achieve two
things. It would stop companies recruiting after the event, with the
consequent reduction in poaching and inflationary impact on salaries.
And, it would force those people intent on growth, to hire ahead of
growth and invest in training so that the skills resident with the few
become widely dispersed across the many.
There is no doubt that the more buoyant economy we are currently
experiencing will increase the temptation to use the virtual pitch team.
One could say that clients who buy from such organisations get what they
deserve, but wouldn’t it be better if they were to get what they were
promised?
Crispin Manners is a member of the PRCA’s Professional Practices
Committee and chief executive of the Argyll Consultancies.
