Interview Segments on Topic: Crisis Management
James Murphy is the chairman and CEO of Murphy & Co.
Murphy was the Chief Marketing and Communications Officer for Accenture and current Chairman and CEO of Murphy and Company, a management consulting firm specializing in corporate marketing and communications. Mr. Murphy successfully let the effort to rebrand and reposition Accenture in 2000 - 2001 which won widespread recognition for the company.
Mr. Murphy also chairs the PR Coalition, which focuses on issues of interest to all communications professionals and has been recognized for his expertise in government and investor relations, editorial and media activities, corporate advertising, crisis communications, marketing communications and philanthropy, plus many others professional skills.
Interviewer: So is there, I would be jumping here to 1986, when you went to Burson Marsteller, but is there anything can you talk about, okay, at Owens Corning, this is where you worked closely with the CEO. Then you were recruited by Beatrice. And from there by
Murphy: By Merrill Lynch right
Interviewer: Can you talk a little bit about your experiences at Merrill Lynch?
Murphy: Well Merrill Lynch was and is one of the most dynamic companies in the world. And in the financial services business there is never literally a dull moment. So the, it’s a high wire act that financial services company like Merrill Lynch and there is never any let up. The tension is constant. Crisis dijour whether it’s a bond crisis or credit crisis or some broker is doing the wrong thing or whatever. It’s just a hugely tension-filled anxiety-filled role. A lot of people. I loved it. It was great. But with some management changes there and some other things developing in my own life, I wanted to try the agency side. So that’s when I went to Burson Marsteller so.
Interviewer: Let’s talk just a minute about ethical leadership and get into Accenture and everything that happened there. It’s a very complicated chain of events for me as an outsider just reading what I was able to read what happened. It started in ’89 which was the year of the establishment of Anderson Consulting in the Arthur Anderson firm.
Murphy: No that’s an erroneous statement. Okay we’ll start with that because that’s where, that’s a core issue right there that you just said. In 1989 an organization was formed called Anderson Worldwide.
Murphy: And under Anderson Worldwide was put Arthur Anderson Accounting and Anderson Consulting. There were two separate business entities entirely. Anderson Consulting per se was never part of Arthur Anderson. It was a sister company. Now it came out of Arthur Anderson as known as the Administrative Services Division of Arthur Anderson. But when they formed Anderson Worldwide two separate companies were formed and the ownership of those two companies were divided between the partners, between each. And that was a confusing point throughout the entire set of exercises and the arbitrator at the end of the day, you know clarified that very sharply that their ownership was split in ’89, there was never any connection after that time. So I it’s a long story. I was fortunate to be there in the sense that it was a phenomenal public relations and marketing challenge. But it came out of the marketplace driving people’s actions in a way that it was unfortunate because what happened was the consulting business was much more robust and profitable than the accounting business at the time. And the agreement had to do between the two companies, was sharing earnings each year and Anderson Consulting was paying Arthur Anderson $100 million a year because of its greater success. Well Arthur Anderson, in violation as the arbitrator found later on of the contract between the companies, was reinvesting that money back into the consulting business. And the basic agreement in ’89 was consulting business was for Anderson Consulting and auditing and tax was for Arthur Anderson and there was to be in violation of that. And there was years of arguments about that of debate and are you violating the contract or whatever and finally in desperation, the management of Anderson Consulting filed an arbitration against Arthur Anderson and Anderson Worldwide. That was the only vehicle they had. They, the bylaws wouldn’t allow litigation, only arbitration. And the arbitrator two and a half years later ruled totally in favor of Anderson Consulting, said that both Anderson Worldwide and Arthur Anderson had violated the contract and dissolved the contract. And so there is no longer any connection between the two. Now interesting enough, in the contract was the licensing agreement for the use of the word Anderson. That was owned by the Illinois partnership of Arthur Anderson historically and the contract which was voided at Anderson Consulting’s plea essentially eliminated Anderson’s ability to use the word. So we had 144 days to find a new name for Anderson Consulting, and working in 100 countries and trying to find a new name, it was almost impossible. We had 5,000 candidate names and ten cleared all trademark clearances etc. out of 5000. Just ten. We could have used only ten. and we picked Accenture. It was an idea of one of our own consultants, and actually his English was second language for the person, it’s Scandinavian that said Accent of the future. Put them together. It was that simple. That’s where it comes from.
Interviewer: Can you maybe add to the problems you had with all the rebranding and the launching of the new…..
Murphy: Well, it was an unbelievable task and it’s a case study among case studies. I mean there’s nothing really ever like it in business-to-business in particular, because you couldn’t use the word after January 1, 2001. You just couldn’t use it. It isn’t like you could drag it out or put up with some guy in Germany saying well I’m not going to change until March or I don’t like the new name and I’m not going to do it. None of that was permitted. And that in one sense was a plus because no one was able to drag their feet. So we marshaled our self in a way that was remarkable in retrospect. In one sense, the marketing communications function, which I led, ran the company for a couple months. Because everything had to be turned to make this change and we were very successful at it. And it took us 75 days to get the name, then 75 days to implement it. But think about it, we had 85,000 people, just the business cards for everybody. Okay, every sign. Every database. We had 15,000 databases that had to be changed. Every paycheck. I mean you just can’t, hundred of thousands of changes. And what we did is we put together a co-, the project was lead by co-leaders. One was one of the people in marketing who worked for me and the other person came out of our private management team who worked for clients who do big technology jobs. And so this is an individual who understood how to take every piece of a project and track it. So we had the partnership of the creative people in the marketing guise with this projected management skill set which worked very well so it was phenomenal success, and the company just relishes it, it was a phenomenal thing that we did.
Interviewer: It was quite an accomplishment….
Murphy: Right, and within 12 months the Accenture name was the 51st best brand by Business Week, best known brand in a year.
Interviewer: I remember the ads.
Murphy: One of the things that we did, a couple side lines. We, we didn’t want to promote the Anderson Consulting name but we wanted our advertising to continue so we used a devise where we crossed out the Anderson Consulting name and put in 0101 which coincidentally the date of this change and 01 in computer’s talk is a crucial set of digits. So that’s our business, so it just serendipitously was beautifully done. It worked out great. Another thing that happened is we couldn’t bring ourselves to throw away or burn all the paraphernalia we use for golf events and give away to clients and employees and T-shirts and everything. So we gave them to charitable organizations. And I got a call one day from an attorney at Arthur Anderson very upset at me because he had seen some a street person wearing one of the Anderson Consulting T-shirts walking in Chicago, because the YMCA or someone gave these things away and he thought we were degrading the Anderson name because they wanted to use it going forward. So that was we just couldn’t’ bring ourselves to burn them. So they are still floating around somewhere, thousands of them.
Interviewer: I'm going to ask you to talk a little bit more about that. We’ve got a crisis across obviously the United States. You mentioned the PR Coalition and the State Department and what you are trying to do for American businesses. Tell me what the PR Coalition is all about.
Murphy: The PR Coalition is a loosely knit group of 20 some organizations, such as Arthur Page Society, the Public Relations Society of America, all public relations public affairs oriented organizations representing about 50,000 professionals in the US. I helped organize it when I was president of Arthur Page because what we saw was all these various organizations doing similar things but with no crossover, no inner play, no cooperative effort. So the first thing was just to get together to see what we were all doing. To see if there was any common ground to work on, so out of that came a number of initiatives on two or three of these organizations working together and it was positive. But we decided we wanted to identify key issues that we could work as a Coalition and conduct what we called Summit Meetings and we did one on corporate trust which was five years ago, I think it was. And four years ago it was one on diversity in the industry and the last one we did was last year on public diplomacy. And what it does, it serves as a catalyst. ,The PR Coalition has no staff, no budget. It’s sort of myself and a bunch of guys who call men and women who get together now and then representing these organizations. The theory is we do these summits and the organizations themselves take all that material and disseminate it. And theoretically, 50,000 of the professionals in the US have received the materials coming out of the PR Coalition efforts through their own organizations. In addition, with the State Department cooperation they’ve disseminated our report all over the world, certainly throughout their own diplomatic corps, and last week the final letter went out, a joint letter from Karen Hughes and myself to the thousand CEOs heading the thousand best companies in the US., the Fortune news, so that’s been just done, and it’s urging companies to take a look at this. It’s a small step. I mean public policy is going to be the big factor in our reputation around the world. But as long as business is doing as well as we do around the world, we ought to take some credit for it and that’s the theory behind it.
Interviewer: Must be exciting work.
Murphy: It is. It is. It’s very hard, because you can’t see, it’s not like changing Accenture name 0101 into this huge success, okay. It’s just like a dripping faucet. It takes so long to make progress.