Interview Segments on Topic: Marketing/Advertising/Branding
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: 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: Let’s talk just a second about outsourcing. Were there functions that you outsourced at Accenture, and do you outsource some work now in your, at Murphy and Company?
Murphy: Well, part of the arrangement I had with Accenture was, I provided my management services through my own company. I was not an employee of Accenture but I served as head of marketing. So, one outsourcing was to me, I mean the leadership was outsourced. In addition there were other opportunities for Murphy and Company to do other work for Accenture. That was part of the contract arrangements. And we do much of the internet work for Accenture. Website and a lot of Internet marketing. In terms of outsourcing the marketing communications functions, we use major global advertising and public relations firms around the world and we also use the corporate entity firm. Other than that, we do, there are 500 people at Accenture in marketing communications, so it’s a combination of outsourcing and but it wasn’t really, we didn’t consider outsourcing. I mean we considered it, specialist skills that we weren’t going to staff inside. It’s a more traditional view of using agencies as opposed to outsourcing. Although the relation with Murphy was more of an outsourcing situation. So now, in terms of outsourcing Accenture, is in that business of outsourcing to major clients from major clients in every business process you can think of. And I would guess there is probably 65,000 employees of Accenture who do outsourcing work for other companies. But not in communications, not in marketing etc.
Interviewer: I want to get a few more questions about that in a couple minutes… but let me ask you a little bit about terminology. Recently public relations, communications marketing, and advertising were all mottled together and it’s especially apparent with advertising and public relations in both the corporate and agency side and then there’s this whole thing about branding. Where does that lie? Could you talk about some of the changes that have happened in the terminology within the industry now?
Murphy: Well the terminology discussion has been going on since forever, okay, about What’s public relations? What’s public affairs? What’s corporate communications? Where does the marketing and advertising start? I think you should you have to step back and look at it. This is a business problem or business opportunity for an enterprise. And how they deal with all the constituents. And each company is probably going to be different about this because people are different. Markets are different. Circumstances are different. Investment..looked at a spectrum of closer to the commercial end of things over to the more societal end of things, you’d see sales way over here. Marketing sort of in the middle. You’d see corporate communications here. Then you start to see public affairs. Government affairs. Corporate citizenship over this other end and social responsibility. That’s a CEO’s job. Now how he or she decides how to do all that it’s really individual. Ideally he’d find someone not necessarily the sales piece but the rest of it he’d find somebody who could do it all and oversee it all, but it’s hard to find people with that kind of experience. So to me, it’s more it’s a debate about the people you have and the capabilities that they have to handle the spectrum as opposed to labeling the spectrum or putting one label on one piece and arguing about which is the right angle for the right piece. I think the debate about the language is academic. I mean excuse the expression, but it’s not that important. It’s what important is understanding interplay of all these activities with your major constituents and managing properly. And our speaker at this meeting, CEO from Abbott really gets it about handling all that. And we were very impressed last night by his remarks regarding that so. So the debate over language to me is not a big deal. But I’m sure we will be hearing about it for years. So.
Interviewer: Right. I really wanted to capture your...
Murphy: But if you think about the spectrum of how you deal with the external constituents and of course your internal ones too. And think about that that’s the space you should spend your time worrying about, not about what labels on which piece.
Interviewer: Okay you are looking for that individual who will be able to handle that whole continuum, what you were just speaking to.