Interview Segments on Topic: PR Agency or Corporate PR/Outsourcing
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: Okay so you landed at Burson Marsteller and could you just talk a little bit about the challenges that you found when you made that transition.
Murphy: I moved over to run the corporate practice at Burson, which was a natural fit for what I’ve been doing. I mean I had had experience in three different industries, diversified food business, manufacturing, and financial services with Merrill Lynch so I had a good background to do this. And the first couple of years were built, spent building the corporate practice and I think by the time we finished that exercise we were the largest corporate public relations practice in the world. And then I moved into running the New York office and then the US and then the Americas for Burson. And that’s what I was doing until Acceture at that time management consulting convinced me to do something differently 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: 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.