Encouraging investment - An Olympic Feat?

The Olympic Games is much more than an extended sporting event, it is a chance for a country to celebrate their national identity. Four years ago, the Chinese used the occasion to flex their muscles and announce their arrival as a true superpower. For Britain there is a similar need to show a vibrant and dynamic country, but the reasons behind this are very different.

The Games were seen as a way to jump start the sluggish UK economy, with the leads applied to its financial heart but the benefits felt by the entire country. The theory went that by delivering a faultless event on the scale of an Olympics, Britain would send a message that it was ‘open for business’. Foreign investment would pour in and Britain would once again lurch into economic growth. But as the Coalition is fast finding out, it’s not quite that simple. Many of the delegates arriving from foreign climbs have used the Games to pose some difficult questions – ‘Why has GDP shrunk by 0.7%?’ ‘Is the Government genuinely committed to investing in UK infrastructure?’ Far from providing an opportunity to communicate London as an investment destination, the Games have been used to grill the Government on its economic vision - something it has so far struggled to articulate.

There have been other unforeseen issues. One of the major concerns around the Games was that it would expose London’s ageing transport system, with many predicting it would crumble under the weight of new visitors to the capital. What’s transpired however is arguably more damaging for the image of London and the UK, and for the prospects of encouraging foreign investment. Instead of nightmare commutes, London has seemed closer to a ghost town at times, with regular commuters working from home or leaving the city altogether. Hardly the image of a modern, bustling metropolis perhaps.

Of course, just as an Olympic Games is far more than a sporting event, it is also much greater than an extended sales pitch. In Beijing it helped to redefine a country’s notion of self and place in the world. At the very least, the London Games may provide a welcome boost to the UK’s confidence, but this will largely depend on how ‘Team GB’ performs. So what will it be -  sporting success and financial renewal, or gallant failure and economic inertia? Keep your fingers crossed.

John Hood

Consultant

john@linstockcommunications.com 

Can I run this up your flagpole…?

The last 24 hours haven’t been the best for the organisers of London 2012. Last night, the North Korea women’s football team left the field in anger after the South Korean flag was mistakenly displayed in a video introducing the players. And today, it’s been revealed that the official programme for the British men’s football team has listed Welshman Joe Allen as English.

In the eyes of many, the Olympics will kick off in earnest tomorrow evening at the opening ceremony. To have two such high-profile blunders already will have caused a few red faces in London 2012 HQ.  They’ll be doubly keen to make sure no other slip-ups are made.

The truth is, we all make mistakes. Right now, though, that probably isn’t much solace to Joe Allen or the North Korea women’s football team. To minimise the storm these gaffes could cause, the public needs to hear apologies – but the parties involved also need to hear apologies in person, and quickly. Otherwise, bad feelings linger, the mistake continues to make headlines, and all the good work you are trying to do ultimately gets undermined.

From a communications perspective, when launching a big campaign the last thing you want is to slip coming out of the blocks. But, much like a sprinter, the most important thing ‘Team 2012’ can do now is stay calm, recover their composure and complete the rest of the event with no slip ups.

Tom Yazdi

Consultant

tom@linstockcommunications.com

Gross Domestic Peculiarity: Is GDP an adequate measure of economic health?

Tomorrow, the Office for National Statistics (ONS) will publish figures for the UK’s gross domestic product (GDP) for the second quarter of 2012. A third consecutive decline is widely expected, and if past responses are anything to go by, doom-laden predictions of imminent economic Armageddon will follow close behind.

But what does a fall in GDP actually mean for the man on the street, the sole trader or the multinational corporation? Is it really a premonition of financial ruin?

If the past two quarters are anything to go by, it would seem not. In the three months from March-May, employment rose by over 180,000. Alongside this, inflation fell. This hardly points to an economy in terminal decline. In fact it paints a pretty rosy picture. If the ONS reports a fall in GDP tomorrow, none of this will matter.

The problem is that GDP has become shorthand for a country’s economic health, and as the thermometer with which a country’s economic outlook is determined, it is also a political flashpoint. GDP figures are anxiously anticipated by political parties, and key messages are drafted or reinforced well in advance - expect plenty of comments of ‘too far, too fast’ and ‘the mess we were left with’ to be trotted out over the coming days. The resulting political battleground has meant debate focuses on the reasons behind a fall (or rise) in GDP rather than an examination of its relevance to individuals and companies.

So what can the Government do to address this? Some tentative attempts have been taken by Government to move away from GDP as a measure of the nation’s condition. David Cameron’s well-publicised ‘Happiness Index’ was an example of this, but it failed to resonate with a public sceptical of its motives and the relevance of a survey that measured concepts as nebulous as ‘happiness’ and ‘well-being’.

If the Government wants to move away from negative coverage of GDP decline, it will need to provide a much more compelling argument on its ineffectiveness as a diagnosis of a country’s economic health. To do this, it will need to deliver a definitive answer to a fundamental question – ‘If the thermometer is broken, how should we assess the patient?’

John Hood
Consultant
john@linstockcommunications.com

UK Infrastructure: Is Osborne’s communications strategy built on sand?

This week George Osborne announced that Government will underwrite up to £50 billion of investment in UK infrastructure and exports. Richard Threlfall, head of infrastructure at KPMG, said it was as “bold a move” as the government could make on unlocking finance. But Osborne is walking a tightrope.

To qualify for the scheme, an infrastructure project will need to jump through a whole host of hoops. It will need to be of national significance, ready to start construction within 12 months and financially credible. But, as pointed out in Stephanie Flander’s excellent blog on the subject, there is another box they will need to tick. Projects will also need to demonstrate that they would not be viable without this government support.

These are tricky criteria to meet, and there is some concern that the scheme will consequently fail to appeal to potential investors. It follows previous attempts to inject private sector finance into public infrastructure, including a well-publicised scheme to encourage pension funds to invest in long-term projects under a National Infrastructure Plan. The problem is, that plan, to date, has managed to raise only a fraction of the investment expected.

The pension fund investment scheme resulted in some strongly worded criticism from construction companies, who accused the Government of failing to reduce the risk of infrastructure investment. But Osborne finds himself in a difficult position here. Reducing the risk for infrastructure companies must increase the risk to the public purse. PFI projects may have enjoyed mixed success, but this hasn’t prevented criticism from the public for them being too costly and potentially leaving the Government, and the taxpayer, carrying the can should anything go wrong.

Osborne needs a plan, he needs to show that the Government is investing in growth as well as exercising financial restraint. But he doesn’t want to fall foul of criticism that he’s supporting construction companies while cutting funding to vulnerable groups. The question is, if this latest scheme fails to bring forward investment, is this a policy failure or a clear indication of risk aversion in the private sector?

John Hood

Consultant

john@linstockcommunications.com

Following the herd – banking on human behaviour

They say presentation is everything; and this is true in communications as much as design. How we communicate ‘reality’ makes a huge difference to public perceptions, and how we present facts and stats can have a significant impact on people’s behaviour.

This was emphasised last weekend when two seemingly contradictory articles were published. The first was a comment piece in the Guardian which reported that, according to the Move Your Money campaign, “half a million people have left the big banks for more trustworthy and respectable organisations so far this year”. Meanwhile, an article in the Financial Times stated that the big banks have found there has been “no rise in the number of customers closing accounts”.

Leaving aside the question of whether both of these statements can be true, what is interesting is that both the consumer campaign and the high street banks seem to have a grasp of basic behavioural economics.

Studies show that we are more likely to do something if we believe that everybody else is doing it, especially people like us. By highlighting the number of people who have already changed their bank accounts, the Move Your Money campaign is trying to nudge people into following the crowd and changing their financial arrangements.

However, research also shows that people have a strong tendency to stick with the status quo, meaning that arguments for change need to be considerably better than those for staying put. By emphasising that very few people have actually changed their accounts, the banks are hoping to take advantage of the natural bias towards inertia.

New measures set to come in at the end of 2013 will address one of the main issues that deters people from changing their banking arrangements, by cutting the maximum time it takes to switch current accounts to seven days. But the Move Your Money campaign will need to work hard to address the additional concerns identified by the Office of Fair Trading, including complexity and risk     

Only time will tell which camp has more success with its communications strategy. The important thing for communications professionals to remember is that there is huge power in words, and how we frame our arguments can make a real difference to behaviour. As a starting point, it’s worth considering what influences your own behaviour – are you making active choices or just following the herd?

Jo Nussbaum

Consultant

jo@linstockcommunications.com

One little word is hard to say for George Osborne

As first seen on Professional Manager

Politicians say sorry like small children: through gritted teeth after a lengthy stalemate or quick, bright and breezy to avoid a telling off. So why should their political opponents chase apologies so fervently when neither approach communicates any real regret? Because politics is the blame game, and apologies are a way of keeping score.

Conservative MP Andrea Leadsom broke ranks by calling on George Osborne to say sorry for implicating Ed Balls in the fixing of Libor rates. But Tory Grandee Norman Lamont used more fitting language when he said the Chancellor had, ‘Overplayed his hand.’ This language tells us everything about Osborne’s accusation, the demand that he withdraw it, and the subsequent media storm. It’s all just a hand of political poker.

So how did the players perform? Osborne wasn’t dealt much, just a suggestion that people close to the previous Government put pressure on Barclays to fiddle the Libor figures. But he chose to make a big bet and implicate the Chancellor. When Bank of England Deputy Paul Tucker told the Treasury Select Committee that no Government figures pressured him to influence Barclays’ Libor numbers, the Chancellor was left holding nothing at all. That was his chance to fold with a quick apology.

Particularly since his aides had already set the record straight with a briefing to the BBC’s Nick Robinson. But he decided to stay in the game while the stakes increased and other senior figures like Foreign Secretary William Hague came to his defence. Now, there are few cards left that would turn his position round.

Politicians can apologise successfully. Apologise immediately or withdraw a remark and people will put it down to the heat of the moment. But try and make political capital from a situation that gets out of control and an apology is simply an embarrassment. No apology will improve the relationship between Osborne and Balls, and what does either care? Unless he means it, Osborne should simply sit tight while the row dies down and think more carefully before he throws political mud in future. He’s already lost the hand, it’s just a case of how badly.

Jon Bennett

Director

jon@linstockcommunications.com

Surely, you must do something!

Surely, you must do something! It’s the standard media response to the latest crisis. In these circumstances the easiest option for a spokesperson is to offer a solution and promise to react. Witness the announcement from Home Secretary Theresa May to give more tickets to the armed forces after further troops had been called in to fill the security gap at the Olympics. 

But it is important to do the right thing, not just something. The modern media environment creates immense pressure to offer an immediate response. As my IT chap so often tells me when my Outlook has crashed again, “It’s just not that simple.” Yes, you need to calm the situation.  But if you promise an instant response you may well get in wrong. 

So what steps should you take in these situations?

First, outline your intent on the issue, the principles behind your decision making and the direction you are going to take. O2 faced a pretty fundamental issue this week; loss of consumer access to networks. This technical issue follows the problem for BlackBerry last year and RBS in more recent times. Technological faults happen. What matters is how you explain them and how you describe the steps you are taking to fix the situation. In this instance, traditional and social media outlets provided the platform for O2 to communicate with its customers.    

Second, take steps to halt any continuing damage to your brand or business. This is where action may be required. Any offer of compensation or dispensation for customers needs careful thought, but if it is an option it can help dissolve some of the anger.      

Finally, ensure you provide regular updates on progress. In the case of O2, they responded quickly to the many comments and attacks that took place online. In many cases responding with good humour to some fairly vociferous views from users about where the phone provider can place its handset. Deprive someone of Facebook updates for more than 30 minutes and see how many friends you lose.

Tony Cox
Consultant
tony@linstockcommunications.com

House of Lords reform is a political house of cards

Despite being a perpetual topic of interest to the political classes, the vast majority of the electorate seem entirely unconcerned by our strange system of hereditary peers, bishops and appointed members.

If the AV referendum last year proved anything it was that public sentiment towards political reform oscillates between indifference and mild scepticism. Today, as MPs prepare to vote on proposed reforms to the second chamber, the electorate prepares to collectively shrug its shoulders.

But despite being an issue that rarely gets the public’s pulses racing, the fallout of today’s vote could be substantial. Should the Government lose the vote, it would be its first significant defeat in the House of Commons. Foreign Secretary William Hague has already described it as test of the Coalition, and with Labour set to join as many as 100 Conservative backbenchers in voting against the reforms, it looks like a test it will fail.

For Labour, a Government defeat would allow them to highlight cracks in the Coalition and within the Conservative party. For Cameron, it would demonstrate a challenge to his leadership and the limited power of Government whips. The Liberal Democrats, who have placed great emphasis on reforming the House of Lords, would see it as an embarrassing bloody nose.

The electorate may care little about House of Lords reform, but they do care about internal conflicts within political parties. Few will vote for a party seen to be divided or disloyal. To date the Coalition has handled the tensions between party interests and the need for Government consensus remarkably well. The Government may not be popular, but it is seen to be relatively stable.

A defeat on House of Lords reform could change this. More than ever, Coalition partners would need to find the right balance between pulling together to demonstrate unity to the public, while simultaneously pushing back in order to appease agitating backbenchers. From a communications perspective, it’s a difficult tightrope to walk.


John Hood
Consultant
john@linstockcommunications.com

Winners and losers on the Megabus

You won’t find many PR people who condone the old adage that there’s no such thing as bad publicity. But it’s fair to say there are some positive spin offs to difficult situations. Here’s a quick look at how the main protagonists fared in yesterday’s big story – the Megafuss.

The Megabus PR team must be scratching their heads this morning to decide what it all means. Their media response yesterday hit the right note – simple, factual, and understated, leaving room for people to focus on the emergency services. Pictures of Megabus holding up thousands of motorists wouldn’t usually be brilliant for the cuttings. But how many train travellers might think Megabus next time they’re booking from London to the north west? The brand will be the butt of jokes for a while, but in return it has suddenly become a household name. All in all, it probably turned out OK.

Whether police with guns make people feel safe depends how far you are from the guns themselves. On screen, this has come across as a well-planned, professional operation that shows our emergency services are ready for Olympic threats. Up close, bus passengers complained of having guns pointed at them as they left the vehicle. This must have been terribly frightening, but it is of course what police with guns are expected to do. The debate will rage as to whether the response was proportionate. Yes, it was an over-reaction now we know the cause of the alert. But as several ‘security experts’ were quick to tell us in the newspapers, we can expect police to err on the side of caution given the events of this summer. All in all, the emergency services looked ready to handle a major incident and they handled people in a dignified way when they could. A decent result.

But the biggest winners must be the electronic cigarette manufacturers. National newspapers have devoted illustrated box-outs to these gadgets. We’ve been told who might like to use them. And we now know they’re legal to ‘smoke’ on public transport. Expect a spike in sales and a similar spike in calls to the emergency services.

So everyone comes out ahead. Unless you were one of the poor souls on the bus or in the tailback of course.

Jon Bennett
Director
jon@linstockcommunications.com

Inquiries could damage Cameron’s ability to shape events

As first seen on Professional Manager

To what extent does any government define itself? Is history written by radical ideas and political ideology – or are the reputations of political leaders at the mercy of events?

Churchill’s enduring position as “Britain’s greatest leader” was forged in his response to global conflict, while Attlee is forever linked with the creation of the welfare state. Thatcher is remembered as an economic liberaliser with a clear political mission, while Tony Blair is forever synonymous with the war in Iraq.

Just now, David Cameron can’t look either way. Any effort to set a clear, proactive narrative is undermined by revelations about the past – and he will have to endure events rather than rise to them. Leveson has proved an embarrassment for the media and political class. The forthcoming banking inquiry will suck in politicians, civil servants and bankers alike. Both inquiries are an important outlet for national soul searching – but both will shut the stable door too late. Cameron will hope the banking inquiry exposes poor decision making and questionable integrity on Labour’s watch. But this simply replaces the self-flagellation of a party dumped from power with a more public process that draws in figures from across the political spectrum.

The government may edge that political battle, but it won’t emerge unscathed. And while the attentions of Cameron’s policy and communications teams are focused on the events of the past, the big challenges of the future – issues such as long-term care, decisions on which will be kicked into the next Parliament – will go unanswered.

Cameron needs a challenge he can rise to today, or a period of calm to set a course for the future.

Jon Bennett
Director
jon@linstockcommunications.com

British railways - Is Labour on the right track?

Picture the scene. Britain is gripped by economic torpor. Huge public debt has led to swingeing spending cuts and people are restless, tired of a Government led programme of austerity. To placate agitating trade unions and an embattled and demanding electorate, the Government has decided to nationalise the railways, despite the difficult financial environment.

It could be a story of Britain’s immediate post-WW2 past, but it may also be a story of Britain's future. This week Shadow transport secretary, Maria Eagle MP responded to a report by Transport for Quality of Life called Rebuilding Rail that suggested the renationalising of Britain’s railways. Although she fell short of endorsing the policy, she was also clear to point out that all options would be considered under a Labour government.

At this stage, Labour are simply flying kites. But if they were to nationalise the railways, what communications challenges would they face?

Perhaps the biggest challenge would be high expectations. In 1948, years of underinvestment under the Big Four railway companies had left Britain’s railways in a state of decay and decline. The British public, who had seen first-hand how effective the Government could be at mobilising and organising on a national level, fully expected a nationalisation programme for the railways to be a resounding success. But the Government couldn’t meet these lofty expectations. Hamstrung by a lack of finance, the investment necessary to modernise the collection of decrepit tracks, carriages and stations never materialised. Three years later, a disillusioned electorate voted Labour out.

Today, a Labour government would likely face similar challenges. A 2009 poll found just 11% back the current railways model, with 51% backing renationalisation. It’s hardly unanimous, but a significant proportion of the electorate would clearly expect improvements to services under a nationalised railways system. With the current restrictions on public finances, this would not be a simple task.

The success of such a programme would rely on how it set out its objectives and how these were communicated. A programme that promised to increase reliability, cut costs and improve services would almost certainly fall short of people’s expectations. But a programme that ‘…put passengers before profit’, as suggested by Maria Eagle, may just resonate with a public increasingly sceptical of the motives of rail companies.

John Hood

Consultant

john@linstockcommunications.com

Inconsistent Cameron still has an edge over the Mili-brand

As first seen on Professional Manager

“We took heat on hot pies. People have Laughed Out Loud during Leveson. And we mislaid the moral compass on tax evasion. Let’s win back those hard-working families with a principled attack on benefits culture… avoid any actual policies, or the Lib Dems will want to get involved.”

Perhaps that wasn’t quite the advice put to the PM by his advisers in recent weeks, but given his new policy direction, it’s logical to consider that it was something along those lines.

As Westminster braces for a slugging match on Lords reform, Cameron’s tough talk on housing benefit for the under 25s says, ‘These are the real issues I’d tackle with a Tory majority.’ According to Ipsos Mori, seven in 10 agree that politicians should do more to reduce the benefits bill. So Cameron can sidestep Lib Dem navel gazing, shore up support from the right of his party and get some popular approval into the bargain.

So far, so good.

But that doesn’t amount to good strategy – just sharp tactics. Cameron’s long-term project has been to detoxify the Tory brand; to lose the ‘Nasty Party’ name tag and compete on the centre ground where elections are won. People who want to know what Cameron stands for won’t feel enlightened by this – they’ll feel confused. It sounds inconsistent, and doesn’t match the long-term narrative.

Attitudes on benefit always harden during recession. These tactics could go the distance if the economy is still flatlining come 2015. But that’s an unlikely precursor to a Conservative majority in any case. Perhaps the thinking is that an inconsistent brand is better than no brand at all. And the lack of vision from Labour – who are desperate not to side with idle scroungers on this one – may be enough to see Cameron through.

Jon Bennett
Director
jon@linstockcommunications.com