Lansons' newsletter - Spring 2017
General election 2017: overview
James Dowling, Head of Public Policy
The latest polling by Opinium shows the Conservatives with a 17 point lead over Labour, and Theresa May personally leading Jeremy Corbyn as “best Prime Minister” by 44% to 19%.
"This is the Brexit election – a poll defined by the aftermath to the referendum – and the ability of the parties to deliver Brexit is key to success"
Received wisdom has it that the party perceived to be strongest on the economy and leadership generally wins. Indeed, in 1992, Bill Clinton’s campaign team legendarily instructed their campaigners to focus on "The economy, stupid" in their successful Presidential campaign against sitting President George H. W. Bush. This was clearly instrumental in the Conservatives 2015 victory. However, last year’s vote for Brexit has, as with many other things in UK politics, turned this on its head. This is the Brexit election – a poll defined by the aftermath to the referendum – and the ability of the parties to deliver Brexit is key to success.
Politically, Brexit is an issue monopolised by the Tories. They are, of course, associated with it – and it plays to their strengths as the party seen as most able to steer the country to a successful outcome. Their approach to date has therefore been a cautious one which offers few hostages to fortune, and emphasises their ability to deliver for the country.
Theresa May is seen as a huge strength here, positively impacting her party’s’ overall poll ratings – and the Conservatives are keen to capitalise upon this. Indeed, pictures of her campaigning over the weekend showed her standing in front of a blue banner with the words ‘Theresa May: Strong, Stable, Leadership in the National Interest’ and no mention of the Conservative Party. Although it is too early to say whether the leaks by the European Commission of their account of the Downing Street dinner will have an impact, Conservative Campaign HQ will presumably be betting that it ultimately does not, with their ‘strong, stable’ message having the far greater traction.
"The Tories are playing a cautious game which avoids offering any hostages to fortune and maximises their freedom post-election. "
These are early days in the campaign, with many weeks yet to go, but it would be surprising if this basic playbook changes. The Tories are playing a cautious game which avoids offering any hostages to fortune and maximises their freedom post-election. Their manifesto is not expected for at least another week, but, given the time they have had to prepare it, it is unlikely to be a big document. They are coming under pressure on discrete areas such as the pensions triple lock and tax rises. When asked about this on Sunday on the Andrew Marr Show, May did actually commit to no further rises in VAT. However, she refused to make the same commitment on national insurance or income tax – and on the triple lock, said that although state pensions would continue to increase, the Tory manifesto could revisit the way this is calculated.
By contrast, Labour are in a situation where they desperately need to change the narrative away from Brexit in order to get cut-through. We have seen some attempts from them over the weekend to do this – for example, by announcing plans to put an extra 10,000 police on the streets, and promising ‘consumer rights’ for private renters.
However, Labour also appear frequently to be hampered by very variable performances from their top team, which play into the Conservative narrative around competence and the dangers posed by Labour being elected. We have recently seen Labour go into damage limitation mode following a disastrous interview by Diane Abbott in which she claimed that recruitment of 10,000 extra police would cost £300,000. We have also recently seen the media widely sharing pictures of John McDonnell at a May Day rally in Trafalgar Square, talking in front of the hammer and sickle symbol and the flag of Bashir Assad’s regime. If they want to turn round the polls, Labour urgently need to up their game and start delivering a slicker, more competent, performance which focuses on issues which remain strengths for them, such as the NHS.
Head of Public Policy
General election 2017: what we would like to know
Ralph Jackson, Director
So now we know that a walking weekend over Easter in Wales has provided a much needed clarity of thinking for the Prime Minister, and we have a General Election on June 8th.
I don’t think I’m bothered about the ‘U-turn’ comments as I think the reasons for this so-called snap poll are valid. The referendum on EU membership last year was a defining moment in UK (and European) history. It led to Theresa May forming a reshaped Government and taking on the challenge of delivering on the electorate’s wishes. Her ability to navigate a process with a time limit placed upon it was always trying, but more so when faced with the prospect of preparing for an election in 2020 a few months after the Article 50 process should be completed. She wants to have an approach to this task that provides for the best possible outcome for the UK, and she does not want a weaker negotiating position with the EU; she should be commended for that.
So we have an election to as she puts it to ‘provide her with the mandate’ she needs. While this election may be ‘all about Brexit’ I think it is important too that the electorate should also get some clarity on what a May-led Government of the future will mean for other areas of society, especially for the wealth generators in the economy.
We already know that those ‘just about managing’ in society are in her thoughts, and that she wants a society and economy that ‘works for everyone’. So we need definition about what this means as some in society – business for example – might also be just about managing. If you are self-employed you might think you’ve had a reprieve with the tax changes at the Budget being reversed, but we don’t know enough about future tax reforms that seek to bring a better equilibrium (if that can ever be achieved) among taxpayers. We have had potential action indicated on corporate governance and executive pay without understanding what this seeks to really do in terms of behavior change. And if the media are to be believed we have a feeling in Downing Street that there are enough foreign owners of UK businesses which to some is sensible management of key assets but to others is a beginning of an isolationist agenda.
So this election should afford us some answers to questions around Brexit and what kind of UK May believes she wants to forge. So in education, health, social reform, trade, international aid, and relationships with Europe and the world’s key superpowers we need to understand what a future Brexit Britain under May would look like. We need real insight on these and not just manifesto-inspired rhetoric.
"Good governments are kept honest by a good opposition"
Pollsters and others will predict what happens in this election and the prospects for success for any of the political parties, so I’ll pass on that for the moment. The British electorate may deliver another surprising result, but a prospect for a landslide win, while agreeable to some, may not be so good for the democratic process. Good governments are kept honest by a good opposition; let’s hope this election delivers both.
How to navigate the key challenges and opportunities that Brexit has to offer
Anna Schirmer, Director
UK politics clearly has had a busy period over the last 12 months and the future certainly doesn’t look any less busy. The snap election on the 8th June this year is set to affect further changes and with Prime Minister Theresa May having triggered Article 50 on the 29th March, the UK is now on its path to exiting the European Union. It was pure coincidence that the 29th March also marked the start of the 47th annual PROI meeting, a meeting where I joined over 100 colleagues from our network of over 70 independent communications agency partners from around the world for four days of discussions, workshops and talks on themes and trends affecting global communications. With these events coinciding, I wanted to take a step back to reflect on what the current ‘pre-Brexit’ state means for communications consultants looking to execute effective programmes in the UK.
I shared the following four themes with our global colleagues, as a starting point for a discussion on how to navigate the key challenges and opportunities that Brexit has to offer within a communications context:
1. Are your views and opinions being heard by the UK Government?
One of the clear fallouts from the referendum vote is the fact that the UK is heavily divided on the future direction of the country. Divided in views by age, geography, ethnicity, education, media consumption and many more factors. As a result, the Government is on a clear mission to unite the nation again, to quote Theresa May in her Article 50 speech: “I want this United Kingdom to emerge from this period of change stronger, fairer, more united and more outward-looking than ever before.”
"UK politicians are in listening mode, seeking to gather views and opinions from various groups and industries on what the future could and should look like"
We have seen this evidenced in a period of relatively neutral policies since the referendum in June last year; in March the Chancellor delivered one of the ‘tamest’ Budgets in years, focused on ‘crowd pleasing’ policies. Hard-hitting policy making is taking a back seat while the Government has turned a firm ear to the ground. As a result, UK politicians are in listening mode, seeking to gather views and opinions from various groups and industries on what the future could and should look like. With this open door, there is an almost unprecedented opportunity for organisations, companies, brands and individuals to engage with the people that will shape the future of this country and to ensure their views are heard and understood.
"There is a genuine desire by the government, industry and media to showcase successful trade relations and inward investment"
2. Do you have any ‘good news’ to tell?
Despite the ongoing news on the need for clarity around future trade relationships with the EU, communications advisors should remember that Britain is very much ‘open for business’. There is a genuine desire by the government, industry and media to showcase successful trade relations and inward investment. Countries and companies with UK trade news to tell will be able to capitalise on this opportunity over the next months and years.
"Expert fatigue has truly swept the UK and the nation’s trust in self-proclaimed ‘facts’ and rationale is on the decline"
3. Are you appealing to minds and hearts?
If the pre-referendum Leave and Remain campaigns have shown one thing, it is that facts and experts are no longer enough to win public support. Expert fatigue has truly swept the UK and the nation’s trust in self-proclaimed ‘facts’ and rationale is on the decline. The public is more probing than ever before - looking for information about the ‘real impact’, how a brand’s or company’s news is going to make them think and feel. As a result, skilful corporate ‘storytelling’ is seeing a renaissance, posing a clear challenge for communications advisers, as it is storytelling that needs to win hearts and minds and storytelling that is under more public scrutiny than ever before.
"If a story isn’t deeply embedded in corporate behaviour, the company at its heart is no doubt going to face challenges"
4. Can your story pass the test of adding real depth to your brand or organisation?
Communications advisers need to be aware that the public will be keeping a watchful eye on corporate stories and has the ability to mobilise at an unprecedented speed if a company or organisation is suspected of ‘just telling a story’. If a story isn’t deeply embedded in corporate behaviour, the company at its heart is no doubt going to face challenges.
Many of us will remember the week in November 2016 when in the space of 24 hours, Bob Jones, a 42-year old father with just over 100 twitter followers, mobilised over 22,000 likes and 13,000 shares for his social media post asking Lego to withdraw its Daily Mail advertising contract. Bob questioned how deeply embedded Lego’s values are, which the company states as “… the desire to make a positive difference … in the world we live in. Doing that little bit extra, not because we have to – but because it feels right and because we care.” Bob raised concern over the newspaper’s recent headlines, that “do nothing but create distrust of foreigners, blame immigrants for everything and as of yesterday are now having a go at top judges in the U.K. for being gay while making a legal judgement”. Bob explained that “it genuinely bothers me that a great progressive company like yours supports this “news” paper, helping it increase its circulation. Lego to me has always been an inclusive product. [..] Your links to the Daily Mail are wrong.”
Lego, and consequently various other companies bowed to this public scrutiny, which has been united under the #StopFundingHate campaign, confirming they would not renew their advertising and promotions contracts with the Daily Mail and other news outlets. The #StopFundingHate campaign sent a timely reminder to storytellers in the run up to Christmas, the UK’s great corporate storytelling season that is Christmas advertisements – challenging brands and companies not “just to tell us a story” but to ask “what if goodwill to all wasn't only meant for Christmas?”
It is clear that the UK and its future direction is in a state of uncertainty at this stage, which has only been further reinforced by the snap election that has been announced for the 8th June this year. But there are already opportunities and threats that are emerging from a communications perspective. It is our job as communications advisers to continuously observe and analyse the environment we operate in and to help the organisations and clients we work for to navigate this ever changing UK landscape.
If you are interested in discussing any of the themes in this post or you would like to learn more about Lansons’ international offer, contact Anna Schirmer.
Bonjour! Je m'appelle John Bull: how M&A in the UK is evolving
Rollo Crichton-Stuart, Director
In the summer of 2016, the chancellor of the exchequer, Philip Hammond gave his absolute backing for the takeover of Arm Holdings, saying the deal was a “big vote of confidence” in British business. Fast forward to the first half of 2017, and haven’t things changed.
The proposed takeover of Unilever, the Anglo-Dutch consumer goods giant, by Kraft, would have been one of the largest deals in corporate history, but was resisted by Unilever itself and provoked serious political unease over British jobs. Indeed, it was the rumour of political pressure that loomed large, as the papers poured over the rationale for such a quick U-turn. There are still plenty of commentators scratching their heads at the failed LSE/Deutsche Borse deal too. Surely the parties could have foreseen the issues around competition regulations; that the £21bn deal would have effectively created a ‘de facto monopoly’? Whispers of back room skulduggery within Westminster, and on the Continent began to rise and raised eyebrows around the sale, at a time of such economic and political uncertainty, of such an important part of the country’s national infrastructure.
"The benefits of foreign capital inflows are plain to see but when conducting M&A activity, the question of whether or not a proposed deal chimes with the interests of the UK as a whole, has to be answered. "
When talking about proposed takeovers of British businesses by foreign companies, commentators, politicians, communities and of course, unions, are quick to remember the aftermath of the Cadbury takeover in 2010. In particular, when the firm confirmed it was to shut Cadbury’s Somerdale factory near Bristol in spite of pledges to keep the plant in operation. And rightly so. The benefits of foreign capital inflows are plain to see but when conducting M&A activity, the question of whether or not a proposed deal chimes with the interests of the UK as a whole, has to be answered. Now, more than ever, the emotive side of any transaction has to be one of the top priorities for any party on either side of a deal. Is it in the national interest? What will politicians say locally and nationally? How will communities be affected? How many pensioners are reliant on Company X’s continued success? By letting a deal go through, will the UK be losing independence within a core growth sector? When building a defence or indeed, planning a raid, in parallel with the investment rationale, these questions simply have to be answered.
There are now calls for takeover rules to be tightened. The business secretary is looking at proposals for how the government should respond to takeover bids for British companies, from foreign rivals. It is expected that any future plan will look to protect key national infrastructure but there is doubt around any broader ‘national interest’ test for foreign takeover bids. Either way, this does not reduce the importance of the ‘emotive factor’ when it comes to M&A; in this time of economic and political uncertainty for the country, the questions surrounding how businesses act in these scenarios will loom ever larger to wider audiences.
It does raise an interesting question though; as we leave the EU, are we at risk of becoming more European through increased protectionism? This may well be the case, and no matter how the General election pans out, advisers and corporates should ignore the emotive side of any transaction, at their own risk.
The team at Lansons has advised on some of the largest transactions in the UK. We are well versed in supporting companies of all sizes, be they public or private, on both sides of the M&A coin and have expertise in advising on financial communications, employee or change management, customer interaction and public affairs . If you would like to talk to us about a defence or potential target, please email Rollo Crichton-Stuart or Tom Baldock.
Plus ça change | A look at what the FCA’s latest announcements mean for the asset management sector
David Masters, Director
A few hours prior to Theresa May’s general election announcement on April 18th, the FCA published its Mission and Business Plan for 2017 and 2018. Given the surprise nature of May’s call to the polls, it’s unlikely that the FCA had timed this to be purposefully buried, but within these documents contained some potential bad news for the asset management industry. Primarily, the regulator’s Sector View on investment management largely re-iterated the findings in the interim Asset Management Market Study, suggesting that the fund management sector has found little traction with its lobbying to date, despite acknowledging consultation on the proposed remedies.
Furthermore, the FCA has used this opportunity to express additional concerns, although many of these had previously been telegraphed from within the depths of the interim AMMS report. The regulator is concerned that asset managers pay for unwanted custody services through bundled propositions and that low-margins result in lack of technological investment.(1) The regulator also raised concerns around a lack of transparency in the services that asset managers pay for, meaning that they (and therefore the underlying investor) are paying more than necessary and that there is a "failure to consistently monitor, assess and deliver on ‘best execution'".
Fund managers also face further scrutiny around product design – too much focus on investment products that are easy to manage, or suit advisers, rather than meet end-investor needs (2). The FCA also raised the spectre of financial stability again around concerns that that a sizeable failure of one or more firms as end-investors attempt to redeem simultaneously. This they describe as a “disorderly wind-down”. For many asset management grandees, the pronouncements of the FCA over the last few years probably count as an “orderly wind-up”.
The FCA also announced a platform competition review to explore how ‘direct to consumer' and intermediated investment platforms compete to win new and retain existing customers. But if the timing of this was obscured a little by Downing Street, the timing of the election may provide a little bit of respite for asset managers. It seems likely that the AMMS final study was slated for publication early June or late May. Given how keen the FCA is to promote change within the industry, it may well be that the regulator needs to adjust the timing by a few weeks (although doing so may also create a further risk if the election result brings with it a change in its mandate)
"Size and scale will increasingly be major factors in the evolution of the sector."
Change within the industry is happening, although at a pace slower than the most agitated reformers demand. Whilst the Standard Life Investments/Aberdeen tie-up does create potential to cut costs and diversify business strategy, the primary reason for the merger is all about distribution. Size and scale will increasingly be major factors in the evolution of the sector. Consolidation remains as inevitable as it always has been, but we should not be complacent about what that will look like. Since there are no really large ‘pure play’ passive managers – Vanguard, BlackRock, State Street et al all have chunky active businesses – why do there always have to be super-sized active-only asset managers? Many of the largest global managers, including Fidelity, have long had a foot in the passive camp, and many others have already shifted into “smart beta”. Therefore, for many “market cap passive” is a natural corollary – whether through organic or acquisitive growth – particularly where their business is driven by scale.
But active is alive and well and will continue to thrive wherever managers can add value – from equity income to systematic trend-following via illiquid assets, activism and unconstrained strategies, and so forth. Moreover, as passive becomes more prevalent in some markets, others will seek to exploit the anomalies that this creates, and so the two approaches will continue their symbiotic relationship.
"Whatever strategies they follow and whatever products they provide, asset managers do need to become more “user-friendly” to survive"
Whatever strategies they follow and whatever products they provide, asset managers do need to become more “user-friendly” to survive - more inclusive, better communicators and more digitally savvy. This is not just at the retail end of the market. Institutional investors are increasingly digitally oriented, and not managing your online reputation – particularly your “search”, can be quite limiting for your capital raising ambitions. In terms of inclusivity, I’m reminded of the US research which showed that investors preferred mutual fund managers from a similar cultural background to themselves.(3) A major challenge to improving diversity is insuring that the groups that you want to appeal to understand what you do and what its value is, and the asset management sector is finding this the biggest hurdle to overcome.
Which brings us full circle. As a simple conduct regulator, the FCA is doing all that it can to ensure that the asset management sector is as fit for purpose as possible in its view. But it can’t make people invest in funds en masse. That requires an incentivised shift at a societal level, not a cultural level within one financial sector. That is well beyond the FCA’s current remit.
(1) According to the FCA margins in asset management are too high and margins in global custody would seem to be too low – so clearly they have a very fixed view of what would be ‘Goldilocks’ margins. I wonder what they are.
(2) The lack of reference to open-ended property funds at this juncture tells its own story.
(3) Kumar, A., A. Niessen-Ruenzi, and O. G. Spalt, 2015. What's in a Name? Mutual Fund Flows When Managers Have Foreign-Sounding Names, Review of Financial Studies 28, 2281-2321.
The perils of a positive mindset
Scott McKenzie, Joint Managing Director
Like a lot of men my age I love a sporting metaphor. My colleagues get bored with my tennis analogies and general sports geekery.
However when I recently had to explain to an elderly relative what I do for a living I found myself making a comparison with a football team. And it kind of worked.
I would say that comms practitioners are often required to be creative - promoting their organisation, or brand - much like an attacker in football. On the other hand we must also sense reputational risk like the very best defenders. Of course the most strategic among us can flex between these two states - much like a midfield playmaker...
Before I stretch the analogy too far it did make me reflect on the different mindsets comms people need to have in different situations.
Much of my work centres around business transformation, or corporate issues and crisis. Now there are many positive elements around changing a business but it probably makes sense to start with a defensive mindset - what could go wrong? Have we identified all the threats? Have we mitigated all the risks?
I'm sure that the comms people around Oscar Munoz the CEO of United Airlines thought they were doing that when he sent that fateful internal email to all staff describing a passenger (who had clearly been seriously assaulted) as "belligerent" and "disruptive".
Yet somehow the comms people had not anticipated that this memo would create the ensuing firestorm. Indeed this piece of - frankly shameful - communications made an already appalling situation so much worse!
So what happened? Did they not sense the danger in an internal email - thinking their 80,000 loyal staff would not leak it? This seems unlikely. Were they so unconnected to the wider sentiment the incident had caused that they felt comfortable sending out something that seemed so tone deaf? Possibly but surely they were listening to the commentary via their social media monitoring?
Of course, it could be the comms people provided Mr Munoz with great advice and it was simply ignored.
"I have an alternative theory. I think the issue was with their mindset. "
That's certainly possible. But I have an alternative theory. I think the issue was with their mindset. Up until that incident United Airlines had been lauded for their communications. Mr Munoz even won communicator of last year from PR Week US.
So could that have bred some complacency? Believing their own publicity? Maybe.
But I wonder if it simply meant that both CEO and comms team had too positive a mindset to recognise the danger.
In his wonderful (and bitingly funny) book - Stand Firm - the Danish psychologist Svend Brinkmann talks about the modern world being dominated by an "accelerating culture". Where a positive mindset based on unrealistic aims around personal growth and career progression trumps seeing the world as it really is - which is sometimes pretty challenging, and frankly often quite negative.
In Brinkmann's view we have sanctified an optimistic and positive mindset at the expense of being able to tell it like it is.
"we can sometimes behave like a striker trying to score a goal, when we simply need to clear the ball from danger"
In other words we can sometimes behave like a striker trying to score a goal, when we simply need to clear the ball from danger. Like a good old-fashioned centre half.
Perhaps if the good people at United Airlines had that defensive mindset they would have understood the dangers they were facing. The beleaguered Mr Munoz is now seeking from his Board what every football manager dreads: a vote of confidence.
Joint Managing Director
News, views and events
News and Views
Congratulations to Lansons CEO and Co-founder Tony Langham who featured in PRWeek’s Power Book 2017. The Power Book highlights the most influential PR professionals in the UK.
We are thrilled to have been featured in the Evening Standard regarding firms that share their office space with start-ups and small companies. For over 9 years we have donated office space and resources to HighTide. This has enabled HighTide to reinvest all their donations and income into producing great theatre.
Rachel Dakin shares her top tips on how to master the business of storytelling. She discusses the importance of an authentic corporate narrative, making your audience the hero of your story and sharing a purpose with your audience.
Lansons Director Louise Ahuja spoke to Gorkana on tackling both rumour and fact in the news. Louise speaks about the need to plan in the moment, read the live situation and be willing to throw out the playbook in order to get your message across.
International Women's Day
This year we have decided to do something different. Lansons is publishing a series of blogs encouraging women to ‘be bold for change’, both in the workplace and in everyday life.
Account Director Lewis Wilks kicked off the series with his four step guide on how to be a feminist ally in the workplace, from challenging the gender opportunity gap to committing yourself to female leadership. Championing women in the workplace is not just the responsibility of women but men too.
Associate Director Jennifer Smallwood speaks on the importance of celebrating the achievements of women, feeling empowered to make subtle changes to how you live your life and encouraging EVERYONE to tackle gender inequality to help forge a more gender inclusive world.
Our analysis of the Spring Budget 2017. This overview focuses on Chancellor Philip Hammond’s statement, the key measures that will take place over the next few years and an analysis of how people reacted to the budget on social media.
Lansons received two awards at the PRCA City and Financial Awards 2017 in the following categories:
- Best Crisis Communications Campaign Award for Lansons and PPF: Protecting People’s Pensions: Managing the Reputation of the Pension Lifeboat;
- Best Accountancy Communications Campaign Award for Lansons: Spanish Property Crash: The UK Fightback.
Associate Director, Madeleine Morgan-Williams was also shortlisted for the Rising Star of the Year Award.
We are very proud to have won a PRCA Ethical Champions award in the Very Large Agency category. To win this award in the first year that it is running is an absolute honour. Our win was also featured in Gorkana.
This year we received the bronze award in the large agency category for PR Week’s Best Places to Work Awards 2017. We have previously won an award in 2016, 2015, 2014, 2012 and 2011.
Congratulations to Associate Director Jessica Warner who was shortlisted in the Young Professional of the Year category for The PR Moment Awards 2017.
Join us for a breakfast session on female empowerment with a panel of inspiring female speakers across the business and political world. The panel will include Michèle Dix CBE, Managing Director of Crossrail 2; Jo Gibbons, Head of Health Industries Marketing at PwC; and Clare Parsons, Chair and Co-founder of Lansons.
Date: Tuesday 23 May
Time: 8.30am for a 9.00am start
If you would like to attend this event then register your interest at: firstname.lastname@example.org