Vickers plc – a very brief case study
The development of financial public relations at Vickers PLC from the mid-1980s provides a good example of the benefits of having a clear financial public relations strategy in good times and bad.
This famous name in British engineering is now a medium-sized company with an interesting portfolio of companies including Rolls-Royce Cars and Vickers Defence Systems, the UK’s only manufacturer of main battle tanks.
In the mid-1980s, Vickers was still recovering from the nationalization of its shipbuilding and aircraft business in the mid-1970s, but following its merger with Rolls-Royce Motor Cars and under the guidance of its new chief executive, David Plastow, was just developing its strategy of concentrating on a limited number of areas of engineering and technological excellence. Its public relations and investor relations strategy was also developed at this time and given particular impetus by the Big Bang in the City.
The communications strategy devised by management and the in-house public relations director was simple: to ensure an understanding of the company’s business strategy and its aim of refocusing its somewhat diverse businesses. A key aim of the programme was to achieve a thorough familiarity with the company’s senior management – and its ability to deliver the goods – among a clearly defined specialist City audience. No attempt was made either then or since to explain to the public the confusing situation whereby Vickers owned Rolls-Royce Motor Cars rather than Rolls-Royce PLC, that the Vickers Shipyard in Barrow no longer belonged to Vickers. Or that Vickers which has been historically famous for aircraft manufacture since the days of Alcock and Brown and the Vickers Vimmy, the Wellington and not to mention the Spitfire, no longer manufactures aircraft.
The in-house public relations department was set up to both manage media relations and investor relations in a coordinated fashion and to develop an understanding of the company’s followers, whether they are journalists, investment analysts or institutional fund managers. The department of eight or so people divided the work into three main areas – media relations, investor relations and the rest, including internal communications, events and publications. The director of public relations personally took on the responsibility for investor relations with the number two being the media relations specialist. They carried out all the public relations functions, including the running of a press office, but their prime responsibility was as an advisor to the chief executive and finance director. They were supported by ad hoc consultancy advice.
If the strategy was simple, the tactics were even simpler: to take the opportunity of acquisitions and disposals, results announcements and the high profile of the chief executive to put across the company’s messages, either via the press or directly to analysts and fund managers. It was important, however, that these opportunities were taken against an established background of understanding. The initial part of the public relations programme involved organizing briefings usually on a one-to-one basis for the chairman, the finance director or the director of public relations as appropriate with key journalists, analysts and other key City players whose opinions would be sought in the City.
The importance of the chief executive, Sir David Plastow, in all of this cannot be over-estimated. A natural communicator and a man who clearly understood the need for proper public relations, he already had a good reputation in the City for being a straight talker and someone who did not disappoint shareholders. It is all too easy for corporate and financial public relations to become focused around the personality of one person, but people like to see companies with clear leadership and to be run by one or two people who are demonstrably in charge. In David Plastow, Vickers had a very good man to put forward.
There is nothing startlingly innovative about this approach, The key factor was to ensure that this was done properly and in a coordinated manner. In terms of messages, the company was careful not to oversell itself or to be extravagant in its claims or predictions. Fortunately for the public relations team, Vickers was also producing steadily improving profit figures, and carrying out a significant number of disposals of non-core businesses and buying a much smaller number to augment the developing core. Each deal provided a welcome hook upon which to continue to hang the message of the company’s strategic development – and improved financial strength.
Some research was carried out into the views of both journalists and analysts, and the company steadily developed a reputation for being a company with a well-formulated communicated strategy, and a reputation for being helpful and open and confident in everything it did.
If all this sounds rather boring and ‘motherhood and apple pie’, the payoff for Vickers was rather more dramatic when in the late 1980s an antipodean financier, Sir Ron Brierley, and his investment company decided that Vickers was well on its way to recovery. Containing operating companies like Rolls-Royce Motor Cars, it might have more embedded value than the stock-market was giving it credit for. His tactic was to build a near 30 per cent stake and then, rather than bid, try to shake an investment profit out of the company by forcing the demerger of its jewel in the crown, Rolls-Royce Motor Cars, a company at that time going through a successful high growth patch following the survival of the Bentley marque.
The subsequent proxy battle – the battle for shareholder votes at the company’s annual general meeting – was the ultimate test of the company’s communication strategy and of its success in having built a good understanding and reputation for success among the key City audiences. The battle raged through the newspaper City pages and the institutions’ meeting rooms of the City until Sir Ron Brierley was soundly beaten at the annual general meeting with the Vickers’ management winning over 90 per cent of the free vote. Although much lobbying of shareholders’ votes was done directly it was done against a background of supportive press comment and analyst notes.
The commentators’ conclusions were, in essence, that the management had carefully explained its strategy, demonstrated that they had made good progress in following that strategy and deserved, therefore, to be given the chance to follow it through and not be hijacked by a raider from New Zealand, however clever and engaging he might be. It was very public recognition that a carefully thought out and implemented – if unspectacular – financial public relations programme had got its message through to the key audiences.
Vickers subsequently went on to fight a high profile battle to win the contract for the British Army’s new battle tank, a battle fought against a very large and sophisticated American arms manufacturer, and a very determined and government-backed German tank manufacturer. Once again in this battle, Vickers’ reputation for competence and ability to deliver on its promises played a very important part in ensuring that the contract was won.
The Vickers experience demonstrates that although there is a great deal of important specialist knowledge and technical ability required for financial public relations, the essence of successful communications activity differs little from many other parts of the public relations industry.
- Ильина о.К., Тычинский а.А.
- Предисловие
- Методическая записка
- Content
- Marketing communication
- The role of public relations in the marketing mix
- Public relations planning in the marketing mix
- Marketing integration
- Campaign development
- Diagnosing the solution
- Product launches
- Improving brand equity
- Public Relations in the future marketing mix
- Step-by step planning process
- Exercises
- I. Discuss the following questions.
- II. Say what the following refer to in the text of the article under the headlines:
- Marketing integration
- III. Match the following definitions with the word-combinations below.
- IV. Complete the words.
- Internal communication
- Why communicate?
- What do people want to know?
- Some communication techniques
- Communication and leadership: the bp Oil experience
- Background
- Preparing the ground
- Creating the right attitude
- 1 The right attitude (see Figure 2.2)
- Attitude Technique Talent
- 2 The communication road map
- 3 The good communicator
- 4 The head office communication forum
- The virtuous circle
- Link with human resources
- Where is bp Oil now?
- Exercises
- II. Say what the following refer to in the text of the article under the headlines:
- IX. Translate the following text from Russian into English.
- (Виктория Чупровская. Внутренний pr способен решить коммуникативные проблемы в компании. Www.Prlink.Ru)
- Сommunity relations
- Background
- What is community relations?
- Why bother?
- Methods used in a community relations programme
- One piece in the jigsaw
- Research
- Strategic objectives
- Project selection criteria
- A sponsorship example
- Donations policy
- How can the project be developed?
- Measurement and evaluation criteria
- Business benefits of the programme
- Employee participation in the community involvement programme
- Why bother involving your employees?
- How do you know that the programme is a success?
- Internationalising the programme
- Future developments
- Conclusion
- Exercises
- I. Discuss the following questions.
- II. Say what the following refer to in the text of the article under the headlines:
- IV. Complete the words.
- V. Translate the following word-combinations from Russian into English consulting the article.
- Financial public relations
- How do you define financial public relations?
- The basic task
- Corporate public relations
- What contribution does financial public relations make to the success of a company?
- What are the rules that govern financial public relations?
- Why has this business become such a major industry?
- Investor relations – Is it public?
- Coordination and consistency
- A time to speak and time to remain silent
- How does it fit in with other areas of public relations?
- In-house or consultancy?
- Vickers plc – a very brief case study
- Conclusion
- A checklist
- Exercises
- Corporate public relations
- Vickers plc – a very brief case study
- VIII. Translate the following text from English into Russian.
- IX. Translate the following text from Russian into English.
- X. Summarize the article “Financial Public Relations”.
- XI. Solve the following pr problem.
- Local government and government relations
- Why central and local government matter
- Effective public affairs
- Defining public affairs
- Central and local government
- Government
- Members
- Local government
- Gaining access
- Case studies
- Bail Bandits – a campaign to change the law
- The execution
- Trident – battle of the dockyards
- Key points
- Exercises
- Business to business public relations by Nigel Lawrence
- The customer rules
- How do you know it works?
- The trade press
- Getting it right
- Being prepared
- Getting the good news across
- Joining forces
- Conclusion
- Exercises
- II. Say what the following refer to in the text of the article under the headlines:
- Public relations for non-commercial organizations
- The mission
- Not-for-profit pr
- The public presence
- Partnership – the sum is greater …
- Provision of services
- Involvement of interested parties
- Case studies – the human face
- Aims, objectives and realization
- Checklist for a successful campaign
- Exercises
- II. Say what the following refer to in the text of the article under the headlines:
- Involvement of interested parties
- III. Match the following definitions with the word-combinations below.
- VI. Translate the following sentences from Russian into English using active vocabulary.
- VII. Translate the following text from English into Russian.
- Sponsorship
- Definition of sponsorship
- What makes a successful sponsorship?
- Do’s and don’ts of sponsorship
- The sponsorship package
- Sponsorship package checklist
- The public relations agency agenda
- Exercises
- II. Say what the following refer to in the text of the article under the headlines:
- The sponsorship package
- III. Match the following definitions with the word-combinations below.
- IV. Complete the words.
- V. Translate the following word-combinations from Russian into English consulting the article.
- Environmental public relations
- Be aware of public concerns
- Chemicals industry – in the limelight
- The Rhône-Poulenc initiative
- Changing public perceptions
- Putting the case for recycling
- Looking to the future
- Exercises
- II. Say what the following refer to in the text of the article under the headlines:
- III. Match the following definitions with the word-combinations below.
- IV. Complete the words.
- (Dorothy Seed. Global warming changes attitudes to nuclear power / Behind The SpinPublic Relations. Http://publicsphere.Typepad.Com/behindthespin/2006/11)
- Glossary a