Diana Marszalek 26 Mar 2018 // 9:00AM GMT
Just three months into the job, chief communications officer Ray Day is moving full-throttle to unleash a new era in IBM's communications efforts, part of an overarching mandate to rally flagging brand fortunes at the 106-year-old tech giant.
A global PR agency review, launched March 9 and set to conclude Thursday, is the centerpiece of Day’s efforts, a process that in the last week resulted in IBM parting ways with its two lead agencies of 17 years — Text100, which opted out of the review, and Ketchum, which didn’t make the first-round cut.
Day’s plan, as laid out in the RFP, is clear — involving a significant overhaul of the measured, incremental approach that characterised IBM's communications under industry legend Jon Iwata. "He’s ripping everything apart," is how one agency source familiar with the situation describes it.
Rather than consolidate the bulk of IBM business with its lead agencies, as the company has done with Text100 and Ketchum since 2001, Day — who declined to comment for this story — is looking to create a “blended team” made up of in-house and agency talent that work together bolstering the business, much like he did when he took charge of communications at Ford in 2007.
Given the scope and complexity of IBM’s business, the work, which in total is worth more than $15m, is expected to favour a couple of firms with global scale, along with specialist consultancies to augment them, according to both Day and the RFP.
The RFP offers some clues as to how specific responsibilities will be divided. The communications team is focused on three primary objectives: improving IBM’s reputation, building brand favorability and expanding communications capabilities. Agencies pitching for the work have been asked to describe their capabilities in a range of pertinent areas — cloud, blockchain, security and research among them.
Accordingly, the RFP notes, anyone vying for the work will be expected to play nice "in a fully integrated way" with other members of the larger team, no matter which agency they come from, or in-house job they hold. This mimics Day's approach at Ford, where he helped oversee the multi-agency Ford team deployed by WPP.
The new Day-driven era in IBM comms is already playing out in concrete and visible ways on the company’s Armonk, N.Y. campus.
Particularly notable is that earlier this month reps from agencies other than Text100 and Ketchum led town hall-style meetings with in-house staffers on such topics as best PR practice, according to sources. Burson-Marsteller (with which Day counts a prior relationship from Ford), Zeno and Praytell conducted the meetings, raising questions about Day’s future plans for these firms.
Many industry sources with longstanding ties to IBM have confessed to a measure of surprise at the alacrity with which Day's plans have unfolded, even if the agency review itself was widely-anticipated.
Indeed, given IBM’s recent struggles, many believe this sort of sweeping change has been a long time coming. "It’s been clear for a while that there’s an unstoppable change agenda at IBM and there was an inevitability about this," an individual familiar with the company said.
It’s also little wonder when you consider what Day, and the larger IBM executive team, is up against; the company has been in the doldrums for years. Like others of its vintage, IBM’s struggles are largely rooted in its efforts to gain a foothold as a 21st century computing company while losing revenue from older, core sectors of the business.
The company reported 22 consecutive quarters of y-o-y revenue declines, until an uptick in Q4 2017 broke the losing streak. At the time, CEO Ginni Rometty said the rise in revenue signaled a turnaround for IBM — tangible evidence that its strategic initiatives to become a leading provider of services like artificial intelligence, cloud-computing and blockchain were working.
Whether the winning streak will continue, however, remains to be seen. Which means that Day’s efforts to overhaul IBM's comms strategy are critical, according to industry watchers. “You could argue with how he’s doing it,” a source said. “But you could argue he has no choice.”
Others pointed to Day's success at Ford, where he led communications as VP for 10 years — a decade that included helping to steer the automotive giant through the financial crisis of 2008. He spent a total of 28 years there before leaving in May in a management shakeup.
“He had a lot of success at Ford and some things worked really, really well,” an industry expert pointed out.
While some critics see Day’s recent moves as hasty, there is more than a measure of methodology to his approach. He has met with in-house and agency leaders to help understand strengths and weaknesses of the organization. A core component of his strategy is building a comms strategy that has credible staying power, so that it can propel IBM into the future, and sustain it once it gets there, sources say.
It also doesn’t hurt that Day joined IBM at an ideal time to remake its comms operations in a manner that reflects his personal style of doing business. His appointment followed the retirement of chief brand officer Jon Iwata, the influential leader who spent 34 years with the company. Day’s predecessor as CCO, Andy Whitehouse, spent just a year on the job.
All of which reflects the considerable communications staff turnover that IBM has experienced in recent times. Other significant departures include VPs Jeff DeMarrais and Paul Bergevin, while Day has made several new appointments to try and change the department's focus and priorities.
Many sources, though, question whether a full-scale overhaul is really necessary, arguing that IBM’s problems are rooted in its business model, rather than its PR initiatives or marketing programs — and that changing the communications operations, no matter how dramatically, is not enough.
Case in point: Watson, the Jeopardy-winning supercomputer, is a household name thanks to smart marketing, yet that celebrity has yet to translate into real revenue in the AI arena. "Communications is really only a good reflection of where the business is at," a source said. "You cannot bend the truth."
Perhaps. But that has hardly diminished interest among communicators, and the agencies they represent, in being part of — and creating — the next chapter in the IBM story.
The company currently works with 20 agencies around the world — including Teneo (which has counselled CEO Ginni Rometty), Highwire, Racepoint and W2O Group — and you would be hard pressed to find anyone that would willingly walk away from a relationship with the iconic brand, a behemoth that counts more than 360k employees in 170+ countries.
"(IBM) has a ton of things going for it," an executive said. "It is one of the most fascinating companies in the world, has a wealth of content experts and businesses and its content is phenomenal.
"As a communicator, you can’t ask for anything better than that."