Lord Bell on International Business in the 21st Century

​Lord Tim Bell is the Chairman of Bell Pottinger Private, the third largest public relations agency in the UK. 

Lord Bell is a world renowned advertising and public relations executive.  He worked in several advertising agencies before helping to found Saatchi and Saatchi in 1970, where he was Chief Executive.  He then set up Lowe Bell Communications in 1987 and became Chairman of Chime Communications in 1994.

Instrumental in Conservative election campaigns, he is seen as a founder of the modern PR industry.  Lord Bell was knighted in 1990 and made a life peer as Baron Bell of Belgravia in the City of Westminster in 1998.

Following is a conversation he had recently with Richard Torrenzano:

Richard Torrenzano:  Tim, tell me a little bit about the current economic conditions in the UK and Europe. What are you anticipating for 2013?

​Lord Tim Bell:  Economic conditions in 2012 were truly terrible with much gloom, doom and poor statistics. So much rubbish about the Eurozone: who was going to default and who was not. In the end, the Germans would bail everybody out.

The stock market and business prospects were very negative. 

Most companies were saving money and keeping it … rather than investing. Those companies which were making profits had very low cash conversion rates.  Everybody just basically closed their shutters. They stopped hiring new people. They stopped growing. They stopped expanding. They stopped investing in their business and just walked around moaning.

RT: What do you foresee for ’13?    ​

LTB:  The gloom is lifting a little bit. But we do not have a government. We have a gerrymandering coalition that does not have authority or any real influence. There is very little direction or leadership coming from the UK government.

The leaders of British economic life - the banks - are in total disarray. Everybody thinks they are completely corrupt. Nobody is being punished for the appalling things they did in the 2008 financial crisis. Everybody is very dissatisfied by it.

I think it will get better in 2013, but not a lot ... unless one or two of the things that people have pushed very hard for actually do come to fruition. For example, shale gases.

We have enormous reserves of shale gas in the British Isles. We have extracted them easily through fracking. But, the government is very timid. Finally, at the end of last year it approved a start again to fracking, but only on a very limited basis. If we got on it, we actually could produce 25 percent of our domestic gas consumption.

There are a lot of things like that. They have issues about airport capacity. There is the very constant, long-term debate going on about whether we should have more runways at Heathrow or build a new airport. It is completely obvious that we need to build a new airport. 

But, this is a government that does not want to upset anybody. In the words of the immortal Lady Thatcher, “You cannot make an omelet without breaking eggs.”

RT:  You took your company private last year. Did that action work well?

LTB:  It has worked extremely well, in three ways.

First, we managed to keep virtually all the business of the company we bought except one account. The only account we lost we replaced a week later. That went very well.

We run the company much more efficiently. We have a very high cash conversion rate. We have already paid off a million British pounds of the ten million pounds we borrowed.

We did that by spreading our wings. We went overseas a lot: to Africa and the Middle East, and to Asia.

In a world where you can fly and communicate on mobile phones and through the computer...you do not need all these great physical presences. We have a sort of commando team, which we fly into different places. That has been very successful.

RT:  What markets in Asia?  Why are you attracted to the Asian market at this time?

LTB:  We set up an office in Singapore about 18 months ago as a joint venture. We have now bought out the joint venture partner and have sent Piers Pottinger, my partner down to Singapore to run it. He is looking at Hong Kong, Malaysia, Indonesia, the Philippines, and Thailand in the same way that we look at expanding across Europe.

We were attracted to this region for three reasons:

First, it is an area of fast growth in all of those markets.

Second, it is extremely immature in its communications’ capabilities.

Third, is in this particular case, Piers is very knowledgeable and experienced doing business in the Asian market.

RT:  The UK won’t conduct an election until 2015. Do you see any early opinions forming?

LTB:  Well, at the moment if you look at the opinion polls, you would assume there is going to be a landslide victory for the Labor Party. But you can never really tell. There is a very important difference because every single British government since World War II has won the next election. Not necessarily the same prime minister, but the same party.

This is a coalition government that will not be standing at the next election. There is only one government that was not reelected, which was Ted Heath’s government in 1970, which was a terrible government. Probably the worst we have had in my lifetime. 

At the moment, it would be clearly a Labor victory. However, not a Labor victory with any enthusiasm. But a Labor victory because the other two parties will be criticized for what has happened during the period of coalition. 

RT:  Tell us a little bit about the changes you have seen as a giant global pillar of communications. What are you predicting for the next couple of years?


LTB:  Well, the diversity of the media, both online and offline, make it more and more difficult to achieve any significant impact. You cannot reach a large chunk of the audience at the same time. You have to do it over a long period across a whole range of distribution channels, including a hell of a lot of Internet channels. It is difficult to produce the kind of ideas that capture people’s imagination.

Communication practitioners have to learn to develop high impact campaigns based around a very core idea that they can execute in all sorts of different ways. Somehow make it have a cumulative effect; which used to only be achieved by running a commercial at all times. Now, you have got to program lots of different things. 

No one really knows how many times it takes to have an impact. One of the core parts of that now is public relations. You are able to sell an idea to the media and pay for it through websites and advertising, and so on.

Advertising on the mobile platform will grow dramatically. The quality of the advertisements hopefully will improve. At the moment they are nearly all rubbish.

We will see a lot more sports sponsorships because everyone realizes that sports is one of the most important things in people’s lives. Associating ourselves with it gets you huge credibility with the consumer audience. However, people will attend less sporting events. We have just too many world championships – too many rugby matches, and football matches, and American football matches, and tennis matches, and so on. 

RT: Other than the media, what do you foresee for the next few years in business?  

LTB:  The problem is the digital world has not learned the difference between volume and quality. The digital world adds everything up in numbers, how many hits and all that stuff. What they do not measure is whether or not it has any effect on their audience. It is not doing that well. They do not want to be good at doing that ... because it would spoil an awful lot of their cost calculations. 

The digital world speaks only to itself. It does not speak to anybody else. It has even invented a new language so that nobody else can talk to them.

Inevitably, that means that there are myths and strange things. Companies end up participating in the digital world simply because they feel they have to be current -- their competitors do it -- not because it produces measurable results.  That has always been one of the most important motivations in growing the activity of the business.

But, people will start to see through the digital experience. I am sure that offline media will diminish. I do not think viewing will diminish, but the number of television stations may because there is not enough money to support them.

Almost all of these great big digital businesses, whether it is Twitter or Facebook are really not buoyant. They are regarded as disappointing. That is because it is all measured by quantity and not by quality. 


RT: Changing subjects; give us a view today of the United States from England’s or Europe’s perspective? ​

LTB: Well, I am a Conservative. You would not expect me to be full of joy that America is being turned into a European socialist country. It is a great disappointment to me that the Republicans are so absolutely useless at arguing their cause and just get distracted by utter trivia. 

They do not argue that core values of America are small government, and low tax, individual liberty, and so on; which is what Romney should have been talking about. Not the ridiculous nonsense that he went through trying to rubbish a bloke who is admired. 

I think from here what we see is an American loss of self-confidence. I think the sort of failure to properly resolve Iraq, and Afghanistan, and so on has been very unhelpful. We think America does not really know what its place in the world is anymore. 

It does not know whether it is a free market, individual liberty, entrepreneurial country; or if it has turned slowly into one of those countries where 50 percent of the population lives off handouts from the other 50 percent. 

RT:  The UK will see an extension of the Royal Family this year. Any views or thoughts on that?

LTB:  Well, I find all of that stuff utterly boring, and dull, and irritating. I know I am going to have to put up with months of pictures of the baby, intimate details on how it was conceived, and born. It is utterly and excruciatingly boring.

RT:  Has there been a different approach by the media since Diana, Princess of Wales died?

LTB: What changed it was the Jubilee, the sheer quality of the Queen.

The Diana period was a very bad period. Of course, the Labor government and the appalling Tony Blair fed the country some kind of loathing of the Royal Family over their supposed ‘getting rid’ of Princess Diana. It is very difficult to answer why people become famous, is it not?  Most people are only famous for 15 minutes as Andy Warhol said. But some people, just simply because of the role they occupy, stay famous for a long time. She has managed to stay famous even after her death.

RT:  Have you been active in the House of Lords?  What are the two or three key issues they are going to face in the next year or so?

LTB: Well, I voted a lot, but I do not speak very much because it is a coalition. I cannot bear the liberal Democrats who are our partners there. They disagree with us and we disagree with them. It is a rather hostile environment, but we all do as we’re told when it comes to voting. I do not think the House of Lords will have any influence over anything. It is part of the process, but it is not a process on its own. It is sort of required to endorse or question all the things that it does…But I do not think it is going to make any difference to the outcome of our economic or social divide.

It is a pity, too. It was a great institution which was ruined by Harold Wilson and then damaged even further by subsequent prime ministers.

RT: What is something you find interesting today?

LTB: Sky Television is running a series of promos. Like little bits and pieces during the programs instead of commercials. Two of them are the economic editor of Sky talking about the state of America in which he says America used to be the great bastion of free enterprise, and success, and power. Now, it is rundown, and broken, and in sharp contrast to the Clinton years, perhaps. I slightly disagree with that. 

The only question being asked is how is Obama going to fix America? I’ll be amazed if the American ambassador -- when we get one -- does not go trudge to the Sky’s headquarters and shout at them. It is doing terrible damage to the reputation of America. It is like every day there is a commercial running saying America is broke. It is extraordinary that nobody is doing anything about it.

There are things going on, but people are just not interpreting them properly.

America is the most important country in the world from my way of thinking and my life. There could not be a better place to prosper. That is no longer as true as it was, but it is still true. But I do think it is tragic watching the Americans not understand their strengths; playing to the wrong things. I think it is very sad.