Recent events for Bell Pottinger UK have led to its Asia counterpart Bell Pottinger Asia ]distancing itself from the scandal – by renaming itself to Klareco Communications. The name change last Friday took effect in markets such as Singapore, Malaysia, Hong Kong and Myanmar.
The move was to emphasise that its Asia team operates as a separate legal entity from Bell Pottinger in the UK. In a press statement announcing the move, Ang Shih Huei, CEO of Bell Pottinger Asia, explained that a new ownership structure is also currently underway.
The separation was due to the agency being involved in a recent scandal in South Africa which which saw Bell Pottinger being expelled from UK public relations trade body for its work on a controversial contract in South Africa for Oakbay Capital. The duties with Oakbay saw the agency being part of a secret campaign to stir up racial tensions. The scandal also saw current chief executive of Bell Pottinger, James Henderson, resigning in response to the breach of industry code of conduct in a bid to take responsibility, despite not being involved.
Founder Lord Bell - who resigned last year - admitted to the BBC that it is probably "near the end" with numerous clients, including HSBC, also cut ties with Bell Pottinger.
But will the move to dissociate itself via a name change help Klareco Communication wash away the stain of Bell Pottinger UK?
Lars Voedisch, founder of PRecious Communications, said the move by Klareco Communication was surely a "radical one", but changing the name alone won’t do the trick. The PR firm needs to show visible efforts to get things back on the right track. He added:
I believe it’s the right move - as the original brand name is toxic and associated with unethical behaviour.
Echoing the sentiment was Nick Foley, president for Southeast Asia Pacific and Japan for Landor, who likened the move to what happened with Arthur Andersen – now known as Accenture. He explained that sometimes the brand is so badly damaged, that it needs a different name and structure to move forward.
Foley added that the reasons for separation seem completely plausible due to a prevention of negative brand misattribution from its UK counterpart.
After all, the brand does not want to be sharing the same name as an organisation it can’t control.
“But the reaction to the incident feels like, and is most probably, a knee-jerk reaction to the events which unfolded. The agency can expect some short term pain, but in the long haul it is its relationships with its clients which will see them coming through this,” Foley explained. He added that there is no one size fits all approach in such situations and brands ultimately need to do what is best to ensure it still is able to maintain its integrity and trust from its clients.
Also weighing in on the topic was Joseph Baladi, brand consultant and former CEO of BrandAsian, who added that the whole point about belonging to a group is building reputation.
“Agencies spend time, effort and other resources touting the strength and core values of the collective. It seems self-serving that when things go south for the group the theory should not apply,” Baladi explained. In such cases, crisis management becomes a multi-faceted, multi-level program which provides entities the opportunity to redefine themselves.
How can Klareco Communications bounce back?
When asked how companies plagued in a similar situation as Klareco Communication can bounce back, Baladi said Klareco needs to accept that it is now starting with a cloud over its head . He said:
Renaming exercises are always first and foremost cosmetic efforts.
"If this is the extent that Klareco is only willing to go to, then I think the folks there will find that existing and prospective clients will be – rightfully – skeptical. Klareco will need to carefully go through an internal identity development process,” Baladi explained. However, the challenge with moves such as this is that they take time to work out and to suggest credibility – not only to external audiences but importantly internal stakeholders as well. Hence, Baladi said that Klareco’s senior management will also need to make its case publicly.
A collection of nice words expressed on a new website or communicated through trade articles will be breathtakingly not enough.
Meanwhile, Voedisch is of the view that the agency needs to play down any association with the heritage brand at the moment and lay low for a while. Only then can it start getting involved in discussions about how to implement and adhere to ethical guidelines in the region.