Ketchum CEO Ray Kotcher in China

 

Written by Wang Zhe     Photos by Zhang Xinbo   Reprinted from the October 2006 issue of Expression magazine with permission.     Since the mid-1980s, many international PR agencies have taken advantage of China’s opening of its economy and reform of its commerce to do business there. In so doing, they have also stimulated the development of the PR market in China and the emergence of local PR agencies. Today, both international and local agencies compete to provide services that are based on industry practices and international standards.     As one of the world’s top 10 PR agencies, Ketchum, headquartered in New York, also saw the opportunities early on and ventured east to China. Ketchum has had a presence in China since 1980 and is now leading other PR agencies in expanding its presence to keep pace with the country’s booming marketplace.   Ketchum’s clients include Procter & Gamble, Boeing and Gucci, and in March of this year, the fast-food restaurant industry leader McDonald’s appointed Ketchum as its PR agency in China. These marquee accounts mark another milestone in China for Ketchum and its Chief Executive Officer and Senior Partner, Raymond L. Kotcher. Mr. Kotcher’s frequent visits to China, leadership of the development of the agency’s specialized services, and history of award-winning work with the world’s largest corporations have underscored his commitment to support Ketchum’s growth and role in this critical marketplace.

         

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

  

 

 

Mr. Kotcher joined Ketchum in 1983 as a Vice President and was named Chief Executive Officer of the agency in 2000. For the past six years, Mr. Kotcher has invested much of his time building and maintaining strong client relationships, managing the global growth of the agency, and expanding and diversifying the agency’s range of services.

    

As a member of Ketchum since 1983, Mr. Kotcher brings a long history in communication and a diversity of disciplines to his leadership role at Ketchum as well as to the industry. This was demonstrated in a speech to fellow PR practitioners at the China International Public Relations Association Golden Awards ceremony in June. Mr. Kotcher’s speech, titled “Journey to the West: How Chinese Companies Can Successfully Engage With Stakeholders and the Media in the U.S. and Europe,” discussed some of the most important trends, issues and opportunities for Chinese businesses to consider in working with Western companies.

      

Mr. Kotcher opened his speech with the following observations: “For more than two decades, there has been tremendous attention on opportunities for Western companies venturing into China. Indeed, in 2004 foreign direct investment poured into China at a record level, with more than $153 billion in new agreements, up by one-third over 2003. With that much interest and attention has come much advice and counsel about how these companies should conduct business in China.” 

    

“Indeed, just look at the industry of consultants and advisory firms that emerged as Western companies began eyeing the vast Chinese consumer market,” Mr. Kotcher continued. “In fact, Ketchum was one of them, recognizing the potential early on and making the commitment to helping our clients as they ventured east.”

    

At the same time, the frenetic pace of economic growth in China has enabled Chinese companies to globalize rapidly as they have expanded into the global marketplace. At this point, Chinese public relations agencies developed the same idea: Chinese companies were starting on their own Journey to the West.

   

Drawing on more than 25 years of experience, Mr. Kotcher offered practical advice on this economic shift:

     

“Let’s first assume that you and your companies have already taken some necessary steps as you enter or eye Western markets. You’ve identified significant business opportunities. You have smart business plans and strong, focused leadership. And while your companies were relatively slow to invest in the West before 2000, with your country’s ‘Go Global’ policy encouraging Chinese businesses to build leading global brands, you are now moving quickly to expand into overseas markets. . . . 

    

“But wherever your companies or clients are investing abroad, a strong communication plan helps you turn opportunity into reality. In addition, remember that just as relationships – quanxi – are vitally important in Greater China, relationships are important in the West with all your stakeholders – from consumers, vendors and partners to the media, government officials and others who can influence your products and services. While developing close and personal relationships is not perhaps as critical in the West as it is in China, it’s still important.

       

“Another key to our market is that it is getting more culturally diverse all the time and each region has its own cultural idiosyncrasies. Don’t make the mistake of thinking that the U.S. is a homogeneous market, just as some Western companies erroneously used to treat China as one homogeneous market.

       

“Reflecting this heterogeneous marketplace, there is a learning curve for overseas companies in the U.S. Some consultants contend overseas companies should take 18 months to get acquainted with the particular marketplace and seeking business contacts.

          

“So to get you on your way, here are a few insights about how we Americans behave in a business context, including our values and ways we like to forge business relationships.

      

“Generally . . . Americans communicate feelings freely; we are verbal, straightforward, assertive and optimistic. We are more action-oriented, and favor a can-do, anything-is-possible attitude. . . . We frequently speak in questions, seeking opinions on a wide range of issues and matters. . . . We are insular, with less of an understanding of world events or geographies than our counterparts.

          

“Perhaps because our culture is relatively young compared to yours, we do not have the sense of the long time horizons that you do. We tend to emphasize action now, debate later – so the pace of transactions is faster. We really do believe that ‘time is money.’ Related to that, we expect results . . . fast. We expect a bottom-line impact and work hard to deliver against those expectations. We assume that others have done their homework and are prepared.”

         

Mr. Kotcher pointed out that not following some of the basic rules of the “Road to the West,” such as those outlined above, can lead to results not living up to expectations. He concluded his address with the following observations:

          

“As Chinese companies engage on their Journey to the West, they should remember the following key lessons:          

1. Communications must not simply be a situational response to events. Tell your story early and often, be consistent, and consider all your stakeholders in maintaining this transparent relationship.
2. Be transparent about your U.S. operations, including adherence to the increasingly strict accountancy rules in the U.S. . . . Adhere to U.S. accounting rules and regulations, regardless of where your stock is traded because, over the long run, it will add to your success.
3. As the old saying goes, ‘When in Rome, do as the Romans do.’ Simply substitute ‘America’ and ‘Americans’ for ‘Rome’ and ‘Romans.’ . . . It takes time to court relationships and, in the U.S., court them in an open and transparent way. In the process you will gain valuable allies from important influencers. That includes practicing smart government relations locally, in the states and regions you will operate in, and nationally. So relationships matter.
4. Understand what differentiates successful overseas companies in the U.S. and the critical role played by corporate social responsibility in our market. Take the time to touch the local community in a real and meaningful way. Just as many of your companies doing business within China are becoming concerned and involved citizens and being recognized as such by the Guangming Daily, American companies strive to be good corporate citizens as well.
5. Engage the media early and often. Develop relationships with key media reporters and editors. Encourage your CEO and top officials to engage in a dialogue with U.S. media and gain – and then sustain – visibility. . . . Again, be transparent and open with the media.  
6. Identify key influencers who can help consumers better understand your products and how they differ from competitors. Even identify detractors and seek ways to soften their misgivings. Directly engage the consumer if you’re marketing products in the U.S. Launch events like shop openings, product launches, and product sampling events. In other words, think through who can help you be successful and who might stand in your way.”

As. Mr. Kotcher ended his rousing speech, he was greeted with warm applause. The applause signified audience approval and agreement, but also conveyed a sense of good humor. Mr. Kotcher has ventured east with his public relations firm Ketchum and has waged a strategic campaign in this market. He shared his experience of operating in this market with his fellow professionals in China as they start to consider the implications of their own Journey to the West. Even though the geographic distances separating East from West are still huge, the psychological distances, experiences and feelings between different people are becoming closer all the time.