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News analysis - Jim Faulds and Dunfermline

By The Drum, Administrator

April 8, 2009 | 6 min read

The recent bailout of The Dunfermline Building Society saw one of Scotland’s marketing legends receive a good kicking in the media. But did Jim Faulds do the right things by criticising Gordon Brown? And can the Jim Faulds brand also be saved?

In his role as chairman of the ailing building society, Scottish advertising legend Jim Faulds was at the forefront of this story and, in the end, was vociferous with his criticism of the UK Government’s handling of the whole situation.

The communications strategy of the drama, which escalated and was resolved within the space of week, has been fascinating to watch.

As a result, the questions now being asked are how dented is the reputation of the Dunfermline brand, which based itself around prudency, and how dented are the reputations of the businessmen, such as Jim Faulds, who were involved in running the business?

Graham Isdale, managing director of Trimedia Scotland, was the man handling the communications strategy. A hardened crisis PR specialist, Isdale would only comment to say: “The ideal outcome for Dunfermline Building Society would have been for it to continue as an independent mutual, but the second best outcome is what has been achieved: that it has become part of Nationwide, the biggest Building Society in the world; that it has retained its headquarters in Dunfermline; that most of its staff will retain their jobs and that an iconic Scottish brand is to be retained.”

Despite the move of Nationwide to take on the strongest assets of The Dunfermline, the whole situation has been another blow to Scotland’s proud financial reputation.

Tsunami

Jack Irvine, executive chairman of MediaHouse, compares the negative press coverage to “a Tsunami” when asked how he felt the building society reacted in implementing its PR strategy to handle the situation at hand. And believes, as a result, the communications was reactionary.

“Because events have moved so quickly in the past few days, I get the impression that there is no PR strategy at all, but I’m maybe being unfair there,” says Irvine.

Indeed, The Drum understands that while a communications strategy was in place ahead of the release of the Society’s annual figures, which would have revealed its problems as a result, it is also believed that the story began ahead of the Building Society’s plan when the company’s dire situation was leaked to The Scotsman newspaper.

With all the attention the story was getting, Jim Faulds – founder of much celebrated Scottish ad agency Faulds and currently non-execuctive chairman of Newhaven Communications and digital media firm I-Design – took centre stage. As an ad man in charge of a major money-lending institution, the media warned he could find himself tarred by the same brush as former HBOS CEO Andy Hornby – the ‘grocer in charge of a bank’.

But, as a popular figure in the industry for decades, Faulds is also known as one of Scotland’s shrewdest and most highly respected businessman. While his reputation will have taken a tumble as a result of of his involvement, his integrity will remain unquestioned having come out fighting to address the media.

“He’s a very popular guy and he will bounce back from this,” Irvine explained when asked how badly Faulds’ personal brand will have been hit. “The tragedy at the moment is that if you are in banking or finance no one has a kind word to say for you. But what might work for Jim, is the nationalist aspect to this, as he looked to protect a Scottish brand. The people who are likely to come out worst will be Gordon Brown and Alistair Darling.”

Irvine continues to say that he was not surprised by Fauld’s reaction and describes him as a “100% media professional”.

The political questions raised by this debacle have also seen some reputations built as others are tarnished, claims Lindsay McGarvie, director of McGarvie Morrison Media.

“Rather than Labour teaching SNP a lesson, this may actually rebound and work well for the SNP Government. In that case, Jim will probably be seen to be patriotic and level-headed. The bad guys out of this are not going to be Jim and Alex Salmond, the bad guys are likely to be Brown and Co. It will underline the media theory that Brown and Co have completely lost the place.”

McGarvie agrees with Irvine that Faulds was right to go on the defensive and that this was likely to have been his natural instinct, but questions whether he forewarned the board of Dunfermline that he was going to do so... and what he was going to say.

“There should have been much more open lines of communication internally within Dunfermline. If this had been the case, they might not have ended up in this media situation. Some guys are obviously trying to keep their powder dry with the Treasury and are looking to fight a rear guard action, which has been completely scuppered by the chairman and figurehead.”

The events of the past fortnight have raised questions as to whether a marketing figure has the clout and experience to head up a financial company. Or any other blue-chip firm, for that matter.

However, Erick Davidson, chairman of design company Tayburn, says that people with marketing backgrounds are ideally suited to bring their experience and knowledge to the role of chairman.

“To be a successful chief exec or chairman you need to be the right kind of person with the right talent and the right kind of personality,” explains Davidson. “You can’t be a shy and retiring or self effacing person in either role. You have to be a businessman with very wide experience. That’s the most important thing – you need to be a business person with a knowledge and enthusiasm for that particular industry... In which case, marketing people are well suited to such roles having forged successful careers in being experts in a wide range of very different client business.”

One thing is for sure, Dunfermline Building Society will continue, maybe not as we knew it, but that it has survived is ultimately the best news for all concerned.

Fauld

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