Corporate Integrity 101 - The Red Flag Group
6 Pages
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Corporate Integrity 101 - The Red Flag Group

Downloading requires you to have access to the YouScribe library
Learn all about the services we offer
6 Pages


  • cours - matière potentielle : business
  • exposé
  • revision
  • redaction
Corporate Integrity 101 Scott Lane CEO of The Red Flag Group A collection of articles on making Compliance a Competitive Advantage
  • entrenched culture of relationships as part of the daily operation of businesses
  • significant compliance risk
  • legislation guidance
  • uk bribery act
  • corporate scandals
  • bribery
  • compliance
  • companies
  • part
  • business



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“Race to the bottom” Is Healthcare Communications putting its own future at risk? Summary of findings from the HCA 2010-11 Benchmarking Programme
2Introduction 2Key trends from the survey 4HCA Procurement Initiative 5Appendix 1: HCA Pitching Code of Conduct 6Appendix 2: About the HCA 6Appendix 3: About the HCA Benchmarking Survey 6Contacts
Cash flow continues to be a significant problem. “A thriving and positive pool of agenciesDelays in purchase orders being raised means that agencies often have to start work in ‘good faith’ is beneficial for both agency and client” and payments can be delayed further as a result. Stephen Cull - Head of External Pharma Agencies are still participating in large pitches, with Communications, Novartis Pharmaceuticals two-thirds having been amongst six or more competitors UK Limited at a pitch during 2010. With the average pitch costing each agency over £20,000 (fees at chargeable rates + expenses for a £200K pitch) this represents a huge - and Times have never been tougher for pharmaceutical industry unsustainable -level of investment for both the agencies communications teams, with falling budgets and shrinking and the companies involved. It’s unlikely that companies headcounts, yet more emphasis on developing meaningful with experienced in-house communications specialists partnerships with customers both in the UK and globally. would support such practice. It is not surprising that there is increased focus generally in Unnecessary pitches still appear to be taking place – the pharmaceutical sector on the procurement process, as a 12% of unsuccessful pitches by the survey participants means to drive down supplier costs. Yet as this year’s annual failed because no agency was appointed – surely a waste HCA Agency Benchmarking Survey shows, the logical exten-of valuable time for all involved? Again, it seems likely sion of a cost-containment approach could result in a world that these may be pitches led by teams lacking a depth where healthcare communications is generally devalued and of communications expertise. there are no winners. The HCA warns that pharma companies must appreciate the THE HIGH COST OF WINNING NEW BUSINESS value of the specialised skills, creative thinking and strategic challenge that specialist communications agency partners • Percentageof new accounts won via can bring, and that, equally, consultancies must stand up for pitch = 56% their own worth and not allow their services to become commoditised. • Averagecost to the agency (fees at chargeable rates + expenses) of a 200K pitch = £22K Key trends from the survey • %of agencies that have taken part in a pitch with 6 or more participants = 62% Continued pressure on agency profit • %of unsuccessful pitches where no margins agency is appointed = 12% Only a minority of organisations made changes to their • Averageno. of participants in an online billing rates in 2010 and these standard rates continue auction = 17 to be subject to discounting. As clients feel the pressure on their own budgets, the most common specificof agencies that said there• Percentage pricing ‘arrangement’ is still a straight fee discount,were ‘no benefits’ of taking part in online with no reciprocal benefit for the agency. Other typesofauctions = 78% arrangements – for example ‘no pitch’ discounts, which could potentially represent genuine ‘win win’ -
example, planning & programme development and An ongoing need to keep pace with even, on occasion, strategic counsel are being seen as new developments and maintain aadd-ons to the service that’s being paid for. For consul-tancies already working with smaller budgets these costs skilled team become even harder to recover, but more important is the potentially negative impact of devaluing the most “As external competition for high quality highly skilled services. employees continues, it remains vital to ensure individual reward and appropriate “Communications agencies should expect career progression for the team” to receive a suitable level of reimbursement in acknowledgement of their expertise HCA Agency Benchmarking Participant & experience. Legal firms are not expected to haggle over their rates & reducing communications agencies to this level A big shift towards digital communications has meanta requirement for consultancies to up-skill currentthreatens to devalue the entire profession. staff and bring in new talent. Other changes have beenNormal competition will ensure that rates are the shift from PR towards the non-branded/medical maintained at a price the market can bear, with education end of the communications spectrum and the uncompetitive agencies pricing themselves out of need to increase global expertise, and strengthen market the marketplace.” access and public affairs offerings, all of which require time and financial resource to implement. Jo Taylor - Communications Director, There is now even more emphasis on compliance.Daiichi Sankyo UK Ltd Agencies must expect to invest an increasing amount of time to ensure that their own staff are fully conver-Online auctions are a recent trend that has not been sant with the Code, but the survey indicates that some welcomed by agencies – nor indeed by a number of pharma companies are expecting agencies to provide in-house communicators to whom the HCA has spoken. Code advice to the client as ‘part of the service’ without Here the aim is to identify a short-list of the lowest it being included in billable hours. bidders – a true ‘race for the bottom’. Online auctions also run the risk of quantitative factors dominating The survey revealed a clear trend towards agencies qualitative assessments of the best agency for a given managing a greater number of lower value client project. With little opportunity to demonstrate the value accounts – this means that staff are spread more thinly, they can bring, and as many as 17 participants in the making it a tougher challenge to meet all their clients’ average auction, it is not surprising that few agencies needs. see any benefit in taking part, yet almost half those The competition to find and retain talent seems to be surveyed have done so on occasion.The process getting even tougher as more people leave the industry also compromises any opportunity for the client for personal reasons such as travelling/career breaks or communications team to contribute their expertise to family reasons, with knock on effects on recruitment and the decision-making. training costs. “Reverse e-auctions are an incredibly negative Worrying new developments addition to the procurement process and have undermined the credibility of our whole business. Against this backdrop a couple of recent new developments We have become ‘me too’ rather than genuine suggest that we may be at ‘tipping point’ in terms of the consultants” sustainability of good client-agency relationships within some companies. HCA Agency Benchmarking Participant
A sustainable future?
It is clear that the above trends cannot continue without having an impact on the quality of delivery. There is a real concern that some of these developments may lead to a ‘commoditisation’ of consultancy services, with the client ultimately suffering when consultancies can no longer afford to invest in the best people or when those people are no longer attracted to the industry.
This year’s survey revealed an increased level of staff promotion, despite the fact that salary rises were lower and the average salary bands are static – which suggests that a ‘juniorisation’ of some organisations’ staffing profiles is already happening.
As the industry develops further, pharma will need to be able to rely on bringing in senior level thinking to help them work more closely with the NHS and to promote and protect the future of the industry. We also know that pharma value the continuity that an agency with a history of a brand/therapy area can bring at a time of ongoing and progressive internal changes.
“In this challenging period for the pharmaceutical industry we need big ideas. These are often the result of sustained healthy client/agency relationships. No one wins if healthcare comms is treated as commodity, as the cheapest option is unlikely to produce an impactful campaign”
Stephen Cull, - Head of External Pharma Communications, Novartis Pharmaceuticals UK Limited
The HCA believes that healthcare communications consultancy cannot be treated as a commodity. The challenge is to find ways to work together to indentify where costs savings can be made where appropriate, whilst suppliers continue to charge a fair price for their top level consultants’ time, and the pharma industry continues to pay a fair price, allowing consultancies to make sufficient profit to reinvest in skilled staff and the development of services and expertise for a sustainable future.
HCA Procurement Initiative
One key initiative resulting from the Benchmarking Programme is the HCA Procurement Initiative, the main objective of which is to identify straightforward, practical ways in which we can move closer towards reaching mutually satisfying outcomes and helping agencies and procurement teams to better understand each others’ goals and priorities. Our initial output from this initiative is the HCA ‘Pitching Code of Conduct’ – see Appendix 1. We hope that all HCA member companies will adopt this Code of Conduct and encourage their clients/suppliers to do so. As such this will be one small step towards sustainability.
The HCA would like to thank Chandler Chicco Companies for their support with the design of this report
Appendix 1: HCA Pitching Code of Conduct
Only pitch when we have a genuine requirement for agency support
Consult the incumbent before briefing other agencies
Prepare a thorough written brief and set aside time to clarify the brief/answer questions
Involve all key stakeholders, including procurement and communications, from the outset of the process and allow equal access to them
Share other key aspects of the marketing mix if appropriate, so that an integrated communications plan can be proposed
Allow at least three weeks between receipt of the brief and the actual pitch date to give time to prepare, and if possible provide a choice of dates
Limit the number of agencies pitching to no more than four and share this number with all those involved
Ensure everyone’s time is put to best use by exploring parameters that could be ‘deal-breakers’ (e.g. team chemistry, billing rates) in advance of the pitch
Explain the criteria you will be assessed against
Give a clear indication of the programme size and scope and if possible, provide a precise budget
Not ask for an entire programme to be accompanied by detailed budgets and timelines at pitch stage
Expect to see at the pitch the actual team who will be working day to day on the account
Ensure that the key decision-makers are present and that there is consistency in attendees at all agencies’ pitch presentations
Set a date by which a decision will be made and constructive feedback given and keep you informed if this changes
Decline to pitch if we cannot devote the appropriate time or dedicated account team to the pitch and subsequent business
(As the incumbent) expect an honest appraisal of the background to the pitch
Expect a thorough written brief and the time to speak to/ opportunity to meet the client team to ask questions and clarify the brief
Engage with all key stakeholders from the outset of the process
Share ideas in good faith that they will not be used by another winning agency
Require sufficient time to respond to a pitch brief (at least three weeks) and would welcome a choice of dates for the pitch
Reserve the right to leave the pitch process if the number of agencies is discovered to be too high
Take part fully in any pre-pitch selection criteria such as chemistry meetings and procurement discussions, with openness and honesty
Decline to pitch if we are unable to meet the requirements of the brief or lack the required expertise/ knowledge
Commit to present proposals that come within the budget where one is given, but not be constrained by budget where no indication is given, nor expect to be judged for this
Provide billing rates and guideline costs for programme elements
Ensure that the pitch team as far as possible represents the actual team who will be working day to day on the account
Ensure that any senior presence at the pitch will be reflective of their continued involvement if awarded the business
Appreciate timely, honest and constructive feedback as soon as possible following the pitch decision
Appendix 2: About the HCA
The Healthcare Communications Association (HCA) was founded in July 2001 as an independent, not-for-profit organisation with the stated aim of promoting excellence and best practice in the field of healthcare communications. It grew out of the recognition that healthcare communications was playing an increasingly pivotal role in the strategic marketing plans being developed for pharmaceutical products and deserved a representative body to champion its cause.
The HCA is now a high profile and influential player in the healthcare arena. It has sufficient influence and credibility to shape opinion and lead debate and is flexible and progressive enough to respond to changing circumstances. Membership has expanded rapidly and the HCA now counts a significant proportion of the leading communications consultancies and pharmaceutical companies among its members.
MISSION: The HCA mission is to provide an independent forum to drive the highest standards and promote best practice, innovation and excellence in healthcare communications.
Aline Beresford,Independent market researcher (Sub-Committee Chair) Antonia Betts,Ogilvy HealthPR Julia Cook,StepBack Healthcare (HCA Chief Executive) Claire Eldridge,Aurora Fiona Hall,Chandler Chicco Companies Polly Purser,Chandler Chicco Companies Mark Swainson,Virgo HEALTH
HCA Website
Appendix 3: About the HCA Benchmarking Survey
For nine years the HCA has been successfully running a Benchmarking Survey as a service to communications consultancies. The 2010-11 survey, conducted in May-June 2011, attracted participation from 27 HCA member companies, with broad representation across the spectrum of those providing PR and Medical Education services. Benchmark data is collected for the previous full year – in this case the year to December 2010 – but participants were also asked to comment on the latest emerging trends at the time of completing the survey.
As well as the topics commented on in this report, the survey included in-depth sections on financial performance & billing and salaries & benefits, the findings of which are shared only with participants, due to the sensitivity of the information and to recognise their commitment to the process. A key objective is to gain insights that will enhance the HCA’s role in promoting best practice and fostering productive working relationships between individuals and organisations.
The benchmarking exercise is handled according to the strictest codes of confidentiality, carried out by a specially commissioned, independent market researcher in order to guarantee anonymity and confidentiality, with no data being attributed to individuals/companies or even seen or shared with anyone else from the HCA.
Survey participants have received detailed reports covering all aspects of the findings. Whilst they cannot be publicly named for reasons of confidentiality, the HCA would like sincerely to thank all those individuals that took the time to contribute to this important exercise.
Note:The survey is completed by one key individual (typically the agency MD), with input from finance and/or human resources as required. These individuals are in a good position to give an overview of what is happening within their own organisations, as well as the prevailing attitudes towards communications, though the survey does also reflect the personal opinions of those individuals who responded. Each of the quotations is the opinion of a single individual, and may not necessarily reflect the views of others. Moreover, inclusion of the quote in this report does not imply endorsement by the HCA.