Searching for the right values

The chief executive of Diageo had something to say the other day that is rather apposite to the mess we're all trying to clear up at the moment.

"We have to accept that our product in the hands of certain people does cause problems for them... for their friends and for their family, and you cannot hide away from that fact; so now, what are we going to do about it?"

Paul Walsh was actually talking about alcohol, and how his company had needed to accept that there was indeed a real problem to get to grips with — and that it was not just a "fake" issue being created by the media, lobby groups and politicians.

But that type of frank and refreshing acknowledgement is what's needed in the trade today when it comes to dealing with licensees. Pub companies need to accept that the old pubco model is broken and find ways to fix it. That's what the debate must be about now: how to reform the tie so that licensees get more reward for their efforts. For as Walsh also said, "Any successful company has to start with its customers, because without these people we are nothing." And in the pubco world, the licensees are customers, and didn't someone else once say, customers are king?

To be fair, Punch for one, has been saying the same for some time — and continues to say so with even more emphasis under its new management. And there are other pubco bosses who say the same. But there is too often a glaring disconnect between what's said at the top and how staff operate lower down the chain. This is a serious problem for any company trying to be more responsive to its licensee customers. Presumably, the heart of the problem is that the need for certain levels of return and the staff bonuses and incentives mean good intentions go out the window. How to redress this so that values espoused at the top translate down through the ranks must all be part of the Bec debate.

After all, values should mean something in this trade — and yet how rarely do we hear anybody talking about them? Management Today recently staged a debate on corporate reputation — it's from that debate that Walsh's quoted comments come — and there were many insights into how companies should look at themselves. One leading consultant said staff these days are asking themselves: "Is this a company I want to be involved in? Do I want to work for it? Do I want to buy from it? Do I want to invest in it? Do I want to support it in any way, shape or form?"

Pubcos need to be asking themselves these searching questions. And the ones who cannot honestly respond in the affirmative to them all must realise they are letting not just themselves and their staff but the whole industry down.

Licensees, though, have their part to play in the great reform process. They too need to change. But that's one for next week...