A strategic relationship

How much should your public relations company know about your business plan? More than you think, Brett Bowes says.

At first, I’m confused as to why I am sitting across from Brett Bowes, Chief Executive Officer, TerraNova Strategic PR. I have shown up at the Rolla Residence in Bur Dubai, after all, for an interview with a representative from Hala Supply Chain Services to discuss the logistics industry in Saudi Arabia.

“Why have they sent me their public relations guy?” I ask myself.

But I quickly realise that Bowes is more than your typical public relations representative. He not only manages the marketing and communications for Hala, but has played an important role in developing the Saudi-based logistics provider’s business plan.

Brett Bowes, Chief Executive Officer, TerraNova Strategic PR

“I have worked more in client businesses than I have communication strategy businesses,” says Bowes.

“My sense of communication businesses – public relations and advertising in particular was that they were populated by very able, very creative people who knew a lot about what they did, but not as much as they should have known about their customers.”

Bowes’ services appear to expand past those of the typical eventholding, interview-arranging, press release-emailing communications company. “Having been a user of advertising, public relations and communication businesses, I thought that there was a gap for a communication business that did understand strategy, and maybe even created the strategy,” he explains. “That way you can write cutting-edge stuff that actually opens the way for sales growth and for market expansion, as opposed to just reporting when a deal is made.”

TerraNova’s logistics work began in 2002 with its young client, South African based Barloworld Logistics (Barloworld now owns Dubai-based Swift Freight). “Barloworld is probably the fourth biggest logistics business in South Africa now, after five or six years,” says Bowes, “and by far the biggest top-end logistics solution provider.”

Impressed by Barloworld’s success, the Hala Group, which owns television stations in Saudi Arabia, as well as Avis car rental and parcel delivery giant Hala Express, approached TerraNova to help them set up a supply chain company in the Kingdom. “Hala Supply Chain Services had positioned themselves as a 4PL and they were having limited success,” says Bowes. “They thought it would simply be a matter of doing what Barloworld did again.” But Bowes recommended conducting research before moving forward.

“If you don’t understand the terrain, don’t go out there and start talking,” he says.

TerraNova was able to gather enough information on the status of Saudi supply chains to offer targeted advice. “What we found was that Saudi Arabia has a logistics environment 15 years behind in terms of its development, even compared to South Africa,” he says. “The country was not ready for a 4PL provider at all.”

Bowes describes Saudi supply chain managers as the “DIY” (do it yourself) type. “They want to run everything and control it themselves,” he explains. “The only thing they outsource at all is transport, and only because of the massive growth and high cost of additional trucks. By law they have to clear through customs with an agent, so there is quite a bit of clearing, but not a lot of forwarding.”

According to TerraNova’s soon-to-be-published Supply Chain Intelligence Report, the status quo needs help. “Despite the fact that these supply chain managers are mainly DIY, their improvements in the supply chain yield very bad results,” says Bowes.

“They don’t achieve the success they want to achieve. They’re failing horribly from a service point of view. As the economy grows every year, the same old creaking supply chains start falling over.”

Thus, Hala had been aiming too high over the industry’s head. “I think their mistake at the beginning was to look at the supply chain industry and look at the high-end, high-value part of the industry,” says Bowes.

He recommended that the company first focus on basics such as warehousing. “We advised Hala that they need to make their dollars and dirhams and riyals in a 3PL environment,” he says. “That will be the next move, no question.”

Bowes says the company will start with overflow warehousing, offering space to businesses in need. “Lots of companies have built their own warehouses, but they are bursting at the seams because of high volumes,” he explains. “When they find out how useful and efficient overflow warehousing is, they might say ‘Hey, that’s the way!’” But, he says Hala should not give up entirely on high-value work. “We have told them they must position themselves as capable of 4PL work and capable of consulting,” he says. “There are early adapters and innovators who are significantly changing their supply chains.

The government is looking at improving the infrastructure of Saudi Arabia, and they understand that the supply chain is critical. Hala will get some very big 4PL and consulting work out of that, I have no doubt. They have got to keep that intellectual high-ground.”

Bowes says successful businesses defined purely as 4PLs are hard to find. “I think the 4PL thing is a piece of jargon,” he says. “I am not sure it exists anywhere.”

He explains that such companies are unsustainable because they earn their revenue based solely on improvements they implement. “When the improvement has been in process for five or six years, the clients are saying, ‘Why do we need you?’” he argues. “The 4PL is a very difficult model just on its own.”

Another piece of jargon Bowes would rather avoid is the word ‘outsource’. “The word ‘outsource’ is almost a scary term to these supply chain managers,” he explains. “We use the word ‘insource’, because we like to think that we are coming into their business and offering more control and more visibility, not taking things away from them.It is a different emotional approach."

So why should a logistics company focus so heavily on words? “Perception is a target market’s reality,” says Bowes. “Whether you say something or not, they will judge you on their perception of who you are and what you do. If you say nothing, they are going to judge you on what they see, as opposed to what you want them to see. In my opinion, not to communicate is just stupid.”