. The Transom .

Sunday, April 23, 2006

Companies should pay more attention to conflicts of interest

The Wall Street Journal reported this weekend that Goldman Sachs Group has come under fire recently (and been fired) for their multiple conflicts of interest. How can they give advice in your interest if their corporate investments are in the interest of your rivals? It's no small secret that Goldman Sachs can make more money by 'playing the field,' which is why they risk walking the line of smart companies relieving them of their duties when these conflicts occur.

The same is true when hiring a communications agency. If you are Coca-Cola and hire me to market your product or company, would you feel secure if I also represented Pepsi? I highly doubt it.

Companies today want to hire firms with experience in their field, but not current experience. And that's the catch. Too many communications firms represent competing companies or interests. Why? They are either specialty shops or they have amassed so much experience in one industry they feel it would be a waste not to use it. And that leads to my problem with niche firms. It simply creates conflicts of interest and limits that firms growth. I believe that to best serve our clients, communications professionals have to be very well versed in multiple industries and disciplines. It brings outside of the box thinking and different perspectives to each program. It's healthy for the strategy.

Be warned of the agency that tries to tell you it won't be a conflict because a different team will be working on each account. If push ever came to shove, the client with the biggest budget will win.

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