Edelman Reshuffles the Deck on his “Pirate Ship”
Charting the future of public relations
Holmes Report
President/Editor-in-Chief

Edelman Reshuffles the Deck on his “Pirate Ship”

In an industry that often seems helplessly addicted to staff turnover, a pair of regional moves would not normally raise too many eyebrows.

Arun Sudhaman

In an industry that often seems helplessly addicted to staff turnover, a pair of regional moves would not normally raise too many eyebrows. But Richard Edelman’s decision to shift Alan VanderMolen and David Brain into new roles stands out, if only because of the long tenures that each of these executives has brought to their positions.

The pair’s track records are a little like mirror images, characterized by wholesale expansion of under-performing networks. By the time he leaves London for New Zealand, Brain will have spent seven years in charge of Edelman’s presence in EMEA. VanderMolen, meanwhile, heads from Hong Kong to Chicago after a nine-year run as Asia-Pacific president. Inevitably, the interruption of this kind of stability will cause some upheaval; it also offers a useful moment to take stock of progress at the last of the big independents.

Richard Edelman is clear that personal factors played a major role in the two moves, particularly Brain’s decision to relocate to New Zealand. Indeed, it is understood the 48-year-old was ready to depart the agency completely. That was before Edelman spied an opportunity to kill two birds with one stone.

“Coincidentally, I’d been talking to Alan about his son being educated in Chicago,” says Edelman. “And I was looking for a corporate practice chair, and someone to run the practices. Some part of it is suiting people’s personal agendas, but it also suits the firm’s agenda.”

Edelman also points out that VanderMolen’s new role - president and CEO of global practices and diversified insights businesses - is a reflection of the increasing importance of Asia to American clients. The agency CEO is also adamant that the position should not not be viewed as any less significant as the agency’s geographic and client leadership.

“I want the practices to be an equal partner with the geographies and our big client leaders,” says Edelman.

Asia-Pacific

The position’s focus on research and intellectual capital will play to VanderMolen’s strengths. After the remarkable turnaround he  spurred, it might appear unnecessarily churlish to question the 45-year-old’s record in Asia. Yet, after quadrupling Edelman’s regional revenues by 2008, the past two years have seen the agency face some significant challenges.

VanderMolen cannot be blamed, of course, for the economic slowdown, which hit Asian PR markets disproportionately hard. But the agency has also contended with a wholesale restructuring of its senior talent layer, turning over leadership in six markets. While not all of the departures - such as Tyler Kim and Margaret Key in North Asia, and Robert Grieves in Hong Kong - appear planned, VanderMolen says they were “by design”; a natural by-product of aggressive growth ambitions.

"We had to put in place the leadership team that could take us from a $40 million business to a $100 million business,” says VanderMolen. “That is what we struggled with through an economic downturn. Without the downturn, we would have got through that pretty easily.”

VanderMolen is also quick to point out that the team he has now assembled, which includes talented executives such as Mark Hass in China and Michelle Hutton in Australia, is already firing on all cylinders, with regional revenues up 21 percent compared to last year.

Brain certainly agrees, carefully noting that the “fantastic top team” which VanderMolen has recruited will make his own focus about “evolution, not revolution.”

There are other reasons to believe that Brain’s move will be relatively seamless. He spent seven years in Asia-Pacific in the Nineties, working for Visa and iconic ad agency Batey. And he takes over a business that is more or less the same size as the one he inherited in Europe in 2003, which has since grown to almost $100 million in revenues.

“The markets we are targeting are Japan, China and India,” says Edelman. “In Japan, we’re pretty far behind. We have some room for grow - now we are going for depth, not just breadth. A tech boutique in India? Yep, we’d like that.”

All of those plans may come to naught though if Brain cannot make one particular factor work: the decision to base himself out of New Zealand. If Australia is often viewed as a graveyard of Asia-Pacific leadership aspirations, its smaller neighbour may well be the twilight zone. Both Brain and Edelman, though, are certain it can work.

“You just have to do it in a different way,” contends Brain. “There’s no question I won’t be living in one of the big markets. But the plan is I spend a week in market and then a week in New Zealand. If you add all that up, you’ll find I spend as much time in market than I do in my EMEA job in markets outside the UK.”
“It means there will be less emphasis on regional head office,” he adds. “I much more believe in the power of markets.”

EMEA

Edelman, meanwhile, prefers to point to Brain’s attributes as a “very hard worker and a completely diligent person.” If anyone can make it work, it may be Brain, after an EMEA tenure that finds few detractors, particularly where the firm’s consumer and digital capabilities are concerned. Corporate may be relatively underweighted, but a succession of acquisitions and start-ups in key cities such as Abu Dhabi, Moscow and Brussels have helped build the network into a more cohesive regional presence.

Accordingly, the race to succeed Brain is understood to include conventional corporate PR heavyweights and less traditional digital talent, as Richard Edelman determines how best to take the firm forward in the region. Robert Phillips, CEO of the firm’s strong UK operation, is also believed to be a key contender in the fray.

Whatever happens, acquisition will continue to play a pivotal role - as demonstrated by a string of buys that have already taken place this year. For Edelman the question is not so much when to buy, but what - with a growing focus on areas outside the confines of traditional PR. “That’s the cosmic question,” he says. “Do we buy depth in markets? We are going to be opportunistic and it will be ex-US.”

Neither does Richard Edelman see funding as an issue, brushing aside two ideas that have cropped up in recent years: either selling the firm, or taking it public. “I thought about it,” he admits. “If I’d wanted to move onto a different job, I would have sold the firm before the crash in 2008. But I’ve decided this is my life’s work. I like the way firm is going and I think [being independent] is a real advantage and point of distinction.”

Succession

Hovering over all of these calculations is the issue of succession. Edelman is 56, and a sprightly one at that. Estate planning issues, meanwhile, have been resolved so that ownership passes to the family’s third generation. “That is set in stone,” he states. “The key question is whether the firm in the next generation is family-owned but operated by professionals, or whether the third generation has enough ability and desire to do it properly.”

As such, Edelman is “very conscious” of the gap that will exist between when he steps down and his eldest or second child “theoretically” succeeds him. “I’m sure that there will be a period of having a non-family CEO,” he says candidly.

He is equally clear that there are currently three candidates for that particular role - VanderMolen, Brain and Edelman US chief Matt Harrington - which will swell to four when the EMEA leadership is settled. “If I get hit by a truck that’s a very strong thing to have.”

The ambitious VanderMolen, for one, will presumably view his return to Chicago as an ideal opportunity to make his case for the top job. Harrington, meanwhile, has quietly navigated choppy waters in maintaining the agency’s dominant position in the US. And Brain, despite being 10,000 miles away, has something of the wild card about him, not least because he is the only non-American in the fray.

It is certainly a race worth watching, even if all bets are off the table for the foreseeable future. “It’s at least 10 years from now, so it’s a long way away,” says Richard Edelman. “The pirate king enjoys his ship.”

comments powered by Disqus