Ruder Finn
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Ruder Finn

Rumors of another management split, which could see co-CEOs Kathy Bloomgarden and Peter Finn going their own ways, creates some uncertainty about the long-term future.

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Ruder Finn saw fee income decline by 7 percent in 2009—probably about the industry average—and ended the year with fees of around $90 million globally, slightly more than $70 million of them in the U.S. However, a strong fourth quarter—better than 12 percent growth—gave the firm plenty of reason to be optimistic about 2010 and the continued success of its “four pillar” strategy. There was new business in all four areas in 2009: in health and wellness, work from Bayer, Merck, Solvay, Novartis, and Guardian; in public trust, assignments from Microsoft, the Swiss Private Bankers Association and a high-profile but confidential automotive client; in connectivity, new additions included Pepsico and Cotton International; and in life and style there was work from Tropicana and
Ruder Finn continues to be dominated by its huge New York operation, one of the largest public relations offices in the world, but last year saw most of the growth coming from the regional network, with the Washington, D.C., Chicago and RF West (Los Angeles and San Francisco) offices up by 10 percent. The firm has also made a conscious effort to identify leaders for each of its four major practices in each of those offices, and balance the portfolio of business across the network—although New York remains the hub for most of the healthcare business; D.C. is focused on corporate and public trust issues; and San Francisco continues to be a lead for much of the connectivity work.
With just nine offices outside the U.S. (three of them in China), and only about 20 percent of its revenues coming from overseas operations, Ruder Finn cannot match its full-service rivals for either its global footprint or a history of serving multimarket clients. Ruder Finn ended the year with about 180 people in its Asia-Pacific operations, the vast majority of them in the Greater China market, which includes offices in Hong Kong, Beijing, Shanghai and Guangzhou, with just 15 in Singapore. The firm celebrated two decades in the Asia-Pacific in 2009, and did so in style, with revenues up by about 15 percent. An impressive client retention record helped but there was plenty of new business too, from the Business Week CEO Forum, CITIC Bank, Cotton Incorporated and Cotton Council International, Credit Agricole, Kimberly Clark, Lamborghini, Pfizer, and the LOTTO Sports Brand in China. In EMEA, Ruder Finn’s management team is hopeful that the firm’s U.K. operations have turned a corner following the appointment of new managing director Nick Leonard, former head of Lewis PR’s Octane subsidiary, in February of 2008. They can take encouragement from the fact that the London office appears to be in a stronger commercial and operational position now than it was going into the recession, using the turmoil of the past couple of years as a platform to transform the agency and expand beyond its healthcare foundation into broader technology and corporate work. In France, the firm added Philippe Raffin as managing director from Porter Novelli in 2009, replacing Mai Tran who moved within the Ruder Finn network to head the firm’s healthcare business in China.
It is now three years since Ruder Finn reorganized its business around four pillars, and the strategy has led to a significant restructuring, including the shedding of some business that did not fit with the firm’s long-term plan. Healthcare remains the largest of the four market segments, with slightly more than $50 million in fees, and while the business was down slightly in 2009 Ruder Finn remains among the market leaders in the pharmaceutical sector. The firm has about $33 million of business in the corporate and public trust arena, which was the only part of the business to show growth last year, with new corporate reputation and change management assignments. There’s about $20 million of global connectivity work (the numbers add up to more than 100 percent of revenues because some business is shared between practices), with significant growth in Microsoft work and an expansion of the RFI Studios business, Ruder Finn’s creative and digital business. The life and style segment of the business is the smallest, with fees of around $18.5 million, and—in part because it tends to be more project-oriented—saw a worrying decline last year, down about 18 percent.
As an independent, Ruder Finn had more latitude to invest in new talent in a downturn than its publicly-traded peers, and continued to deepen its bench throughout the year. Perhaps the most significant new hire of 2009 was Mindy Gikas, who joined as senior vice president for human resources and recruiting from a similar position at Ogilvy Public Relations, signaling the firm’s commitment to attracting and developing top talent. New additions in the health and wellness practice included women’s health expert Kristin Gearty, formerly of Ogilvy; senior VP Sherry Goldberg, formerly of Porter Novelli; and Sara Latham in Washington, D.C. In the connectivity practice, the firm added Robert del Principe as creative director; in public trust Tegwyn Collins joined as senior VP from Porter and Julie Johnson; and in the life and style group, both Daniel Pooley and Sue Canepa joined in the Chicago office.
As an independent, Ruder Finn is not subject to the tyranny of quarterly earnings, and can make investment decisions that are difficult for holding company-owned agency. So while revenues were down, headcount was actually up slightly (about 5 percent) as the firm sought to take advantage of a more plentiful supply of talent. Ruder Finn also invested about $1 million in upgrading its technology and took a long-overdue decision to refurbish its New York headquarters offices. Perhaps most surprising, however, the firm almost doubled its profit-sharing pool in 2009 in recognition of employees’ hard work during a difficult year and increased its 401k match by 50 percent. On the professional development front, RF introduced a new training program with a commitment to being the offering some of the best professional development resources in the industry.
Ruder Finn does not produce a particularly impressive volume of research (although its RF Insights division does a lot of work with clients); nor does it spend a lot of time discussing new methodologies or processes. Most of the firm’s thought leadership activity comes in the form of published work: a PR ethics blog by Emmanuel Tchividian that considers some of the difficult dilemmas facing professional communicators (and builds on a passion of founder David Finn); Kathy Bloomgarden’s book on Trust; the Move magazine, which contains interesting articles by people from the firm’s offices around the world.
Novartis remains Ruder Finn’s biggest client, and the one for which the firm does much of its best work, particularly in the corporate reputation and corporate responsibility arena. Last year was a challenging one in reputation terms, with the firm leading efforts to rebuild trust in business generally and the pharmaceutical industry in particular in the wake of the financial crash and the debate over healthcare reform, while also highlighting the company’s sustained and substantial efforts to raise awareness of malaria. Other highlights included corporate reputation building for lithium ion battery manufacturer Quallion, the introduction of the pocket-size Viao P for Sony Electronics, PR support for Microsoft Health, and a host of creative digital work including website design, the creation of widgets and apps, and social media outreach.
Ruder Finn has not been able to capitalize on its independent status quite as effectively as the only larger full-service firm to escape the clutches of the giant multinational holding companies, but it has taken the chance to set itself apart from the crowd with its new practice structure, which has not really attracted the kind of attention it deserves. Its four groups—life and style, health and wellness, global connectivity and corporate and public trust—are actually much more reflective of the expertise most clients are looking for today that the tradition corporate, consumer, healthcare, technology mix. The firm needs to work harder, however, to explain what makes its approach so different, and to demonstrate thought leadership in each area.
At the end of 2009, it looked as though Ruder Finn was one of the few firms to have a “good” recession. Fees were down slightly—not nearly as dramatically as most of the giant holding companies—and the firm’s independent status had allowed it to continue investing in talent (both new hires and internal development) and infrastructure (a major redesign of the New York headquarters). The firm looked to have decent momentum going into 2010. But rumors of another management split, which could see co-CEOs Kathy Bloomgarden and Peter Finn going their own ways, creates some uncertainty about the long-term future.
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