Paul Holmes 08 Jul 2001 // 11:00PM GMT
As the wave of consolidation sweeps across the public relations landscapes, many skeptics look at the giant multinational PR agencies that have emerged and ask whether a firm with $300 million in revenues and 3,000 employees can generate the creative spark necessary to come up with bold, outside-the-box ideas, whether agency executives answerable to cost-conscious CFOs and holding company shareholders can go the extra mile to deliver the kind of personal attention client demand.
But the biggest challenge facing giant multinational agencies today is not the lack of creativity or shoddy customer service; it’s homogenization. As top-tier agencies grow ever larger, they have an increasingly hard time differentiating themselves from their competitors, most of whom offer the same array of services in the same locations and even use the same language as they attempt to define what their brands stand for.
That’s a problem that GCI Group president and chief executive Bob Feldman recognized when he was an executive vice president at Ketchum—and that occupied much of his time as he sought to create a distinctive culture when he took the helm at GCI in 1997
“When I was at Ketchum we talked a lot about our ‘best teams’ approach,” Feldman says. “But it’s not like other agencies were talking about their ‘worst teams’ approach. In fact, every agency made some sort of promise about their ability to draw together their best talent from around their network. It was very difficult to make the ‘best teams’ promise unique, but what made it work for Ketchum was that it captured the culture and values of the firm. That made it real.”
When Feldman arrived at GCI it was no longer the struggling second-tier player it had been in the early 90s, when management in-fighting led some to speculate that parent Grey Advertising would simply pull out of the PR business. But it lacked a point of differentiation. It was just another large agency—not a giant like Burson-Marsteller or Shandwick, but not a niche player. It needed to develop a character, a personality all its own.
“Every firm has something that is uniquely its own,” says Feldman. “The trick is to find out what is truly, genuinely you. When you find the answer, the words may not sound unique, but if they are true they will differentiate you from everyone else who uses them.”
What Feldman found as he studied his new agency was a uniquely entrepreneurial spirit. “I don’t think there’s an agency out there that would say it was not entrepreneurial,” he says. “But I think it’s more true of GCI than it is of any of the other big agencies. Many of our offices are run by people who have an equity stake, but all of our employees are encouraged to take ownership of the business.”
Feldman set out to reinforce that culture with a unique approach that created dozens of small business units—sub-specialties within traditional practice areas such as healthcare, technology, and financial communications—each of which provided an entrepreneurial opportunity for a business unit leader responsible for attracting and growing clients.
GCI’s strategy, says Feldman, is be “the most entrepreneurial public relations firm in the world.”
“We are in the early stages of fleshing out our business unit strategy, but I think it’s going to make GCI a unique place for people and clients,” Feldman says. “If you look at our organizational structure, the top layer looks like every other agency, with practice areas like healthcare and technology, and a matrix that includes a geographic overlay. But then if you look at healthcare, for example, we have business units that focus on cardiovascular health, or oncology, or the central nervous systems.
“Each one of these business units presents an opportunity for someone to develop a multi-million business, to take ownership of that category. Clients are looking for a depth of expertise in their industries and their markets, and we think this architecture will enable us to provide that depth.”
The architecture is explained in a new book, Growth!, produced by agency management and distributed to all employees over the past month.
“I was sitting around with [GCI North America president] Bob Pearson and [Europe chairman] Adrian Wheeler talking about how we were building the firm, the entrepreneurial positioning, and how we could capture the substance of that positioning for our people around the world, and it seemed as though we needed something more than a brochure or a roadshow,” says Feldman. “We needed something that went into a little more depth.”
The result was a 100-page booklet that was unveiled at the firm’s global forum in New Orleans last month and has since been distributed to employees around the world. The booklet includes a brief history of the agency, a description of its strategic plan, an explanation of the practice area architecture, and information about career development. The idea that employees must be increasingly entrepreneurial runs through the entire book.
The firm’s commitment to the entrepreneurial ideal begins with its positioning statement: “GCI is an organization of business consultants with expertise in communications. We draw from a portfolio of service offering to help our clients achieve their business objectives. We are also entrepreneurs. We seek to build and create both for our clients and within our own organization.
“GCI encourages risk and innovation. We challenge employees at all levels to explore the unexplored. Our people are encouraged to identify opportunities in new market segments and to make a case that we should invest in market development. If the case is made, we move forward.”
But as Feldman says, the words are easy. Any agency can claim to be entrepreneurial. To deliver on the promise, GCI is putting in place an organizational architecture and a corporate culture designed to encourage entrepreneurial behavior. The organizational architecture is based on the belief that clients are looking for increasingly specialized knowledge. In some respects it looks like the architecture at other big agencies—particularly Weber Shandwick, where Larry Weber is promoting the idea of “hyper-practices”—but in other ways it goes considerably further.
When clients are asked why they chose their professional advisors, “knowledge of our sector” is always among the top reasons, Feldman says. Similarly, when clients want help with a change program, a new product introduction, or a crisis, they look for consultants who have experience and expertise in that specific area.
“Our strategy is to provide excellence in the mainstream combined with clearly defined specialist services in key sectors and key disciplines,” says Feldman. “In combination, this strategy gives clients the best of both worlds: the generalist resources of a major consulting organization plus the focus of a specialist boutique.”
To accomplish this, the firm needs to unleash the entrepreneurial potential of its employees. “We need to provide talented people with the freedom to express their abilities to maximum effect,” Feldman says. “Our structure and our systems support entrepreneurs. Some PR firms find it difficult to reconcile organizational imperatives with individual requirements and they end up frustrating talented people. We don’t. At GCI, the firm exists as a platform for gifted people to do great work.”
So in addition to the practices, there are sectors within the practice, and there are business units within the sector.
“Healthcare is a practice,” the book explains. “Pharmaceuticals is a sector. Cardiovascular drugs is a business unit. Each has a leader and each requires a vision and a plan of action.” (The book suggests that the agency may eventually dig down one level deeper. Within the cardiovascular business unit, specialist areas could include heart failure medications, blood lipid lowering agencts, and antihypertensive drugs.)
“The practice structure is really all about unleashing entrepreneurial behavior at GCI. Business units can be built by anyone with the ability to envision a plan for their area, which they can execute via the building of new accounts and/or growth of existing behavior…. The resulting environment is one where the corporate entrepreneur drives the growth of the practice. We are limited only by our ability to figure out which business units have potential.”
To build a business unit, employees are advised to ask several questions: What type of staff do you need to become the best? Who constitutes your dream client list? Who, within GCI, already has the expertise you are looking for? Who can help you leverage a professional community within GCI? How will you create buzz for your efforts externally, so we don’t keep our expertise a secret.
A new business unit can be built by literally anyone within the agency, Feldman says. But the answers to some of those questions require a skill set not often found at the senior account executive or account supervisor level. That means GCI faces a challenge in training its people in marketing and new business skills as well as in aspects of professional practice.
The culture meanwhile, needs to support the entrepreneurial positioning by providing people with the knowledge they need to do their jobs differently. That’s one reason Feldman hired Lori Kafafian, who was head of human resources at Ketchum. Kafafian has been charged with helping to re-engineer and redefine the GCI culture.
One of the biggest challenges is making sure employees understand the financial dimensions of the public relations business. Many agencies don’t expect their employees to understand the financials, but GCI devotes an entire chapter of its book to teaching employees how to understand a profit and loss statement and to explaining revenue, costs, compensation, administrative costs, bad debt, and capacity management.
Another is making sure employees understand the importance of growth, and the need for retaining existing clients, spurring organic growth, and winning new business.
The book advises employees to ask themselves whether they are more of a hunter or a farmer, terminology popularized in the professional services field by consultant David Maister. “You will start hearing more about hunters and farmers within a practice,” says the book. “This is our way of helping you determine where you want to spend more of your time, based on your expertise and passion. Some people tilt more toward client service and organic growth. Other people tilt more toward new business. Both hunters and farmers are equally important to the success of GCI.”
It’s also important that employees don’t feel trapped by the new structure. Although there is an emphasis on specialization, Feldman doesn’t want his people to have a narrow niche focus.
“It’s not that we want people to choose a box and stay in that box for their entire career,” says Feldman. “We think this opportunity gives people an opportunity to build a portfolio of skills based on their own interests. They may start out in one business unit and develop some expertise there, but after a year or two they have a chance to expand their portfolio by moving to a different business unit or perhaps a different practice area. We want to build an organization in which people have specializations but in which they also collaborate based on clients’ needs, learning new skills every day.”
Any new system is bound to cause unease, and there are those who have not embraced Feldman’s entrepreneurial emphasis. The system places heavy demands on younger staff and rewards those who are prepared to take risks, while it’s easy to see how senior executives could see the empowerment of junior people as a threat to their leadership role. But on the whole, Feldman says, employees have been energized by the new approach.
“We are a big agency, but we are not the size of a Fleishman-Hillard or a Hill & Knowlton,” he says. “We have to find some way to differentiate ourselves, something that is uniquely ours. I believe this is it.”