Paul Holmes 16 May 2001 // 11:00PM GMT
David Paine founded his own firm because he wanted to do things differently. He had worked at Burson-Marsteller when it was the biggest and most respected public relations agency in the world, but like so many entrepreneurs in the public relations business, he was convinced that he could offer both employees and clients something they weren’t getting from the giant multinational agencies. His vision was based on a more “humanistic” approach to running a business and combined elements of total quality management, open book management, and several Japanese management techniques.
Founded in 1986, Paine & Associates—which recently changed its name to PainePR—has grown to become one of the west coast’s largest independent public relations firms, with billings of $9 million in 2000 and a client list that included a host of accounts won against much larger competition: Bausch & Lomb, buy.com, Hyundai, Miller Brewing, Polaroid, Procter & Gamble, Suzuki, and Verizon Wireless. More impressively, staff turnover is among the lowest in the industry, in the mid single digits.
You might think that the owner of an agency enjoying such good fortune would be determined to keep the secret of his success to himself, but David Paine is a man on a mission, an evangelist for a new way of doing things. He has a new website (www.painepr.com), at which he discusses his philosophy at length in a 16-page “manifesto.” He launched a new advertising campaign (tagline: “The Revolution Starts Here”) that emphasizes the firm’s values-based management approach. And next week he will be presenting his ideas on public relations agency management at the annual Counselors Academy meeting in Puerto Rico.
“We have what we think is a very different way of doing business,” he says. “And we believe that a revolution is needed in this business. We can’t assume the methods of the last 20 years will continue to sustain this industry in the 21st century. Our industry is not well respected, and we have to do something to change that.”
The manifesto is a refreshing antidote to the saccharine pronouncements of so many PR firms—although not everyone is going to agree with its central thesis, or some of the solutions it offers. It looks at public relations without the rose-tinted spectacles and warns that “the industry remains plagued by fundamental service and quality issues that continue to undermine client satisfaction and limit the agency field’s growth potential.”
Citing statistics from the most recent Thomas L. Harris/Impulse Research client study, the manifesto asks, “What does it say about the PR agency industry today when only 46 percent of clients say they’re ‘very committed’ to the agencies that represent them? That’s not a good sign, no matter how successful we happen to be as an industry right now.”
Paine highlights some of the biggest client complaints:
- Too much delegation of work to junior-level agency staff members, who often lack the experience needed to deliver consistent quality or make the right judgment calls when dealing with problems
- High levels of agency staff turnover, approaching 20 to 30 percent at many top firms
- Escalating service costs relative to the value of the work produced
- Lack of proactivity, and an over-emphasis on tactical implementation
- Inconsistent service quality, including poor writing and mediocre results overall
If it sounds like Paine is taking the entire industry to task, he insists that’s not the case.
“Raising these issues is not meant to be an indictment of the agency field,” he says. “It’s meant to point out the significant opportunities that exist for all of us in the agency business, to raise our expectations of what’s possible, to reject being satisfied with the way things are right now, to develop new and better ways to serve our clients and, while doing so, to better support the many hard-working people who devote long hours to this profession.”
Paine acknowledges that many individual agencies have taken steps in the past several years to address client complaints—and to enhance their work environments. He’s just not convinced they’re the right steps, or even that the agencies in question understand the true nature of the challenge, which he sees as being about systems—or the lack of them.
“Many agencies have been working hard to resolve these problems,” he concedes, “but rarely are their changes systemic in nature. Benefits like on-site day care, paid sabbaticals, casual attire policies, and even stepped-up training, while very valuable, will do little to significantly improve quality, reduce turnover, or enhance results as long as these benefits are bolted on to existing systems that undermine people’s best intentions.”
Paine reserves his greatest ire for the way agencies treat their employees. The work environment “had made life difficult for a lot of talented, hard-working people, dampened loyalty and enthusiasm, and in many cases driven bright people out of the agency business altogether. Consistent quality cannot be achieved when people have to work in environments characterized by extremely long hours and intense pressure to deliver billable hours.”
Because of the pressure to work long hours, burnout is commonplace and high staff turnover is accepted as the norm. Agency costs are inflated by the need for constant inspection and revision. In such an environment, “mistakes and quality problems breed workplaces characterized by blame, finger-pointing, competition and incessant conflict; cooperation, collaboration and creativity become stifled.”
At PainePR, the work culture is “based on the principles of humanism—a culture that puts people first,” says Paine. “We believe that all employees have the right to be heard and participate in decision-making. They have a right to be told the truth, the right to have a fair and meaningful stake in the success of the business, and the right to be treated with fairness and respect regardless of title. And they have the right to balance their lives, which includes the right to pursue areas of professional and personal interest and to work a reasonably normal work schedule as often as possible.”
Paine calls this approach his “bill of rights,” and reinforces it with a values-based approach to management. The agency espouses four key values—cooperation, openness, fairness and excellence—and offers an explanation of each in a Shared Values document.
More important that the document is the fact that the values are reflected in the way management runs the agency. One of the ads in Paine’s new campaign, for example, cites industry statistics showing that women in PR typically earn about 27 percent less than their male counterparts for the same work. At Paine, salaries are uniform, and women are not penalized when they decide to start a family. As the ad says, “To us, getting pregnant simply means a person’s become a little more rounded.”
Even more dramatically, the agency resigned a seven-figure account last year because the people who worked on it felt the client was not treating them with respect. It was a difficult decision, for obvious reasons, but it paid off: morale soared, and the agency was able to replace the lost business within a matter of weeks. The result is a culture built on mutual trust.
“People feel safe to take creative risks. They share resources, work together, and collaborate among teams without any financial incentives to do so. They respect each other’s personal needs and pitch in when others need support. In a nutshell, our people thrive in and appreciate the kind of workplace they have collectively created.”
But Paine understands that culture does not exist independent of structure. As much time as he has spent on “soft” issues such as values, he has spent even more on creating processes that empower the culture, making changes to the traditional agency structure and to traditional work processes to create an environment that allows people to do their best work.
“Quality and service problems are not a function of talent or lack thereof, but rather a direct outcome of poorly designed systems, processes and methods,” says Paine, who cites statistics used by total quality management pioneer Edwards Deming: that 94 percent of all outcomes of a function of the system rather than the people, and that 85 percent of any outcome is built into the first 15 percent of the process.
First, he has turned his back on “account management structures that feature multiple layers, titles, and billability rates that are not conducive to delivering high-quality, strategic work.” In such a structure, he says, work is typically delegated down to people with the least experience. “How long does it take an inexperienced account executive to write a press release versus a more experienced professional? The junior person’s hourly rate might be low compared to more senior staff members, but it takes them twice or three times as long to complete the assignment. Add in all the extra hours required for the supervisor to inspect and fix that work,” and the costs begin to rise dramatically.
Second, he has applied some of the techniques of total quality management—more often found in manufacturing organizations—to the service business.
“We adhere closely to formal methods for continual improvement,” says Paine. “For instance, we document out methods when we discover how best to do something, like the best way to run a media tour. We capture that thinking in a process document and share it system-wide. We invite everyone in the company to continually scrutinize our methods in the hopes of improving them. And then we improve them again each time a team implements them.
“It’s a never-ending cycle that takes time and discipline. More than that, it takes a participatory culture that encourages people to speak up honestly with ideas and even complaints. Real improvements and consistent outcomes are only possible through these methods. In the absence of a formal system that promotes quality, generating great results is more likely a product of chance than real intent.”
Finally, Paine believes there is an over-emphasis on profitability at most agencies—or at least a mistaken view of what an agency must do to achieve profitability. Too many firms, he says, set unrealistic billability goals for their employees, expecting them to bill 90 percent or more of a normal eight-hour week. Those goals are made even more unrealistic by the fact that employees must also participate in new business efforts and career development activities, and that poor budgeting—and constant rework—makes it impossible to bill all the time spent on a project. The result is that people are forced to work much longer than a typical eight-hour day to meet their goals.
“Any financial model that essentially requires substantial staff overtime simply to achieve profitability is not conducive to producing quality outcomes,” says Paine. “People who are tired and burned out make mistakes. They’re incapable of being creative for long, and they eventually lose their passion for the job. Then, of course, they leave.”
Paine believes that lower and more flexible billability ranges are not only economically feasible but even advantageous.
“We’ve spent many years developing methods that allow us to be financial successful without requiring our people to work on the edge of inefficiency and burnout,” he says. “We’ve substantially reduced or eliminated wasted work. We’ve carefully managed costs, and we’ve employed proprietary management techniques that help ensure we’re as productive and efficient as possible. We get more done in less time than other agencies. In fact, a study for one major national client found that we saved them 20 percent in fees because our system resulted in better planning, reduced inspection, and less rework.”
While others are looking to other professional service firms—from ad agencies to management consultants—for solutions to some of the challenges the PR industry faces, Paine believes public relations people must lead, not follow.
“We’ve looked at management consulting firms and law firms and a whole range of professional service firms, and we think they all suffer from some of the same problems,” he says. “I believe there’s an opportunity for the public relations field to come up with solutions that are adopted by other professional services business. We shouldn’t be asking what we can learn from them, but rather what they might learn from us, if we do this right.”
Cooperation: We are committed to working with our colleagues in a spirit of mutual cooperation, assisting others when needed, supporting their personal and professional growth, showing appreciation for their efforts, and working to find constructive solutions that meet the varied interests of our colleagues and those who contribute to our company.
Fairness: We are committed to fostering fairness and tolerance in our workplace by according all our colleagues respect and courtesy, regardless of background or title, giving equal consideration to human and professional needs, and offering everyone equitable, competitive compensation and opportunities for advancement based on their skills and commitment to our Shared Values.
Openness: We are committed to running an open and trusting work environment by encouraging people to be honest about their feelings, promoting free expression of ideas, concerns, and opinions, giving people a meaningful voice in decisions that affect them, and listening to, appreciating and thoughtfully considering the differing viewpoints of others.
Excellence: We are committed to achieving excellence in the work we do by building valued relationships with our colleagues, continually enhancing our individual capabilities and those of our company, and contributing our energy, creativity and talents to produce the highest quality results for our clients.