Arun Sudhaman 04 Aug 2012 // 11:00PM GMT
In return for their ample reward, we expect a lot from our business leaders. They must be strategic mavericks, combining dynamic vision with the chutzpah to deliver dramatic change. They must also have a sensitive side, alert to the intricacies of politicking, and able to soothe egos, persuade employees and court popular acclaim in the media.
It is a tall order. And one that will be vexing the minds at Omnicom Group as it decides on how best to right a Porter Novelli ship that has veered off course in recent years. The departures this year of Julie Winskie, Anthony Viceroy and Gary Stockman leave the agency with a vacuum of leadership that will be filled, says Omnicom, within an indeterminate period of time; until then, there will be plenty of speculation as to who is best qualified to lead the once-powerful firm towards a more secure future.
In compiling this analysis, the Holmes Report conducted a range of interviews with numerous players in this drama, including executives currently at the firm and many that have left. The firm’s travails have been well-documented, ensuring a plethora of unfettered views, feedback and opinions. Amid all of the speculation and innuendo, one thing is painfully clear: the next Porter-Novelli CEO will not lack for advice.
Whether those suggestions should be heeded is another matter altogether. The Porter Novelli saga has highlighted some specific failings at the firm, but one thing the agency is rarely accused of is an atmosphere that is less than collegial. Instead, says one insider at the agency, it may make more sense for the next CEO to be someone more decisive than collaborative, a CEO that - to all intents and purposes - leads from the front.
“In a perfect world, it would be a rockstar,” says the source. “Someone we could all feel excited by, and would surprise the industry.”
Despite the attention attracted by the various senior departures, few believe that staff needs any more mollifying. “I don’t think everybody needs a hug,” adds the source. “Staff would like to see leadership, they would like to get aligned behind somebody.”
“Decisive decision-making - that’s a really unique asset,” Winskie told the Holmes Report. “Everything cannot be done by committee.”
Indeed, other firms have benefited in recent years by replacing a well-liked leader with one less concerned with personal popularity and more focused on winning—which requires a willingness to make the occasional enemy.
2012 marks Porter Novelli’s 40th anniversary, but if they are having a party, it is one where the hosts have departed early. Left manning the keg is Michael Ramah, a respected 25-year Porter veteran who heads the firm’s planning unit, once a source a considerable competitive advantage. Supporting Ramah is a 12-strong executive committee that includes proven market leaders such as Kiki McLean (Washington, DC), Brad MacAfee (Atlanta), Sally Ward (London), and Rich Cline (San Francisco) and a respected recruit from sister agency Fleishman-Hillard in Karen van Bergen (New York).
The task facing this group is tricky. They must ensure there are no more defections of key senior staff and clients, and try and navigate a course ahead for the firm, all the while knowing that their efforts may count for naught if the next CEO is an external hire who wants to blow everything up and start again.
Overseeing the CEO search is Dale Adams, who took charge of Omnicom’s DAS unit, which houses its PR firms, late last year. Adams is adamant in his desire to protect Porter Novelli’s culture. “I don’t want new leadership to disrupt the culture,” he told the Holmes Report at Omnicom’s offices in London. “I’m very focused on finding someone that has the right cultural fit, as opposed to someone who will come in and revamp everything.”
Complicating the task is the fallout from the dramatic break-up of the agency’s C-suite leadership. Stockman, Viceroy and Winskie are a less celebrated triumvirate than Caesar, Crassus and Pompey, but the experiment has met with a similar level of success. There was a feeling that the culture, the purse strings and the new business process were being managed separately.
Ultimately, a single ruler made the Roman Empire stronger. The hope is that a similar fate awaits Porter Novelli.
“It was unquestionably a problem,” says one former senior Porter Novelli executive of the three-pronged leadership strategy. “The buck has to stop somewhere. When you surrender that ability you are no longer accountable.”
Adams is less willing to concede the point, but notes he always believes the “CEO and CFO should work very closely together.” However, he adds, “each one will complement each other’s roles, but they won’t share leadership.”
Strategy in flux
Much has been made of the personal differences between the three principals. The more salient issue seems to be that there was insufficient agreement over how best to implement a strategy designed to accelerate Porter Novelli’s development. Viceroy, for example, invested heavily in building a strong digital analytics practice, but lacked the political skills to integrate those skills into existing accounts.
There was also disagreement over the importance of Porter Novelli’s illustrious legacy, as a social marketing agency built around a pioneering planning practice. Ramah believes that a focus on insight and behavioral change is not misplaced, but it would take an unrealistically jaundiced view of the competition to conclude that this is a clear competitive advantage in today’s market.
“I don’t feel that we are the only people to do this,” admits Ramah. “But it is something I think we do better and we would like to do more of.”
A preoccupation with competing with bigger rivals such as Edelman and Weber Shandwick, say numerous sources, has not always helped. Even if the idea that midsize firms are struggling is a myth, Porter probably attempted to be a little too multifaceted, rather than targeting specific areas of strength.” It wasn’t so much a wrong direction as many directions,” says Ramah. “It’s more about focusing about what we do well and what we enjoy doing.”
That is easier said than done. Yet Porter, even if you accept it has shrunk over the past four years, remains one of the largest PR firms in the world. A more pressing concern may be the relative stagnation of its global network. While other agencies have actively explored new markets around the world, Porter’s actual majority equity presence stretches to six markets in EMEA and two in Asia-Pacific.
The returns from this network are mixed. While the UK has prospered under Ward’s leadership, and Belgium is fine, the Netherlands, France, Spain and Portugal are in less stellar shape. In Asia, Singapore MD Ed Dixon recently departed. That leaves China, where the joint venture with Shunya does not appear to be growing as quickly as its competitors in a critical market.
Has this lack of a strong global network hampered Porter’s ability to compete for big seven or eight-figure multimarket accounts? Perhaps. What is clear is that it does not stack up against bigger rivals or, indeed, the expansionary zeal of similarly-sized peers such as Cohn & Wolfe and GolinHarris.
The suggestion that acquisition investment has favored other Omnicom firms is one that Adams resolutely denies. “There’s been no set pattern saying we will spend our acquisition dollars with Fleishman Hillard or Ketchum versus Porter Novelli,” he contends. “It’s simply opportunistic.” Porter’s acquisition in February last year of respected Silicon Valley technology firm Voce would appear to support that assertion.
Ramah is correct to note that Porter has one of the best affiliate networks in the business; turning some of those relationships into concrete revenues, in countries such as Brazil and India, would seem like a logical move for an agency backed by public funding.
Adams agrees that developing markets represent considerable opportunity, but also points to “markets like the UK or US or Brussels were we would look to bring in additional acquisitions.”
“We’re not limited to expanding the dots on the map,” he adds. “We’re also looking to expand within the geographic footprint.”
The issues at Porter were magnified because they were centered on its flagship New York office. Bereft of a functional leadership unit, the firm has nonetheless displayed solidity and enterprise elsewhere, amid considerable disruption.
For Adams, the chief challenge is perceptual. “I think sometimes the market doesn’t realize how good they are.” Does that mean the next CEO should opt for a higher profile than Stockman, who was not as visible as many of his peers? “It’s certainly a question we are asking ourselves,” he says. “But it’s not going to be the most important attribute.”
Omnicom has publicly distanced itself from any suggestion that it will merge Porter Novelli with one of its PR siblings. Among holding companies, client conflicts and the sheer level of complexity involved ensure that such efforts are rare. Omnicom, presumably, knows this well, having recently been through a difficult merger of Ketchum and Pleon in Europe.
Adams, for his part, remains bullish about the PR industry, believing it has an opportunity to outpace marketing industry growth in general. He is considering both internal and external candidates to realise this ambition at Porter Novelli, but adds that he sees no need to recruit from outside the PR world.
“I do believe it will be someone from the industry and not from outside,” notes Adams. “I think people within the industry have that foresight, they see the future.”
Several executives, both inside and outside the firm, believe that the change at the top represents an opportunity for the agency, effectively clearing the decks for a new start. The bigger issue, one source adds, is whether the next level of leadership, so critical to any firm’s day-to-day operations, can tolerate much more change.
Adams admits that any leadership change brings “some disruption” but believes this has been overstated. “My message is we are going to find another person like Gary that can lead the organization and the important thing is to continue to focus on delivering great work for our clients. If we do that, our agency is going to grow and we are going to prosper.”
“Internally, people need a reason to believe,” adds Winskie. “I think that’s where people need to be strong and give people a reason to follow. It has to be a powerful leader.”