Paul Holmes 01 Jul 2012 // 11:00PM GMT
Only a matter of days after Ketchum announced that Rob Flaherty would succeed Ray Kotcher as chief executive officer (in addition to his current title of president), it is probably too early to opine on whether the move will ultimately be judged a success. But industry observers should have no lack of confidence when predicting that the transition will be a smooth one. This is something Ketchum appears to do better than its competitors.
The transition from Kotcher to Flaherty appears to be proceeding according to the same game plan that saw Kotcher himself succeed Dave Drobis as CEO in June of 2000—and the one that the agency followed a decade earlier, when Drobis succeeded Paul Alvarez.
For one thing, the individuals involved have been working together not only for years but for decades. Flaherty is a 23-year Ketchum veteran; Kotcher has been with the firm for 29 years. For another, the succession plan has been clear within Ketchum and to external stakeholders for several years, at least since 2008, when Flaherty was named president—and probably for several years prior to that. And for another, Kotcher will continue to serve as chairman while his successor gets comfortable with his new role (Drobis, for example, held the chairman’s role for three years).
“Rob and I have been working together for 23 years,” says Kotcher. “We have a very collaborative relationship. We have worked together particularly closely over the past couple of years.” That’s why it’s hard to imagine any of tension that might arise at a different firm, if the previous occupant of the C-suite continued to show up at the office every day, looking over the shoulder of the new guy—that’s not a prospect that concerns either man.
“This is the Ketchum way of doing it, and it works,” says Kotcher. “It allows for greater continuity and it gives us a one-two punch.”
Adds Flaherty: “In an organization that is more hierarchical, there might be an advantage to a cleaner break. But our culture is very collaborative; it’s not about your position or the authority that comes from that position. It’s about working together closely and I will be extremely grateful for Ray’s counsel over the next few months and years.”
That’s a pretty stark contrast to the way leadership transitions have been handled at other large multinational agencies in recent years. Among the WPP businesses, for example, there have been changes that resulted in a clear break from the past (the most recent transition at Ogilvy was relatively seamless; the one before that, not so much).
Ketchum’s Omnicom-owned sister agency Porter Novelli is in the midst of a succession with no (named) successor, while Fleishman-Hillard’s most recent transition was the culmination of a horse race in which the winner only became apparent in the months before the change—a process that led to the hasty departure of other candidates.
It would be a shock if anyone stormed out of Ketchum in disappointment at missing out on the top spot. “Our executive committee was very much a part of this process. There’s a core group of people on that team who have been together for years and years and they understand how important it is to work together on something like this.”
All of which is not to say that there won’t be changes.
Kotcher can look back on 12 years during which Ketchum has grown impressively, from a North American powerhouse with relatively flimsy overseas capabilities to a genuinely global agency. In Europe, the firm took over the operations of sister agency Pleon, giving it a leadership position in the German market and strengthening other continental offices. In Asia, deals in India and Korea and Japan have expanded the footprint beyond Greater China.
The firm has also expanded its capabilities: in digital and social media obviously, but also in areas such as word-of-mouth (with the launch of Zocalo), change management (now a global practice), and sports and entertainment marketing.
But Kotcher looks back on particular pride on achievements that exemplify and showcase the Ketchum culture. “I am proud of our commitment to social responsibility,” he says, citing the firm’s worldwide commitment to Room to Read, which received $1 million in time and money from Ketchum last year. “I am proud of the work, not just the quality of the work but the level of creativity our people bring to their clients. And I am proud that we have maintained our culture, which is very distinctive and something our people take great pride in.”
One of the reasons he is confident in Flaherty’s ability to step into his shoes is that “he embodies that culture.”
“There’s still a lot of work to do,” says Flaherty. “We have expanded globally, but there is a big difference between having a tremendous global network and being where you want to be in terms of mobilizing and integrating that network. We want to make sure out people have all the global experience they need to have to serve global clients.”
He also wants to make sure that Ketchum delivers the kind of creative thinking that will help the firm take the lead in brand-building and reputation management, underpinned by an even stronger commitment to analytics. “We see a lot of opportunity to use analytics to make sure we have the best data, and if we have the best data we can offer the best advice.’