OPINION: The Big Question - Is it better to grow your PR agency organically or by acquisition?/Last week Keith Simpson, managing director of consumer agency Nexus Choat, told PR Week of his decision to leave the company because of the consultancy’

JONATHAN CHOAT

JONATHAN CHOAT



Nexus Choat



’Both. Organic development is without doubt beneficial to the growth of

a company, but acquisition is essential if you want to gain substantial

amounts of business rapidly in a new area. More and more people are

needing specialists. We’re growing our own healthcare specialists, for

example, but if we want to grow more quickly we have to acquire. We’re

not looking at acquisition to swamp another company, we’re looking to

bring in people who can add experience in new fields, and who can

develop themselves and their skills fast. Acquisitions allow you to jump

three rungs of the ladder in one go.’





KEITH SIMPSON



Formerly Nexus Choat



’Organically, without a doubt. The risk of growing by acquisition is the

challenge of blending cultures. This can sometimes work, but my view is

that the organic route is healthier. There’s no doubt, too, that the

organic route requires the same level of investment as the acquisition

route. If you have two businesses of the same size, one grown

organically and one grown by acquisition, the organically-grown one

would be stronger, simply because you have developed one culture. A

business grown by acquisition is a many-headed beast. This mix of

cultures can mean you have many skills to draw on, but its inherent

fragmentation can also be its weakness.’





FRANK BARNARD



International acquisitions consultant



’It depends on your ambitions, clients and what time you’ve got. You can

still build a team of professionals inspired by a shared culture.



Blinks Bearings of Penge will be happy with that. But if you’ve got

clients with global ambitions, you’ll hit a ceiling.



Either you turn work away or meet their needs. ’Organic’ isn’t fast

enough, so you’re compelled to acquire. But clearly you can’t acquire

continuously.



At some point, ironically, you must return your attention to organic

growth.



Implanting a shared vision in peoples from different cultures - national

and corporate - is when the challenge really starts. Until you’re ready

to acquire again. Or stick. The issue never goes away.’





TOM LEWIS



Text 100



’Text 100’s emphasis is absolutely fundamental to its business

model.



For us, organic growth means the establishment of a steady flow of

start-up agencies worldwide. And the need to staff these in turn

delivers attractive entrepreneurial opportunities for our existing

staff. In the absence of acquisitions, organic growth has allowed us to

take equity that might otherwise have been used to fund acquisitions,

and instead divert this into stock options for staff. The end result is

an agency whose staff members enjoy both the motivation of

entrepreneurial opportunity and the dignity of a credible and

well-trodden path towards financial security.



That is how we have built long-term stability, and I doubt we would have

achieved the same result had we chosen to grow substantially by

acquisition.’



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