Many small agencies are started by PR practitioners who are disillusioned with the culture and formal structure of larger consultancies. They set out on their own, maybe with a couple of friends, pledging that they will do things differently, that they will have a flat structure, treat staff wonderfully, be transparent and democratic and always creative.
Then, because they are successful, they grow, taking on more clients, and recruiting more staff. Eventually, they get to the stage where they have to start operating with a couple of layers of management, the directors might not see all the staff every day, and before they know it they are operating like a big agency.
That's not a bad thing in itself, but the challenge is to maintain the values and culture of a business as it evolves, since agency culture is of immeasurable importance to staff and clients.
'Culture is not a 'touchy-feely' thing but you know it immediately,' says Ogilvy PR Worldwide managing director Donna Zurcher. QBO chairman Trevor Morris adds: 'Cultures grow organically. They can be managed a bit but not completely planned.'
That is because the culture of a business is influenced by the people who work there - and nowhere is the influence of individuals more important than in a people business like PR. What makes cultures difficult to impose is the fact that the attitudes and values of more junior staff can have just as much impact on a culture as the personality and actions of their bosses.
Le Fevre director Joy Le Fevre warns that in periods of high growth, such as the one the PR industry has experienced in recent years, consultancy cultures can come under threat as values are subordinated in the chase for more clients and more staff to service the new business.
Around 18 months ago she and her fellow directors decided to place greater focus on job applicants' attitudes to the culture of the consultancy in order to safeguard the spirit of the business.
Applicants whose values were incompatible with those of the business would be rejected - even if they had the right skills and experience for the job. This approach, it was felt, would actually help the consultancy thrive by protecting its distinctiveness.
'In our industry, where there is a skills shortage, ultimately people make decisions about where they want to work due to their value systems,' says Le Fevre.
For employees, it is not just what a consultancy does, but the manner in which it does it that is important. No one wants to work somewhere that is out of step with their personal value system, even if they are well paid for their troubles.
'I believe cultures evolve as the natural outcome of collections of people engaged in a common endeavour led by individuals - sometimes one, but more often several - who have strong ideas about the purpose and standards of the enterprise,' says GCI London chief executive Adrian Wheeler.
'What is absolutely vital is that those leaders sublimate their egos in the collective interest, so that the framework they establish is open to influence from anyone and everyone who joins in. The culture must be defined by a few but must belong to all, and it must enable rather than compel,' he adds.
Scathingly, Wheeler argues that too many so-called 'people firms' are 'run as temples dedicated to the supreme wonderfulness of their founders.'
Lexis co-chief executive Bill Jones agrees with Wheeler that 'you can't impose a culture from the top'.
'It's very much ground up, but it's very important that the leaders of the business understand the culture and don't get out of touch with it.'
This is hard as cultures are not static. And sometimes they change much faster than others; for example, if a shift is made in business direction, during periods of rapid growth and if a business is sold or merged with another company.
Zurcher, for instance, has instigated what can only be described as a cultural revolution at Ogilvy. When she joined two years ago it employed 23 people. Now it has over 100 employees, with only five of the 1999 team still remaining.
'The majority didn't like the change of going from this little agency to one that is much bigger,' says Zurcher. This means that in some respects Ogilvy resembles a new agency.
For most businesses, however, the prospect of completely re-engineering the culture is anathema. Harvard PR managing director Gareth Zundel says his agency spent 20 years building its culture before selling itself to Chime last year.
There is, he feels, a balancing act to pull off. Harvard needs to retain its cultural identity to keep staff and clients happy but at the same time take advantage of becoming part of a large group.
'It's a fine line,' concedes Zundel. 'On the one hand we want to preserve the cultural facets, and people want that. On the other hand it would be silly to go into a merger unless you felt you could embrace the other companies in the same family and some of their cultures. It's about assimilating and accommodating and appreciating, and having a mutual respect for the differences.'
Sometimes, though, pronounced differences can cause problems. Three years ago Kaizo was created through the merger of four consultancies within the same parent group: Argyll, Arrow, Abacus and Aspect.
Initially the strategy had been to use a quartet of different brands to keep people working in small groups in order to foster a strong team spirit. Eventually, though, this approach was seen as flawed.
'We ended up with a range of disparate brands with different cultures,' admits Kaizo chief executive Crispin Manners. 'If all that you care about is growth, it is a very effective way to grow. But if you care about a sustainable business, that's very hard to deliver with separate cultures.'
Since the decision was taken to scrap the four-brand strategy, Manners says a lot of attention has been paid to developing good internal communications processes. Relying on information exchange by 'osmosis' is no longer viable, he argues, once an agency reaches the size of Kaizo, which now has around 70 people.
Size is an issue
Size really does matter when it comes to issues of culture, and there are certain stages in an agency's growth cycle at which cultural changes occur. Identifying exactly at which points these changes happen is an imprecise art - and varies from agency to agency, given that structures and cultures are not uniform.
Jackie Cooper PR chief executive Robert Phillips thinks passing two, ten, 20, 50 and 100 staff are all potential 'turning points' in a consultancy's development. And the bigger an agency gets, the harder it is to maintain a culture as the company principals are unable to involve themselves in every aspect of the business.
However, Wheeler says: 'I often hear that there is a maximum size for a firm beyond which a 'natural' shared culture is not possible. I don't see why. Some of the strongest unifying cultures are to be observed in the army - or in a Roman legion - and few PR firms are anything like that size yet.'
Ketchum Europe managing director James Maxwell agrees: 'If there is a ceiling, I haven't seen it. It's how you manage the business that is key.
Ketchum is managed as a partnership, not a hierarchical structure.'
Of course, the heads of the big agencies are bound to say that - Ketchum now has 160 staff in its London office.
Edelman London managing director John Mahony makes the point that developing a recognisable culture is more challenging now than in the past given the pace of change in the business world.
Culture, he feels, is expressed not only in the way an agency treats its staff but also in the manner of its relationships with suppliers, clients and the media. He also argues that Edelman has a stronger culture than many of the other big international players because it remains independently owned.
There's also an interesting debate about whether certain people are more suited to big or small agencies.
'It comes down to how people work,' says Nexus Choat chief executive Jim Horsley. 'Some people prefer to work in isolation and if they do they often work better in a small agency environment. Other people like to feel they can draw on lots of different sources of information and thrive on collaborating as part of a team. A big agency environment is probably better for them.'
The Red Consultancy principal director David Fuller is less diplomatic: 'If you're good, you can thrive whatever the size of the agency. If not, then it's easier to get noticed in a smaller company.'
Clearly, smaller companies are not all alike. Some are very entrepreneurial with plans to grow fast. For others, rapid growth is less of a priority.
Cicero chief executive Stephen Lock says his recently formed venture is definitely in the former camp. It has 40 external investors and, as such, the need for strong growth and an investment exit strategy was established from day one.
'That funding mix predicates that it's a business I'm growing aggressively and will sell in five to seven years time,' says Lock. 'That dictates the culture. You need entrepreneurial people, and they want equity.'
At Cow, another recent start-up, the perspective is markedly different.
'We want to be known for great work,' says co-founder Dirk Singer. 'But we think that the way to do this is to only work for companies that genuinely interest and intrigue us.'
One way of sending out very powerful signals about the culture of a company is through agency structures and job titles. Several agency heads have sought to address this by stripping away layers of job titles so as to inject a greater sense of parity into the workplace.
E-conomy specialist Mantra is one agency that has done away with job titles, the thinking being that saddling people with specific titles does not empower them to produce top notch work.
'All that the client knows is that they are being given great advice,' says Mantra co-founder Debbie Wosskow. But she concedes that managing people's professional development in an environment where there are no titles does create some problems.
Jones thinks that a more structured set-up is an essential means of motivating staff. He argues that people do want to know their place in a hierarchy and what their prospects are, so they can develop plans for fulfilling their ambitions.
Another key cultural signifier is the degree of transparency in an agency.
How open is it with its staff? How much information does it share? And how much do its bosses listen to what their employees are saying?
MacLaurin managing director Vikki Stace says in periods of strong growth there is a danger that there is not enough information flow 'upwards'.
In other words, not enough account is taken of employees' views.
There are clearly plenty of challenges in creating and maintaining a cohesive, healthy and creative agency culture. In the end, being a monolith or a cosy three-man operation isn't what counts - it's about staying true to your ideals.
QUIZ WHAT KIND OF AGENCY SUITS YOU?
It is 12.30 on a weekday. Is your natural inclination to:
a Take a taxi to the West End and treat a journalist, spouse or mistress to a staggeringly expensive four course lunch with champagne. Sign 'entertaining contact' for whichever client's turn it is to subsidise you that day
b Order in a decent spread for your fellow directors at a weekly cost equal to your charge out rate for a couple of hours
c Go to Pret A Manger and get an egg mayo sarnie to eat at your desk.
It is time to pull out some amazing ideas for the pitch next week. Do you:
a Retire with a team to the agency's creative zone, and spend some quality time in the play area just bouncing some ideas off each other
b Book some time in the boardroom, and hope the Habitat prints spark some ideas
c Retire with a team to the agency's creative zone. Also known as the local pub.
Egad! Your best account manager has handed in her notice because she's got a better job offer. Do you:
a Offer her a 100 per cent pay rise and upgrade her company car
b Offer her two more duvet days a year
c I am the best account manager. And account director. And managing director. And office cleaner.
You fancy a coffee. Do you:
a Send a minion downstairs to your in-house Starbucks branch to fetch a tall skinny latte
b Send someone out to the local caff for a filter coffee
c Make a mug of instant yourself in the small Formica kitchen.
It is the beginning of August. Do you:
a Spend the entire month in your southern French gite maintaining contact with the office through a sat phone and laptop, but mainly lounging by your pool with a glass of Krug and a cigar?
b Spend two weeks crashed out on an unspoilt beach to recover then return to the office to get some work done?
c Spend the month frantically trying to nick other agencies' clients while they are playing away from home?
You decide to do an office redesign. Do you:
a Hire professional photographers to take glossy portraits of every one of your hundreds of staff. And hang the framed prints throughout the building
b Call Terence Conran to design the lobby and the client meeting rooms.
c Get down to Homebase for a few pot plants and tins of paint in a wacky colour.
Your computer keeps crashing. Do you:
a Call your extensive systems department to fix or replace the offending machine
b Call the IT contractor to pay your office a visit
c Dig out the Word for Windows manual
The client is spitting chips over a disasterous press conference, attended by exactly two journalists. Do you:
a Find a junior account executive to act as sacrificial lamb
b Get the account director and account manager to sort it out
c Switch off your mobile and screen every call for a few days.
Junior account executives are for:
a Making those annoying press release follow-up calls journalists don't need to receive
b Making tea in the office and being an extra bod at client events
c Studying and making crop circles, single-handedly, for a client launch (this really happened).
Mostly a: Your dream is to be head honcho of one of the Top 10 agencies. Congratulations on fully embracing the privileges of a comprehensive hierarchy.
Mostly b: You are best suited to the environment of a medium-sized agency boardroom. Not too much responsibility, a decent client list, and enough staff to get people to do the annoying stuff for you.
Mostly c: You're fully immersed in real life at your small, dynamic agency. No one to pass the buck to, but at least when you attend a pitch the client knows it's you who will be doing the work.