DG&A: Agency Business Report 2007

As PRWeek's Small Agency of the Year, DG&A is focusing on moving to what David Grossman, the firm's president, calls "the next level" - a goal that he sums up in terms of getting deeper into the organizations his agency serves, and engendering leadership skills.

As PRWeek's Small Agency of the Year, DG&A is focusing on moving to what David Grossman, the firm's president, calls "the next level" - a goal that he sums up in terms of getting deeper into the organizations his agency serves, and engendering leadership skills.

"Those [business leaders] on the front lines of communication, that need the most direction, are often being led by those [with] the least ability," he says.

Plans for the coming year include the rollout of a new diagnostic tool that helps corporate leaders understand how - and if - they're meeting their staff's needs.

Principal: David Grossman, president
Ownership: Independent
Offices: One, in Chicago

Staff
DG&A has 18 staffers, nearly doubling in size from 2005. Hires have been at the "senior thoughtpartner" and "thoughtpartner" levels, as well as at the VP level. Hires include Anne Marie Mitchell, formerly VP of employee communications at Sara Lee, as VP. DG&A has ramped up senior staff to create a more robust layer beneath Grossman.

Practice areas
DG&A has three main practice areas: internal communications; leadership communications and business consulting; and DG&A Design. In its focus on internal communications, service offerings expanded to include the design group, which doubled in size in 2006. The leadership communication and business consulting area spun off into its own group, and now comprises 25% of revenue. This combines HR, organizational development, training, consulting, communication, coaching, and business strategy.

Accounts
Key wins include Abbott Laboratories, ACNielsen, Greeley & Hansen, LaMarsh & Associates, SCA Technologies, and Shedd Aquarium. DG&A says it hasn't lost any clients outside one-time projects. Client expansion includes work for McDonald's, working on five new business and functional areas within the company in 2006. The firm also added two new divisions within Lockheed Martin.

Performance
DG&A posted $2.6 million in revenues in 2006, 37% up from the $1.9 million mark in 2005, exceeding its own goals. Around 60% of growth was organic, with new business accounting for 40%.

Agency's full questionnaire follows below:

Name of parent division/company (enter both where applicable)
N/A

Name of subsidiary companies
N/A

Has your ownership status changed in the past year? If yes, please explain
No

Name of global CEO and US CEO (or most senior equivalent)
President and principal thoughtpartner David Grossman

Name of person, if any, the most senior person named above reports to
N/A

What is your current headcount?
18

How has your headcount changed since FY 2005?
Our team has grown 80% since 2005, from 10 to 18 total.  dg&a has added staff at the Senior thoughtpartner and thoughtpartner levels, brought another designer to our design team, and recruited top-level talent to join the dg&a leadership team at the VP level. 

What was the percentage of staff turnover in 2006?
Agency declined to give information

Did you make any senior hires in 2006 (VP and higher)? Please state name, title (and unique responsibilities, if applicable), and previous company
In the past year dg&a added staff at the Senior thoughtpartner and thoughtpartner levels, brought another designer to our design team, and recruited top-level talent to join the dg&a leadership team at the VP level.  Specific additions to this powerhouse staff include:

Anne Marie Mitchell, formerly vice president of Employee Communications at Sara Lee, joined dg&a as Vice President and Senior thoughtpartner.

With the additions to the already robust senior leadership team, David is able to focus more on the strategic leadership of the agency and providing high-level counsel on all accounts, with the senior team taking on more of the day-to-day activities.

What senior staff have departed the firm? Please state name and previous title
No information given

Please list any other senior management changes, including restructures and significant, senior-level promotions
Vice president and senior thoughtpartner Kate Peters added to her responsibilities in her new role as chief operations officer.

Have you made any acquisitions in the past year, or merged with another agency?
No

How many wholly owned offices do you have globally? Please list with agency names and cities under the following headings. Add majority-owned offices in parentheses.

North America One dg&a, Chicago, Illinois

How many partly owned offices or affiliates do you operate globally? Please list agency names and cities under the following headings.
N/A

What offices opened in 2006 or early 2007? (State when)
N/A

What offices closed in 2006 or early 2007? (State when)
N/A

Which regions, US and globally, are growing, and why?
N/A

Which regions, US and globally, are shrinking, and why?
N/A

Practice areas

How many practice areas do you have? Please list.
Internal Communications
Leadership Communication and Business Consulting
dg&a Design

In 2006, dg&a set a strategy that would focus us even further on our expertise in internal communications consulting. As we grew that practice over the past year, we expanded our service offerings to include dg&a Design, which became a profit center and doubled in size in 2006.  We also spun off a new practice area: leadership communication and business consulting.

With clients, we found our roles to be a blend of many disciplines, not just pure communications: we're asked to combine HR, organizational development, training, consulting, communication, coaching and business strategy every day. dg&a continues to anticipate and fill the needs of clients and the marketplace, and we saw a distinct need for a new level of communications consulting.

We successfully launched this new practice area by focusing on creating and proving groundbreaking consulting models centered around what we call leadercommunicators - teaching leaders to leverage communications as a strategic business tool to reach their audiences, change the way they work together, and achieve business results.  Our business and organizational consulting works with clients to help create world-class organizations by addressing internal and external issues, solving challenges, improving communication and working toward business goals through change management and engagement strategies. 

Which ones are new?
dg&a Design and Leadership Communication and Business Consulting are our two new practices areas.  The Leadership Communication and Business Consulting practice area came from what we saw as a distinct need for a new level of communications consulting.  While working with our clients, we found our roles to be a blend of many disciplines, not just pure communications: we're asked to combine HR, organizational development, training, consulting, communication, coaching and business strategy every day. As dg&a continues to anticipate and fill the needs of clients and the marketplace, our new practice area was born.

Of those, which ones are part of the core strategy of the agency?
All are part of our core strategy.  As we grew our internal communications consulting practice over the past year, we expanded our service offerings to include dg&a design, which support virtually every project we work on, but in 2006 doubled in size and became a profit center for dg&a.  We also spun off our new practice area: leadership communication and business consulting.

With clients, we found our roles to be a blend of many disciplines, not just pure communications: we're asked to combine HR, organizational development, training, consulting, communication, coaching and business strategy every day. dg&a continues to anticipate and fill the needs of clients and the marketplace, and we saw a distinct need for a new level of communications consulting.

We successfully launched this new practice area by focusing on creating and proving groundbreaking consulting models centered around what we call leadercommunicators -teaching leaders to leverage communications as a strategic business tool to reach their audiences, change the way they work together, and achieve business results.  Our business and organizational consulting works with clients to help create world-class organizations by addressing internal and external issues, solving challenges, improving communication and working toward business goals through change management and engagement strategies. 

Which practice areas have been phased out in the past year?
None

What practice areas showed the most growth? Please elucidate.
We started 2006 with ambitious goals in nearly every area: revenue growth, client acquisition, service expansion, team development and ultimately, re-branding to dg&a.  As our sixth year in business began, we entered a time of amazing agency growth, attaining unexpected heights.

In 2006, we took our client roster to the next level by diversifying our work with long-term accounts (McDonald's and Lockheed Martin) and adding ten new clients including Abbott Laboratories, Greeley and Hansen and Nielsen.  Our client retention for non-one-time projects remained at a perfect 100% and our revenue exceeded $2.9 million, up from $1.9 in 2005 and $800,000 in 2000.  Also in 2006, we received more than six major awards for our Lockheed Martin Community Relations program, and most recently were named PRWeek's Small Agency of the Year!

We also launched our new practice area: leadership communication and business consulting.  The new practice is already showing a strong start, accounting for 25% of our business.

Which practice areas showed the least growth? Please elucidate.
Agency declined to give information.

What is the distribution of accounts across practice areas?
Internal Communications = 70%
Leadership Communication and Business Consulting = 25%
dg&a Design only = 5%

While our dg&a Design team supports virtually every project we do across practice areas, it's showing a strong start as a core offering, providing 5% of our accounts.

Accounts

What key account wins did you have in 2006? If based outside the US, or are global, please state regions.
In tandem with wowing our existing clients, dg&a set out to take our client roster to the next level as a growth strategy in 2006.  We've won ten brand-new clients, many in our new practice areas focusing on business consulting and leadership communication.  New clients include Abbott Laboratories, ACNielsen, Greeley and Hansen, LaMarsh & Associates, SCA Technologies and Shedd Aquarium.

Of your 2006 wins, how many were across three or more countries?
None, as dg&a focuses on domestic markets.

What key accounts did you lose in 2006? If based outside the US, or are global, please state regions.
None.  Our client retention rate for non-one-time projects remains at a perfect 100%

Did you expand any existing accounts into new domestic or international markets or sectors? Please elucidate.
While McDonald's proudly remains an anchor client, dg&a continued to diversify its work within the corporation to touch five new business and functional areas within the company in 2006.  We also added two new divisions within Lockheed Martin, another of our anchor clients.

What proportion of your clients are on a retainer?
dg&a is the agency of record for the U.S. Communications group at McDonald's.  Generally, we work on a project basis with many clients, so we're always focused on keeping our clients happy and never being complacent, and our client retention for non-one-time projects remains at a perfect 100%.  Our greatest client testimonial is that nearly 70 percent of our new business has traditionally come from referrals. 

Has this changed over the past year?
No

Performance

What was your 2006 global (including US) revenue?
See below

What was the % change over 2005 global revenue
See below

What was your 2006 US revenue?
dg&a saw $2.6 million in 2006, exceeding our own goals and truly reaching a new level.

What was the % change over 2005 US revenue
dg&a went from $1.9 million in revenues in 2005 to $2.6 million in 2006, a 37 percent growth.

What was your US profit margin in 2006?
Agency declined to give information

Did you experience top-line or bottom-line growth in the past year, or both? Please elucidate.
Agency declined to give information

How much of your growth was organic, and how much was due to new business won?
Approximately 60% of our growth was organic, while new business accounted for 40%. 

While McDonald's proudly remains an anchor client, dg&a continued to diversify its work within the corporation to touch five new business and functional areas within the company in 2006.  We also added two new divisions within Lockheed Martin, another of our anchor clients.

In tandem with wowing our existing clients, dg&a set out to take our client roster to the next level as a growth strategy in 2006.  We've won ten brand-new clients, many in our new practice areas focusing on business consulting and leadership communication.  New clients include Abbott Laboratories, ACNielsen, Greeley and Hansen, LaMarsh & Associates, SCA Technologies and Shedd Aquarium.

How did your performance, in terms of revenue and growth, meet expectations you had for the year? Please answer this even if you have not submitted revenue figures, including any information that characterizes your 2006 performance.

David Grossman & Associates started 2006 with ambitious goals as an agency in nearly every area: revenue growth, client acquisition, practice and expertise expansion, team development and ultimately, its re-branding from David Grossman & Associates to its current identity, dg&a.  As we passed the all-important 5-year threshold and moved into our sixth year in business, we entered a time of growth, stretching, enhancing and in some cases attaining unexpected heights-all in the name of taking our business to the next level.

In 2006, dg&a set a strategy that would focus us even further on our expertise in internal communications consulting. As we grew our internal communications consulting practice, we expanded our service offerings to include dg&a design and spun off a new practice area: leadership communication and business consulting. With clients, we found our roles to be a blend of many disciplines, not just pure communications: we're asked to combine HR, organizational development, training, consulting, communication, coaching and business strategy every day. dg&a continues to anticipate and fill the needs of clients and the marketplace, and we saw a distinct need for a new level of communications consulting.

We successfully launched our practice areas by focusing on creating and proving groundbreaking consulting models centered around what we call leadercommunicators -teaching leaders to leverage communications as a strategic business tool to reach their audiences, change the way they work together, and achieve business results.  Our business and organizational consulting practice area works with clients to help create world-class organizations by addressing internal and external issues, solving challenges, improving communication and working toward business goals through change management and engagement strategies. 

In all, we went from $1.9 million in revenues last year to $2.6 million in 2006, exceeding our own goals and truly reaching a new level. 

Please briefly outline any initiatives undertaken in 2006 that add to your agency's story, such as staff development/training, fundraising/charitable initiatives, community programs, business partnerships, etc.

Our team is the key to our success in 2006 and we've always been committed to taking care of the people who take care of our clients.  Our full-time team members enjoy generous "traditional" benefits, including healthcare benefits above industry standard, profit-sharing (unprecedented in the communication industry) and 401k with matching contribution, as well as some creative perks that support our culture. A sampling: monthly "Tally Rallies" where the team celebrates meeting or exceeding revenue goals; free lunch; board games in the main conference rooms (Candyland tournaments have been known to get intense); the Annual Absurd Winter Outerwear Exchange; celebrity pumpkin look-alike contest; Friday afternoon "Wined-Downs;" group outings to support a team member's karaoke competition; matching donations for thoughtpartners' individual charitable activities; and more.  In one of our favorite traditions, each year, the office closes for a day while the team converges on a local cooking school to make Grandma Elsie's Pumpkin Pies-for every client.  The pies are handmade, hand-packaged and hand-delivered by the dg&a team the week before Thanksgiving (177 last year!) to say thanks for a great partnership.  

dg&a also is very involved in the communications industry, including supporting industry organizations and servicing pro-bono clients such as The Red Dress Lady, Community Health and Human Rights Campaign.  We work with the Membership Services Committee for the Chicago chapter of the International Association of Business Communicators (IABC), responsible for growing membership at three different levels: individual professionals, corporations and students.  dg&a also coordinated IABC Gold Quill judging, and support the chapter in many ways.  We also work with the PRSA Foundation to raise awareness of and funds for the Betsy Plank Scholarship Endowment Fund through a communications plan to effectively reach PR agencies and national corporations.  David Grossman teaches the only graduate-level course in internal communications in the U.S. at Columbia University in New York City and is much sought after on the lecturer circuit.  Also, as a certified member and Diversity supplier through the National Gay and Lesbian Chamber of Commerce, dg&a is developing a tool kit for small- to mid-size companies seeking to improve their diversity.

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