On the 38th floor of the Empire State Building sits the headquarters of an agency that undertook a dramatic transformation of its business model. Taylor is a premier strategic PR firm in the lifestyle, sports, and entertainment sectors with about $19 million in revenues, 100 employees, and prestigious clients, such as Procter & Gamble, MasterCard, Allstate, and Coca-Cola.
A recently published Harvard Law School case study, which I co-authored with Professor Ashish Nanda, tells of Taylor's rise from a successful but unremarkable sports publicity shop to a top strategic marcomms firm.
The story begins with a transition from the firm's founders to a new generation of managers with a radically different view of the business. Many companies do not survive such a transition, but for Taylor, the second generation was a group of long- term staffers willing to rethink the business model and pursue a new vision. Turning that into reality is a huge challenge for any management team, but Taylor's second generation made some critical moves that fueled its success.
- Create a bold vision. Headed up by CEO Tony Signore, the new leadership team was not afraid to think big. They saw a glimmer of potential in the agency and built a vision of a fundamentally different type of organization. They started by taking a hard look at where Taylor was in the market and realized their business was fairly indistinguishable from other small and midsize firms. Yet they knew they could build on some strengths - solid relationships with existing clients and a dedicated team of people.
- Listen closely to clients. This was a key part of developing Taylor's vision. The firm had great relationships with leading consumer brands, but its work was mostly on execution. Clients told them what they really needed was a strategic partner and Taylor was not in a position to provide strategic counsel. The determination to provide this level of service played a key role in decisions going forward. Hearing it directly from clients also gave management the confidence to revamp the firm.
- Disciplined execution. Taylor's management team realized early on that if they were to become strategic counselors, they had to drastically reduce the number of clients on their roster to fully immerse themselves in the business of a select group of category-leading consumer brands. To do so, they formulated specific criteria for an ideal client and then rigorously measured each of their relationships against these standards. Not only did they end up moving away from the majority of their clients, but they also started to turn down business development leads that did not align with their vision.
This approach sounds straightforward, but presented major challenges. Shedding clients and shunning opportunities meant potential revenue declines if the core client base did not grow organically. It was a huge leap of faith and quite rare in professional service firms. But it paid off when, in the first six months, Taylor moved 31 clients off its roster, but increased revenue by 50%.
- Practice what they preach. Taylor's management team was determined not only to lead the firm in a new strategic direction, but also nurture a corporate culture that valued employees above all. One example stands out.
Shortly after the second generation took over the reins, one of the firm's longstanding six-figure clients put a new person in charge of the Taylor relationship. The new manager demonstrated a glaring lack of respect with the Taylor account team. The agency's management team decided no client was worth losing employees over and put the client on notice. When there was no significant change over a few months, Taylor parted ways with the client. This action spoke volumes to the firm's employees about their value to Taylor.
It has taken considerable drive and persistence, but Taylor has more than doubled its revenue and maintained healthy profits since the second generation took over in 2004. The agency's staff has shown a resilience and determination to succeed that is paying off during a sluggish economic recovery.
Lisa Rohrer, PhD, is the director of the Hildebrandt Institute at Thomson Reuters. She was formerly a research fellow in the case development initiative at Harvard Law School.