Hill+Knowlton Strategies US: Agency Business Report 2015

Martin Sorrell described Hill+Knowlton Strategies in WPP's full-year financial results as "challenged" in 2014 - and that could charitably be called an understatement.

Mike Coates, president and CEO, the Americas
Mike Coates, president and CEO, the Americas

Principals: Jack Martin, global chairman and CEO; Mike Coates, president and CEO, the Americas
Ownership: WPP
Subsidiaries: Public Strategies, Wexler & Walker Public Policy Associates, Blanc & Otus, Soho Partners, PBN Hill+Knowlton Strategies, Dewey Square Group, Group SJR, and Scangroup
Offices: Global: 87; US: 13
Revenue: Global: $350 million to $400 million; US: $100 million to $150 million
Headcount: Global: 2,500; US: 550

Martin Sorrell described Hill+Knowlton Strategies in WPP’s full-year financial results as "challenged" in 2014 – and that could charitably be called an understatement.

WPP’s PR and public affairs group reported a 2.5% like-for-like increase in revenue in 2014, but H+K scrambled to stay flat with year-on-year global revenue, following further leadership change at the top, the loss of four big clients worth as much as $10 million, and significant senior staff turnover.

"We were flat for the year," says H+K’s new president and CEO of the Americas Mike Coates. He arrived after 20 years as CEO of H+K Canada, replacing Andy Weitz, who lasted a year in the role and subsequently re-emerged at H+K client Aon.

"Martin Sorrell’s comment is fair," adds Coates. "The business has been challenged by a lack of growth: It was last year and the year before that."

Clients lost included Qualcomm, Salesforce, CA Technologies, and Amgen. Senior leavers included COO Dana Bethel; global practice leads Chris Gidez, Joe Eyer, and Jeff Eller; EVPs Ian Bailey, Hadley Wilkins, Paul Turner, Bill Coletti, and Devon Spurgeon; and SVPs Susan Thiele and Mylene Mangalinden.

"It was a year of change," notes Coates. "There was a change in leadership during the year, then a change in style when I came in – this year is the same."

Coates introduced a new go-to-market offer and trained his team in what it means for elements such as pitch processes.

"So much of change management is about training and getting buy-in for what you’re trying to do," he adds.

Addressing key issues
Coates also identified a number of issues he thought needed addressing, the biggest of which was staff turnover.

"It was a lot to do with why there hasn’t been growth in the past couple of years," he says. "It’s hard to keep a client satisfied when their account team is constantly changing."

He spent the first 60 days listening to the team and focused on people, clients, and new business. A new maternity leave policy was inspired by Sheryl Sandberg’s Lean In book. In H1 2014, staff turnover was 21%; it was down to 14% in H2 and across the year it was 28%.

He put in place a new regional structure, led by Howard Opinsky on the East; Chris Winans was hired from Promontory Financial Group to replace Ian Bailey and instill a strong financial service offering in New York.

Former Obama comms director Ellen Moran moved from H+K subsidiary Dewey Square to be GM of the firm’s DC office. Erin Gentry is now global co-chair of client services; Jodi Baumann came on from NetApp as tech practice lead and San Francisco GM; and Monica Bouldin moved from Edelman to lead H+K’s Los Angeles office.

The next focus was to integrate H+K’s content offering within Group SJR into everything it does. Acquired in June 2013 and led by managing partner and now H+K chief global strategist Alex Jutkowitz, Group SJR has 85 employees and a growing shop in London. An integrated pitch won from incumbent Environics in February this year for top 30 client Coca-Cola in Canada and Asia under the H+K banner with Group SJR at the table illustrates the offer.

"It was fascinating to see the client listen to the presentation," says Coates. "They could see we were speaking to different aspects of their marketing budget. At one point it looked like experiential or advertising – and digital flowed through everything we did."

Coates integrated H+K Digital with the mothership as soon as he arrived.

"If we need something specialized we get that from Group SJR – and we’re integrating that too," he notes. Coates will recruit a US CEO for the firm when he feels he’s done what he needs to do in the US.

"I had to grab a hold of the operation, give it a good shake, and set it on a path," he adds.

H+K doubled down on existing clients including GE, Coca-Cola, Chick-fil-A, Statoil, and Northrop Grumman. It also won AIG at the end of 2014, but new-business revenue mainly came from smaller engagements for clients such as Genesis HealthCare and Dana-Farber Cancer Institute.

"We fought our way back the hard way with $200,000 to $300,000 wins," explains Coates. "More than anything, I just want to get H+K’s mojo back. There’s nothing like a few wins to turn things around."

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