FEATURE: Calling in the consultants

When should agency managers seek specialist advice? Mark Johnson speaks to the founder of new consultancy 'What Next?' and other experts in the field.

If the agency you manage is repeatedly failing to hit targets, and if you find yourself facing a series of client reviews, then perhaps you should call in a consultant for some much-needed management advice.

This month saw the official launch of aptly named business What Next? - the latest ‘consultancy for PR consultancies'. Set up by Jim Horsley, the former CEO of Nexus PR and Ketchum, What Next? is based on the familiar premise that the skills required of a talented PR practitioner are wildly different from those of a successful business manager.

Horsley's intention is to help struggling agencies come through their period of malaise, set in stone their ‘brand values', and steer them on the road to business expansion. ‘All agencies plateau,' he argues. ‘If agencies keep applying the same skill sets in the same way, they will continue to get the same results and fail to
develop in new directions.'

Performance check-up
For managers looking to maximise agency performance - either with the intention of cashing in and selling up, or the desire to continue building the company - the range of options is expanding.

The PRCA, for example, offers a rigorous audit called the Consultancy Management Standard (CMS). The trade body's MD, Patrick Barrow, says the CMS measures eight areas of business management. The aim, he explains, is to guide applicants through the audit process. In that sense, it can be used by managers as a business performance tool.

But is such external advice always the best option? The London office of US-based agency Waggener Edstrom went through the CMS audit to demonstrate its credibility to clients in Europe after it launched. Managing director David Ingle says it was a ‘great, holistic way of taking a step back and asking if we'd done all the right things'.

But other agency managers understandably believe that the person best placed to comment on how their business is run is - you have guessed it - themselves. For that reason they see little value in seeking external advice.

There is also a great deal of reluctance among pass­ionate managers to give outsiders acc­ess to the inner workings of their beloved business.

Mike King, managing director of tech PR agency Johnson King, has used external consultants twice. He agrees that laying everything open to an outsider is ‘a brave thing to do', and acknowledges that ‘a lot of people don't want to do that'.

He can also vouch for the value of such advice. Since last October, King has been working with Horsley's What Next? on strategic development at his agency. King says that although the firm has reported impressive revenue growth of between 25 and 30 per cent over the past two years, he needed advice on how to continue that success in an increasingly commoditised tech PR sector.

‘We went through a similar exercise almost four years ago with Results International, and our fast growth in the past two years can be largely attributed to the work we did then,' says King.

Horsley says a major benefit of What Next? is its expertise in areas such as branding and finance - in the form of partners Peter Finch (a previous strategic director of ad­vertising group FCB) and ex-Chime Communications group financial controller Mark Seabright. Mark Adams, the founder of Next Fifteen Communications, is now a partner at Pembridge Partners, where he advises creative services firms on business performance and mergers and acquisitions. He argues that because of the nature of the PR industry, insider experience of the kind provided by Finch and Seabright at What Next? is indispensable for the managers of PR agencies.

Adams says that although his firm and mainstream management consultancies share the same objective - ‘creating value' for their clients - the difference lies in their definitions of value.

‘McKinsey would define value in a certain way,' he says, referring to the creator of management theory, James McKinsey. ‘When most management consultants say "let's build shareholder value", they mean just one thing: money. But in the creative services industry, value is more like an egg in that it has two parts: the yolk is money, but there is also other stuff - the people and what motivates them. PR agencies are not just cash machines. They're made up of people who are passionate about doing something historical or living in a great culture. They're not there just for the money.'

Jay O'Connor turned to Pembridge Partners during the acquisition of her agency, Fuse, by PR group Race Point in November. It was not the first time she had called in consultants. ‘The process was very valuable,' says O'Connor. ‘Calling in a consultant can be a benchmarking exercise in many respects, as well as the advisory aspect.'

She adds: ‘The benefit of working with advisers who operate in your industry is that they know what your competitors are doing and how well they are performing in certain areas, so that helps you establish performance benchmarks.'
‘A definite impact'

King says his experience of working with advisers who can demonstrate their PR and creative industry expertise has been wholly beneficial.

His current exercise with What Next? has involved an audit of client satisfaction, brand development workshops and service differentiation. ‘I have already noticed a definite impact,' says King.

He says: ‘Stepping back from the day-to-day running of the firm and looking at the bigger picture is useful, but we're also learning more about branding, which is helping us to develop our own brand and understand the challenges faced by our clients. We recently entered three pitches and won all of them - two of which I can say with some confidence we would have lost without this process.'

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