Agency Management: Sacrificing players for the good of the game - Burson-Marsteller is nearing the end of a far-reaching restructuring of its European operations which certainly seems to have taken its toll in terms of staff turnover

Ten months after Burson-Marsteller’s European region began its radical reorganisation in earnest, rumours are flying that the agency has been haemorrhaging staff.

Ten months after Burson-Marsteller’s European region began its

radical reorganisation in earnest, rumours are flying that the agency

has been haemorrhaging staff.



B-M suffered its first blow when UK chief executive Alison Canning

announced her resignation in August last year. She will soon be joined

at First and 42nd, the agency she has since created, by Mike Seymour,

European managing director of issues and crisis management at B-M.



He resigned in May and is due to leave next month. In the interim at

least seven senior managers have taken their leave.



Notable departures include European marketing director, Alex Price;

European managing director of research and planning, Jane Atkin; UK

chief executive of Marsteller Advertising, Jeff Klein; chief executive

of Spain and Portugal, Juan Astorqui; and managing director of consumer

marketing, Liz Freeborn.



Managing director for UK healthcare Nigel Garland arrived in January

this year and was gone by March.



But European chairman Alan Watson, points out that numbers in the 190

strong UK office have actually increased.



B-M’s own records show that since November, 50 people have left, but 60

have joined, including 40 professional staff. However, former B-M

managers believe the agency has lost up to 80 staff in the past six

months.



B-M’s figures represent a turnover of around 37 percent in the last

year.



This is not an unusually high figure during an internal restructuring,

and in an industry where the norm is to change employers every two or

three years.



By comparison Lynne Franks PR loses 25 to 30 per cent of people in a bad

year, but without the radical changes seen at B-M. In a good year it can

be as little as five per cent, estimates Lynne Franks deputy managing

director Julian Henry.



But the real issue here is to more to do with employee relations and

staff retention then total staff numbers. So what has caused the above

average leakage of key staff? A former B-M account executive, who left

after the re-organisation began, said: ’The reorganisation wasn’t well

communicated and people didn’t buy into it.



’They are constantly restructuring but nothing ever seems to

change.’



Canning, who joined B-M in 1994, implemented her own reorganisation of

the UK office prior to the current one.



B-M has reorganised along practice lines, to match more closely the way

clients work. Profit and loss is no longer calculated by country,

measured instead on a European basis according to the five practice

areas: marketing, corporate, healthcare, public affairs and

business/creative services.



The roles of general manager for each country have been abolished, and

staff have been appointed to head up the European practices.



B-M has shared the posts evenly across the region. Of the five practice

chairs, two are from Copenhagen, one is from Milan, one from Oslo and

one from London.



The new roles are part of a complex reporting structure. Cutting through

the practice lines are 25 client leaders, identified 12 months ago, who

focus on the largest businesses B-M serves. Some geographical posts

still remain, adding another dimension to the matrix. These are the

market leaders, who are intended to be ambassadors for the agency in

each country it serves.



Beside them are a handful of local, as opposed to European practice

leaders, mostly based in the UK. Eric Gerritsen, for example, will be MD

of marketing practice in the UK from September. He is currently market

leader for B-M Rome.



Those who have left say the structure is confusing, particularly for

practices which did not previously have a global outlook. Paul

Philpotts, B-M UK managing director and head of European financial PR,

says the changes have made a difference.



’It’s a different company now and I’m sorry that some people haven’t

felt they could fit in with it,’ he says. ’We’ve removed the financial

barriers to working right across Europe. It’s more difficult to say

’this is my fiefdom’ and some people didn’t like that.’



Meanwhile B-M’s competitors have been watching closely. Some have now

followed its lead but claim to have also learned from B-M’s

mistakes.



Scope Ketchum, which has reorganised to co-ordinate its practices across

Europe, has been careful to maintain strong country by country direction

for its teams. Profit and loss is still calculated by country rather

than by practice.



UK CEO James Maxwell says: ’Whereas B-M has chucked out local office

heads and moved immediately and radically to global practice groups,

Scope Ketchum has looked for a balance between strong local office

management and the growing influence of global specialist practice

groups which can enable teams to share knowledge, and market themselves

to global opportunities.



’We believe it is extremely important for people in local offices to

have a strong local structure, a strong sense of leadership and a strong

team image,’ he says.



But Watson insists B-M’s reorganisation had to be radical. He explains:

’The whole idea is to break away from turf thinking. At the end of the

day there is only one source of prosperity and that is what clients give

to us.’



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