For a handful of the highest-profile PR agencies in the US,
determining future leaders is a simple task. Family businesses know who
will be in charge. At the Rubenstein group of agencies, for instance,
sons Richard and Steven, and daughter Ronni, make for a Rupert
Murdoch-style succession strategy, with the former two running
Rubenstein agencies. And at Ruder Finn, David Finn's children, Peter
Finn, Amy Binder, Kathy Bloomgarden and Dena Merriam, all hold senior
positions within the company.
At several agencies, such as Weber Shandwick Worldwide,
Burson-Marsteller and Edelman, the current leaders are still in their
But at Ketchum and Hill & Knowlton, where leaders are closer to
retirement age, succession plans have been worked on over a number of
years, with Ray Kotcher and Paul Taaffe, respectively, being gradually
groomed for the agencies' top jobs.
Taaffe has not been officially rubber-stamped for H&K's worldwide
chairman and CEO job, but his name is widely touted in the industry as
successor to 57-year-old Howard Paster. Who might replace US president
and CEO Tom Hoog, who sources indicate will retire by year's end, is
less clear, although worldwide head of corporate practice Harlan
Teller's name has been linked with the job. Ketchum's Kotcher has
actually been working closely with chairman David Drobis since the early
1990s, so his switch to the CEO slot last June was seamless.
But for some of the other top agencies, there's more uncertainty hanging
over the future leadership. Fleishman-Hillard CEO John Graham, for
example, has assembled a cadre of 12 people, a combination of
geographical and practice leaders, who make up his second level of
command. Graham, 60, swears that he has no single deputy among those
He says he intends to stay on as CEO for 'some time to come,' and that
he has 'a number' of potential successors in mind, but has not put any
specific plans in place.
At Porter Novelli, 58-year-old CEO Bob Druckenmiller refuses to comment
on the nature of any plans for future management of the agency, although
sources indicate that David Copithorne is a likely successor. Helen
Ostrowski, general manager of P-N's New York office, has also been
mentioned as a possibility.
Manning Selvage & Lee CEO Lou Capozzi, 54, says it can often be
counter-productive to identify an obvious deputy too soon. 'Businesses
like ours, which have such an emphasis on collaboration, aren't served
by drawing organizational charts at a very senior level. It's like when
you have a team of five basketball players - the coach doesn't want to
pick out one as the star and insult the four others.'
But senior management egos aside, there is a very good reason why
agencies need to think carefully, and well in advance, about who they
want to take over at the top. In the 1990s, PR went through a
metamorphosis as agencies grew at a ridiculous rate (in both employee
numbers and geographical reach) and clients began to take PR more
PR agencies not only counsel big business these days, they are big
All the more reason why senior management should take a page out of
General Electric's strategy book and pay serious attention to grooming
potential chiefs. 'If, as an industry, we want to be admitted to the big
league, succession planning is the kind of is sue that needs to be
addressed,' says Jack Bergen, Council of PR Firms president.
What it takes to lead
As if that were not a pressing enough reason, add the fact that the role
of agency head honcho has changed drastically in the past decade, and
the importance of leadership planning really starts to sink in.
As PR agencies have grown both in size and complexity, the role of
agency leader has evolved into a montage of jobs, including cheerleader,
cultural advocate, technology expert, human resources guru and financial
Once upon a time, managing a PR agency was a relatively straightforward,
if not simple, task of assembling a decent team of PR people, enough
clients to stay in the black and keeping the two groups happy. Most
often, the person who emerged to lead the agency was the practitioner
who best proved his (and it generally was a 'he') worth to clients.
As Jean Allen, a senior partner in recruitment agency Heidrick &
Struggles' communications group, explains: 'Ten years ago, agencies
wanted rainmakers as leaders, the people with Rolodexes full of contacts
and business-building skills. That's seen as less important now; other
qualities have become more crucial.'
The problem of attracting and keeping talented people has become such an
issue to agencies in the past five years that CEOs' HR skills have come
into sharper focus. 'The agency leader of today and the future needs to
be part PR practitioner, part sales and marketing professional and part
HR guru,' says Bill Heyman, president and CEO of headhunter Heyman
Associates. 'The greatest need is that this person can produce the kind
of culture in an agency that will recruit and retain the best talent.
This applies even given the current economic climate.'
'It used to be enough to be a fairly dynamic leader - a smart,
high-energy person with self-confidence - and to not worry about the
softer side of management,' adds Heyman. 'Nowadays, the likability
factor is so much more important. The leader sets the tone for the
culture of an agency and you want potential recruits to feel that
It also means that a higher premium than ever before is being placed on
training and development, something that the smartest agency leaders
take on as a personal crusade.
Kotcher characterizes his own management style as focusing on HR issues
first, and 'applying them through a PR lens.' Under his guidance, the
agency works within his HR philosophy: happy employees produce delighted
clients, who feed more business into the agency, which sustains the
health of the agency and in turn keeps the workers happy. This 'virtuous
circle' idea is also expounded by MS&L's Capozzi.
At the very top
One of the most obvious changes to the biggest American PR agencies in
the past decade has been ownership. Of the top five, only Edelman
remains independent, while the others have been snapped up by worldwide
But agency leaders maintain that this hasn't necessarily changed the
nature of their jobs, claiming there has been no extra pressure from
their new parents. 'It hasn't been an issue,' says Graham of Omnicom's
1997 purchase of Fleishman. 'We go to them each year with our targeted
figures. It's a bottom-up approach, rather than top-down.'
H&K's Paster is equally adamant that having a new owner with
responsibility to shareholders hasn't adversely affected his role, or
made him feel the need to be more aware of the financial side of
business. 'I don't think Richard Edelman has any less of a demand for
quality management just because he's independent. Yes, the business of
running an agency is changing, but not necessarily because of
New issues to deal with
However, new ownership has brought new access to investment for the
largest agencies, which has meant off-the-scale growth, in numbers of
employees, offices and global reach.
Paul Taaffe, president of Hill & Knowlton, believes burgeoning agency
size is the single most pressing challenge for the agency leader of
'The old issue with agency management was that the people who were good
at account work weren't necessarily good agency leaders, but often found
themselves promoted into that role.'
'Now the issue to deal with is size. The top agencies have tripled their
worldwide income over the past five years to take them individually over
the dollars 300 million barrier. It's not inconceivable that some will
break through dollars 500 million in the next few years, even given this
slowdown. That entails an entirely different kind of leadership. '
Taaffe points to H&K's solution to this sprawling complexity -
engineering a structure that includes geographical, practice and client
managers to manage the business. 'The agency leader has to come up with
a structure that can cope with a business of such size and scope.' He
predicts more senior agency managers from the advertising world, where
these issues have been addressed earlier, will switch to the PR
As agencies grow larger, they are creating increasing numbers of
specialties to cater for ever-more complex client needs. This leads to
another new task for the agency leader - structuring these specialities.
Should they report straight to the CEO? Should they also have
geographical reporting lines? Both systems have been tried, with varying
degrees of success at each of the major agencies.
But the problems don't end there for the CEO juggling new practices.
He (and possibly soon she) is faced with a whole strata of PR people
coming up through the ranks as specialists. Capozzi points out: 'The
business is going to have to figure out how to accommodate these
professionals who don't choose the management track. We need to find
ways to show that a senior crisis person who we bill out at dollars 500
an hour is just as valid to the organization as a 35-year-old MBA
graduate. If the only way that 'success' is defined is by managing part
of the business, that's wrong. These specialists do a great job for our
Because of dilemmas such as these, many senior PR agency managers
subscribe to the view that the PR agency of tomorrow is going to need
something akin to a 'professional' manager to lead it through a period
of unprecedented change. 'We think of ourselves as having worked in the
heyday of PR firm growth, but we haven't seen anything yet,' Capozzi
says. 'The emergence of the professional manager is an inevitable
outcome of the growth of the agency business.'
Capozzi admits that growth in agency size puts a strain on him to keep
up with the change. 'The prospect of the 10,000 employee-agency
emphasizes the need for more serious credentials as a manager. My
professional background as a financial writer won't serve me well unless
I can translate it into management skills of leadership, direction,
delegation, as well as accounting for our agency's performance.'
Taaffe also testifies to the priority of sharp management skills.
'Obviously, you must understand the PR business, but at least as
important is the ability to take tough, often unpleasant decisions to
keep the business in shape.'
Staying close to the action
Interestingly, this is the one area that invites dissent amongst the
major agency players. While many of the 'new breed' assert management
skills as a priority, some of the more senior industry leaders are
adamant that the person at the top must be a PR man or woman first and
'It would be my worst nightmare to have managers not working on client
business,' says Graham, who has structured the agency he has run for 27
years so that he can still spend 40% of his time on PR work. His desire
to remain hands-on with client accounts isn't only because he feels he's
still good at it. 'It helps me keep a feel for what's going on. I think
you can quickly become isolated unless you keep in touch with the
accounts. It's easier for me to take strategic decisions on which
direction to take the business when I am familiar with client
His counterpart at H&K, Paster, similarly refutes the idea of a manager
who is more devoted to the processes of agency life than the practice of
client business. 'Size of the agency doesn't necessarily affect the
quality of the management,' he says. 'Agency leaders of the future will
have to continue to be client-facing people first. You just have to add
to those client-counseling skills. I wouldn't like to see an
'institutional' system of managers coming into the business.'
But Ketchum is a good example of the need for classic management skills
applied to a business at a crucial point in its growth. The agency
started the 1990s as a fairly small PR shop that was part of an ad
agency. It was bought by Omnicom in 1996 and has since quadrupled in
size, becoming international in the process.
Although Ray Kotcher emphasizes his roots as a PR man, Kotcher spends
much of his time trying to turn Ketchum into the Dell of the PR
(The computer giant is famed for its dedication to delivering the same
experience to every customer).
'I do spend a lot of time with clients, but there are people here who
are much better than me at PR,' says Kotcher. 'I'm not bad at it, but my
time is better spent constantly reinterpreting the Ketchum brand,
professionalizing our business.'
'My challenge is to ensure that, as we grow, we stick to our culture of
co-operation, teamwork and trust. These are the qualities that set us
apart, and I spend a good part of my time institutionalizing that
culture at an operational level, putting the processes in place that
make it real for staff and clients. If we are to truly create a seamless
experience for clients, no matter where they work across the world, we
need consistency in how our people perform throughout the agency.'
Changing with the times
The need for business savvy extends beyond size issues. PR agency chiefs
of the future will make complex decisions about spending large amounts
of money on technology to increase efficiency, and facilitate the kind
of processes described by Kotcher. They'll also spend even more time
dealing with law firms and bankers while negotiating mergers and
In addition, the increasingly hyper level of competition among the big
agencies means finding new services to offer, differentiating them to
clients. Paster defines this as the strategic ability to 'spot industry
trends, but also to anticipate what clients might want in the future and
plan how to provide it.'
As Bergen observes, the ever-tougher agency game means that those at the
top will have to reinvent themselves yet again - as
'They need to break out of the traditional mold they've always been in,
into new areas. They'll have to address the possibility of buying, or
being bought by, management consultancies. And consider how to offer
clients new Internet services.'
The global nature of clients' business is now being reflected in the PR
agency business, meaning that managers need to be more aware of life
beyond US borders than ever before. 'Clients want agency leaders who
move in the same international arenas they do,' says Paster. Or, as
Bergen puts it: 'We've all talked global for 10 to 15 years. The agency
leaders of tomorrow will actually have to deal with the implications of
The day will soon come when a major PR account will move in an
international realignment similar to the DaimlerChrysler ad switch,
which cost True North its independence. When that watershed happens, PR
agency leaders will truly be playing a global game.
But for now at least, the emphasis is on lining up those people who will
be able to compete on a world stage.
If that sounds like a hard task, imagine how much harder it is to be
catapulted into the role. Capozzi admits to feeling occasional
'frustration' when he can't spend enough time with clients (he estimates
spending 25% of his time on client work).
'I grew up in the profession, spent all my time thinking about my
client's problems and developed my skills as a PR man,' he says. 'Then I
got promoted to run a dollars 100 million company, which is a job that
requires an entirely different approach. But I still think of myself as
a financial writer.'
Hoog expresses similar feelings about how his job has evolved: 'I
certainly had the right mix of skills for the right time, but I'm not
sure if they would be so relevant in five years' time.'
No doubt, it's a tough transition. Kotcher estimates that the amount of
time he spends with clients has not changed in the past 10 years, but he
has had to add in numerous other tasks in efforts to guide the strategy
of the agency. 'I've just had to fit more into my time - we're talking
getting in very early and leaving the office very late. It's a function
of globalization and of all the information now at our disposal.'
John Graham has seen more than a few changes in the profession during
the 27 years he has been running Fleishman-Hillard. He has created a
structure for the agency that both allows him to spend a good portion of
his time doing what he loves - dealing with clients - while
masterminding the kind of growth which has seen Fleishman climb right up
to the top of the American PR tree.
But despite Graham's achievements, it will be whoever holds the reins at
the agency in 10 years from now who will ultimately shape Fleishman's
part in the global communications dance - for which the curtain has only
Dave Drobis, Chairman
Years as CEO: 10
Successor: Ray Kotcher
Ketchum was the first agency in recent memory to address the issue of
succession. Having worked closely with David Drobis for the past decade,
Kotcher moved into the CEO role last June, and Drobis became
PRWEEK PREDICTS THE FUTURE
John Graham, CEO
Years in Job: 27
PRWeek Pick to Succeed
Picking a likely future leader of the US' largest PR agency is a tricky
task, as the dynamic Graham has no obvious deputy. Of the 12 senior
execs who make up Graham's next level, none has pre-eminence over the
others. Although Graham admits that he has put no particular succession
plans in place, he says he has 'a number' of potential successors
amongst the 12. 'Anyway, I intend to stay on as CEO for some time yet,'
adds a sprightly Graham.
Odds: 12 horses are in the paddock, but no race is scheduled.
Hill & Knowlton
Howard Paster, Chairman and CEO
Years in Job: 7
PRWeek Pick to Succeed
Paul Taaffe, President
Australian-born Taaffe is truly a global citizen these days, having
worked in the UK, and supervised Europe, the Middle East and Africa in
his previous H&K role. He's also seen as having close to the perfect mix
of experience, having headed up Unilever's corporate affairs in the UK,
before becoming director of Shandwick Consultants. He moved to New York
last fall and is generally regarded as Howard Paster's
Odds 2-1: A fine pedigree makes this colt a shoe-in.
Hill & Knowlton USA
Tom Hoog, President & CEO
Years in Job: 7
PRWeek Pick to Succeed
Harlan Teller, Global head of corporate practice
The name of H&K's Chicago-based corporate head is regarded as being in
the running for Tom Hoog's job when he retires, although the rumor mill
says it's not a done deal. Other names in the mix are Ron Hartwig,
EVP/GM in LA, and Phil Sheldon, GM in New York. However, Teller is
well-regarded within both the agency and the industry, having guided
clients through a variety of crisis situations, M&A's and legal issues.
He joined H&K in 1996 after 20 years with Burson-Marsteller.
Odds 4-1: The early pacesetter.
Porter Novelli International
Bob Druckenmiller, CEO
Years in Job: 9
PRWeek Pick to Succeed
David Copithorne, President
A journalist-turned tech PR man, who sold his agency (Copithorne &
Bellows) to P-N in 1995, Copithorne was promoted to president last
November, a position from which he runs the US business. Although
Druckenmiller is prickly on the subject of succession, with UK-based
veteran Peter Hehir recently retiring, Copithorne appears to be
best-placed to take over from his boss.
Odds 3-1: Has rallied from the back of the field to nudge ahead, but the
finish line is not in sight.