With the industry still abuzz over Tom Nides' departure from Burson-Marsteller, CEOs spoke with Anita Chabria about the qualities that are essential to lead a PR agency today
Tom Nides' brief tenure as worldwide president and CEO of Burson-Marsteller has been marked by controversy - not for how he has led the agency, but for the fact that he led it at all.
In a business that traditionally draws its leaders from within, the appointment of an outsider sparked industry-wide discussions about exactly what it takes to run a global agency, and who is best suited to do it.
Now, as Nides departs after only eight months on the job to follow his former boss John Mack to Morgan Stanley, PR pundits are once again fueling the rumor mills as to why, as one puts it, Nides turned into "an experiment that didn't work."
Nides, who declined to be interviewed for this article, has said his departure isn't so much about leaving Burson as finding a "spectacular" opportunity at Morgan Stanley (PRWeek, July 18). Yet his decision has caused much introspection on the pressures and pitfalls of today's PR marketplace, and the skills needed to navigate them.
Few industry leaders would comment directly on Nides' tenure. But there was no lack of willingness to discuss how the role of CEO has changed in the industry, and how that evolution impacts the women and men who are trying to lead their firms - and the field in general - into a very competitive future.
"The environment certainly has changed dramatically over previous years," says Aaron Kwittken, Euro RSCG Magnet CEO. "The role of CEO [used to be] more focused on business development, growth, talent development, and thought leadership. All the things that are typically standard and customary for any CEO."
But, in an era of Sarbanes-Oxley, Eliot Spitzer, and Enron, "CEOs are having to spend much more time on the practical side of the business," he says.
"It has created a new breed of CEO - a racehorse rather than a show horse."
Understanding business is vital
It is a truism that as more companies realize the value of strong communications plans on their own bottom lines, the need for PR pros to be well-versed in business, as well as PR, has dramatically increased. Nowhere is this notion truer than at the CEO level, where the pressure to be a valuable advisor to client CEOs continues to grow.
"The demands on CEO clients are tremendous," says John Graham, chairman and CEO of Fleishman-Hillard. "Probably more challenging than they've been in any period in history."
And to meet those demands, says MWW Group president and CEO Michael Kempner, "the need [for agencies] to justify and validate what you do for them, to tangibly prove value, has never been higher."
Yet "PR CEOs have not traditionally focused on running a business like [leaders in] some other marketing disciplines may have," he adds.
Many agency heads have risen up the ranks of the communications field and have had to learn business on their own.
Some say that the reality is that many in the C-suites of agencies are more comfortable creating client communications strategies than plans for their own financial growth. This does not always mesh well with the profit-driven mentality of the holding companies that have devoured the industry. In fact, it can impair agencies that are trying to gain the respect of both their clients and bosses.
"If [client CEOs] are dealing with a CEO of an agency that doesn't have a business background, it's much more difficult to gain their trust," says Graham. "You must have the ability to identify with the client."
"We're playing at a higher level than we did five years ago," says Ketchum CEO Ray Kotcher. "We have to be a lot more professional and a lot more disciplined. We must bring a lot more sophistication to our clients' marketplace."
Staying inside the industry
But while the CEOs interviewed by PRWeek seemed to agree that the industry needs people with specialized knowledge of business and finance, they disagree that firms should draw talent from those fields, as opposed to developing their own leaders.
At the time of his October appointment at Burson, attracting a talent such as Nides from outside the field seemed like a quick way to inject that business acumen into the CEO post.
Nides' Burson stint was his first foray into PR. But his ability to understand and run a global organization was never in doubt, and perhaps gave WPP leaders a level of comfort that he could bring that sophistication to the PR industry.
Nides himself said he believed that "what you try to do is look at ... talent and say, 'OK, if you're good at this, you should be good at that.' Talent is transferable. People make mistakes by typecasting [individuals] in jobs. I've worked in financial services, government, communications - people have taken bets on me." (PRWeek, March 7)
Agency CEOs almost universally agree that their success does depend on knowing business, as well as their client needs, but they also say that communications is still an art, and running a strong PR enterprise demands an understanding of the unique and sensitive relationships between consumers, media, and corporations. And that is something that only comes from time spent inside the industry.
"A deep knowledge, experience, and background in the communications business is absolutely essential," says Graham. "There are other skills that transfer, but if I were picking a new CEO, I feel very strongly that they must really know the communications business."
Ruder Finn co-CEO Peter Finn agrees. "Personally I think it's very hard for people to move into the agency world from outside," he says. "The agency world is just different from any place else. I think that the best CEOs are the ones that have spent their career in the agency business and have grown up in it. They're the only ones who [will] be able to make it."
Even Nides was wise enough to know what he didn't know, and quickly chose Richard Mintz (formerly Burson's global affairs practice leader) to lead the agency's global business development. At the time, he told PRWeek, "Frankly, I need someone of Richard's stature to help me."
But even that kind of high-caliber help isn't enough, say current industry leaders, since clients are now demanding that CEOs take an active part in their business.
Graham, for example, still bills "60% of my time working with clients," he says.
Ketchum's Kotcher notes, "Experience counts," and at the end of the day, "it's the mix of [PR and business experience] that makes for effective management today."
Beyond all that, there may be one other factor that can't be underestimated: A passion for the job. If there is one universal characteristic that describes the industry's CEOs today, it's a love for their work and their field.
Talk to any of these leaders, and it is immediately evident that they find PR to be exciting, challenging, and rewarding. And in an industry that lives and dies by its people, that kind of motivation from the top provides a vision and culture whose worth can't be underestimated.
These are truly homegrown CEOs, and it shows in their commitment not just to the bottom line, but also to PR.
"I don't want to go anywhere," says Kotcher, echoing many of his counterparts. "I
love my job."