Firm foundations

There's no such thing as a non-client-serving job at a PR agency.

There's no such thing as a non-client-serving job at a PR agency.

Even as they counsel clients on best practices, PR agency heads have their own businesses to run. How well they do that relies on much more than how the account managers work with clients. It also depends on the traditional functions of a well-run company, including human resources, finance, information technology, and office administration. "A PR firm is not a philanthropic enterprise," affirms Jim O'Rourke, director of the Fanning Center for Business Communication at Notre Dame University. "It's there to make money. PR firms often fail because the people who are running them are not good businesspeople." While those in client-facing roles typically grab the most attention, the so-called back office keeps the PR agency ticking. In a difficult economic climate, there's an obvious need for companies of all kinds to organize their operations more efficiently. And for a business like PR, which is constantly working to prove the depth of its real-business-world expertise, installing the best people to perform the essential business roles is crucial. Clients recognize the signs of a poorly run organization. Phones that go unanswered, account executives that can't be found, bills that can't be explained - all can point to poor processes that may frustrate and alienate a contact. Moreover, they create an impression of a firm that does not grasp the fundamentals of operations, a fact that will not instill confidence in a prospect seeking a strategic partner to help drive its business. "Clients care a tremendous amount about the consequences of an agency being run well," says David Maister, consultant and author of books on managing a professional services business. "It's just like when we go to the doctor's office. We don't care about the detail about how they get things arranged, but we care a tremendous amount about the consequences." It's not only the client who suffers from poor management, but the firm itself. "It's happened time and again in which firms will do a sort of sample promotion or pitch, or produce sample materials with no idea how they will get paid," O'Rourke says. "Or a client will complain about a bill and the agency isn't sure how to negotiate it. To keep the client, they'll just back away. They are afraid to alienate the client." As a result of the rapid growth of the industry in the late 1990s and early 2000s, the economic pressure on agencies is greater than it has ever been. Even smaller firms expanded their capabilities around the world. But now that top-line growth is limited, the focus is firmly on the bottom line. "That has resulted in great pressure on the agency side to provide all the needed and required services, but also to manage costs," says James Arnold, a management consultant who specializes in corporate marketing. Arnold says that pressure is also coming from the corporate side, particularly when in-house teams have shrunk and the PR firm takes on many of the functions that the corporate communications department may have handled in less cost-conscious times. This is one reason why so many corporate professionals are seeking best-practices guidance on structuring teams internally and externally. Judith Harrison, SVP of HR at Ruder Finn, and chair of the Council of Public Relations Firms' HR roundtable, says that an agency's business functions are a critical component of that firm's culture. "They can help or hinder account staffs' perception of an agency's ability to provide the resources needed to ensure that work-quality goals are met," she explains. "That way, account staff doesn't feel overwhelmed by financial or technical concerns, is not stretched too thinly because of inadequate staffing, and feels confident that there is a sufficient level of expertise - as well as the will - to address any administrative, management, or HR issues that arise." In the end, the client is the final judge of a firm's creative and commercial savvy. Ensuring that this key stakeholder is satisfied with the firm - from the initial phone call to the arrival of the bill - is something no agency can afford to neglect. Maister says that PR practitioners really grasp the importance of that client-satisfaction imperative, particularly when compared to other types of professional service firms. "PR may even be leading the pack," he says. "PR people are the least pompous of every profession I know. Creative advertising people are pompous, lawyers are pompous. The one where they most frequently get it is PR." ----- The merger king Martin Franken, chief financial officer Weber Shandwick Martin Franken, who knows advertising holding companies from way back, says that PR people differ in some ways from their advertising counterparts. "PR people are very strategic, not just creative," he says. "In advertising, you don't see as much, I think, of the business savvy and the strategic sense." A veteran of the professional-services-firm environment, Franken worked at Saatchi & Saatchi from 1986 to 1999. For 12 of those years he was at the company's PR unit Rowland Worldwide as CFO, and later president and COO. Prior to that, he worked at Saatchi subsidiary Yankelovich Clancy and Shulman, and as a consultant at KPMG. His experience lends itself naturally to a dedication to client service. "Marty has a particular appreciation for focusing on external clients and for how we need to orient our people and systems on serving clients well," says Andy Polansky, president, North America. "He really gets it, and is often an important voice of reason as we work through issues on all fronts." Franken joined BSMG in 1999, two years before its parent True North was acquired by the Interpublic Group, and BSMG merged with Weber Shandwick. "A lot of what happens in a merger situation is not just worrying about client conflicts," says Franken. "It's about the consistency of the deliverable to the client." At the time, the agency still had issues to resolve from previous acquisitions. "Weber and Shandwick had previously gone through a quasi-merger, but never really merged the back offices," Franken explains. This July, the team will unveil a new consolidated financial system that will include everything from billings to expenses. The system will be rolled out internationally later in the year. Franken is accustomed to the dynamic that exists between a holding company and its operating units. "In a typical parent company-operating company relationship, they kind of leave you alone on a daily basis," he explains, adding one caveat, "once you have the budget interchange, and as long as you are delivering against expectations." He adds that holding companies have given many PR firms new opportunities. "We move in this IPG family, and draw on resources we might not otherwise have." And though there are strict processes for how things are done, he says, "they are not necessarily onerous." Though Franken and other finance executives may not face clients daily, one of the most potentially contentious aspects of their work does: the bill. He believes an agency is judged not only by the direct work with clients, but by professional execution on all aspects of the account. "We are heavily focused on the idea that the end product is the bill," he says. "Everything must support that." Franken believes a PR agency's survival depends on its business savvy, not just creativity or strategic insights into the client's objectives. "The last thing we want to be known for is not having substance behind the lines," he says. "If you focus just on the deliverables on the program side, you'll get your ass kicked." ----- The go-to guy Rashid Sakir, office manager Thorp & Company The impact Rashid Sakir has had on his workplace is disproportionately large compared to the length of his tenure at Thorp & Company - about three months. But with a degree in architecture and design from the Pratt Institute, and a background that includes facilities management as well as architecture, he is bringing a new approach to service to the Coral Gables, FL firm. "I became interested in how to be creative in the administrative team, and how to raise the level of service," he says, explaining his unusual career trajectory. "I think sometimes that things get lost, that we are so busy making sure things get done that we forget to go the extra mile." "He is what I call an administrator plus," says David Schull, SVP of the 15-person agency. "Not only does he have the administrative skills, but he is able, because of his background, to add a different dimension to the team, including anything from design work in the office, to helping design materials that we use with clients." Sakir heads up a team of three, and he manages all of the administrative functions of the office, from the operations of the building facility to answering phones. The attention and responsiveness that he showers on clients is the most obvious example of his focus on detail. Indeed, part of his self-imposed remit is to make sure that the meters where clients are parked are constantly fed. Perhaps more importantly, he knows the clients by name, not to mention the whereabouts of the account teams for tracking people down when clients call. But Sakir aims to instill in his team a sense that their internal and external clients are equally important. That includes solving technical problems, as well as managing the process for new-business presentations. He reorganized the workspaces as well, to create a more efficient environment. The point, he says, is to help the team focus on its accounts. "When the internal clients are satisfied, it creates the perfect environment for them to be able to satisfy external clients." ----- The talent spotter Dan Relton, SVP of human resources GCI Group North America After beginning his career marketing tax-shelter investments in oil and gas, Dan Relton moved into a role with an executive search firm. When he decided to go in-house, he found it wasn't an easy transition. He got his MA in human resources at New School University, and was at MS&L for four years before being recruited by GCI Group seven years ago. "At the time, the New York office of GCI had only 45 people," Relton recalls. Today, there are 130. Employee retention is something Relton takes seriously. "If you have turnover, you don't have consistency in your business," he says. "Clients build a rapport with their account teams. It throws a wrench into the process when a key person leaves." Relton's training as a recruiter has proved an asset in identifying talent, especially in the healthcare field. "Ask any HR person in the industry, and they would say that recruiting talented healthcare practitioners into their agency is a challenge - especially because we're pretty much all going after the same pool of applicants," he says. Relton is deeply involved in GCI's training and development programs, including a program covering local, regional, and global practices, as well as organizing three regional workshops a year. He says that training and other key HR functions have not lost their focus in the downturn. "There's not a function here that's more important than HR," agrees Bob Feldman, CEO. "Dan communicates our values and our culture as well as anyone, and his ability to relate to our senior executives as well as our junior folks is a rare, exceptional trait." But Relton is keen to prove that HR has an impact on a firm's bottom line. "I'm recruiting talent to work on major pieces of business, multimillion-dollar accounts," he says. "There's a high ROI in that." ----- The troubleshooter Meredith Mendes, chief financial officer Edelman When Meredith Mendes started working at Edelman four years ago, the firm was ensnarled in a financial-systems snafu. "We installed a system that had completely blown up," says Richard Edelman, CEO. "We couldn't even bill our clients." Mendes brought in a new system, made the accounting operations work, and spearheaded the implementation of a European-wide system that is being rolled out now. But she's accustomed to challenges. She started her career as an attorney (she also has an MBA), and later went into investment banking at First Chicago Capital Markets. She later became CFO at Medline Industries, a manufacturer and distributor of healthcare supplies, then SVP and CFO at Hartford Computer Group, a computer reseller and distributor. Her experience of fixing problematic finance systems was just what Edelman needed. Subsequently, she also made her mark by bringing a human face to the financial side of Edelman. "When I first came here, there was a mentality that PR and accounting are very different," she recalls. But Mendes believes there is a hunger on the client-service side to better understand how finance plays a role in what they do. As companies have grown more attentive to financial details, that case has been easier to make. Clients, she says, track budgets and spending at unprecedented levels. Every dollar billed for a FedEx package or a phone call has to track transparently. "The challenge is to have global service and have one bill, yet around the world we may not have the same system." she says. "Clients want to see it all on one bill." With 50 staffers in Chicago and New York reporting to her, Mendes is tuned in to what goes on all over the firm, even though she is not convinced that most people are aware of their reach. "People underestimate what we know," she says. "There is nothing that can happen here that eventually doesn't flow through the finance department - and usually sooner rather than later." ----- The smooth operator Kirsten Lundstrom, VP of operations Sterling Communications At Sterling, a midsize agency that specializes in working with technology clients, the firm's own technology expert plays a crucial role. "One of Sterling's most important differentiators, our Inside Agency initiative, rests on our ability to field a cross-platform intranet that allows us to communicate more effectively with our clients and each other," explains founder and president Marianne O'Connor. "That intranet wouldn't exist without Kirsten." Lundstrom has been with Sterling for 10-and-a-half years, having landed at the firm right after earning a double major in biology and fine arts at UC Santa Clara. Thinking she would get some work experience for a year before graduate school, she wound up staying. "At that time, Sterling was in its infancy," Lundstrom recalls. "I enjoyed the people I worked with, and right off the bat I was given a real opportunity to have an impact on what we did." While Lundstrom's job includes overseeing the facilities operations, including some work in human resources, her IT role is really at the heart of her job. She says that tech clients have a particularly high standard when it comes to the technological capabilities of their firms. As Sterling has grown to three offices, all of which work together, the intranet has become an essential tool. It is Lundstrom's job to keep it running, and to continuously develop new technology tools according to client needs. Five people report to Lundstrom, and she takes seriously the need to hire quality personnel. "The higher the skill set in administrative jobs, the more value they can add to the company as a whole," she says. "I find that for the operations staff to have the ability to be involved in different components of the agency makes for a better understanding, better processes, and better quality of work that's put out." Lundstrom says she holds a "dual-service" role, making sure that the needs of employees are met so they can better service the accounts. She keeps that bigger picture in mind at all times. "We're kind of a step back from the client, but it's always about keeping them in mind," she says. "What is the client going to need to help them be successful? If we aren't doing something that the client needs, they aren't going to pay us for it."

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