CEO role even more important in age of integration, weak economy

Does the agency CEO still matter? More than ever, according to industry leaders who cited the changing expectations of clients and the diversification of agency services.

Does the agency CEO still matter? More than ever, according to industry leaders who cited the changing expectations of clients and the diversification of agency services.
Days after two major firms announced leadership changes, executives from a range of communications agencies told PRWeek that the person in the corner office is critically important. They explain that agencies need a strong leader at a time when the industry is in a state of flux, with clients moving from simply needing media relations to an integrated approach.
“When you're driving on a road that's not well mapped, you need a really good driver, someone who is paying attention and indentifying the most important things,” says Mark Hass, US president and CEO of Edelman. Hass was named US CEO when Matthew Harrington was elevated to global COO of Edelman.
Hass adds that the CEO must have a vision on both strategy and investments that will grow the agency. That executive must also hold his or her team accountable with results, client service, growth, and productivity, adds Sean Cassidy, president of DKC.
“Absent one leader driving accountability across the agency, you end up with an amalgamation of individual representatives that results in such deficiencies as lost opportunity to strategically cross-pollinate among clients, a failure take advantage of trends, and a generally loose standard,” Cassidy said via email.
Humility doesn't hurt, either, says Jim Weiss, chairman and CEO of the W2O Group, who has rebranded his company several times in recent years. “People can feel like they can lead and have a sense of ownership of the business when my name isn't on the door,” Weiss said.
Two top 10 PR agencies announced leadership changes in the past week. Last Friday, Porter Novelli said CEO Gary Stockman will step down from his role at the end of July. On Tuesday, Ketchum said it will transition its leadership from current chief Ray Kotcher to president Rob Flaherty next month.
The identity of the CEO is more important than it was before the economic downturn of 2008, and the uncertain climate means clients expect chief executives are playing a role in their accounts, says Pam Edstrom, co-founder of Waggener Edstrom Worldwide and worldwide president of its Microsoft account.
“Companies don't have as much money as they did 10 years ago, and they want to make sure their communications programs are really pushing the business forward,” she explains. “They want to know they are getting the best team…and an indication of that is having the most senior person in the room.”
Executives also note the importance of having a clear succession plan in place because it gives employees a sense of stability as well as an indication of where the firm will go in the future, says Ketchum's Flaherty. He adds that he learned a lot working under Kotcher and says not to expect any radical shifts under his leadership.
“If a company feels like there is always a new mission or vision, you're going to have a hard time getting a sense of what you stand for,” Flaherty said.
Although executives generally concur on the importance of the top spot at an agency, they note that his or her responsibilities differ at independent firms versus subsidiaries of holding companies.
MWW Group CEO Michael Kempner explains that executives at firms that are part of holding companies often have to determine “what will make us enough money?”
Kempner's company bought itself back from Interpublic Group in December 2010, and since then, “I focus on my employees and clients, and the profit takes care of itself,” he says.
Fleishman-Hillard Americas President Jack Modzelewski explains that CEOs of agencies that are part of holding companies are no less vital, saying, “this business has to be managed daily, if not hourly.”
“No holding company managing a portfolio of 200 companies can lead and manage individual companies on that basis, nor should they,” he contends.

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