Editorial: Managing the great escape

The high profile departure of the ’gang of five’ from Shandwick Consultants demonstrates both the strengths and weaknesses of the PR business.

The high profile departure of the ’gang of five’ from Shandwick

Consultants demonstrates both the strengths and weaknesses of the PR

business.



The model upon which the five have based their new company, the Hogarth

Partnership, is becoming an increasingly popular one - an inverted

pyramid with senior directors and support staff but few in the middle

ranks, and a willingness to work alongside other consultancies.



This kind of set-up is a response to several trends - a strengthening

in-house sector, a move towards more project-based work, and a client

demand for strategic input rather than down-the-line implementation. As

such, it is surely a sign of a maturing industry - one where PR is less

process driven, and its importance recognised by the greater status and

resources allocated to it in-house.



The problem for consultancies is how to service an increasingly

sophisticated client sector; provide specialist advice; incentivise

staff to come up with the best solution for the client - and still make

a decent profit.



The changes ’brought forward’ by Shandwick in the aftermath of the

breakaway - the creation of three new business units (financial, public

affairs and corporate); and a move away from account groups towards

teams of people working across those practice areas - are a response to

the same pressures.



Then there is the ’management issue’. As demand for the best people

increases, it becomes correspondingly more difficult for consultancies

to hold on to them. The problem, therefore, is how to manage the

inevitable breakaways that an entrepreneurial industry will always

spawn. In this case, Shandwick, not wishing to appear a soft touch, is

applying pressure on the departing executives to stay within the bounds

of their contractual obligations to keep their hands off their former

employer’s staff and clients for 12 months.



In practice, it is unlikely that such restrictive covenants could stand

up for long. Nor is there much to gain from queering the pitch for those

clients that decide of their own volition that they would prefer to be

with the new firm.



Having rattled its sabres menacingly, Shandwick is now rightly moving

towards a negotiated settlement with its wayward children. This is a

wise move which should result in a carefully negotiated, phased

withdrawal of staff, with minimal disruption to clients.



In a people business like PR, no consultancy can hope to avoid the

possibility of breakaways altogether. It is also a sign of a maturing

business that such situations can be dealt with sensibly and with good

grace - albeit through gritted teeth.



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