PR agency model must change to embrace the future (Column)

Greg Power is president of the Canadian operations of Weber Shandwick. One of the key drivers of success in any business is to recognize the moment when you know that what got you here will not get you there, and to do something about it. It’s a tough call to make because the moment is […]

Greg Power is president of the Canadian operations of Weber Shandwick.

One of the key drivers of success in any business is to recognize the moment when you know that what got you here will not get you there, and to do something about it.

Greg Power

It’s a tough call to make because the moment is not always easy to see, but I would argue that the time has arrived for Canada’s PR agencies to restructure our business models as we embrace the enormous growth opportunity before us.

Recently, the Canadian Council of Public Relations Firms hosted Paul Holmes at a gala dinner attended by the principals of most major Canadian PR agencies. He gave a 90-minute talk about the future of our industry that got the attention of everyone.

Holmes is the most influential commentator on the PR industry, and he is a passionate advocate for the profession, but he is also sometimes an outspoken critic of its practices. PR has been ascendant for the past 10 years, and for Holmes the ‘what got us here’ is PR’s unmatched relevance in the age of “radical transparency.”

Public engagement through social media is the sweet spot in today’s communications, which clearly favour a craft that can create advocates or reduce detractors for the benefit of a client, through open and transparent conversations with key influencers.

Holmes says PR as a discipline now sits above corporate communications and marketing because PR is more credible for supporting a business strategy.

He adds that PR’s natural instinct to discover the truth inside an organization and bring it to life in authentic stories is a powerful advantage because behaviours and the actions a company takes matter more than the image it projects.

But he ended his remarks with a stern warning not to be complacent as we climb the communications value chain, and to recognize that what got us to where we are may not also get us to where we should be.

PR agencies are not outperforming ad agencies and transforming their market offer fast enough to continue their rapid climbs unfettered. There are several factors at work, but Holmes’ concern was focused significantly on agency structure.

One of the biggest barriers to growth, in Holmes’ opinion, was an old management architecture built on multiple P&Ls as defined by practice area and geography.

This web of competing P&Ls fosters an environment where agency leaders compete with each other before they compete for their clients, and agency resources are organized around internal priorities rather than being aligned with the clients’ best interests. Holmes believes PR agencies must be organized around their clients first in order to achieve the understanding of business strategy required to create the best solutions for their needs.

Weber Shandwick Canada moved to a one P&L structure three years ago across our entire business, and the change was the catalyst to accelerated growth and client success. We have only one financial target across Canada, and everyone is expected to contribute to its achievement. In the early phases of this new approach, we scrapped all conventional practice areas and aligned staff to individual clients to effectively destroy old ways.

It was a massive shift in our operating culture, but the benefits far outweigh the growing pains associated with the new order. Three of these benefits will be the pillars on which we build the future:

Client centricity
Every client is led by a national client leader (NCL) empowered to do the right thing for the client. The NCL has the authority to staff a client with the right resources from any practice or office across the country. This creates an operating system where the client need is boss. The result is outstanding organic growth and client loyalty.

People empowerment
The career path of talented staff is no longer locked into one practice but fluid across disciplines and geographies, where the client fit is the best fit. Clients are truly national and leadership on big clients resides in any office across the country, not just Toronto. The result is richer experiences and faster development for staff, and high retention rates for the agency.

Management culture
A senior team with one goal is by necessity more collaborative and more aware of everything that is happening in the business. This ultimately leads to better chemistry on client work and more holistic strategies across clients and the agency as a whole. The result is a high-performing leadership team focused on clients first.

We made the shift to one P&L to create the conditions required to transform our business by adding new disciplines in strategic planning, creativity, data analytics and more across the agency, all without bogging down the evolution of our service offering in financially driven silos.

It is still the early days for us in the new model, and we will need to adapt our open model as we grow.

Paul Holmes believes that one P&L is a challenging operating environment to maintain in agencies with 100-plus staff, so it’s not easy, but structure equals behaviour and PR agencies must do more to get rid of the financial barriers to change if they are to achieve their true promise.

I believe the switch to one P&L—in practice and certainly in spirit—is the path that gets the PR industry from here to there, and the leadership role we have earned.

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