PR agencies - which have been historically driven by internal competition among offices - are now turning that energy toward their competitors. Drawing on internal PR experts with a range of backgrounds and expertise, regardless of where they are based, is becoming a weighty indicator of where the PR profession is headed.
Over the past month, Hill and Knowlton launched three "asset" groups based on H&K's business philosophy of cross-servicing the accounts handled by its 51 offices that dot the globe.
In most instances, H&K is hand picking who will get these groups off the ground to sustain both its client base and the services it can offer. The (still-expanding) new Energy Asset Group, for instance, has been built by leaders who have reviewed the backgrounds of more than 100 staffers and/or spoke with those heading the companies' various offices and selected 30, according to Megan Mastal, managing director of H&K's Houston operations.
Burson-Marsteller is another PR monolith that's hanging its hat on eventually removing internal profit-center incentives and creating synergy among offices.
The Cream of the Crop
H&K has grown its 1,450-plus workforce by nearly 10 percent in the past year. And it has brought on these additional 134 staff members while in the thick of stepping up its "center of excellence" business philosophy - one of the most ambitious business-model shifts the company, which is owned by ad and marketing giant WPP, London, has undertaken since it was founded in 1927.
The addition of the asset groups brings the number of new groups H&K has debuted in the past year to eight. The asset groups are not divisions, rather networks of experts who work on accounts for clients as deep-pocketed as the PGA of America and as transitional as AT&T which just announced major layoffs.
Newcomers include:
- The Energy Asset Group, drawing on 30 professionals at 10 offices;
- The Sports Marketing National Asset Group, which includes 34 PR professionals in 12 offices; and
- The Financial Communications Interactive Group, which will tap into H&K's 35 financial core staffers including 10 senior-level people, who will be vying to win the chance to oversee interactive projects for publicly held companies. H&K has already customized a slew of interactive ventures for some high-profile corporations such as The Chicago Tribune and Tiffany & Co.
New in the Shuffle
The trio joins an expanding slate of H&K asset groups that have been rolled out over the past year. The first to be announced at the start of 1997 was the employee communications/change management group. The others are: litigation support; media training; crisis communications and strategic philanthropy - all areas of PR that have been pigeonholed as lucrative growth areas and all areas where H&K wants to be able to pull in the professionals it needs to keep clients coming back.
H&K's sports marketing group has already inked a deal with the Houston Astros via its Houston office and a separate agreement with The Diving Equipment Marketing Association through efforts in New York, according to John Eckel, who is leading the sports marketing effort. He is also senior managing director and head of H&K's Irvine, Calif., office. And today, H&K's reps in Chicago are pitching the U.S. Karate Federation.
"I've been with this company for seven years and steadily, over time, we've been building this business with this spread-the-wealth mentality," Eckel says. "For instance, we've prepared pitch materials and packets of information (as starting points) for staff to work with potential clients instead of everything having to be bounced back to Irvine."
It's no secret in the industry that the 1990s were filled with some growing pains for H&K, which was not only slow to downsize (its worldwide staff has been cut by 400 since 10 years ago), but had some significant changes in upper management during this decade.
In 1996, Tom Hoog, who had moved up quickly through the ranks of H&K after he joined the firm in 1990 (in 1996, he had been named general manager of H&K's New York office) was named president of H&K's U.S. operations. He replaced Howard Paster who remained as chairman and CEO.
''There is no doubt that there was a period of time in the early 1990s - when the entire PR industry and country was changing from the frantic 1980s - that H&K didn't act as quickly as it should have to reorganize and that we had some shaky years," says Ron Hartwig, GM of H&K's Los Angeles office. And Hartwig agrees that part of what H&K is banking its future on is this asset-group archetype. "It is a demonstration of the matrix approach," Hartwig adds. "In other words, some firms are organized geographically which creates a silo and some have gone to an exclusive-practice approach. But this is an approach that we believe creates a healthy tension."
H&K Fact Sheet
- Purchased by WPP in 1987 - previously it had operated as a separate PR entity of the JWT Group.
- 1997 financials are still being audited but revenue is expected to be up by over 10 percent from 1996's $160.8 million.
- It's continuing to attract executives to bolster its in-house expertise. Last week, it announced that Scott Tagliarino had joined as GM of its New York office. Tagliarino came from Edelman where he was president of the firm's corporate and public affairs division.
- Existing energy clients include Shell, the Tennessee Valley Authority and Duke Energy. (Tom Hoog, 212/885-0300; Ron Hartwig, 213/966-5700; John Eckel, 714/752-1106; Charles Ernst and Ed Belak, 212/885-0531; Megan Mastal, 713/752-1900)