DRIVING VALUE

&

REVENUE

November 22nd, 2012

Work Stream Brief

• How we will continue to deliver value

• How we will convert that value into revenue

• …and on into healthy, sustainable businesses

PS. We considered this from a consultancy perspective only

Work Stream Team• Alex Sandberg Work Stream Leader

• Fraser Hardie Blue Rubicon

• Chris Lewis Lewis PR• Trevor Morris Professor, Westminster University• Angie Moxham 3Monkeys• Rana Reeves John Doe

BACKCLOTH TO OUR INDUSTRY• An established professional services discipline, bought at Board level, the world over

• A $10 billion industry (Holmes) – growing faster than many

• Driven by :

– 20/20, uncompromising transparency of businesses, personalities and institutions – Speed... of everything : information, reaction, pressure to respond in real time– 24 / 7 engagement, ‘sunrise media desk’– Some great talent in the industry and maturing, excellent businesses– Recognition of strategic, creative and insight contribution – Declining mainstream media, replaced by (mobile) online engagement, creating a whole new spectrum of opportunity– New roles (= revenue) always presenting themselves

We are at or near the bottom of this cycle, an exciting time to be in our industry

OVERARCHING DRIVERS

TOP LINE  Value added into Revenue

• Practices : service and product• (Industry) sector focus• Geographic reach - local to international

BOTTOM LINE Revenue into Margin

• Managing the business - P&L, HR, contractual issues etc.

PR is a business tool delivering transformational work that makes a difference for businesses, brands and

organisations

SPECIALISE

• Why hire a “generalist” when a specialist is available

• Pressure to specialise by:

– Practice– Sector – Local knowledge and / or global network

TOP LINE : VALUE• Media relations … PLUS

Whilst media may be core to delivery, MORE is increasingly expected Continually renewed content, now both A & V digital

Media, creativity, plus …

• Strategy• Messaging• Insight• Securing third party endorsement• Mentoring

• Necessity to become more granular about the process (cost) of delivery

– Planning (segmentation, targeting … testing)– Creativity, insight (owning the data through analytic/research function at the centre)– Strategy (mapped out and supported by data)– Messaging, positioning– Targeting / working the channels to identified outcomes

TOP LINE … MORE VALUE

• Embrace an online, mobile world

– Doesn't fundamentally alter our role : insight, content, campaigning – An enhanced opportunity: embed creative technologists across all teams– Ad Agencies are credible because they focus on sales (outcomes)

• Make talent an urgent priority

– Invest in TOP talent, not necessarily PR centric– Retain top level talent (give "ownership" = motivation)– Match talent to projects they are passionate about – Evolve working practices = flexibility, e.g. not always in the office– Acknowledge power of the freelance and the potential of the “virtual agency”

BOTTOM LINE … 2 MODELS

1. Creativity, insight and strategy

Expensive, premium

2. Implementation

Less expensive, but vital

It isn’t valid to charge out implementation at a premium rate

BOTTOM LINE … MORE MODELS

• Move towards outcome driven revenue models = success related

– Focus on defining success, scoping in partnership with the client

– Acknowledging the difference between premium / standard fee components

• Clarity of the "contract” and a concerted determination to enforce terms

– between the client and the consultancy : T & C’s

– between the employer and the employee

BOTTOM LINE … YET MORE MODELS• Incentivisation

– Owner driver structures, phantom "equity" even in holding companies (!)

– Transparent share in success   • at a personal, a team and a company level

• Talent is THE top priority

– Disproportionate resource balloons into “management” systems, disenfranchising / demotivating the talent

− Talent drives these businesses = revenue

– Revenue generators must sit equally at the top table

Some actions• Make talent the urgent, overriding priority … re-cycle revenue/profit into talent,

not “process”. Talent DOES take us to the top table and must sit at the top table of our businesses also

• Embed “creative technologists” fluent in new channels, across the piece

• Specialise. Be famous – for one or several valuable offerings.

• Fees to reflect value added /outcomes - premium or implementation

• Scope success with the client and build in reward for achieving that success

• Be granular about delivery. “It doesn’t just happen” - break the process down into its component parts

• Enforce professional rules of engagement, with clients as well as staff