(MENAFN- PRovoke) It has been three years since Chris Foster ended Omnicom's lengthy search for a CEO to oversee its public relations group (OPRG), comprising 20-odd agencies and around $1.6bn in total revenue.
Under Foster's leadership, OPRG has returned to growth, although recent returns - in line with much of the industry - are less stellar. There has also been considerable reorganization of the group's PR firms into three "micro-network" groupings - full-service, public affairs and consulting - alongside a stronger central team and a specific focus on integration and partnership among agency brands.
To take stock of the progress and pitfalls so far, Foster sat down with PRovoke Media in New York last week, soon after revealing that Ketchum's presence is being significantly scaled back in Asia. The following conversation has been edited for length and clarity.
Arun Sudhaman (AS):
When you joined, OPRG hadn't grown for several quarters. Was there any magic formula to bringing back that growth ? To what do you attribute it?
Chris Foster (CF): I attribute it to three things. One, we focused on growth, but growth is a team sport. And when you have a portfolio this size, our ability to bring the best talent and best agencies together against some of the larger opportunities was a game changer. And that's where we used the strength of the portfolio to compete differently in the market. And I think that advantages us a bit as well.
I also think we looked at other areas where we were underrepresented and leaned into the network. So, for example, public affairs and corporate, we really didn't have a lot of that work before 2020, 2021, 2022. So that represented growth for us, and we had talent throughout the entire portfolio. Not one agency nailed it, but when you bring the best talent together against the opportunities, we started to get more and more of an offering in corporate. We started playing differently in public affairs.
And then the third thing is we did a lot of restructuring of the agencies. We looked at the agency models to make sure they're relevant, the value propositions, how they went to market. And we just started, one and two at a time, trying to restructure the agencies so they're more relevant in the market, really trying to understand what clients wanted. We spent a lot of time talking to clients and the teams to figure out what was working. I did something interesting in the first six or seven months. I went into the work, I'd show up in conference rooms, I'd go see clients. And through the work, I got a much better perspective on what we were selling, why we were selling, why clients were buying, where we could do things better and smarter. That's how I built some of the relationships early on. Not everyone loved me poking around their clients and new business pitches, but it was the right thing to do.
AS: You mentioned the importance of getting the agencies working together on some of these major clients. Is there any particular way in which you've done that, that's proven successful?
CF: It's a relationship business and we focus on the relationships. It's amazing what will happen when you bring people together and articulate a strategy as a holding company, OPRG, and everyone sees themselves in that strategy. And the way to realize it is really collaboration and growth. I also had to clarify the OPRG value proposition. I had to move us away from this administrative, financial apparatus, much more to a partner to the agencies. OPRG's in service of the agencies, around people, growth and innovation. If we get that right, good things will happen.
AS: Recent quarters have seen tougher returns . To what do you attribute that - is it just market conditions?
CF: I think it's probably two things. The market conditions were tough last year. Our agencies weren't the only ones who struggled a bit. I also have a unique portfolio and a large public affairs business focused on campaigns and elections. In some of the election years, you're going to see a spike in revenue and in the off years you'll see decline. So that was a little bit of what you saw in 2023 and 2024 is off to a good start, but we're also coming off really difficult comps. As John [Wren] said on the earnings call, I think we're bullish about 2024 for PR, and I think we'll see strong Q2, Q3 and Q4.
AS: In 2021, you said the verdict's out on OPRG as a standalone brand, and you haven't really made any moves to extend OPRG in that fashion. It's the same five markets that you inherited where OPRG was operating as opposed to the individual agency brands. Does that suggest you're even less of a fan of that approach now?
CF: No. I needed to understand the portfolio and how our clients were buying and how we were servicing clients and what the value would be of it. So, I didn't want to just create OPRG markets around the world because I had it. I wanted to create things that were relevant, and it's taken me the better part of the last two or three years to really understand the secret sauce and the uniqueness of each agency and in each market. What may work in one European market may not work in a Latin American market, which may work in a state in the US. I've really been on a discovery tour. I think I like the OPRG positioning in the markets we're in currently. And I definitely think there's room for more in some markets, but it's going to be a very careful, very thoughtful evolution. I do think there's an opportunity for us to show up as OPRG in certain markets around the world. It's less about a financial exercise and much more around my ability to leverage a network to deliver greater value to clients, compete differently and show up a little stronger in markets where I'm historically underrepresented.
AS: In terms of the OPRG brand, is the concern that it's not about OPRG as a financial exercise, but ensuring it's as strong a brand as, for example, a Fleishman or a Ketchum in a specific market?
CF:
I don't have concerns about OPRG as a brand. What I do also want to do is make sure that in some of the most important markets, a Fleishman, a Ketchum, a Porter means something. They're incredibly relevant and I don't want to dilute that by showing up as OPRG. That's why I haven't looked at sort of quickly collapsing one big, global OPRG. No, I think the brands allow me to go to market slightly differently. It allows me to compete differently. It's a different value proposition for retaining and recruiting staff, and it allows the organizations to represent what's authentic to them instead of just sort of being one sort of gigantic organization. And I like the boutiques I have, I like the large agencies, I like the consulting firms. They all mean something different. I think on their own, they stand up well, but when I can bring them together, incredibly powerful partnership.
AS:
If we talk about what you've done with Ketchum now in China and India - you haven't, for example, brought the brands together in those markets as OPRG. It looks, at least from the outside, that Fleishman is now the key brand in those markets. You could perhaps say in Asia in general.
Is that an approach you'll look to replicate elsewhere where you have one particular brand that is strong? Or is this just purely dictated by market conditions?
CF:
Honestly, I think it's market conditions. I mean, Fleishman happens to be the strongest and the largest in APAC but, in Latam, PN has probably the strongest and largest footprint with our partnership with InPress. So it's market driven for sure, but I'm also trying to find growth. And as we try to figure out what our clients' needs are and to partner with our clients in this very, very complicated environment - I'm tending to see the OPRG go to market proposition for more holding company solutions at a client level, less about the market. Where we've been very effective as OPRG is in new business efforts for clients and bolting teams together to go to market. It's less about the geography, more about the opportunity.
AS: If you look at the moves some holding groups have made, there's almost a prevailing narrative that one way to get to growth is to consolidate agency brands together. I'm not sure I completely understand the thinking behind that, but that doesn't seem like an approach that you are in favor of?
CF:
I'm not in favor. I think one way to get to cost efficiencies is to consolidate brands. We want to manage our businesses as efficiently as possible, but I also want to drive growth, and I don't always think the solution to drive growth is just merging companies together who are seemingly different. First of all, mergers are tough. They take a lot of time. They're incredibly complicated and they can be very disruptive to staff, clients and markets. So strategically, there are moments in time when a merger of two brands makes a lot of sense, but it's got to be geography-specific, offering-specific. It's got to solve a problem in a market and create opportunities to my way of thinking. I definitely see, across the industry, a lot of consolidation. Some of it is a head scratcher to me. I'm truthfully eager to see how some of these work out. I think it's going to take us a while, though, to realize some of the impact of some of the recent mergers.
AS:
You've made various leadership changes at the agency brands. What would you say you've learned about dealing with agency CEOs and what do you look for in them?
CF:
I need CEOs who can lead and inspire teams in an incredibly complex dynamic environment. I want CEOs who are very focused in addition to leading and inspiring teams on the work. I don't want CEOs who are going to retire into the CEO position, right? I think it is when we're just getting started as executives and senior leaders in the business. That's when I want us all hustling and seeing clients and imagining solutions and being curious every day, not just living in spreadsheets. So I look for that, and I also look for CEOs who have a deep appreciation for our industry, but are unafraid and courageous enough to think about how it should evolve and change in the future and not be so wedded to - 'Well now I'm a CEO, we've done it this way for the past 10 years.' I look for imagination and curiosity in CEOs.
AS: So you're not looking for much then.
CF: Having said that, we've changed a lot of CEOs because it's a tall order. I have high expectations for CEOs, and I'm thrilled with the CEOs we have in place. Many of those we brought in, I think have just reflected that curiosity, their imagination, a little bit of courage. The greatest learning for me - it's not as though anyone's excited as a CEO to have a CEO boss, especially from a competitive holding company. When I first came on board, trust was important for me to earn. It took a while, which is why the number one focus in the beginning was around supporting the agencies on growth because we have a common goal and everyone benefits from that. The first 12 months was really around growth and learning. That's where I built the relationships. It became clear to me the team I needed around me at the center to support that and support the agencies.
AS: You've made acquisitions. Which is first of all, not something we'd seen at Omnicom PR group for a while. How did you thread that needle?
CF:
John Wren and the team have been incredibly supportive of OPRG. We focused a lot on developing a strategy that the board and John bought into, and they saw evidence of it working. And we looked at the acquisition strategy in two different ways. Is there a market we're underrepresented in? Is there a capability we're underrepresented in, or is there something that a need in the market that our clients are telling us they need that I can't build fast enough? So when the opportunity came around for Plus and FP1 , it really solved all our problems. It was an area that was growing for us and it was paying off. They had unique capabilities, and we wanted much more bench depth in and around Washington for that. John and his team, the M&A team, were really supportive, and we got that deal done pretty quickly. I also knew the players from prior life, which helped.
AS: There was a comment from the analysis of your arrival three years ago. "Your role will only work if you can persuade Omnicom to look at PR agencies as investments for growth."
CF: I remember that.
AS: Do you think you've been able to do that?
CF: I do think that. It is a work in progress, but I do think Omnicom and John and the team do see PR agencies as a gateway to growth. I think our focus on our top client program and how that's growing well and how we're integrating across Omnicom, has been evidence of that. There's a lot more collaboration on Omnicom's top 50 clients within the PR agencies. And that's a good thing. Some of the Omnicom client leaders are from the PR industry, from our agencies, which is also great to see. The collaboration and integration across OPRG is starting to extend into Omnicom, which has been powerful for us too, and a great learning.
AS: A couple of questions now on industry issues. Are you concerned at all that the industry in general is receding in terms of its DEI commitments?
CF: I don't think the industry is receding in our DEI commitments at all. It is puzzling to me that it continues to be such a struggle to recruit and retain diverse talent. I think we've done a fair job at it, but there's so much more to do. One of the things we haven't done successfully as an industry is increase the pool of diverse talent because we're all competing for a smaller pool of talent. We've got to invest in making the pool bigger to create more opportunity. I think that's an industry opportunity, less of an individual company or a holding company. I'd say it's definitely frustrating from where I sit. I feel, as I've said publicly, an honor and responsibility to do more to move OPRG along. But also the industry - we're trying to do that, and I should use my voice and the podiums. I also think we have to be a lot more intentional in how we engage with our clients around the strategic importance of DEI, as part of an enterprise wide strategy. That needs to be done more intentionally than I've seen in the past.
AS: What does that look like?
CF:
When you're thinking about your ESG commitments or you're thinking about real estate, I mean, do we ever run those enterprise-wide initiatives through a DEI lens? What's it going to mean for our Bipoc staff? How can it allow us to achieve? How could a real estate optimization effort allow us to help us advance or be more supportive of our DEI efforts? I think we have to start to bring those things closer together on our ESG commitments. I think that's a disconnect, which is why it probably feels like there's a departure from some of the DEI commitments.
AS: We hear about it a lo , that support for DEI, even for DEI roles, isn't as strong as it was in 2020. When there's a tougher economy, sometimes there's a temptation to sacrifice certain investments, and that seems worrying.
CF: If DEI is seen as an investment, then when times are tough, you'll cut it. If DEI is seen as a strategic imperative and part of an enterprise-wide strategy, then that's the North Star for organizations, and we should stay focused on the North Star. I think you hit on something and words matter. DEI shouldn't be just an investment. It should be a strategy, and it should be a strategy around people and innovation and around growth.
AS: On AI, you have mentioned two things, agency remuneration and the impact on models, and then on people. If we're talking about the impact on models, are you at all concerned that AI is going to reshape the traditional agency model of selling time? Because the implication, of course, is that will have an impact, for example, on the number of people that are required and the amount of time that you're selling.
CF: As I've said in the past, I'm bullish on AI. I think we need responsible generative AI. I think AI and automation are going to allow us to practice communications very differently with more precision. I think it allows us to manage and manipulate and curate and mine data sets faster to get to results. But I think it's about results for clients. I think we're going to have to partner with clients to sort the payment model out. It's not like I can sit in a conference room and imagine something and deliver it to a client. We're all in this gen AI journey together, so we're going to have to partner.
I actually think it's an opportunity to look at the operating and business models of the past and the value we deliver as communicators. I'm very confident and believe deeply in the power of communications, but if we can do our job smarter, faster with more precision, that's best for clients. Some jobs may be replaced, but I also think some jobs will be created - some jobs you haven't even imagined yet, which is the exciting part. The size of our portfolio allows us to experiment a little differently, partner differently, and invest differently, which is where OPRG is a real asset to the agencies.
AS: Finally, what has been the biggest challenge you've faced in this role?
CF: The biggest challenge has been managing the velocity of change, because there's so much I want to do with the portfolio. There's so much I've done as a new CEO building a new team, trying to drive results for shareholders at Omnicom, you could easily get sucked into doing too much, too soon. So, managing that cadence while earning and building the trust of the agencies while learning about the agencies and paying attention to the market conditions. I'm impatient by nature, but it's forced me to really be very intentional and deliberate and focus on all the things you need to focus on and try to get everything you need to get done, but maybe not today. I do look at this as a multi-year transformation of OPRG.
It just so happens as we're evolving OPRG, our industry is changing before our very eyes and the world's changing, whether it's geopolitics or ESG or the sustainability development goals or AI. It's all happening at the same time, which I think is exciting, but it does force you to really get grounded in a North Star and a strategy. And again, strategy built to flex. But you can't chase butterflies. Also, I've gained a much broader appreciation for the impact of change on people. And the thing I worry about the most are staff. Are they happy? Do we pay them right? Are they working on the types of things that are exciting to them? Do they see long-term career opportunities at Omnicom? I'm hoping they do, but there's an enormous strain and pressure for our people from a client delivery standpoint. There's a lot happening on return to office and the mental health of our staff and our senior leaders is a concern to us. So there's a different tax I think today on leaders and staff than I even thought we saw 10 years ago. And it feels heavy. The gravity of the moment feels heavy.
MENAFN06052024000219011063ID1108177442
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.