Why fungibility is the PR industry’s biggest problem (Marcom Pro)


As the head of WPP, Martin Sorrell’s pronouncements on any aspect of marketing are always worth paying attention to.

Back in December, he suggested that the PR sector’s biggest issue was the lack of talent – at least by comparison with other industries such as investment banking and management consultancy. According to Sorrell: “professional consultancy firms such as McKinsey and Goldman Sachs continuously hire the best people. Our malaise as an industry is that we don’t – we just nick them.”

On a related theme, Speed Communications joint Managing Director Steve Earl had a great post this week talking about how recession is the overriding factor dominating how PR businesses are run, how they’re developed, what their aspirations are and how PR is bought at the moment. Says Earl: “What I’m getting at is whether agency management teams are responding wisely, transparently and fairly to helping their personnel through a recession. Many of the job applicants Speed has seen through its doors in recent months talk about how many agency staffers are being asked to do jobs a level above their pay grade.”

Sorrell’s views are related to Earl’s observations. But these issues are nothing new. Professional services consultant David Maister identified the symptoms (and cures) for this malaise over 20 years – his books on Managing The Professional Service Firm and Strategy and the Fat Smoker should be required reading for senior PR management.

So what would Maister’s advice be to Sorrell and Earl?

According to Maister, Goldman Sachs and McKinsey are both “one firm firms”.  The emphasis is not so much on hiring the best talent as developing it from the ground up. Maister contrasts this with what he describes as “warlord firms”, where the productive senior members operate as chieftans presiding over their own territories, “occasionally collaborating but generally acting without a long-run commitment to the institution or each other. The past and the future are not often items high on the agenda.”

Consequently, over time, the performance of extreme warlord firms often swings through peaks and valleys. Much management energy is expended in modulating the politically charged environment.

As Maister presciently observed some years ago: “many warlord firms have reduced or eliminated entry-level recruiting, purportedly because of the short term cost of hiring and training such people. They prefer to hire laterally from other firms, to avoid the costs of investing in junior people.”  Or in Sorrell’s vernacular, nick them.  As far as Maister is concerned, “such firms are sending two uncongenial messages: the people we hire are fungible and there is nothing special about us. As a result, they fail to develop the loyalty and cohesiveness needed during periods of both prosperity and stress.”

And recession and stress go hand in hand. As Sorrell said in December of the PR sector: “we are supposed to be in the differentiation business”. In which case, the apparent “fungibility” of its most prevalent commodity may well be the most urgent issue that needs addressing.

(This post originally appeared here).

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