Lord Chadlington: Many senior PR leaders may soon be out of a job
6th March 2014
I first met Lord Chadlington in India last year. We were both fulfilling our roles as Brits abroad and speaking at a PR conference. The first problem I had when we met was that I wasn’t too sure how to address him.
I’ve always thought that it must feel awkward to introduce yourself as a Lord. Imagine, your whole life all your friends call you (in my case) Ben – and then you become Lord and they have to use your surname instead, so I would be Lord Smith. Other than the new-found observation that Lord Smith doesn’t sound right – my mates definitely wouldn’t let me get away with it!
Within this context I was a little apprehensive when meeting Lord Chadlington for the first time. Calling someone a Lord isn’t really my thing. So I was relieved when he introduced himself as Peter.
Nice people succeed
The most senior people are so often the nicest. This is by no means a trend limited to the top of Huntsworth, but more widely in PR. Perhaps this follows some sort of lifetime evolution, but guess what? If you are nice to people, you are more likely to be successful. And Lord Chadlington is certainly an example of this. He’s a genuinely nice guy.
I caught up with him recently and we discussed the biggest challenges in PR today, the idea that many senior PR execs may soon find themselves out of a job and the challenges of a British PR firm trying to build a multinational business.
Making money from digital
While no one disputes that digital and social are massive opportunities for public relations, one of Chadlington’s concerns is whether PR can make money from digital. I was intrigued with his thinking here. I wondered whether he meant this from an agency structure perspective, or perhaps from a low-yield perspective, but Chadlington sees the digital challenge very much as a skill-set problem. He states: “The real problem with digital is making sure you change your workforce to match demand. Accept digital or you will look over your shoulder and find your market has disappeared.”
Like another (non-Huntsworth) international agency CEO I spoke to last week, Chadlington suspects that we may see a significant clear out of senior agency personnel. These expensive, senior execs will find their counsel increasingly redundant in a digital age. As Chadlington says: “Analogue influence is becoming less and less – we either accept it or we go bust, there is no good giving a digital mandate to someone who doesn’t understand digital.”
A digital skill set is required across the business, from consumer, to healthcare, to corporate and public affairs. Chadlington believes that corporate and public affairs will get away without non-digital skills for the longest, but change is already coming. “Increasingly, in elections, social networking is vital, because it’s the only way you can engage young people,” he adds.
If PR agencies upgrade or retrain their staff, Chadlington believes there is no reason at all: “why you should not have really good, strong digital revenues.”
I put it to Chadlington that PR firms have a monthly wage bill number that they have to hit, and that this short-term struggle, if you are not careful, can consume your business.
Chadlington, who has been running PR firms for 40 years this year, warns that the trouble is: “you become obsessed with the internal review. Huntsworth earns probably £3 million in fees a week – and you can become obsessed by it.” What Grayling has done is appoint a chief executive who runs the business, this enables Chadlington to continue to talk to clients and pitch for new business. Chadlington doesn’t want to become an overhead and adds: “If I didn’t continue to play an active role in the business world I become out of touch.”
Does London PR rule the world?
Chadlington has launched two PR firms in London and the UK. I ask him whether UK PR does, or ever did, lead the world.
“London PR is of a very, very high order, but I’ve never believed that London has led international PR, it’s always led in PR skills … we’ve got creative people in the UK. We are creative and intelligent at how we address these issues. Locally in the UK we are very good technically.”
“In my judgement, we’ve been relatively slow in accepting the digital challenge, there are plenty of other countries in the world where you can find more advanced digital skills.” Chadlington continues: “We [in the UK] have never been good at co-ordinating and running multinational firm businesses.”
Intriguingly, Chadlington suggests that continental Europe has historically been better at running international PR campaigns than UK agencies, and that US firms have such large domestic markets that, in pure number terms, European/Middle East markets are not a priority.
Why America rules
American public relations firms dominate the world’s PR market. Their model, and it’s a good model, has been to build a robust and successful firm domestically in the US. As their US clients launch in international markets, they launch with them. This gives the PR agency a foothold in a new marketplace, paid for (in varying degrees) by the client. The PR agencies then build a presence and add credentials in these new markets and hope this leads to a sustainable, profitable business.
The problem for any British PR firm has been that for the last 40 years there are just not enough large domestic UK clients that need international PR to enable UK PR firms to follow this model. This has undoubtedly held back some good domestic British PR firms.
I put this challenge to Chadlington and asked him how he overcame it. “Shadwick was the first real multinational PR firm that didn’t come from America. How we did it is that we went public and we bought things. We bought the network. We did it in reverse. We had local clients in each of the places where we bought businesses and overlaid it with international clients. But it took a long time. This process took 25 years.”
I ask him whether this could ever be repeated: “We’re doing it differently this time around. We’ve got many more start-up offices now. We’ve got 1,800 people, we’re doing $350m in fees and the business feels like it’s in a very strong place – having had a difficult couple of years, because 60 per cent of our business was in Europe.”
The recession’s bite
I ask Chadlington whether, in a way, the recession helped Huntsworth because it forced some difficult strategic decisions. “If I’d have known about the recession I wouldn’t have done things in the same order because we got bitten in the bum quite often … the cost base and you need growth. If you can’t get your top line up because you are in depressed markets there is very little you can do. Think about Europe (in 2008-09). Why would anyone spend money on a global public relations programme when they are not even sure they are going to be in business in six months’ time? Without the recession we would have integrated and built the business faster in North America and Asia Pacific than we were able to do.”
In the past three years, Huntsworth has grown quickly in the Middle East and North Africa, something it needed to do to offset its problems in Europe. I ask Chadlington how he set up these international offices. His reply is brutal: “last year I spent 200 nights out of the United Kingdom. There is no substitute for it. You’ve just got to work. You’ve got to go to these places … and we built the business virtually from scratch. To do this needs people, preferably from within the business, who you can say – ‘you run this for me’. And who share your drive and vision.”
Challenges of China
Huntsworth’s merger with Oscar Yhao’s Blue Focus seemed to reinvigorate the group. Strategically, it’s difficult to argue that this merger is anything other than a shrewd move. I ask Chadlington how the merger was going and he batted me away – Huntsworth’s results are due in April.
What he did say was that a vital part to make the merger happen was his relationship with Oscar Yhao and his team – Chadlington flew out to China 50 times in eight years. Chadlington adds: “The most important thing in business in China is the relationship.” I put it to him that this was always the case, business has always been about the trust, to which he replies: “There’s a difference. Americans and Europeans want legal arrangements on everything. With Oscar and me, it’s about the personal relationship. The Chinese have a special way of feeling like that.”
Winning changes cultures
On PR firms business development strategy Chadlington advises – “Go after 40 per cent of the new business that comes along, and win them, rather than pitching for 90 per cent of pitches out there. You tend to get better relationships because you are much more careful about what you take on. Winning changes a PR business culture … the higher your win ratio, the better.”
If you only win four in ten pitches, it will have a negative effect on the agency. The practicalities of pitching for too many accounts are also important. “The pitch presentation is still the most important element, if you haven’t got time to do the work, and you haven’t got time to think about it, you don’t impress the potential client. If you have four other pitches going on you don’t have that wonderful feeling of clarity.”
Cameron and UKIP
I couldn’t quite resist asking Chadlington about his views on the UK Independence Party (Ukip). I ask whether Chadlington thinks that Farage has played David Cameron an impossible hand. “I believe it will be difficult for Farage to keep the momentum going unless he has an exceptional European Election result, I mean mind blowing. We need that piece in place before we can predict what might happen at a general election.” I press Chadlington on why merely a very good Ukip result might affect Nigel Farage’s momentum? He replies: “I think that people may say – it’s fine to vote for Ukip in the European Elections, but do I really want to vote for him in the general election?”
“There is only one way to win an election – that is we (The Conservatives) have got 20/30 marginals that we have got to protect and hold, and we’ve got to win 20/30 more. There is no other option – but don’t forget, the one thing people will never vote for is a divided party.”