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Public Relations Agency Culture: Best Practices for Implementing Culture as a Business Strategy to Impact Agency Performance & Retention

Matthew E. Burnam New York University School of Continuing and Professional Studies M.S. in Public Relations and Corporate Communications 2013

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Acknowledgements This research would not have been possible without the continuous support and professional relationships of my advisor, colleagues, and loved ones. I wish in particular to thank Sherry Pudloski – my Capstone advisor and mentor. Without Sherry’s guidance, industry relationships, invaluable insight, and introductions, this research would not be possible. I also would like to thank the following individuals: Barby Siegel, Chief Executive Officer, Zeno Group, for pitching the Capstone idea during a keynote speech at New York University. Grant Deady, Chief Culture Officer, Zeno Group, for helping me gain insight on the culture activities of Zeno. Kim Sample, Chief Executive Officer, Emanate PR, for taking the time out of her busy schedule to sit down with me and deliver a glowing and insightful interview. John Cassese, Principal, Concentric Communications, for the professional insight and encouragement in the beginning years of my PR career. Nick Leonard, Managing Director, Ruder Finn UK, for coordinating a fantastic and priceless Google hangout all the way from London. Robyn Streisand, Chief Executive Officer, The Mixx, for kindly distributing my survey among her employees. Finally, I would like to thank the person who means the most to me in my life, Alicia J. Olivares, for all her encouragement and always believing in me.

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Abstract The purpose of this research is to identify a correlation between public relations culture and impact on agency performance and retention. This research draws upon scholarly sources from journals, and primary research that include surveys and interviews. Surveys were administered to employees working in the public relations industry. The data from the surveys were used to correlate if employees felt that their agency culture benefits the agency overall performance. Interviews were also conducted with executive management of public relations agencies to gather insight on how they manage culture in their firms. This research will provide best practices for implementing culture in public relations agencies.


TABLE OF CONTENTS Introduction………………………………………………………………………………………1 Goal of the Study………………………………………………………………………………....2 Theoretical and Conceptual Frameworks………………………………………………………...2 Literature Review………………………………………………………………………………...6 Research Design and Methodology……………………………………………………………..14 Summary and Conclusions……………………………………………………………………...37

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Introduction There is extensive scholarly research on organizational culture and the impact it has on an organization’s success – however, there is little-to-no research on public relations (PR) agencies’ internal culture and its impact on agency performance and retention. In order to be competitive and successful, PR agencies must employ top talent that will affect the firms’ bottom line positively. While there are many PR agencies that specialize in internal engagement and strategic communications for clients, this study will research how PR agencies manage their own internal communications. More importantly, how does culture impact agency performance and retaining its top employees. For many years, there has been much debate on how internal culture is measured to impact a company’s bottom line. Denison (1984) utilized a five-year comparison administered through employee surveys and collected data that substantiates a correlation between culture and company profits. Many agencies today survey their employees throughout the year to better inform human resources and management on how to improve the firm’s effectiveness. For example, CRT/Tanaka, a public relations agency, administers performance reviews to their employees biannually to “ensure there is a mutual understanding of personal goals, sources of fulfillment and issues with communication,” (Holmes Report, 2001). In today’s competitive market, adapting business strategies to market changes is crucial in setting agencies apart from the competition. By empowering their workforce with access to resources such as training development, and company financials, a correlation between agency and employee performance can be found. The caveat to positive agency performance is sustained by client retention and new business. There are many factors as to why an agency loses a client, 6


but tough decisions will have to be made during the times when management has to either restructure internal departments, or inevitably lay off staff. Though there is not one ubiquitous formula to measuring internal culture and company success, in order to differentiate agencies, boost employee morale, and impact agency performance – culture is s critical component.

Goal of the Study This study explores the internal culture structure of public relations agencies. The goal is to discover a possible correlation between company culture and its impact on agency performance and retention in order to develop best practices.

Theoretical and Conceptual Frameworks The scope of this study, will utilize three theoretical/conceptual frameworks as part of the foundation of the research. The first, Edgar Schein’s “Organizational Culture Theory” examines how culture exists on three levels and how these make up an organization’s cultural basis. Examining Schein’s theory helps to build the foundation of this research paper by examining how internal culture is developed and carried out by its founder and employees. Second, W.E. Deming’s “System of Profound Knowledge” theory will examine the “joy in work” and rewards and punishment knowledge. Deming’s theory covers much weight in this research paper by examining the leadership role in organizational culture, and guides much of the direction in this research based on his theory. Thirdly, Mark Mallinger and Gerard Rossy’s “Integrated Cultural Framework” concept will be examined in order to set the theoretical structure on how internal culture behavior is developed. 7


Organizational Culture Theory can be used as a model when researching how culture is formed in firms. Edgar Henry Schein’s Culture Theory demonstrates that organizational culture exists on three levels, and each level has an attribute to the formation of a firm’s culture and methods of measuring success. The first level Schein discusses is called artifacts; this level is described as what is perceived by the new individual entering the firm, as well as what is felt and heard by the individual. The artifacts level consists of attributes of the individual’s surroundings and have an impact on how he or she feels. Level one is difficult to measure, states Schein, and has an important element as it is the environment of the organizations culture. Level two, Schein discusses is called values; in this level, the firm will have a set of “goals, ideals, norms, standards, and moral principles” (Schein, 1988). The values level sets the operational tone of the firm and a way of examining if employee efforts are aligned with the firm’s business goal. Level two can impact the firm’s operational and performance when a set of values are not carried out by employees. Level two is measurable by administering surveys to employees periodically and gauging whether or not employees are on the same page as the rest of their co-workers. Lastly, level three is referred to as the underlying assumptions; this particular level is difficult to explain as it “just happens,” states Schein. Level three is uniquely measured by observing employee behavior as Schein states that employees aren’t quite able to explain the values of their organization. According to Schein, this level of culture theory is a “phenomena” and the “essence” of organizational culture. Deming’s System of Profound Knowledge examines the “joy of work” within an organization, and how an organization can apply a set of paradigms that disprove common assumptions often made by leadership. A common assumption made by leadership without actually realizing it, according to Deming, is that rewards and punishments systems are the most

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effective motivators for people. Deming adds that “joy of work” is experienced through an intrinsic work environment where the employee seeks joy by overcoming or achieving goals. One of the paradigms Deming developed for management through the “joy of work” is that employees are most motivated by balanced internal (intrinsic) and external (extrinsic) motivation. When employees experience intrinsic motivation, they’re more prone to be motivated and enjoy their work. In order for this “joy” to occur amongst employees, management is responsible for creating an intrinsic environment. When management only focuses on extrinsic motivation, the employee is motivated by purely by the reward of accomplishment or by the fear of punishment. For fear of punishment, employees tend not to achieve their goal(s) and in turn do not foster an environment of “joy.” Additionally, Deming explores another paradigm in which employees working in cooperation with each other, instead of competing against one another, – the firm wins. In this type of non-competing environment, the firm’s rewards come with satisfying the client, receiving return business, and in eventually securing jobs for the employees. When a firm experiences a competitive environment, mistakes, redundancies, client dissatisfaction, and enormous costs to the firm are bound to happen. Developed by Mark Mallinger and Gerard Rossy, the Integrated Cultural Framework analyzes is composed of six approaches that scrutinize the cultural environment of a firm. The first approach by Mallinger and Rossy (2003) discuss the “ability to influence,” or the examination of how decisions are made. This approach highlights important questions of work culture: does the culture influence the employee to feel empowered to make decisions, and do employees feel that their actions influence the success of the organization. Secondly, the authors examine the “comfort with ambiguity,” whether employees are likely to take risk and how the culture of the organization handles times of uncertainty. Due to the current economic downturn

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and increased competition among agencies for business, agency employees must make calculated risks in order to satisfy their client needs and retain business. If an agency loses an account, it can possibly lead to employee downsizing and low morale. The third approach examines “achievement orientation,” which places an emphasis on employee goal achievement and if employees are held accountable for their actions. In the fourth approach, the authors examine “individualism/collectivism,” which identifies positive and negative employee behaviors within in a firm. An employee rewards system can result in a negative employee behavior especially because the system can increase competition amongst colleagues. Internal employee competition can result in silos between departments and can encourage individualistic rather than team behavior. Lastly, the authors interpret “time” and “space” by testing if the vision and mission of the organization is being carried out by staff, and by determining if the agency has a closed or open door culture.

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Literature Review

Understanding Organizational Culture There is no single definition of organizational culture. Various scholars and theorists have different perspectives on what organizational culture really is. For example, Meryl Reis Louis (1983) defines the concept as “distinctive social units possessed of a set of common understandings for organizing action and languages and other symbolic vehicles for expressing common understandings.” Additionally, Elliott Jacques (1951) says culture is "the customary or traditional ways of thinking and doing things, which are shared to a greater or lesser extent by all members of the organization and which new members must learn and at least partially accept in order to be accepted into the service of the firm.” Lastly, John Kotter (2012) says, “culture consists of group norms of behavior and the underlying shared values that help keep those norms in place.” Schein (1983) examines organizational culture as something that just doesn’t happen on its own, but occurs when a person in a leadership role or founding group forms the paradigm for the organization. He further states that the founder will have biases on how the structure of culture is achieved due to prior cultural experiences. In order to drive culture, the leader will have his/her group do particular things a specific way. This allows the leader to test out reactions of the group and determine what works among the group. Schein goes on to say, the leader looks at the organization from a long-range view by embedding his or her own identities thus developing a community like group early on. The surroundings within the organization in turn will be more political than bureaucratic, which creates an identity of the group that is based on trust than formal principles. 11


For modern organizations, culture is an imperative management tool for success. Culture is in part how an organization functions day to day. The relationship of its leader effects the interactions of the managers and employees in the organization with its clients. Within the organization, culture does not focus on a single individual, but the shared collective behavior of the group. Additionally, culture is more than just shared ideals, but also includes artifacts or symbols of expression that include “group interactions, in board meetings, but also in material objects,” states Alvesson. This leads to the “the culture concept,” which creates a connection between organizational behavior and management that ties the entire organization with “everyday experiences and individual action” (Alvesson, 2002).

Culture Creates Value In a leadership position it is important to understand culture, but more importantly – how to manage it. “Strategic execution” of culture is a tool containing many elements that leaders implement for long-term business success (Cha, Chatman, 2003). Executing culture strategically stimulates employees by causing increased engagement at work, and increasing work performance when employee behavior is in-sync with fellow co-workers. Cha and Chatman (2003) examine the role of “leadership through culture,” by stating when leaders do not direct culture in a formal way and allow employees to take ownership of their work and actions, the organization will have higher staff performance. Additionally, the firm must act as the gatekeeper when selecting candidates to fill positions in order to maintain culture. It is equally important to fill a position based on candidate work experience and performance, but the candidate or employee must also be a good fit in the company culture to maximize a smoother transition (Cha, Chatman, 2003). 12


Culture and Employee Performance Well-positioned firms that are culture-centric tend to enable employee “energy” to become a tangible asset to their firm and drive internal performance. Organizations that have developed a culture-centric environment, coupled with “values, beliefs, symbols, rituals, norms and philosophies,” are prone to be much more effective. Whether the organization’s culture is deemed inadequate or strong, it will greatly impact the behavior of its employees. If a strong culture is to exist, employee goals must be aligned with those of the management (Saffold 1988). Sørenson (2002) states that organizations with a strong culture are able to adapt to changes in routine, and since work environments can change without notice strong stable firms are able to adjust quickly and address changes without negatively affecting employee performance. Additionally, Sørenson (2002) reveals that there is a strong link between culture and uniform behavior of employees in a firm. The link between strong culture and employee behavior can be viewed as more than a direct impact on performance, but also on environmental change within the organization. Employees of strong cultured environments will impact, “employee commitment, job satisfaction, strategic planning, innovation, task and authority relationships, turnover, coordination and direction of activities, purpose and order, and competitive advantage,” says Arogyaswamy, Aupperle, Byles (1991). When employee goals and values are shared equally with management, it provides the individual with a feeling of success and professional fulfillment. When goals are present, the positive relationship of culture and behavior affects firm performance by decreasing turnover or increasing productivity (Arogyaswamy, Aupperle, Byles, 1991).

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Bettinger (1989) states that a strong positive culture is a prerequisite for high performance. In order to trigger high performance, a positive culture firm must exhibit the following five attributes: focus, standards, values, commitment, and teamwork. Focus is an attribute that comes to fruition when both the employee and management understand the mission, goals, and objectives of the firm. As a result the employee, believes they are an integral part of something important. Standards and values are present when a strong culture firm has clearly understood core values that affect the everyday behavior of its employees. These company values become so ingrained in the culture that employees perform at high levels and do not settle for mediocrity. Commitment is also found in strong culture firms that exhibit a high degree of commitment when the organizations strategic vision is understood and carried out by employees. Lastly, teamwork is exhibited when the company’s vision is carried out by employees of all staff levels. In other words, the employees are aware that they must some how work together to attain business goals. Most importantly, teamwork solidifies the strength of the firm’s culture (Bettinger, 1989). In the event a firm does not manage its company culture, or if there is a gap between management and employees, an adverse impact on the firms’ bottom line results, and the firm’s survival is at stake. Want (2003) examines seven hierarchies of firm culture that impact results. 1) Predatory Cultures are found in low performing firms that have a disconnect with its culture – typically not listening to employees, and not having preventative measures in place when internal and or external changes occur. 2) Frozen Cultures exhibit a risk-free approach from top leadership and are expected by all employees in the firm. This type of firm does not believe in being innovative or in allowing risk taking, thus causing the firm to be stagnant and not competitive. 3) Chaotic Cultures lack internal structure exhibiting a no rules environment and no

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strategic planning. 4) Political Cultures exhibit an “every man for himself” mindset, causing employee turmoil and betrayal of trust, which can lead to internal disorder and communication barriers. 5) Bureaucratic Cultures tend to drive away their top employees and not focus on the client. This type of culture causes management to lose sight of the organization’s mission and to isolate themselves from real internal issues. 6) Service Cultures will focus their efforts on the client to make sure they are satisfied. The firm will make sure that their mission and strategy are aligned with the customers’ needs and satisfactions first – enabling employees to feel empowered to carry out the firm’s mission. 7) New Age Cultures are the archetype of firm culture that is built on shared beliefs and risks. These types of firms are innovative, adapt to change, and even create change depending on the current market climate. Additionally, this type of culture welcomes employee feedback from all levels within the staff hierarchy, thus fostering an open environment (Want, 2003).

Competitive Advantage of Culture What gives a firm a competitive advantage is when the company focuses on its internal culture and recognize the importance of both its employees and clients. Barney (1986) states that a firm needs three characteristics in order to have a competitive advantage. First, a firm must execute strategies that have an impact on its financial value. Additionally, Barney (1986) suggests that a firm’s culture “must be rare” and uniquely different from the competition. Lastly, a firm must exhibit a culture style that is not easily imitated by others. Barney (1986) mentions that when an agency imitates a high performing or higher value firm, the model organization will have a disadvantage as it leads to competition. The imitating firm will have a chance of being

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unsuccessful due to the high performing firms ability to leverage its current supportive culture and maximize productivity (Barney, 1986).

Performance and Employee Turnover While organizations and employees work to increase the company’s overall bottom line, employee satisfaction must be developed to avoid the costly affect of turnover. Employee turnover – whether it is voluntary or involuntary – will impact the organization financially. Consequence costs incurred from employee turnover comes from “termination, advertising, recruitment, selection, and hiring,” states Huffman, Pritchard, Watrous (2006). Additionally, organizations will consequently have an “intangible” impact on employee morale from turnover, and in some instances, employee turnover is inevitable when outside intervening variables occur. Not all employee turnovers occur because of a low morale work environment, and sometimes the employee does not share the same values as their co-workers. Also, employee termination is necessary for the organization to maintain morale and high employee performance. Huffman, Pritchard and Watrous (2006) uncovered that employee turnover can boost firm performance by terminating low performing employees. It is also suggested that employee performance will decline when employees are intending to leave. Impact on operations from turnover will inevitably affect the organization financially, on all levels of productivity (Huffman, Pritchard, Watrous, 2006). According to Boushy Glenn (2012), researcher for Center for American Progress, the average cost of employee turnover to a firm is estimated at one-fifth of an employee’s salary to find a replacement. In the interim of an employee’s departure, an organization’s cost in turnover is reflected by loss of productivity, cost of training a new hire, and working the new candidate up to

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the standard company productivity level. Further research suggests that the higher skilled professional in a firm can cost the organization more money and a higher loss of productivity because of their years of experience, education, and specialized skill-sets. Finding a replacement for a high level executive position incurs a higher cost because of strict requirements and higher standards, whereas low-level requirements will not incur a lower cost. Regardless, if an employee voluntarily leaves or is terminated, the firm will be burdened with the cost directly or indirectly (Boushy, Glenn, 2012). See the table below for direct and indirect costs incurred from replacing employees.

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Direct Costs Exit interviews, severance pay.

The cost to temporarily cover an employee’s duties. Replacement costs such as advertising, search and agency fees, screening applicants, including physicals or drug testing, interviewing and selecting candidates, background verification, employment testing, hiring bonuses, and applicant travel and relocation costs.

Indirect Costs Lost productivity for the departing employee who may spend their last days on the job writing exit memos or with reduced morale.

Coping with a vacancy or giving additional work to other employees.

Costs incurred as the new employee learns his or her job, including reduced quality, errors, and waste.

Reduced Morale.

Los clients and lost institutional knowledge.

Source: Center for American Progress. November 16, 2012

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Psychological factors also exhibit a correlation with employee mental health and turnover rate in the workplace. According to Page and Vella-Brodrick (2009), the organization benefits from high levels of productivity from its employees, and mental health is linked to employee longevity. When an employee exhibits higher levels of enjoyment in their workplace, the employee tends to stay with the company longer, thus reducing turnover.

Human Capital According to Kassahun (2007), leveraging individual employee skill sets more affectively will lead to organizational optimization. When an organization leverages employees strategically, internal staff knowledge and skill sets increase. In order to develop and leverage employee skill sets, the company must provide access to resources and allow the employee to feel empowered. With easy access to resources, employee perceptions and attitudes change, resulting in “boosting employee morale or motivation,” states Kassahun (2007). The author goes on to discusses “job autonomy” in the workplace, stating that this is a key element for enhancing employee performance. Job autonomy provides employees with a sense of self-management, responsibility, and empowerment in their work environment. When an organization lacks job autonomy, consequently “diminished performance and employee stress” occurs, states Kassahun (2007). “Organic” organizations, according to Zeitz (1983), have educated and professional oriented employees who are capable of working in unpredictable office environments. The environments that exhibit an open structure, or open to ideas, typically increase employee morale and boost individual autonomy among employees, states Zeitz (1983). According to McCue, Gianakis (1997), employee autonomy is a function of job satisfaction, and a lack of autonomy leads to decreased job satisfaction, decline in task performance, absenteeism, and turnover. The

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increase of job satisfaction, the author contends, leads to an award system that attributes to employee performance.

Research Design and Methodology In order to test the hypothesis “does culture impact a (PR) firm’s performance and turnover,� two types of data collection methods were implemented. In addition to collecting data, secondary research from scholarly literature was examined. First, due to limited scholarly sources on PR agency culture and performance, examining past and current research on organizational behavior of employees and performance has helped in developing questions to distribute. Once the secondary research of scholarly sources was examined, development of the data collection method commenced. Next, the survey questions were developed to get an understanding of employee perception and insight into the agency they work for. Lastly, interview questions were developed for CEOs and other C-Suite of PR agencys in order to gain insight on how their culture is managed to impact performance.

Primary Research Survey Questionnaire Administered Through Qualtrics The goal of the survey was to collect primary data from employees at PR agencies for more insight into the companies. By utilizing the Qualtrics online survey builder, the questionnaire was assembled and distributed to more than 20 PR agencies in New York, Los Angeles, San Francisco, Atlanta, and Miami. The survey consisted of 15 questions ranging from demographic, dichotomous, and Likert scale questions.

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The survey was distributed through direct email and the professional social media online platform, LinkedIn. After the survey was launched, there were a few responses from agencies disclosing they wish not to take the survey. Reasons ranged from, “our agency has already administered many surveys already to our employees,” and “we would like to, but are afraid of the published results.” Due to a limited timeframe, one agency in New York agreed to distribute the survey among its employees. In total, the survey gained 35 respondents, which is not an ample size to appropriately test the population. In the future, more time may be needed in order to receive ample responses that best represent the test population.

Research Findings I Employee Survey Thirty-five respondents had begun the survey, and 34 (97%) completed the survey. The first survey question collected the respondents’ official employment title and position within their organization. From these data, 35% are currently holding senior management positions at their respective agency. The second survey question collected the respondents’ total number of years of employment at their current organization. The data show 35% of survey respondents have been employed for 10 or more years at their current agency.

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Employees were also asked whether their firm has a mission statement and/or a motto, and 82% responded that their organization does have one. Surprisingly, the other 18% responded with their organization does not have a mission statement and/or a motto (Figure 1).

Figure 1 – Does your firm have a mission statement and/or motto?

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Employees were also asked whether or not they believed that their company culture is a measure of their firm’s success. Only 79% responded “yes” and believe that their company culture correlates with their firm’s success. The remaining 21% responded “no,” culture does not correlate to their firms’ success (Figure 2).

Figure 2 – Do you think that your culture is a measure of your firm’s success?

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Employees were asked whether or not their company culture affects their company’s overall success positively. Eighty eight percent responded “yes,” internal company culture affects their company’s success, while 12% responded that it does not (Figure 3).

Figure 3 – Do you think that your company culture affects your company’s overall success positively?

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Employees were asked whether or not their company culture impacts the way they serve their clients, and 91% responded “yes.” Only 9% disagreed (Figure 4).

Figure 4 – Does your company’s culture impact the way that you serve your clients?

Employees were asked whether or not their company culture is a factor in determining the reason why they work at their firm. The majority, 76%, responded, “yes,” while the remaining 24% responded “no” (Figure 5). 24


Figure 5 – Was culture a factor in determining if you’d work at this firm

Employees were asked whether or not company culture plays a factor in keeping them employed at their firm. The respondents, 82%, answered, “yes,” while 18% responded, “no” (Figure 6).

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Figure 6 – Does culture play a factor in keeping you at your firm?

Employees were asked if their firm currently offers employee training in order to learn a new skill set. The data shows 74% responded “yes,” while 26% responded “no” (Figure 7).

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Figure 7 – Does your firm offer training to learn a new skill set?

When asked if they feel their organization values their (employee) opinion, 74% strongly agreed and/or agreed, while 3% disagreed with the statement (Figure 8).

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Figure 8 – I feel that my organization values my opinion.

When asked if their organization recognizes and celebrates team member successes, 88% strongly agreed and/or agreed, while 3% disagreed with the statement (Figure 9).

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Figure 9 – My organization recognizes and celebrates successes of team members.

When asked if their organization respects a diverse range of opinions, ideas, and people, 73% strongly agreed and/or agreed, while 9% disagreed with the statement (Figure 10).

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Figure 10 – My organization shows respect for a diverse range of opinions, ideas, and people.

When asked if their organization puts clients first, 88% strongly agreed and/or agreed, while 0% strongly disagreed and/or disagreed with the statement (Figure 11).

Figure 11 – My organization puts clients first.

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When asked if their organization puts employees first, 41% strongly agreed and/or agreed, while 26% disagreed with the statement (Figure 12).

Figure 12 – My organization puts employees first.

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When asked if their organization is differentiated by culture, 65% strongly agreed and/or agreed, while 6% disagreed with the statement (Figure 13).

Figure 13 – My organization is differentiated because of our culture.

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Primary Research II Interviews of Officer’s and Management at Public Relations Firms In addition to surveys, interviews were conducted to top executives from different public relations firms in the US and abroad, who have been in the industry for more than 10 years. The interviewees’ titles ranged from Directing Manager, Chief Culture Officer, to Chief Executive Officer. The interview questions developed asked the interviewee about managing culture, 33


leadership, and retention. Each interviewee holds a different position, thus questions were developed and conducted accordingly. (List of interviewees and the interview questions are in Exhibit A).

Interview I – Managing Director for Ruder Finn UK

With over 15 years of public relations in the UK, the Managing Director of Ruder Finn UK Nick Leonard begins by discussing “autonomy” in the workplace, and how they operate as a loose framework. When asked if Ruder Finn has a motto and/or mission statement, Leonard responded, We have our strapline that is called Creative Edge, a philosophy rather than any kind of mission statement. Ruder Finn is an agency that is about the client. We adapt to market conditions, For example, our Ruder Finn office in the US has a lot of individual offices. Ruder Finn UK operates as an open plan. What we compromise in terms of privacy, we gain in collaboration and cohesiveness. The only people with offices are myself, the managing director, and the HR director, and finance. We foster a collaborative approach amongst our people, and get them talking by being in an environment where they have to communicate with people – rather than shutting people away into cubicles and offices and letting them do their own thing. We try to breakdown traditional work environment barriers because we find it much better to work together and to have a feeling that everyone is in it together.

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The Ruder Finn UK culture has been found to impact employee satisfaction and employee retention. From Leonard’s own personal experience working for Ruder Finn, he states, We have staff surveys to see what our employees want. We also implement an appraisal system every six months where every employee needs to give a presentation to their manager to discuss their achievements, frustrations, what they want to do next, and ideas that can help us improve as a business. Also, it’s important to understand that some staff do not fit the culture of the business, and their roles don’t fit where we are going. A culture has to be comfortable for people. They must enjoy being here, get along with people, and have an element of personal ambition. You cannot have a good thriving culture here without that streak of ambition and dynamism running through it – and to do that you must manage people out. You have to do it as quickly as possible so the company does not resent you and think you’re not taking action To keep the best people, you have to be strong about how you manage the staff.

Lastly, Ruder Finn UK is aware that their own company culture does impact their client satisfaction and overall agency performance of the agency. Leonard goes on to say, In a competitive market, where budgets change all the time, we are aim to keep clients happy…and you can’t do that unless they buy into your culture. Inviting our clients to events, involving clients with the Ruder Finn business, and making sure clients meet people outside of just the core account team. You have to communicate the culture to your client, and clients are concerned with what you can do rather than what you say. Ruder Finn does not measure culture but instead adds an open floor plan, staff appraisal system, and HR system in order to make everything more transparent. Over the past 3

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years, our financial growth went from 8% to 25% partly as a result of the things we have implemented. The impact has been felt by the staff and morale, progression, client service, and new business has improved. Steady year-on-year increase on growth, based on cultural input can be projected based on our new initiatives.

Interview II – Principal, Co-Founder of Concentric Communications

John Cassese is the Principal and Co-founder of Concentric Communications in New York City. Cassese has over 35 years of experience in public relations, and describes his agency’s motto as “Redefining Experiences.” Asked to describe the Concentric agency culture, the founder responds, We all work together and we are our own worst enemies. We know our strengths and weaknesses, and we been through good times and difficult times together. Our culture is very collaborative, we’re all friends, and we have known each other for such a long time. The agency is an anomaly in the industry, as you won’t find many people who have worked together as long as we have. The Concentric culture is a community with a feeling of brotherhood, which has been both a positive and a negative. This makes us very insular and sometimes it is very difficult for us to bring in new external people; however, when we pitch new business, we can come in as a unified team.

How the Concentric Communications culture impacts their employee and client satisfaction, Cassese responds,

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If you can’t enjoy the people that you work with, you can’t service your client. If you’re fighting internally it makes it very difficult for you to service your client effectively and to get the job done. Clients can pick up on business that is going well, and when the culture is not doing well. If the client senses that you don’t get along with the people that you are working with, it makes them feel uncomfortable.

Lastly, Concentric Communications culture impacts agency performance in that company culture is transparent to the client. The founder goes on to say that, You have to like going to work, you have to like the people you are working with, and it has to go beyond liking your job. You’ve got to like the environment that you’re in, feel comfortable, a place where you feel that you can be yourself, where the exchange of ideas is appreciated and valued. The culture of camaraderie of supporting each other and getting along has to be there.

Interview III – Chief Executive Officer of Emanate PR

Kim Sample, the Chief Executive Officer of Emanate PR in New York City, describes her agency’s motto as, “less talk more action.” She goes onto to explain,

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less talk more action means we’re going to have a bias toward action. We’re going to bring smart people together and sit around and figure out strategies. We’re going to go make it happen. The lingo here is very familiar and relevant; we are going to go make work happen.

The Emanate culture can be described as an “incubator of success.” Sample goes on to expand the agency’s notion, When I started the firm I had a vision of us being an intense business. We wanted people to have a ton of ambition and the downside is we probably would not keep them forever. Today, we want to make sure that when somebody leaves Emanate, they look back and say at my time there I learned more than any other job I’ve ever had. We also want our clients and prospects to recognize they have the best-trained talent in the industry. When we set up the company, one of the first things we agreed on was to have a flat structure. If we can keep things really flat and attract senior people that love doing the work and will be deep in the work, we can train junior people really quickly. These junior members are going to be working arm-in-arm with senior staff, but they will not be constrained by our titles system in terms of what they can do.

When asked to describe how morale and company culture is managed to align Emanate’s culture in its offices worldwide, Sample says, We talk about One Company all the time. There are cultural things that have to be tweaked in different geographies and we try to make the really important things stick in every market. A lot of communicating and information sharing takes place so that we

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know things are aligning. The Emanate mantra is to hire entrepreneurial-minded people in ways that don't involve changing the agency vision/philosophy, but who can contribute to vision. I hold myself accountable for that and I hold all of our senior managers accountable as well. But essentially it is all of Emanate’s employees who are responsible. We must have a collaborative culture, and accepted and unacceptable behaviors must be established. In order for this to be a great learning environment, we have teaching moments. Getting good and bad feedback in the moment can’t just happen in employee annual performance reviews.

Lastly, Sample describes how Emanate’s culture impacts employee, client, and agency performance. She believes, Our culture has to shine through in the worst situations. We want to make sure when and if our employees depart, they have learned all they can at Emanate. We are passionate about client retention and administer a client scorecard asking about their perception of the Emanate culture and if it was a positive experience for them. Nothing trumps great work and great thinking. You have to have both, and we can’t hold onto clients for just being great to work with, or being positive or motivated. It has to be married up with great work, and if you put that together – it's a great thing.

Interview IV – Managing Director & Chief Culture Officer of Zeno Group

Grant Deady is the Managing Director of Zeno Group in Chicago, and is the first Chief Culture Officer over the entire Zeno Group agency. When asked, how does Zeno Group

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distinguishes itself from Edelman, Deady responds, “We are sister companies, so Zeno is kind of a different experience in that we offer big agency thinking in a small package – which results in best of both worlds with global resources.” Deady states that Zeno Group pride itself on two unique attributes. First, the “agency has extremely entrepreneurial minded employees that balance work life balance and not on a traditional track that allows our employees to do things different, that is from an Internal perspective. Second, from the Client Perspective, clients choose Zeno to shake things up or bring some big time life into their communications.” Deady describes the Zeno Group’s mission as being comprised of “believers in the fearless pursuit of the unexpected.” According to Deady, fearless is, what we talk about most often in order to motivate our staff and the roles of our clients. Employees must behave in a fearless way and not reckless and clients must know that Zeno challenges the status quo. To make it more tangible, we live fearless everyday, and it is plastered on the walls at every agency. Employees even wear fearless bracelets to help remind them that's who we are and how we behave.

In addition, Deady describes how Zeno Group’s culture was adopted. The company was started by the Edelman family in order to, “give clients a different experience. We can be incredibly nimble and adjust to what happens in the marketplace. When you wake up every morning, whatever client you’re working with, you’re creating an idea to bring to the table.” Zeno Group manages its worldwide offices via Deady. As the Chief Culture officer he must make sure that morale is aligned with the company culture. Deady explains,

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One of the main reasons behind my new title is to continue to live and activate the belief of Zeno in our offices abroad. Their are Culture Crew Members assigned in every Zeno office and are in touch with me on a daily basis. We also have additional network wide culture programs. For example, this year we held the second annual Zeno Day of Play. We are the only agency in the world that closes our office on the first day of Spring so that our employees can unplug and recharge.

Lastly, internal culture is important for Zeno Group, and Deady recognizes how the culture impacts client satisfaction. Deady goes on to explain, The field of PR and social media really require people to be on 24/7; it’s all about capitalizing on breaking news. When this is the professional life you lead, it’s important to make the agency a great place to work. Having a supportive and energetic work environment is important, but at the same time, we always convey to Zeno employees to put their families first, which in turn creates a supportive work environment with a low turnover rate. If work environment is positive, and employees are happy, the work reflects upon our client relationships. If employees are unhappy, it will also show in client work. Productivity and culture are married hand in hand, and our clients know from the beginning that Zeno Group culture is why they hire us.

Summary and Conclusions

Summary of Findings

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The results from the surveys administered through Qualtrics demonstrated that employees believe their company culture relatively impacts the way they serve clients. The employees also want to be recognized for their successes; thus boosting morale and creating “joy” in the workplace. They also want to feel that their ideas, and opinions are valued. Additionally, the employees believe that their company culture affects the overall success of the business. Nick Leonard, Managing Director for Ruder Finn UK, states Ruder Finn UK was not doing so great from a business standpoint before he was appointed. First, Leonard created an open floor plan for employees to collaborate together, placed an HR system, and created more transparency. He states, after 3 years, he noticed that Ruder Finn’s financial growth go from 8% to 25% and is continuing to grow because of cultural input. Agencies that promote a strong cohesive culture will produce the best work achieved by their employees. Though the survey is not representative of an entire population, due to the sampling amount, nonetheless it’s an indication that culture is an important element to employees of public relations agencies.

Recommendations for Internal Culture Practice to Impact Agency Performance & Retention Based on the secondary and primary research, the following are recommendations for best practices of structuring agency culture to impact performance and retention. 1. Provide employees with training to learn a new skill. It is important for employees to learn a new skill set and apply the knowledge towards projects. Not only does it make the employee feel more valuable, it reflects well on company growth. ADD SUPPORTING EVIDENCE FROM RESEARCH FINDINGS.

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2. Value staff opinions, ideas, and celebrate employee successes. Employees in the workplace want to feel a part of the organization, and the best way to have a thriving staff is for management to welcome input from their team. The feeling of ownership is important to employees as well, as this creates autonomy in the workforce. Additionally, create a rewards system and implement it when an employee has a successful project or meets a company goal. By celebrating staff success both individually and as a team, agency employees will be motivated to continue to perform better. 3. Differentiate your agency culture. The function of PR agencies is to compete for business and to maintain/retain clients. A key selling point for an agency is its internal culture whether it is conveyed in the company mission statement or a motto. Zeno Group differentiate themselves by assigning the role of Chief Culture Officer to manage culture in their worldwide offices. Additionally, Zeno Group employees will wear a “FEARLESS” band around their wrists during new business pitches. Zeno employees refer to themselves as Zenoids, and they wear the FEARLESS band to represent camaraderie amongst each other. The culture shows through in how employees interact with each other, “If they sense that you don’t get along with the people that you are working with, it makes the client feel uncomfortable.” 4. Develop a system of measuring agency culture. Administering employee surveys throughout the year helps management and HR gain insight on if strategies need to be changed. Employee reviews also help supervisors gain insight on employee’s personal goals and insight on their development with the agency. Share agency financials with employees, so they have a clearer understanding if the agency is growing or declining. These practices helps the agency to compare results to agency culture strategy.

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Conclusion Based on the primary research conducted, though there are no quantifiable systems in place to measure culture impacting agency performance, the research from the interviewees believe that it does due to their growth since culture has been in place. Employee retention is contingent on many variables as, fitting in, growth, and client business. The primary and secondary research substantiates that culture does indeed impact retention of agency employees. Since there was not enough supporting evidence to conclude that culture impacts agency performance in my research, recommendations for best practices were developed. Interviews with the executive management and chief executive officer’s uncovered many likenesses between the agencies they operate. The interviewees mentioned how they encourage employees to voice their opinions, ideas, and discuss their own personal goals through meetings and one-on-ones. Also, managing employee talent was one of the key talk points among the interviewees. When employees’ goals are not aligned with the agency goal, and they’re not the right fit, it’s important to manage those employees out quickly. Public relations agencies are a client centric business, it’s important to keep top talent that want to see and help their agency grow. The secondary research of scholarly work has indicated the significance of company culture has against an organization’s bottom line. Keeping employees who do not share the same goals as their counterparts, or do not want to see themselves grow within the company, are the ones that degrade the company culture. These employees are the first to be managed out.

Retaining top employees is important for an agency; unfortunately, the cliché of “business is business” rears its ugly head when even top employees have to be let go. The caveat 44


to being a public relations practitioner at an agency, your employment is based on client retention. Kim Sample, the CEO of Emanate PR, shared with me after our interview concluded that they just lost a major client. Due to the lost, restructuring had to happen which resulted in downsizing the company. Sample stated, “that if they have to downsize, it would be in an Emanate way – it will feel appropriate to our culture.” Since Emanate is part of Omnicom Group, Sample, was able to find jobs for her employees that were let go within other agencies owned by the Omnicom Group. With so much competition, the agency must differentiate themselves from their competition, and that is where culture can be used as a strategy for the agency.

Further Research This study sets the groundwork for further exploration of public relations agency culture, and how it impacts agency performance. The sampling population was not near what we anticipated, but with more time and access, surveying more employees at many agencies would help shed light on employees’ view of their agency culture. Finally, interviewing more chief executive officers, directors, and talent management of public relations agencies. Because there are agencies with different staff size, independently owned versus owned by a holding group, and across multiple geographies; further research will expand best culture practices for public relations agencies when a quantifiable system has been proven.

Exhibits

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A. Survey

B. List of Director’s and Chief Executive Officers Interviewed

C. Interview Questions (Modified accordingly for each interviewee)

Exhibit A

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Qualtrics Survey: Company Culture Driving Agency Performance & Employee Retention This questionnaire is completely anonymous. Your participation in this survey is greatly appreciated. 1. Which category best describes your position within your organization? • Account Executive • Senior Account Executive • Account Supervisor • Vice President • Senior Vice President • Executive Vice President • Senior Management • Other 2. How many years have you worked for your current organization? • 0–1 • 2–5 • 6–9 • 10 or more Please Choose Yes or No 3. Does your firm have a mission statement and/or a motto? • Yes • No 4. Do you think that your company culture is a measure of your firm’s success? • Yes • No 5. Do you think that your company culture affects your company's overall success positively? • Yes • No 6. Does your company’s culture impact the way that you serve your clients? • Yes • No 47


7. Was culture a factor in determining if you’d work at this firm? • Yes • No 8. Does culture play a factor in keeping you at your firm? • Yes • No 9. Does your firm offer training to learn a new skill set? • Yes • No Please choose the best option from the following scale: 1 = Strongly Agree, 2 = Agree, 3 = Neither Agree nor Disagree, 4 = Disagree, 5 = Strongly Disagree 10. I feel that my organization values my opinion. • Strongly Agree • Agree • Neither Agree nor Disagree • Disagree • Strongly Disagree 11. My organization recognizes and celebrates successes of team members. • Strongly Agree • Agree • Neither Agree nor Disagree • Disagree • Strongly Disagree

12. My organization shows respect for a diverse range of opinions, ideas, and people. • Strongly Agree • Agree 48


• • •

Neither Agree nor Disagree Disagree Strongly Disagree

13. My organization puts clients first. • Strongly Agree • Agree • Neither Agree nor Disagree • Disagree • Strongly Disagree 14. My organization puts employees first. • Strongly Agree • Agree • Neither Agree nor Disagree • Disagree • Strongly Disagree 15. My organization is differentiated because of our culture. • Strongly Agree • Agree • Neither Agree nor Disagree • Disagree • Strongly Disagree

Exhibit B

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Public Relations Executives Interviewed

Ruder Finn UK

Nick Leonard UK Managing Director

Concentric Communications

John Cassese Principal, and Co-founder

Emanate PR

Kim Sample Chief Executive Officer

Zeno Group

Grant Deady Managing Director & Chief Culture Officer

Exhibit B.1

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Interview Questions for Nick Leonard 1) What is your title? 2) Does the agency have a motto and/or mission statement? If so, how is this reinforced to employees? 3) How would you describe the agencies’ culture? 4) What does the agency pride itself on? 5) How does culture impact employee satisfaction and retention? 6) How does culture impact client satisfaction? 7) How does culture impact the performance of your agency?

Exhibit B.2

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Interview Questions for John Cassese 1) What is your title? 2) How long have you been in this position? 3) How long have you worked in PR? 4) Does the agency have a motto and/or mission statement? If so, how is this reinforced to employees? 5) How would you describe the agencies’ culture? 6) How does culture impact employee satisfaction and retention? 7) How does culture impact client satisfaction? 8) How does culture impact the performance of your agency?

Exhibit B.3 Interview Question for Kim Sample 52


1) What is your title? 2) How long have you been in this position? 3) How long have you worked in PR? 4) Does the agency have a motto and/or mission statement? If so, how is this reinforced to employees? 5) How would you describe the agencies’ culture? 6) With offices worldwide, how do you manage each location to assure the morale is aligned with the agencies’ culture? 7) Does the agency have a person assigned to the role of managing company culture? 8) How does culture impact employee satisfaction and retention? 9) How does culture impact client satisfaction? 10) How does culture impact the performance of your agency?

Exhibit B.4

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Interview Questions for Grant Deady 1) What is your role/position at Zeno Group? Do you have other responsibilities than culture? 2) What distinguishes Zeno Group from Edelman? 3) What does Zeno group pride itself on? 4) Does the organization have a motto and/or mission statement? How is this reinforced to Zeno employees? 5) What is Zeno’s culture and how was it adopted or started? 6) Zeno Group has offices worldwide, how do you manage each location to assure the morale is aligned with Zeno’s culture? 7) Why is internal culture so important for Zeno Group? 8) How does culture impact client satisfaction?

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Matthew E. Burnam – New York University Master's Capstone