THE VITAL DIFFERENCE
By Terence Fane-Saunders
Chairman and Chief Executive, Chelgate Ltd

Most people had heard it all before. "Really. This is going to be a different kind of PR firm" I insisted.

The usual response, at best, was a kindly "mm hmm?" This was 1988 and the world seemed to be full of people announcing the formation of new PR firms; PR firms that were going to be different.

But in our case, we really were. And I knew what the differences were going to be. I had worked all over the world, for two of the world's largest and most successful PR firms. I knew what was happening in the industry. And I knew that there was no role model out there for Chelgate.

First, and fundamentally, we would put clients first. This may not have seemed too revolutionary at the time. The corporate brochures of every PR firm in the land seemed, without exception, to talk of commitment to clients. But what was different, was that we meant it; we really meant it.

This was not some fine ideal. We were going to build it into the system. Here is an example:

Most PR firms base their charges to clients on hourly executive rates. The more hours they charge, the more they earn. So executives are set targets of hours to charge out each day. Groups are set targets, and so are divisions. Productivity is measure d not by client service, but by hours charged. When targets are not met, the pressure can be acute. Bonuses, salary reviews, promotion prospects can all be put in jeopardy if the executive doesn't deliver the chargeable hours.

The first reaction is to generate the hours somehow, anyhow. The result is "calorie-free" activity: time spent, but no substance. Nothing is achieved. The wheels are spinning, but no-one's going anywhere.

The alternative is false charging: inventing hours that were never spent. Often, there will be a giant milch cow of a client, bloated in budget, who might never notice a few hours here or there. Pretty soon, half the executives in the firm are charging time to that client, to meet their time sheet targets, and that, by any measure, is simple theft.

PR firms don't ask their executives to cheat and lie on their time sheets. Indeed, most would roundly condemn the practice. But they maintain a system which is almost guaranteed to produce that result.

At Chelgate we decided to do it differently. Executives keep time sheets, but they have no time targets. The accounts department have a written instruction not to provide management with details of individual's time records, and as no executive works a lone on an account, there's no way of telling who did or didn't spend the hours. There are no time sheet heroes at Chelgate. Each member of the team is told simply to "get it right for the client". As a result, time sheets are accurate - there's no incentive for them to be otherwise.

There were many other ways that we wanted to be different. Our approach to international business was one of them. I had spent much of my public relations career managing international PR programmes, and the more I did it, the more I was certain that most PR firms did not manage international assignments to the clients' best interests.

These days the larger firms offer their clients international networks of offices stretching across every continent on the globe. The seductive message talks of consistency and control. The reality is rather different.

There is actually real inconsistency in the international networks. You have good offices and weak ones. You have offices which specialise in one thing and offices which specialise in another. For a client to be best suited in each market by the local offices of the same international network is not just a freak of chance; it's almost impossible.

But the manager who says to his client: "Don't use our office in Paris - Bonaparte Communications would be much more suitable" would be unlikely to find himself top of the Christmas Bonus list.

At Chelgate we have made it a point since the beginning to work with firms around the world whom we thought would best suit individual clients' needs. Recently we had two assignments running across Europe for two different international clients. There was not one market where we felt it best to use the same two PR firms.

Finally, we decided to build a very flat firm. Most of us at Chelgate have worked at one time or another within the traditional management pyramids - and we didn't like what they did for clients or for staff.

For clients, too often it meant that they didn't get what they were paying for. They'd turn for help to a top PR firm believing that this would give them access to top PR professionals. But all too often, those top professionals are simply not available. The better they are, the less PR work they do. They become managers. Their days fill up with committee meetings, board meetings, strategy meetings and new business meetings. They lead triumphant new business pitches. But when it actually comes to delivering client service, there just aren't enough hours in the day.

In fact, the firm's profit margin shifts up the further down the pyramid it can push the account handling. Among the more cynical, the technique is known as "Delsi" (Delegation to the Level of Sustainable Incompetence). If the client complains, it can always be moved up a notch or two - for a while.

For executives, the pyramid breeds politics as surely as rabbits breed little rabbits. Two executives sit in neighbouring offices. There's only room for one on the next floor of the pyramid. Pretty soon, "I hope I do better than Fred" becomes "I hope Fred looks worse than me". In some cases, natural logical progression leads remorselessly to "How do I make sure Fred looks worse than me?"

The very system creates a negative dynamic. Energy that should be focused on client service is directed into internal politics. Blood lies thick on the boardroom carpets, the revolving door spins dizzyingly, and clients barely have a chance to get to know their account team before the pack is reshuffled again.

At Chelgate, there are no long lines of delegation. Senior professionals work hands-on with their clients. And the approach seems to work. Executives stay (more than half the executive team have been with the firm four years or more), and clients stay (with the two largest clients in our first year of business remaining Chelgate clients today).

It's now over a decade since Chelgate first opened its doors for business. But the beliefs which shaped our early days still make a difference - a vital difference - to the way the firm operates today.

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