Latest H&K turmoil is sad to watch

As a proud Hill & Knowlton alumnus, it pains me to read the latest upheaval at the firm's upper ranks. (Founders Donald Knowlton and John W. Hill are pictured, below.) It seems that, since the late 1980s, H&K has been the industry lightning rod for turmoil, controversy and unrest.

Gallery It wasn’t always that way, though. I had the good fortune to land an H&K entry-level position in 1978. At that point in time, H&K was the gold standard of the profession. Sure, Burson was growing rapidly. But, Carl Byoir and Harshe-Rotman & Druck had already started to decline, and firms such as Porter, Ketchum and Golin were still in their nascent stages. H&K was unquestionably the “…shining city on the hill.”

It was a thrill to work there. In those days, giants walked Hill & Knowlton’s hallways.  We had former newspaper editors, syndicated columnists, press secretaries and industry insiders by the scores. H&K also had a curious new business policy. The firm refused to proactively pitch prospective clients, believing it to be demeaning. Instead, blue chip organizations approached Hill & Knowlton, hoping to be added to its uber-prestigious client list.

Our power brokers were the powerfirm’s upper ranks. It seems that, since the late brokers. Bob Gray, who ran H&K’s Washington, D.C. office, was the ultimate Beltway insider. If a client needed to influence Congressional votes, Gray made it happen. I had the pleasure to work alongside two of Gray’s subordinates, Sheila Tate and Colburn Aker, to support the American Trucking Association’s efforts to prevent new anti-trucking legislation in scores of states (note: Tate later became Nancy Reagan’s press secretary and founded Powell-Tate. Aker had his own influential lobbying firm for decades). I traveled to New Hampshire, Oregon and the state of Washington in 1980 to help the team ensure voters turned thumbs down on increased trucking taxes. It was an unparalleled experience for a green-as-grass, 24-year-old account executive.

H&K’s decline began in the late 1980s, when a senior management struggle resulted in the firm’s representing highly controversial clients such as The Church of Scientology, The U.S. Catholic Bishops and, most notoriously, the government of Kuwait. With the latter, H&K was accused of staging a genocide of Kuwaiti kids (an event that later inspired the Hollywood movie, “Wag the Dog”).

H&K seemed to have stabilized its image and reputation free-fall by the end of the 20th century. And, quite a few industry trades rightly lauded Paul Taaffe and Marylee Sachs for their fine work in righting the ship. Now, they’re gone with the wind and the firm, once again, seems to be in adrift. It’s really sad to say this but, once a firm sells to a larger holding company, all bets are off. Some survive. A few even thrive. But most, like H&K, begin a long, slow downward spiral.

6 thoughts on “Latest H&K turmoil is sad to watch

  1. Wow, that is some analysis, CredibleContext. Thanks. You’re 100 percent right, of course. And, yet, I still read trade journals predicting the future belongs either to the global holding companies or specialized boutiques. I couldn’t disagree more. The former can’t get out of their own way and the latter are limited by their depth and breadth. There’s never been a better time to be an independent midsized firm.

  2. Steve,
    If there is one thing the role of the Internet and the rise of social networking have taught communications professionals it is that the skills of public relations are more essential now than they have ever been.
    The opportunity to speak directly to consumers, the inability to say different things to different audiences at different times without being discovered, the end of a “news cycle,” and the hyper-competition driven by increasingly distributed industries (like telecom and entertainment) make consistent, accurate and timely communication essential to being heard.
    The turmoil at large PR agencies is not the result of any one thing, but, as can be seen in the case of Hill and Knowlton, the result of a series of moves in rather short order (six years by my count) based on almost everything other than the give-and-take nature of client relationships.
    The first occurred in 1980 when J. Walter Thompson bought Hill and Knowlton. The thinking at the time made sense on paper — we can expand our relationships with our clients — but failed to take cultural differences into account. Ad agencies saw budgets and clients differently than public relations did. The clients, too, were different. The executives who bought advertising were removed from those who signed public relations’ checks.
    The second occurred in 1981 with the inauguration of a new President of the United States and the advent of the “Reagan Revolution.” For public relations agencies, already knocked back by their ad firm owners, the federal decision to return more responsibility to the states put public affairs in the lead. Public affairs is more an off-stage, negotiation than a full-throated public discussion and, because of the stakes, more profitable. Consider how public affairs margins compared to marketing communications margins might skew decision making.
    The third occurred in 1986 when WPP bought JWT and cemented the era of the publicly held, full-service marketing holding company. Once the unrelenting pressures of the public market began to weigh on cyclical PR account relationships, they bent or broke. It caused agencies to take on accounts that wouldn’t do either, whether they fit the firm’s historic profile or not.
    Right now, news of executive and client comings-and-goings seem to diminish the value of public relations. One can only hope there is truth in the notion that reputation lags reality. The reality of how companies are best able to succeed on the new social networking platforms may be an early indication of a renaissance.
    Anyway, that’s my story and I am sticking to it.

  3. Thanks for the note, Jeff. Working alongside you at H&K was a great experience. You were one of those ‘giants’ I wrote about in the original blog. H&K was just loaded with top talent in the 1980s.

  4. Hi Steve,
    When John Hill walked the halls it was quite the place. As a young Art Director and Graphic Designer I recall sitting next to John Hill at meetings and wondered what the heck I was doing there. I believe most of the senior staff thought the same of me. Their most prestigious client base soon had me quite busy in developing a variety of design communications for many of their Fortune 500 clients. To the credit of the company they went with the flow (albeit not quite sure what this graphic communications stuff was quite about) but saw the positives of this new burgeoning profit center. I left shortly after the acquisition and transition. I believed it just wasn’t going to be the same and unfortunately it wasn’t.

  5. Thanks, Chris. There are obviously some exceptions to the holding company malaise you so accurately describe. But, H&K is undoubtedly a prime example of what can happen to a superb brand once it loses its independence.

  6. Steve, you were responsible for bringing me to H&K in 1984, and I concur with your thoughts. I feel like I have been waiting for 15 years for H&K to rise from the ashes and reclaim its glory. ‘Twas not to be. And, after spending more than 20 years in holding company owned agencies, I fear that such ownership has wrung the value and differentiation out of all of these once sterling firms — it seems like you get the same ideas (and the same fees) from all of the big agencies. There doesn’t seem to be any investment in advancing the profession in any significant way. Increasingly, one gets the feeling that these firms are just cash machines, pressured to deliver higher and higher margins that are not re-invested in the business.
    It’s a tremendous disservice to the men and women who work like serfs for below average pay at these PR factories. I am not one to wallow in the good old days, but it was a magical experience working in the firm you describe.