00:00:00.000 ‚ 00:00:21.920 Anne Green
There will be things that the machine should do more of and it we then, whether it's senior people or more junior people, become the orchestrators of agents of colleagues that are machines. But I think we're going to have to be really open and nimble. And I love your idea about how do you look at other types of value add that may not be just a monetary outcome too.
00:00:33.120 ‚ 00:00:37.640 Anne Green
Hi, and welcome to another episode of Building Brand Gravity. I'm Anne Green.
00:00:37.640 ‚ 00:00:41.000 Steve Halsey
And I'm Steve Halsey. It's great to be together again an.
00:00:41.040 ‚ 00:01:18.120 Anne Green
It always is. It always is here, both in our New York office today, just at opposite ends of the office, which is fine. Um, later in the episode today, we're going to be digging into data and insights from the 13th annual Public Relations Industry Trends report from Davis+Gilbert, well known to you and I and many of our listeners, I'm sure, Steve, and it's a good read this year.
There's a lot of really important points to discuss, and Michael Lasky is going to be on deck to take us through the findings. But to kick things off today, I thought we'd do a quick round of in the news. What headlines have been catching your eye in the last week or so, Steve?
00:01:18.360 ‚ 00:02:32.600 Steve Halsey
You know, one that I saw was really interesting, which is a new report that came out from McKinsey called Nail Your First. And what's interesting about this is the core idea of this was really that the CEO role now starts first with stakeholder credibility, not operational cadence. So what the article was really talking about and the findings were saying, hey, in those first 100 days, the most critical thing for leaders is to really communicate well, because that's how they're going to be evaluated, how they show up, how they listen, and how they build trust so long before their strategy has actually taken place.
And long before you're seeing the operational changes, they're really being judged by that. And what I really find fascinating about that is how much pressure that then places on the corporate comms and corporate affairs ecosystem to really make sure the CEO gets out of the gate really strong, really fast.
And, you know, you've got to be aligned and you've really got to help make sure the CEO really isn't flying without instruments, that they're really putting that vision out there quick and fast.
00:02:32.800 ‚ 00:03:16.080 Anne Green
You know, that reminds me, um, I resonate with that being a CEO. And, you know, we're in a smaller pond here, but still leading you and I and our partners in this space. But it reminds me of reading some articles in Harvard Business Review about the skill sets that are needed for CEOs today, and that emotional intelligence and that communication across stakeholders is so critical.
And it makes me think of for years now? I felt that MBAs in particular. You know, these training grounds for corporate leadership were very under indexed from my perspective on the communication side and that skill set that many of us learn either through study or on the job, when we're practitioners like you and I are.
00:03:17.120 ‚ 00:03:25.480 Anne Green
It sounds to me like more than ever, you know, CEOs need to be coming in or those that may be on the path for organizational leadership need to really lean into that.
00:03:25.520 ‚ 00:04:06.680 Steve Halsey
Well, and, you know, we're communicating everywhere and always in every way, shape or form that that I think you're right, is really having that communications, um, framework to really bring that vision of life. And let me just read here, I wanted to pull this quote because I found it really interesting.
It says new and incoming CEOs are often unprepared for the intensity of internal and external stakeholder engagement. There's no honeymoon period. People in other roles may have six months or even a year to find their footing. But as CEO, you're expected to be ready from day one and communicate from day one.
That's some serious pressure.
00:04:06.920 ‚ 00:04:12.520 Anne Green
Yeah, I couldn't agree more. And I think we see that with a lot of our clients and just what we're observing in the landscape.
00:04:12.720 ‚ 00:04:37.160 Steve Halsey
So I thought that's interesting. And that really parlays a lot of the things I'm hearing from the chief communications officers I'm talking to. And kind of as we've talked about in previous episodes of Brand Gravity, it's no longer the old question, do you have a seat at the table? It's like, what do you do now?
It's how do you get them out the door as quickly as possible? But but that's something that kind of stuck with me. What have you been reading? What's sticking out for you?
00:04:37.240 ‚ 00:07:11.320 Anne Green
So in preparing for this, I definitely had a story that caught my eye. You and I have been talking a lot about structure and the role of integrated communications within corporations, within those functions. So a big story that caught my eye this week is the appointment of an executive Vice president, a new EVP to lead a newly unified corporate affairs structure at Verizon.
So this was in PR week and covered in many other places. Now this group is going to combine corporate communications, public affairs, government relations and what they term at Verizon Responsible Business, which is very interesting to to see how that language evolves. And the new EVP Frans Pash, I believe that's how you pronounce it.
He's a seasoned veteran that's worked at a lot of agencies and a range of corporations. But the thing that of course really caught my eye is Dan Schulman is the newly appointed CEO at Verizon. He was at PayPal before, and he had some very powerful quotes. This was in the actual formal announcement in the press release that was quoted.
I have them here. So some of his quotes on this. We have an opportunity to redefine not just who we are as a company, but to fundamentally change and lead our entire industry. And then he also said, in a world where trust and transparency matter more than ever. How we show up, communicate and deliver. Define who we are as a company by creating a world class corporate affairs function will take bold and responsible actions to drive growth and position Verizon as a leader with all our stakeholders.
Now, I was telling you this, Steve. Offline, I had the honor of working with Dan Shulman years ago in his first CEO role at Virgin Mobile USA, and he, I found, was always very savvy about brand, about reputation, about the breadth of stakeholders and the critical importance of building trust. He brought a lot of values with him from that entity to a stint at Amex and then of course, famously at PayPal, where, um, you know, some people might call him an activist CEO.
I don't think he would typify it. Like that was much more about being very clear on the values of the organization tied to their business and their stakeholders and their customers and living those values. But for me, just this idea about being so clear and deliberate about this move at a time where other entities, as we've discussed on this podcast, are kind of fragmenting that comms structure.
I don't know. I just found that really interesting. What's your take on this?
00:07:11.360 ‚ 00:07:59.120 Steve Halsey
Yeah, is is very interesting. And I like some of the words that he use like redefine be bold. You know that that to me really kind of ties those themes together that we're talking about. You know, the McKinsey piece is really arguing about leading with reputation for results. And what I think is interesting that Verizon is doing is they're clearly architecting a system here around Dan that makes this whole thing possible, right?
By unifying corporate comms, public affairs, government relations. It's more than a structural change. It's really, as you said, a deliberate signal of trust, of transparency, of stakeholder leadership. So this one's going to be interesting to see. To see how it works out. But yeah absolutely interesting story in the news.
00:07:59.280 ‚ 00:09:05.520 Anne Green
Yeah. And just you know, the day after I saw this story, I noted um, fortune in their CEO daily or it might have been Wall Street Journal in their, in their CEO brief. There's so many good newsletters. But one of them had featured more remarks from Dan Schulman from one of their board level gatherings. And so a lot about needing, um, the kind of mindset that's needed, the kind of boldness and also even large entities needing to think about themselves as a startup and being more nimble and agile.
So definitely a space to watch. And I guess, you know, we've been talking a lot so far on this episode about the corporate side of the fence. Now I think it's time to turn our attention back to the agency landscape, and that's our chance to ask Michael Lasky, who's been a long time partner at Davis+Gilbert, well known in the industry.
You know, you and I, Steve, have known him for decades. Um, to everything we want to know about the new Trends report. Having done it for 13 years is a long scope of time, and there is so much change right now. And I think the conversation I had with Michael yesterday will bring that level of change into focus.
So for now, please stay tuned for my conversation with Michael.
00:09:07.480 ‚ 00:09:14.120 Anne Green
I am so excited to welcome an old friend and colleague for many years now, Michael Lasky. Welcome, Michael.
00:09:14.160 ‚ 00:09:15.640 Michael Lasky
Thank you and a real pleasure.
00:09:15.640 ‚ 00:09:46.000 Anne Green
And Michael is the chair of the public relations practice at Davis+Gilbert, as well as co-chair of litigation and dispute resolution practice. But, Michael, you are well, well known in our industry, and I've known you for many years, as I've said, and you've been a great mentor and a support and counselor to me over those years.
But I don't know that a lot of people know your own story in terms of how did you end up in this specific practice area because you're so deep in it? Tell us a little bit about that. I think it's a great way to start.
00:09:46.040 ‚ 00:12:15.480 Michael Lasky
Sure. Well thank you. Well, you know, I'd like to say it's a it was a combination of strategy and serendipity. Um, the strategy was when I joined Davis+Gilbert, the firm had a, you know, really proud history of, um, being preeminent in the advertising law area. And back then, in 1983, advertising was still king, and everything else was a below the line business.
But the firm had been around since the early part of the 20th century, and we literally put the first radio spots. Yes, I said radio on the air for P&G. Um, and we've been synonymous with the monetization of what we now referred to as commercial speech since the early days of radio. And to be frank, our practice followed the technology of the day radio, television point to purchase then internet, social, digital and the like.
So when I joined the firm, I actually came at a time when I thought we were really well positioned to essentially work with firms whose key assets were people and ideas, creative businesses. You know, the term marketing communications had not yet been invented yet. And I looked at what we were good at and thought of what were logical line extensions and public relations.
You know, cried out as something that I thought we really could add a lot of value to. I think that was in part so that was the strategy. And I think the strategy was in part informed by my own background. I did a lot of writing as, um, uh, a student and, uh, I ran a 1200 page publication when I was in law school, and I actually was a, um, I wrote for my student newspaper.
I was a Broadway theater critic, Um, uh, for a bit. Um, when I was in college. So the craft of storytelling and authentic communications always resonated with me. And I thought reaching, you know, audiences with the information that would influence outcomes was also something that I think really resonated a lot with me.
So, you know, strategy and serendipity came together and I, um, you know, consistency and persistence also probably played an important role.
00:12:15.840 ‚ 00:12:55.320 Anne Green
I think that is how my life often goes. What's interesting to reflect back on the trajectory of many of the agencies in this space is where we came from and what we are today, like you said. You know, I would describe our firm today at G&S Integrated Marketing Communications. I still really love and feel passionate about the term of public relations, too.
But we also, like many firms, do much more than that. And, you know, I can think about the trends I've seen over time. You've got some years on me to to think about that too. When you think about the evolution of the whole space, especially the agency side, what are some of the things that you've noticed, some of those bigger trends?
00:12:55.560 ‚ 00:12:57.280 Michael Lasky
Well, I mean, certainly
00:12:58.320 ‚ 00:14:00.840 Michael Lasky
it's changed dramatically. And, um, you know, largely influenced by, um, you know, both scope of services, the complexity of the services and the technology that's enabled the, um, very substantial expansion of the swim lanes. So, you know, I, I was actually thinking this morning and I've thought about this a lot as it relates to the skyrocketing use of AI in the industry and, frankly, in all industries.
But, um, it really reminds me to a time in the in 1994 War ish when we started with the year, with virtually no firms having websites to by the end of the year, you know, WW w became synonymous with, you know, an extraordinary explosion. But frankly, it was a time when people were still trying to grapple with.
00:14:02.880 ‚ 00:14:36.800 Michael Lasky
Was this world regulated? And, you know, I kidded at the time that, you know, WW w stood for Wild Wild West. People thought it was, you know, completely unpolished, when in fact it was policed the very same way. Um, it was old wine and new bottle. So the technology created new issues, but a lot of the same kinds of framework applied.
And I think, you know, um, I, I certainly the kind of trends that I'm seeing are also greatly influenced by the expansion of services and the technology.
00:14:36.840 ‚ 00:15:47.880 Anne Green
It's funny to hear you speak about those early days. I very much remember when my firm, Cooper Cat's, back in the early 90s, sent out a postcard that said we are on the internet superhighway, and that just dates us all. But I embrace it. I, you know, you got to get in the Wayback Machine and enjoy those old memories.
Um, one of the reasons I wanted to connect with you, Michael, is talking about today and the trends that are really shaping our industry, and you folks have had for many years now your annual public relations trends report. Very helpful. I always look forward to it. I have participated, you know, in events when we're speaking about the trends.
I've, you know, done mainstage work with you guys on the AI side and some other pieces, M&A. So, um, just came out and the overall theme and I've got it here. That report really emphasized the gap between strategy and reality, those disconnects between agencies aspirations and the actual execution. So I want to go piece by piece through some of the findings.
And I know you've been on a bit of a road show for this, so you're ready to go, but what what are some of the top lines that you would identify before we drill down a bit?
00:15:48.320 ‚ 00:17:40.520 Michael Lasky
Well, I think I'd focus on three. Um, and certainly, you know, the whole purpose of the report is to look at the white space. Where can we influence outcomes? What is separating the the, um, advancement of the kind of firm that every firm hopes to be, you know, growing profitable. Well, you know, positioned.
And, um, as we looked at the data, um, there were three areas. One is I really saw some misalignment between the the virtual unanimity of firms using AI for a virtual explosion in types of services and for types of purposes, from content creation to media monitoring to data analytics, to proof of concept to crisis communications.
Let's just went on and on. But when you look to see, though it was popular, many firms did not have comprehensive policies in place. And that exposes them to liability for how employees were to be using it. What kind of client involvement and consent they had, and virtually no firms had, you know, appropriate AI policies for the vendors they used.
So, frankly, getting an alignment on the usage and policy to reduce risk was one area that we certainly I certainly felt would improve agency performance and check a lot of important boxes for alignment.
00:17:41.720 ‚ 00:17:55.120 Michael Lasky
Second area that came out very clearly from this year's data was while there was a very sharp increase in training at firms around AI platforms.
00:17:57.840 ‚ 00:18:05.440 Michael Lasky
Ways to, um, you know, you know, best prompts, um, best outcomes.
00:18:07.240 ‚ 00:18:52.440 Michael Lasky
Every other area of training was dramatically down. And, you know, the shoemaker's kids were going barefoot. So at a time when many agencies were struggling mightily to grow top line, maintain or grow profits, business development and client growth strategies, and operating holistically to cross collaborate.
Elaborate. Notice I didn't say cross sell, but cross collaborate. Among types of service offerings and between and among areas of specialization that was dramatically down over prior years. You know, similarly, um,
00:18:53.720 ‚ 00:18:55.199 Michael Lasky
we saw a lot of
00:18:56.960 ‚ 00:19:15.960 Michael Lasky
agencies still having the bulk of their revenue driven by retainer work, yet there was very little training being done around financial management, client contracts, how to appropriately stay within the scope of work,
00:19:17.560 ‚ 00:19:40.400 Michael Lasky
making sure the account people know you know, how to proactively communicate with clients on those issues. So that was another area of probably, if not leaving money on the table, losing money in part because that training piece was misaligned with, you know, the growth opportunities.
00:19:41.600 ‚ 00:20:03.280 Michael Lasky
You know, the third area that, um, came out in this year's data in terms of, um, what I would call closing the gap, was, you know, I'm a strong believer in economics, driving behavior. And while there is, again, um, the agencies were struggling to grow revenue and profitability,
00:20:04.920 ‚ 00:21:21.880 Michael Lasky
many of them still were operating in a annual discretionary bonus arrangement and did not properly and appropriately incentivize um, uh, uh, key employees over a multi-year period, typically referred to as long term incentive plans of one kind or another. And you have to sort of reverse engineer, um, what outcomes you want for your mid-level and senior people.
And if you needed a roadmap about what works, well, the data. Um, you know, uh, the the endpoint is not the data, it's the starting point. But the data shows that the top performing firms, firms that grew revenue or profits or both, by more than 10% this year had, on average, a very higher percentage of these, uh, long term incentive programs for mid-level and key employees, both as a retention tool and as an incentive arrangement, then agencies at large.
So those are the three areas that really struck me, as, you know, um,
00:21:23.040 ‚ 00:21:32.200 Michael Lasky
what I would recommend is sort of advisory services to help, um, enhance performance in the year ahead.
00:21:32.360 ‚ 00:22:52.840 Anne Green
That's really helpful overview and a lot to dig in there. I want to take the second one first on training. Um, I think that's very critical. And as I was listening to you, you know, I always have a double consciousness in these things, which is I'm thinking about the industry at large, but I'm also trying to also interrogate myself and say, what are we doing?
Where are we at? You know, that's the helpful thing. I always joke that there's a pendulum that swings between, we're doing great or we have to fix everything, you know? And I think that's a healthy, dynamic tension. But your point about the focus on training in AI, which I think is obviously critical, this is a massive upskilling moment, but missing some of these other pieces.
A lot of the trainings you mentioned, Michael, are known to us as leaders. Agency leaders. We should know that these are critical, the constant refreshing of financial management skills, how an agency works, how it makes money. But even recently, our Chief Growth officer, when my partner Steve Halsey, did a series of events around, some of our officers had called Coachella.
And it was a fun, tongue in cheek way of saying for both junior people, but also more senior people, how does our business work? How is our new business process work? What are the pricing models, etc.? Why do you think that these sort of perennial best practices are falling by the wayside?
00:22:53.280 ‚ 00:23:08.480 Michael Lasky
You know, I think it's harder to, um, stay current and, um, you know, maybe, uh, there's a strong focus on the new hula hoop. If I can date myself with that analogy.
00:23:08.800 ‚ 00:23:11.880 Anne Green
Go for it. The pet rock of today.
00:23:12.360 ‚ 00:23:43.560 Michael Lasky
There you go. And and, uh, you know, I think a lot of firms are really, um, working really hard to stay current and to move quickly. And, you know, there's an obvious expression. The harder we go, the behavior we get and sometimes, you know, things that are really back to the basics get left behind. And I think that some of what came out in this year's data that that it was easy to focus on, I mean, there was so much energy.
00:23:44.600 ‚ 00:24:27.630 Michael Lasky
I mean, 37% of the firms said they're building, you know, an AI, um, model, and 62% said they're investing in an AI powered program. I mean, that's a Herculean undertaking. So, you know, not looking to be critical, but just to provide, you know, comment. And that's sometimes the perspective that an outside advisor can, whether it's a public relations professional or a lawyer who does a lot of work in the industry can provide is, you know, um, you know, objectively, I get it.
But there's also this other thing here which you can't leave behind. It's it's it's basic.
00:24:27.750 ‚ 00:26:01.110 Anne Green
Yeah. And you're making me think of two. I was looking this morning. Um, I was scanning fortune CEO daily, and they were quoting. That was Wall Street Journal CEO brief, one of those types of newsletters, and they were quoting a Deloitte leader. I think it was the Deloitte CEO talking about, um, recent research they did with CEOs in general.
And they and he was just talking about two of the most important things of this pivot is, is really human mindset. It's a growth mindset. Um, and it's kind of leaning into the ability to change and emotional intelligence. So that growth mindset and emotional intelligence, interestingly, both randomly and I guess happily, both things we've been focused on here this year very intentionally, but this is very much a human challenge.
So you've got the core skill sets of the business. You've got the training on the business of the business, and then you have that training on being a manager and a business leader and how you bring your best self to it. So I find that really interesting. Switching over to, some of the other trends. Revenue and profitability.
It was really interesting to me. And there's a million different details in here. But there's this there was this donut effect that you guys found that smaller firms and larger firms, and there was numbers associated with them tend to be outperforming whatever we see as midsize. And I think larger firms were typified as over 100.
Was that right in terms of staff? But how would you. And I feel like you've seen that effect before in earlier studies in different years. But tell us a little bit more about that donut effect and what you noticed about it.
00:26:01.310 ‚ 00:26:26.590 Michael Lasky
Yeah, I think there are a few things that account for that. I mean, certainly, and the devil's in the details. Look, there are a lot of very large firms that have had massive layoffs this year and are continuing to have them. So it's not like, um, you know, larger firms have all the answers and are immune from all the kinds of trends, the uncertainty, the,
00:26:27.910 ‚ 00:26:50.710 Michael Lasky
you know, you know, clients asking more for less than anybody else. But they do have, you know, a larger, um, revenue base to, um, put against their expenses. So I think that has helped them in some way. Um, you know, uh.
00:26:53.430 ‚ 00:26:58.589 Michael Lasky
Again, as a monolith, you know, do a little bit better than the midsize
00:26:59.910 ‚ 00:27:29.150 Michael Lasky
at the, you know, 30 and under which we called, you know, smaller, not small, small, but mighty, you know, remember, the tugboat can also pull the ocean liner. So it's not it's not big as not always best. But, you know, I think the reason for the stronger profitability at the smaller firms is they tend to be laser focused.
They tend to be, um, very much, um,
00:27:30.670 ‚ 00:27:49.109 Michael Lasky
focused on an industry. And, you know, this is a hard time to be all things to all people. So I think the specialization has become more important than ever. And whether you're a firm over 100 or a firm that is smaller but nimble, I think
00:27:50.470 ‚ 00:28:53.390 Michael Lasky
knowing and understanding your competitive advantage, where are you going to make your investments? Being close to, you know, a particular or or more than one industry, but having some laser focus in those industries and envelop all the service offerings that are relevant for that industry, you know, can really be very helpful to drive both revenue and profits and actually also grow, you know, your clients internally so that there's a stronger connection with them.
You're not only, you know, doing their media relations, you're doing their content creation. You're doing their events, you're doing their thought leadership. You know, you're doing their data analytics. And, you know, sometimes firms have had to acquire different talent or even do smaller acquisitions to be able to bring in a capacity to get more heavily involved with an industry or a client so that they're not they're using their relationship to build the strongest connection to that client.
00:28:53.630 ‚ 00:30:07.510 Anne Green
Yeah, it's a very it was helpful and heartening to read some of this data and also hear right now what you're saying, um, we've been having a lot of conversations about where, especially in the world of AI, right? Where is the human and where is the machine, and there needs to be a symbiotic relationship there.
The PR Council recently put out a framework that I really liked, and it was more about the writing side, but it was looking at how do you understand a framework so you're very intentional about this is all human. This is all machine. But this is where on the spectrum they merge. Mostly human, mostly machine.
ET cetera, etc. and being intentional about that. But the reason I bring that up is that where is the human essential as counselor. So sector expertise, deep knowledge of an area or an industry. Um, really going deeper into areas or service sets that are fueled by technology, underpinned by AI as a tool, but then overlaid with human analysis?
I mean, I think this really puts a sharp point when you look at it from like the revenue and profitability side, it puts a sharper point to, you know, as you dig into the details on how we need to be thinking about what why someone needs a counselor at this point. Why do they need someone outside their walls?
00:30:07.630 ‚ 00:31:01.550 Michael Lasky
Well, you know, I the the analogy to law, you know, rings true to me because there was a time in the practice of law where a lot of attorneys, business cards, said attorneys and counselors at law. And that, you know, um, really was a reference to the English legal system where there were two distinct roles that lawyers provided.
One was transactional, and that was, you know, the, the, the, the solicitor. But there also was the barrister, the counselor, the, the, the, you know, advice and counsel role. And I think actually that has become, you know, more important than ever in a lot of professional services, certainly in strategic communications and public relations.
And I'd argue perhaps even in law.
00:31:01.870 ‚ 00:32:14.310 Anne Green
That is an excellent metaphor. Are we in what we're seeking to do? When are we the solicitor and when are we the counselor or the barrister? I think that's an excellent, excellent analogy. So in your trends and when you're talking about training, you mentioned something I wanted to get into, which is the persistence of the retainer and retainer billing.
Obviously, we're both in professional service. It's it's it's a common construct, as you well know, in our industry. There's been talk for so, so long about this, um, buzzword of value based pricing. And my observation, and I'm not the only one has been easy to talk about. Difficult to do, I think by other names it might be consulting or it might be project, or there might be other words for it, but it's been a buzzword and a bit of a cudgel at times, where it's kind of beating agency leaders over the head like, hey dummies, why haven't you done moved to value based pricing yet, when oftentimes the corporate side really needs that retainer model, or would prefer a model that's sort of legible and understandable?
What's your take on the persistence of the retainer model, and what are the the things you're seeing now that are interesting relative to how pricing may shift over time, if you have a POV on that?
00:32:14.350 ‚ 00:32:17.229 Michael Lasky
Well, yes, my my point of view is
00:32:18.270 ‚ 00:32:25.790 Michael Lasky
it's the wrong discussion to think about it as an either or. Um, I'd like to have, you know, clients
00:32:27.030 ‚ 00:34:30.709 Michael Lasky
either early in the process of onboarding a new client or sometimes even in the, you know, end of the pitch process. Um, or maybe when it's time to renew the contract, say, okay, what is your home run look like? We're going to do all these things and that's going to give you, you know, great results, great outcomes.
You know, to use maybe a sports analogy, just for a moment. There'll be some great, you know, singles and some great doubles. Um, might even be an occasional triple. But what is your home run look like? And, you know, if I think there's a no lose scenario to that discussion, even it may well be okay. Uh, home runs are rare, but if I can deliver a against that, would you be open to at least having a placeholder in the contract?
So at year end we have a discussion as to whether or not that success fee is warranted for for the home run. It might even be given that we now have, you know, a lot of data tools on our hands, setting an objective measure for how to how to measure not solid work, but spectacular, you know, outcomes. And, you know, I would like to think that either for new relationships or one where there's a history of trust that, you know, those conversations can be had more frequently.
Look, there are there are a number of ways to also do this. Maybe it's okay. Um, I understand that, you know, corporate won't allow, you know, this kind of success fee. But how about this? The next time one of your brands, you know, wants to do a RFP for new work, can we basically have a most favored nation status and not have to go through the RFP process, which costs us
00:34:32.110 ‚ 00:34:51.310 Michael Lasky
thousands of dollars? You know, I think it just elevates the debate about, um, we want to hit the home run for you. And if you know, to use the analogy again, if economics drive behavior, we want to align our incentive with your preferred, you know, home run.
00:34:51.750 ‚ 00:36:29.590 Anne Green
Yeah. And I think you're really talking about a both and in a way which I think we need to embrace, which is not all pricing models. It doesn't need to go away. Something doesn't need to go away in favor of only one model. One thing we've been talking a lot about on our leadership team is kind of having freedom to operate across different models within the same entity, and that even within the same client, especially with um AI, there may be aspects of the program that really need one kind of contract structure and another aspect of the program that needs a different one.
And it's not like this is unheard of in our field. I just I just think that there's been a lot of angst about trying to get away from the hourly bill, which I agree, you know, billing by hours, especially as now there will be things that will be more commoditized, there will be things that the machine should do more of.
And it we then whether it's senior people or more junior people, become the orchestrators of agents of colleagues that are machines. But I think we're going to have to be really open and nimble. And I love your idea about how do you look at other types of value add that may not be just a monetary outcome too.
Yeah. Let's let's talk about the AI of it all. That's what I like to the AI of it all. Um, I was very Be interested in what you're saying about these gaps between. It's almost like a governance and behavior gap. How does it relate to the client? What are those governance structures? What are the ethical structures, the legal structures?
What's the risk matrix? As you've talked to various firms, I know you were just at the
00:36:30.710 ‚ 00:36:39.830 Anne Green
summit speaking there, but what have people's reactions been to the gaps you've identified in around this sort of AI practices?
00:36:39.950 ‚ 00:37:15.430 Michael Lasky
I think, um, people have really responded like a bit of a oh yeah. Aha. And I think people have it has resonated with them. Um, and I'm, I'm a little humbled by that. But, um, um, you know, one of the things that really struck me also when I looked at what I call closing the gap and the difference between strategy and, and and and actually how it's being executed is when we asked the question about are you using with clients?
Have you modified your contracts? Um,
00:37:16.790 ‚ 00:37:33.550 Michael Lasky
most responded that they had not had the conversation with clients, but those that did responded in a very high percentage, that the clients were receptive and were open to the conversation when proactively,
00:37:34.910 ‚ 00:37:50.430 Michael Lasky
you know, um, brought up by the agency. And that actually told me a lot, which, you know, um, one of my favorite quotes from, uh, Louis Pasteur is chance favors the prepared mind. And, you know, you know,
00:37:51.470 ‚ 00:37:55.949 Michael Lasky
being passive about something, uh, is, is probably
00:37:57.630 ‚ 00:38:59.990 Michael Lasky
a worse set of state of mind when things are moving as quickly as they are in this industry than, frankly, ever before. But, you know, having to use your word, intentional conversations with clients about. Let's talk about why I think we can get better outcomes with you, for you, for your brand, for your objectives.
If we use AI in this way, these platforms for these tasks, and this is the ROI we expect from it, and that ROI is not just measured by, okay, we're going to save you a few nickels here and there. It can be about we're going to have a much better crisis plan in place, because we're going to be using this to help, really, you know, look at experience for similar kinds of situations to help use data to guide
00:39:01.030 ‚ 00:39:32.470 Michael Lasky
your next strategic moves. And that's, you know, a conversation. Mission? Yes. Advisory in nature. And yes. Strategic. You know, you're using the AI, um, to maybe, you know, um, empower you, if I may, to have the conversation. But it's only the starting point. And I think clients are looking for their communications firm to be, you know, good stewards of their trust.
And frankly, you know,
00:39:33.510 ‚ 00:39:57.389 Michael Lasky
this is their area of expertise. And the client, frankly, I think will respect and value. There's that word, the kind of advice and counsel that is not just relegating the function to execution. And I think that's a big mistake that the business some
00:39:59.150 ‚ 00:40:05.870 Michael Lasky
firms make more than others. And if we were to look at, frankly, the firms that are
00:40:06.990 ‚ 00:40:11.190 Michael Lasky
defying gravity, to use the analogy from the Wicked song.
00:40:13.350 ‚ 00:40:53.310 Michael Lasky
Very timely. Yes, we're all waiting for, uh, you know, the release on, I guess, the Thanksgiving weekend of wicked for good. Um, and, you know, I think it's, um, firms that are really, you know, playing at a higher level. They, they're leveraging off, um, you know, their, their value and, um, playing not just the execution, you know, aspects, but also the strategic advisory as the threshold that then guides the execution.
00:40:53.390 ‚ 00:43:34.350 Anne Green
I couldn't agree with this conversation more. I have a few observations. It was interesting in the research to see. I have it here that 63% of respondents to the trends report said clients are cautious but open to integration. I would say that it really depends on which clients you're talking to. And I would say some of the corporates are really starting to get ahead.
And it's radically different than a few months ago. And so one of the things I enjoy about being out and about in our industry, and it's not just the agency side, it's not just PR, it's that broader integrated marketing communications. It's both corporates, agency side nonprofit academia, venues like page PR counsel.
What's really helpful about a venue like page is that it's very self-selected about who has decided to be in that room. Not only are they senior communications professionals and leaders and counselors, they've also said that their commitment to the industry and professional development is such that they want to make that time.
And I feel like and I'm sure, Michael, you agree, when you're in those kinds of rooms, you hear how quickly a sect of the organizations out there, sectors of them and categories of them are leaning in and starting to find acceleration And looking at what does this mean for our FT's in-house, our partners out of house, you know.
Um, and so to build on what you're saying, my feeling is that I say to my people when it comes to AI and our clients show the work we need to go intentionally and be the ones to bring up this conversation and say, we want to, first of all, show you our AI policies. This is how they're in our contracts. This is how we're thinking about it.
These are how all the levels at which this is how we're doing peer to peer discussions and counsel are tech stack, because there's so much focus on generative AI through the large platforms and the language models that there's a transformation of our entire tech stack, a lot of which are technologies that we carry and use on behalf of many of our clients to lower their cost basis.
But if we don't know how AI is tracking, but then from there, how do we have those discussions to say, these are the this is the ethical framework we're using. This is how it's making us smarter. This is how we're getting to value. Because as I as I've said many times to my peers, if we don't lead that conversation, eventually the call comes from procurement and the procurement professionals are going to be under huge pressure here.
And I see them already trying to interpret what this change means and how they pull value back to the organization. Um, sometimes that can be a blunt instrument. I think there are some very nuanced conversations going on, but I love that you're bringing this up, because if we don't come forward ourselves right then we are being.
I think you use the word passive, right? That's that's not a good place to be, right?
00:43:34.550 ‚ 00:45:41.470 Michael Lasky
No. And I even take it one step further. Not only can't you be passive, you can't stand still. The the the the rate of the change has been so dramatic, you know, that, um, you know, I think more now, more than ever, staying still is really falling behind. And that's definitely not a good place to be. So, you know, anticipating the conversations, thinking through the ROI that you can explain to the client, making sure that you're not you're approaching the AI conversations with the right client, contract addenda with the right internal policies, that you're not setting yourself up for a breach of contract because, um, you're using it in an unauthorized ways or disclosing confidential information of the client in a, in a non in an open platform or, or worse, infringing on, uh, intellectual property of a third party.
So there are lots of let alone, you know, um, having, um, uh, you know, issues that could lead to, you know, bias in the results or, you know, using it in a way that's going to, um, lead to a deceptive practice. So there are. So it's a combination of the, you know, frankly, the artificial intelligence and the human intelligence.
You know, one of our colleagues used the expression that, um, you know, the the public relations professional of tomorrow is going to be a data engineer. Um, I like to think of the analogy of the tool kit. You know, what what tool from the toolkit you're going to pull out to advance the client's, um, uh, objectives.
And, um, that's not an automated function that's based upon your skill and experience and your knowledge of the client and your knowledge of the industry and everything else that you do.
00:45:42.030 ‚ 00:46:13.190 Anne Green
Yeah. When you talked about not standing still, it reminded me of another Broadway reference, which is a song Move On from Sunday in the Park with George. You've got to move on, you know. You've got to find that next thing. So as we wrap up today, you know, we talked early on. You talked about those three takeaways we dug into many of them.
If you had one piece of advice not just for agency leaders, but other senior communicators that are working to transform or work with counselors, you know what would be maybe 1 or 2 things you really want folks to think about going forward?
00:46:13.390 ‚ 00:47:23.230 Michael Lasky
You know, I'd say, you know, maybe reverse engineer, you know, um, you know, if you had a magic wand, what would you like to achieve for your agency and its clients? And then if you know that you know that goal, it's easier to achieve it. And then, frankly, try to think about what are the barriers right now within your organization to getting there.
Um, and, you know, it's almost like in the M&A context, we typically will tell independent firms to flip your hat around. And if you were buying your firm, what would you want to find? And, you know, build towards that outcome. Flip the hat around and what would you want the outcomes to be? And if that's on the people side, you know, build your compensation system that reflects what you want to achieve.
Um, for that practice group, for that office, for that whole firm. Um, and if it's on the training and development side, we'll think about what's missing in that equation and why you're not, you know, getting where you want to be and what you need to do to get there.
00:47:23.590 ‚ 00:47:40.950 Anne Green
That's great advice. I love that. Well, Michael, thank you so much for joining us today on Building Brant Gravity. And people can easily Google the report. Go to Davis+Gilbert, look for the Public Relations 13th Annual Trends report. We'll put a link in our show notes and thank you. It's always good to see you.
00:47:41.110 ‚ 00:47:43.310 Michael Lasky
My pleasure. Anna, it's great being with you.