Working Lean and Mean: Savvy Leadership Key to Success in Tough Economy

Successful small firms focus on business management along with client service. Strategic planning, human resource development and providing maximum value to clients are all key to doing well. After just four years in business, Kalman Communications was in high gear. Founded in 1986, the Los Angeles, CA, firm had expanded rapidly to 12 employees and opened a second office in San Francisco. Then the recession hit and clients cut back on their public relations efforts. Already suffering from weak management, the San Francisco office foundered. So owner Jerry Kalman, APR, cut back to six employees and a single office. Kalman has learned his lesson. "Profitability is a more remote concern for a big agency," he said. "But in a small firm, the proprietor needs to stay much closer attuned to it." The leaner, meaner Kalman Communications concentrates on hiring people with entrepreneurial drive, motivating them to do their best and providing clients with the best possible value. Rather than overexpanding again, Kalman lines up consultants to work for the firm's high-tech clients as needed. Running a small firm well is a real challenge, especially in tough economic times. Unable to obtain big lines of credit, small firms have to be especially mindful of cash flow. They can't afford to pour money into overhead or to waste time or resources. But with savvy leadership they can offer experienced, personal service at lower rates than the big firms. And the environment is often stimulating. The most successful small firms are those that pay as close attention to business management as they do to serving their clients. They take time to plan, concentrate on efficient operation, make the most of their human resources, and find ways to offer clients the best possible value. "Sometimes we see senior public relations people who only want to service the client and not manage the business," said Gerhart (Jerry) Klein of Anne Klein & Associates in Mt. Laurel, NJ. "But if you don't manage the business, you won't be there to service clients." PRJ talked about keys to successful management with the owners of nine prosperous small firms around the country. The firms ranged in size from four to 22 people, but most had eight to 12. Here's their advice on operating successfully. 1) Engage in strategic planning. Martin Cooper, APR, president of 10-year-old Cooper Communications, a 13-member Los Angeles firm with a second office in San Francisco, is a great believer in the first key to success: strategic planning. "Everyone in the organization is involved in planning, each with a specific assignment," he said. Cooper began by preparing a written plan of action for the firm just as he would for a client. Cooper's plan envisions growth at 10% to 15% per year until the firm reaches $1 million in billings and just under 20 employees. That's where he intends to stay, to be able to keep a handle on the firm's operations himself. The key to efficient operation, Cooper said, is to treat planning as a continuous process. His employees prepare monthly work plans specifying what they intend to do for which clients, then keep track of their work on time sheets. Every month he meets with each account executive to review the previous plan and discuss the new one. That helps ensure that the firm doesn't over- or under-service accounts on retainer. He figures that each employee devotes a full day a month to planning, and he himself devotes three. "It pays off," he said. "It allows us to do the optimum job for the client." The initial planning process should include establishing a clear identity for the firm. Nancy Pope, CEO of Woods Creative Group in Kansas City, MO, tells about a survey of clients that her firm conducted a few years ago, when the firm had a Chicago office and a photo studio. "We were struggling with who we were," she said. "They told us we were a marketing communications firm, so why didn't we stick with what we did best? …