Former ICCO president Jean-Léopold Schuybroek tells Communicate it’s time PR agencies stopped generalizing

Originally published in Communicate, May 2010

Jean-Léopold Schuybroek is the chairman of Interel, a Belgium-based PR company specializing in crisis and issues management and European public affairs. He has been president of the International Communications Consultancy Organization (ICCO), the Belgian Association of Public Relations Consultancies, and the Public Relations Organization International (PROI), a global network of independent agencies (see “Join the PRty,” page 26, Communicate, Dec. 2009). He now heads up PROI’s international development group.

On a visit to Egypt, Schuybroek tells Communicate that as public relations develops internationally, it is becoming more important and central to the companies it services. But as agencies evolve, they can no longer afford to cover all aspects of communication. The time will come when independent PR firms must choose areas to specialize in or be forced out by international networks – if they don’t join forces first.

How important is PR to a company?
Our industry goes back 40-50 years, no more, but it is an industry with a lot of potential, because you manage a reputation of a company. The reputation of a company is one of its most important invisible assets when you are talking about avoiding a crisis, when you are talking about bringing a new product on to the market, when you are talking about managing change, when you are talking about handling a crisis or issues or when you are talking about dealing with political decision makers. You touch the heart of the responsibilities of a CEO; those are all the things that keep a CEO awake. So we have a very important opportunity in our business.

Is PR’s role changing?
I am very much in favor of really upgrading our business, bringing better people into our business, and expanding the range of services we provide. That’s what I have seen in the last years in communications. Our business is really growing and gaining in importance. In the first major crisis in Europe, in the early 1990s, our business was sort of wiped out because companies didn’t really value the services we were providing at the time because they were very ancillary, very tactical. So they basically stopped public relations.
It was interesting to see that after two other crises our business came under pressure but clients didn’t leave us because they felt that a number of the services we were providing were absolutely critical and that they needed to continue with that. In this crisis, yes we have been under pressure, but if you look at most of our peers, clients have reduced their budgets but have not gone out like in the ’90s. Now we also offer other things, we have got other services.

Should agencies be general PR shops or specialists?
Multi-specialist. There is danger in remaining a generalist. When the market is in the early stages you have to be a generalist, there’s no other way. But the more the market evolves, the more you will have always to be a step ahead of the market. You have always to be ahead of the companies you advise, otherwise you become a subcontractor; then you get into a commodity business, which is the last thing you want to be in. We [Interel] have chosen a number of areas where we really want to be leaders, and where there are a lot of opportunities.
The obvious one [for Interel] is public affairs, because Brussels is a public affairs market, so we are one of the leading lobbying firms in Brussels. If you are a London-based company you should pick up competence in areas where the market is very strong – financial is one of those. And then there are specialisms that are less related to geographies. For example, issues management and crisis management are one of the key services we provide, and are critical for companies.

Has this region gone beyond generalist agencies yet?
I think you are still in that stage. That sort of evolution [toward specialization] is what we have seen in other markets, and I think there is a point where it is crucial for local companies to get into that business. If they don’t, international companies are going to take over the high-end business. I’d say [financial PR agency] Regester Larkin is an example of that. International companies will take the cherries on the cake if local companies do not jump in soon. Local companies have an advantage in that they know the market and they understand the market. But they cannot yet offer specialisms.

How can local agencies adapt?
This was the same in continental Europe. We saw specialized agencies coming from the US and from London on the back of their credentials, fantastic credentials: “We have done that for so many companies, we have done that for these companies…” They won the business just like that, and that was a business that we couldn’t have. So by affiliating with some companies and joining forces we, as a consultancy in Belgium, brought a very interesting solution. It’s competence from a [foreign] market where the competence has been developed, but with local input. At the same time you learn, you pick up knowledge.
At one point your affiliate says, “It’s stupid that I always send business out of the country. There’s more and more business, so I have got to set up something in the country.” But by the time your agency is sort of pushed out, you have absorbed so much experience that you are ready to compete with those [international] guys, and that’s what’s been happening in Europe and so on. [For the international agencies], that’s market share that is going to be lost. At the next stage, now those companies do not have the local support, they will take the best consultants from the local firms, who they can easily pay to bring in, or they will buy the local firms.

What can that mean for smaller agencies?
We have seen that in a number of European markets. Then you see the markets are dominated by international groups, and the local firms become commodity businesses that are pushed into a corner and that do the basics for prices which are becoming very, very low. Basically they can be commoditized out of the market.