Los Angeles Business Journal

Independent Streak Keeps Firm Alive

By Joe D. Phelps Monday, November 25, 2013

More advantages of staying independent: The following advantages are reasons independents can provide better client service than large, slow-moving, siloed public companies.

• Fewer layers of hierarchy: Faster delivery, more personal satisfaction and clarity of accountability.

• No financial turf wars among conglomerates’ profit centers: Recommendations can be for what’s best for the client, not for the best way to divide revenue among agency profit centers.

• Decisions are made locally: More alignment with local cultures with fewer layers of hierarchy.

• Sensitivity to longer-term client welfare: As compared to catering to shorter-term stockholders’ demands for profit.

• Feelings of ownership and accountability: The results of working on smaller teams.

• The agility to adapt to a quickly changing business environment: Battleships turn faster than aircraft carriers.

• Better pricing for the client: Resulting from a higher percentage of employees actually providing client service vs. administration; i.e., less overhead from more simple operations and no Sarbanes-Oxley or mountains of accounting required for a public company.

And the biggest advantage – in my opinion: Freedom. Freedom to choose clients carefully without pressure to grow the company because of revenue projections made to shareholders and stock analysts. Freedom to promote “balanced lives” for our associates. Fewer evenings and weekends at work, resulting in less associate and client turnover – and a more stable environment.

This freedom attracts Talent with a capital T: Increasingly, smart people are figuring this all out and they are attracted to smaller companies where they can make their mark. Talented people working in an unencumbered environment deliver better work. And that’s what clients look for.

So, “Why such longevity as an independent?” A lack of financial pressure from outside stockholders and a more streamlined, balanced organization allows us to provide the quality of service necessary to build a client-retention record that includes: Panasonic, 26 years; Tahiti Tourism, 21 years; City of Hope, 15 years; Whole Foods Market, 12 years – to name a few. Our associate-retention record is also impressive. It’s this stable, healthy environment that has helped us weather 33 years of increasingly accelerating change and numerous economic recessions. And our continued success gives us hope that will continue for many years to come.

I hope this is helpful to you.

Joe D. Phelps is the founder of Phelps, an advertising and public relations agency in Santa Monica.

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