Focusing on Building for Long-Term Growth

Introduction:

Clearly, it’s been an extremely interesting year thus far. Here at Executive Connections, we are already having a banner season, with an unprecedented number of new search assignments underway or recently completed, while our approach to executive coaching continues to attract c-level executives. We also have recently launched expanded Strategic Data Marketing & Organizational Consulting services, and you will be hearing more about these soon. 

The companies, and the leaders, we are working with are taking a long-term view to their businesses, recognizing that growth must come from innovation, generated by a sense of vision coupled with careful planning. (The concept of “planning” is in fact a core value of EC, as we are now requesting all candidates that we place to create their own First 90 Days Leadership Transition Plan even before assuming the new position. We then provide executive coaching for a six-month period, supporting each hire in executing his/her plan, and beyond.)

The results of The Conference Board’s quarterly measure of CEO confidence tend to confirm our positive outlook. According to the survey results, CEOs’ confidence in the nation’s economy edged up to 62 in Q1 compared to 61 in Q4 of 2004. 

In releasing these results, Lynn Franco, director of The Conference Board’s Consumer Research Center commented “Both CEOs and consumers continue to rate the economy as favorable, and expect little change over the next six months.”

However, there have also been some recent reports that tend to contradict this optimism. For example, the University of Michigan reported consumer confidence fell to 92.6 in March, from 94.1 in February. Further, disappointing levels of consumer spending, coupled with a record trade deficit, are already causing a number of financial investors to begin downgrading their previously more bullish economic growth forecasts.

Specifically, the Commerce Department released March retail sales figures showing a mere 0.3% increase, short of Wall Street expectations of a 0.7% rise. This forecast was based on assumptions that consumers would stock up on spring clothing. Yet, instead both department store and clothing sales posted a downturn, falling 1.9% and 2% respectively. 

Excluding autos, which show great month-to-month variations, retail sales for the month advanced a paltry 0.1% or the weakest results since April 2004, compared with initial forecast for a 0.5% gain.
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The rising U.S. trade deficit is another area of bad financial omens. The deficit reached a record monthly high in February of $51.04 billion; imports of oil and textiles surged while American exports showed little if any change. 

The jump in textile and clothing imports, in particular, is giving impetus to demands that government barriers to protect domestic manufacturers be put into place, especially in the wake of the growth in goods from China since global textile quotas expired at the beginning of this year. For the months of January and February alone imports of Chinese textiles and clothing were up 62.4%, compared to last year’s like period.

Further, for the first two months of this year the overall trade deficit was running at an annual rate of $717.2 billion or a whopping $100 billion above the record imbalance of $617.1 billion set for all of 2004. Already analysts are projecting that this year’s deficit is likely to set another record, coming in at about $675 billion with rising global oil prices contributing much of the increase. “We are hemorrhaging red ink in our trade accounts and the red ink is just spreading wider and deeper," said Mark Zandi, chief economist at Economy.com. 

Yet, companies in the sectors served by Executive Connections thus far seem undeterred by these numbers. In fact, they are looking at this as being a time to seek out the very best talents available, adding to their leadership ranks and positioning their companies for growth. They are moving full speed ahead and dealing with new challenges as they arise. 

We are also seeing broad-based hiring, particularly at the middle management levels, where companies had previously been holding off filling open positions or hiring to staff up new strategic initiatives.
In the meantime, the information below provides some insights, and a few opinions as well, on the latest happenings in the industry sectors we serve.

Direct Marketing:

Revenues, Hiring All on an Upsurge.

It’s no wonder that activity, of all types, has been particularly brisk in the direct marketing sector so far this year. Indeed, according to a recent two-thirds of direct marketing companies will be adding employees during the current quarter, while the industry at large is reporting steadily improving business conditions.

Jerry Bernhart, president of Bernhart Associates Executive Search, the firm that conducted this research, added “the number of companies planning cutbacks has fallen to its lowest level in the five years we’ve been conducting the survey.” Participants in this survey included 112 direct marketing agencies, suppliers and end-users.

Employers participating in this survey are anticipating that the greatest hiring needs will be in the areas of account management, analytics, sales and technology. 

Such hiring activity is right in sync with business conditions, at least as indicated by the Direct Marketing Association’s (DMA) Quarterly Business Review. According to its estimates, a record revenue index of 69 was achieved by the industry in 2004’s fourth quarter, and presenting the highest index number of any single quarter since the inception of this review back in 2002. The review also showed that all DM segments, including users, agencies, and suppliers, are forecasting continued growth.

"The market continues to be better on a quarter-by-quarter basis from the previous three to four years," said Ron Jacobs, president of Jacobs & Clevenger, in commenting on the Review results.

The industry also came off a year when mergers and acquisition activity reached an all time high, according to research conducted by and calculations carried out by Petsky Prunier, a New York City-based investment-banking firm. According to the firm’s numbers, during 2004 there were 550 transactions among direct marketing, marketing services and marketing technology companies, with these generating an estimated $27.2 billion in total transaction volume.

Looking ahead to the remainder of 2004, Petsky Prunier is forecasting that there will be more venture capital firms seeking to acquire and take DM companies public, pursuing and handling the types of deals that were historically organized by buyout groups.

Within the broad definition of the direct marketing industry used by the firm in its research, interactive agencies were characterized as a "red hot" sector with 48 transactions, and with Petsky Prunier expecting continued increases in M&A activity here, especially with this year’s 20% anticipated online advertising growth rate.

Other attractive targets, the firm points out, include cataloguers, and especially for those companies looking to build Internet marketing businesses, along with acquiring fulfillment and distribution facilities. The most sought after sector, though, according to Petsky Prunier, are firms that provide data and data analytical services. Activity in this sector is somewhat limited, though, by the relatively small number of large firms that can be targeted for M&A activities.

Another sign of change in the industry is the new strategic plan recently unveiled by the DMA, the first to be put into place by the association since 1997. Among other fresh initiatives, this plan now calls for the DMA to begin marketing itself differently to different customer segments – just like its members are urged to do. 

Explaining this change during the press conference announcing the plan’s completion, John A. Greco Jr., the DMA’s president and CEO, noted “In the past the DMA would have gone to the entire population, with the same message for each member.” Now, though, instead it will be offering “selective packages of services tailored to the needs of members.” 

This relates to a second mandate stated by the plan – that the DMA provide more relevant services to its members, while continuing to foster the use of direct marketing by all sectors and in “all existing and future channels. This means working to develop best-in-class skills in such areas as member segmentation, consumer research, developmental programming, and political representation.”

To help in developing this plan the DMA undertook some research of its own, in the process uncovering that its members want four things: education, assistance with networking (market making), research and political representation. However, the order in which they rank these four varies significantly according to how large a percentage of their total business is now coming from direct marketing.

Specifically, companies generating at least 90% of their sales through direct marketing indicated that their largest area of interest is representation, or government lobbying, by the DMA. Companies where revenues from direct marketing generate 50% to 89% of their total placed education and market making at the top of their list, while those with less than half of their sales through direct marketing are most prone to make DMA research their number one preference.

Already one of the areas where this plan is being implemented is relation to the Association for Interactive Marketing. Greco first observed, during this same press conference, “Recognizing that almost all of its members are active online, the DMA will try to free the Association for Interactive Marketing (AIM) from its silo.” This means spreading the “benefits that accrue to AIM members” to the entire membership base. Since that time the DMA has in effect dissolved AIM itself, and, in its place, established the Interactive Marketing Advisory Board (IMAB).

Announcing the establishment of the new Board, Greco said, “The creation of the IMAB within the DMA will allow every member to leverage the knowledge, research and expertise of industry-leading interactive marketers as they strive to maximize interactive technologies and techniques more successfully.”

AIM members automatically became members of the DMA with access to the association's existing Marketing Technology and Interactive Council (MTIC). AIM had been acquired by the DMA in 1998.

Michael Aronowitz, AIM’s former head, is now serving as executive director of IMAB, while IMAB confirmed participants include Scott Ferber, CEO of Advertising.com (who will serve as chair of the IMAB); Michael Della Penna, CMO of Bigfoot Interactive; and Matt Blumberg, chairman and CEO of ReturnPath. The names of additional board members were to be announced shortly. 

The IMAB also includes Emily Hackett, executive director of the Internet alliance, and the chairs of the following five DMA councils: Council for Responsible E-Mail, the Search Engine Marketing Council, the Performance-Based Marketing Council, the E-Commerce Council and the Online Advertising Council.

The DMA is also grappling with ways to work more closely with the International Association of Privacy Professionals on common issues related especially to privacy concerns. As Greco said in speaking before that organization’s National Summit, "Privacy issues are critical for all DMA members… it's imperative to our business' bottom lines today and tomorrow that we build a bridge of trust and mutually beneficial relationships between marketers and current and prospective consumers and donors.”

Of course this last quarter also was the occasion for the annual conference of the DMA’s Financial Services Council (FSC), of which Jeff Gundersen, EC’s president and CEO, is the current chair. During the two-day event Gerber Life Insurance Company was honored by the FSC as the recipient of its “Company of the Year” award while Eugene Raitt, senior vice president and chief direct marketing officer, AIG Companies Worldwide, received the “Direct Marketing Executive of the Year Award.” 

Gerber Life Insurance company, led by Wes Protheroe, CEO and President, and a long-time EC client, is not only a leader in the direct-to-consumer marketing arena, but is the recognized leader in the children’s life insurance market with its flagship Grow-Up juvenile insurance product. Gerber Life has achieved 17 consecutive years of record sales and operating income, including a 38% growth in sales and a 60% growth in profits since 2001, a time when results at the rest of the life insurance industry have been essentially flat. In 2004 alone the company’s direct marketing efforts generated over one million new customer applications and over $30 million in new sales premiums. 

Wes’ earlier experience includes having been with Procter & Gamble, making his success a great example of that of a growing number of CPG executives who have moved to the direct sector and are now leading their businesses with a powerful combination of brand building and direct disciplines.

As for Raitt, he began with AIG in Japan in late 1994 when Japan already accounted for the largest direct marketing business in the AIG world. At the same time, though, most companies throughout the rest of Asia were not using direct at as a distribution strategy at all, with the exception of minor activity underway in Hong Kong. However, under Raitt’s leadership and management, a number of initiatives were launched in Asia. These included: pioneering of DRTV; a number of product introductions, offering products specifically for seniors; the expansion of print media; the creation and leveraging of sponsored (third-party) relationships) and the introduction of telemarketing. Raitt, in positions of increasing scope, has now been responsible for the development and growth of the AIG direct marketing businesses in Japan, Korea, greater China, Southeast Asia and India. He is also a member of the Board of Directors of the DMA, as well as the Hong Kong DMA.

The achievements of these companies and executives, as well as others nominated for these awards by members of the FSC, are all the more notable in view of the major changes that are underway in both the financial services and the direct marketing industry itself. However, as the success of Protheroe/Gerber Life and Raitt/AIG indicates, true leaders rise above any obstacles put in their path. These are executives who have worked hard not only in their careers, but to achieve a strong personal brand, enabling them to rise to the top of their industries and companies by creating and sustaining profitable corporate growth. 

Here at EC we are very fortunate to currently be working to place a number of new leaders into direct marketing organizations. Recent placements include those of a SVP Product Management, SVP New Business, SVP Marketing and VP Strategic Alliances. Searches currently underway include recruiting a SVP & Chief Administrative Officer, VP Market Research & Data Analytics, VP Product Marketing and VP Product Operations positions.

In conducting those searches recently completed, as well as those underway, the help that many of you have provided, and continue to do so, proves to be invaluable. We truly appreciate your continuing efforts to introduce us to the very best and brightest direct marketing talent at all levels.

Financial Services:

Management defections, legal scrutiny and questions about looming M&A activity all high on the agenda.

Management defections, intense legal scrutiny and continuing speculation about when and where the next major mergers and acquisitions will occur all characterize the financial services sector. In other words, it’s another year of “doing business as usual.” 

On the management defections front, by far the most high profile situation is what’s continuing to play out at Morgan Stanley. Just as this Quarterly Connections Report was being completed, two more senior bankers at the venerable Wall Street firm tendered their resignations, shaking the foundation of the firm’s prized investment banking division as well as causing observers to doubt whether or not Philip J. Purcell, the current CEO, will be able to gain control of the now very divided firm.

These latest defections are a continuation of the exodus of senior bankers and traders who had already left the firm in recent weeks. The latest two, adding to this list, are Joseph R. Perella and Tarek F. Abdel-Meguid. Their departures are all the more surprising since just two weeks before they had agreed to stay after Purcell named new co-presidents, in response to calls for his resignation. Perella had also been given the new title of vice chairman.

Equally troubling, especially for the firm’s ability to continue to attract (as well as retain) top talent is mounting speculation as to whether or not the departure of these last two executives, in particular, signals that the highly vaunted Morgan Stanley name, what has bound generations of Wall Street’s leading bankers to a long career at the firm, still has that same value and allure with Purcell at the helm.

Just as having the “right” leader at the helm can have such a positive influence on the ability of an organization to succeed, so too can having the wrong one create an equally detrimental effect. Even if the executive in question otherwise possesses strong skills and has a wealth of experience, if she/he loses the respect of those around them it may become a situation simply not worth trying to save.

Moving to the insurance company sector, throughout the quarter just completed many major players have sought to cope with, and to settle, charges they have faced, or been “threatened” with as a result of the wave of legislative probing set off by the investigation launched last year by New York State Attorney Elliot Spitzer. 

One such example is AON. During the quarter just ended the company settled such investigations related to contingent commissions and other business practices that may have created actual or potential conflicts of interest by reaching a comprehensive agreement with five agencies in three states. Parties involved in the settlement (with Aon admitting no wrongdoing or liability) include the attorneys general of New York (Spitzer), Illinois and Connecticut, along with the insurance departments of New York and Illinois. The settlement contains no fines or penalties.

However, elements of the agreement did include the following:

• Creation of a $190 million fund to provide compensation to eligible U.S. clients who started or renewed policies between January 1, 2001 and December 31, 2004;
  
  
• Commitment to new business practices, including greater disclosure of remuneration and the elimination of any practices that may previously have posed conflicts of interest
  
  
• Establishment of a Compliance Committee of the AON Board of Directors

Advertising and Branding:

Repositions and Shuffling in the Management Suites as Companies Seek to Redefine their Services.

The first quarter has continued to be a time of change, and of challenge, for some of the leading players in the advertising and branding sectors. Repositioning and management defections are just a few of the major issues consuming management’s time and attention, and contributing to what seems to be a general skittishness among some of their largest clients. 

On the repositioning front, J. Walter Thompson, the world’s oldest advertising agency, has been taking some aggressive actions, and including having Craig Davis named worldwide chief creative officer. This promotion came just 10 months after Davis had joined the agency as chief creative group director for Europe, Middle East, and Africa, coming to the agency from Publicis Groupe’s Saatchi & Saatchi where he had been regional executive creative director.

In his new role Davis is working in tandem with Bob Jeffrey, CEO of the global network, to maintain the agency’s historical heritage in account management, but while intensifying its focus on creativity and strategy. Jeffrey, together with Davis and Rosemarie Ryan, co-president of JWT’s New York office, revealed the initiative to the agency’s senior management back in January.

As part of a press release issued at that time, Jeffrey said “The ultimate goal is to transform JWT from a service-driven organization that is ruled by the rational to a creative organism that is inspired by the visceral.”

The agency’s repositioning includes cosmetic changes, most notably the changing of its formal name from J. Walter Thompson, after its founder, to JWT, as well as a number of operational ones, with the intent of promoting cultural and behavioral shifts. A new set of creative standards, to be used in assessing work across the agency’s 315 worldwide offices and an evaluation tool called Health Check both fall into the latter area. Health Check is starting to be used by head office personnel to “holistically” assess the agency’s business, looking at each office’s work, people, client relationships, reputation and financial performance.

With worldwide revenue of $1.17 billion, JWT is already the world’s fourth-largest agency network (according to estimates from Advertising Age) and making it larger than WPP Group siblings, Ogilvy & Mather and Young & Rubicam.

Speaking of WPP Group, it looks as though the dust is beginning to settle from its takeover of Grey Global Group, including the anticipated cashing out by Ed Meyer, who is honoring his contract to run the Grey Global operation through 2006. After he steps down as Grey CEO – he has six months to propose a successor – he still has the option to take a WPP board seat.

Yet within less than a week of WPP completing its Grey buyout Meyer started to cash in on the deal. In total, Meyer and family interests stood to gross more than $400 million in cash and WPP stock as a result of the sale of the company which the 78-year old Meyer controlled and led for many years, according to published estimates. So far it hasn’t been confirmed just how much Meyer has sold off, but insiders agree that it’s an extremely substantial amount of cash that’s now in his coffers. 

At the same time, though, Steve Blamer, Meyer’s choice to take over as CEO, has announced his planned departure to FCB where he will become CEO Worldwide. This leaves Grey without a proven leader to replace Meyer, so expect WPP to tap someone from the outside to take over.

Hopefully the new leader won’t have to deal with the same kind of issues that sometimes plague executives newly placed into the agency top spots. One case in point is the situation that has emerged at Publicis Groupe agency Saatchi & Saatchi. The recent chain of events began with the resignation of Mike Burns. Burns had been the joint chief executive of Saatchi & Saatchi New York before executive creative director Tony Granger and Arnold Worldwide’s Mary Baglivo were named Chief Creative Director and CEO, respectively, last September, leaving Burns as worldwide account director on the highly-prestigious (and high revenue) General Mills account. 

By February of this year Burns appeared to have had enough of dealing with the new structure and announced that he was leaving the agency, with which he had had a 25-year relationship. Three weeks later 17 loyal staff members followed him out the door. More recently, it was confirmed that the Interpublic Group (IPG) had hired the 17. 

IPG has actually taken the step of creating a standalone unit where most of them will be employed and that will pitch brands related to youth, health and wellness. (IPG reportedly made the initial offers to the 17 days after their defection from Saatchi but at the request of General Mills, gave Saatchi an opportunity to hire them back – none accepted the offer.) 

It isn’t too surprising that the next move in this evolving chess game was Saatchi’s decision to file a civil suit against Burns. The suit, filed in state Supreme Court in New York City, seeks at least $3 million in damages on claims of breach of contract, breach of fiduciary duty and breach of the duty of loyalty. It also includes a request for an injunction that would bar Burns from “directly or indirectly launching any company or taking employment with any advertising marketing or communications company that services” General Mills or “soliciting, communicating and/or advising Saatchi’s client, GM as well as any other client or prospective client of the company.” 

Industry insiders are claiming that Saatchi & Saatchi really had little choice but to resort to legal action. However, others point out that it is still in many ways “bad form”, putting a major client in the middle of what in many ways is still a family dispute. General Mills so far is, wisely, keeping mum on the whole situation, and with Saatchi & Saatchi already having made several major reassignments and new hires to shore up the otherwise rather decimated account team. At the same time, though, it also needs to be spending time reassuring other clients that their work remains a top priority.

The latter is particularly important since clients clearly are aware that there are morale problems throughout the agency itself. It’s up to Baglivo and Granger, primarily, to deal with these – even though they themselves have been in these leadership roles for less than a year. It’s a good reminder that along with careful planning in transitioning into such new roles, the plan itself also needs to leave room for the unexpected. At Saatchi this surely means putting those people, as well as those creative, talents to the test.

Meanwhile, looking at IPG’s role here, it seems somewhat surprising that it would become involved in such a high profile, volatile situation given the other challenges it is already facing. Many of these stem from Sarbanes-Oxley related compliance issues, but come in the wake of other previously reported financial problems.

Early in April, just as this Quarterly Connections Report was being developed, IPG’s management announced, for the third time in a three and a half week period, that they still could not determine when it would finally be possible to release 2004 financial results – results due to be filed by March. Confirming this, in an email sent out internally to employees, but also released to the press, Michael I. Roth, IPG co-chairman and chief executive, was extremely succinct: “At this point, we just can’t be sure of when we will file,” he wrote.

Now IPG isn’t alone in delaying filing results due to the more stringent Sarbanes-Oxley related regulations that have gone into effect. However, the situation there is compounded by the company’s already very well publicized financial troubles, including now facing the second round of accounting-related problems in less than three years.

To help and try to allay at least some of the concerns of its investors (and in all likelihood, clients too), IPG went ahead and released some preliminary 2004 results, but with the caveat that these are “likely to change” once a further review by both inside and outside auditors is completed.

Reportedly, as the auditors go about this work, so far no major mistakes at IPG have been uncovered; previously IPG had indicated there was a possibility that it had improperly recognized an estimated $145 million in revenue and $25 million in net income related to acquisitions made from 1996 to 2001. An additional mistake was subsequently disclosed, totaling $35 million and attributed primarily to improper lease accounting.

The preliminary results released to date show that IPG organic revenue rose 1.1% last year from 2003 levels – if these numbers hold it means this is the company’s first full-year posting growth since 2000. These figures also show 2004 revenues of $6.2 billion, or representing (at present) an increase of 5.8% from the approximate $5.9 billion achieved in 2003.

At the same time, however, the unaudited figures show an operating loss of $285 million last year, in contract to operating income of $52.2 million achieved in 2003. Before various charges, there was operating income of $391.1 million, compared with $531.2 million in 2003

Such turmoil is also affecting the management ranks. Not only has the Group faced a number of staff defections, but there’s also been shuffling taking place in the inner sanctums. Most significantly, David Bell gave up the title of CEO of Interpublic to instead becoming co-chairman while Michael Roth, previously the ad holding giant’s sole chairman, added the title of CEO to his portfolio of duties. Both were still relatively new even to their previous positions, with Bell having replaced John Dooner as Interpublic’s president, CEO and chairman in February 2003, joined by Roth, a board member since 2002, who was then named chairman in 2004. 

Part of the challenges they, and other executives throughout the ranks of IPG member companies, face is further reassuring understandably skittish clients. While as of publication of this report there had not been any major client departures, the member companies can’t help but be worried that IPG’s woes will make it easier for competitors to start the process to woo some of the big name clients away. 

Then there is also the talent question. Certainly IPG’s hiring of the 17 departed Saatchi & Saatchi employees made headlines, but this is without a doubt an unique situation. Otherwise, while candidates may still think highly of the creative output, and management staffs, of many of the member companies, the bad financial publicity can’t help but place somewhat of a damper on their enthusiasm. This places the responsibility squarely on the shoulders of the leaders of these firms to confront these issues directly, while also reassuring would be “stars” that their future is solid. This is a major task for any executive, and especially one who is at the same time dealing with their own feelings of unease.

All of this underscores how fragile IPG continues to be – even now in the third year of its supposed recovery. The C-suite remains a revolving door, star talent continues to leave for better options, and Roth has a long way to go to prove he can win clients over and build the business. Just look at the recent replacement of Ann Fudge as head of Y&R Advertising (although she remains chairman and CEO of Y&R Brands) as an indication of how difficult it is for a non-advertising leader to take over the reigns of a creative services business and build it successfully.

At the same time, the advertising industry at large also continues to face some challenges, but of a different sort, still having failed to come up with any magic answers to some of the questions and issues held over from 2004. For example, while in 2004 Jim Stengel, Procter & Gamble Chief Marketing Officer, shook the advertising industry by “awarding” it a “C-“ grade during the American Association of Advertising Agencies’ Media Conference, in recognition of what he saw as a failure to facilitate communications planning, attendees at last month’s annual Four As meeting indicated that there has been little or no progress made in the year that had passed.

The lack of significant improvement was in fact the consensus that arose from an audience poll conducted during the opening session of this year’s Four A’s Media Conference, held in New Orleans. The opening session featured a panel of media trade association leaders discussing how their respective mediums fit into today’s world of “total communications planning”. Only 9% of the 209 audience members present for this session and participating in the poll gave Madison Avenue an “A” grade’ 13% gave it a “B”, 44% a “C” and 11 percent a “D”, while 20% said it had either failed completely or delivered on an “incomplete”.

Even defining “communications planning” seems challenging. Specifically, eight of the 10 media trade representatives on the opening panel referred to communications planning as a “consumer-centric” approach, based primarily on how well a communications contact engages a consumer. Just 27% of the audience went with this consumer-centric definition, 13% selected media-centric, while 60% see it as a combination of the two approaches.

Whatever definition, heightened attention on communications planning is only one symptom of the continuing demand for greater marketing accountability. Another manifestation of this is the shift by a number of large, consumer-centric companies, such as Victoria’s Secret and Home Depot, to name just two examples, moving significant portions of their advertising budgets away from traditional media outlets and instead to channels where the outcomes can be more precisely measured and tracked. Increased use of online banner ads, catalogs and snail mailings to boost both direct and retail sales are all a part of Victoria’s Secrets plans. Home Depot likewise is testing the potential of new products through utilizing such direct response vehicles as mail and short-form infomercials.

This shift towards utilizing more marketing methods that can be measured, tracked, analyzed and tested is going to place new demands upon marketing executives. Competitive differentiation particularly in very crowded product or service sectors (and there are hard to find any who don’t fit this description) is all about branding and brand differentiation. Yet, these direct response vehicles don’t lend themselves to image creation. How to achieve both goals is going to be a creative, and execution, challenge.

Here at EC, in the advertising and branding sector, we are continuing to see signs of emphasis on new skill sets as we work with both search and coaching clients. 

Our current search assignments in this sector include VP Advertising, VP Market Research, VP Licensing, and VP New Product positions.

Looking ahead, we see advertising and branding agencies expanding their services, especially in relation to digital media, as well as putting a higher premium on talent that understands and accepts that financial accountability is also part of the service package clients will demand going forward.

Where Are We Going From Here?

As this Quarterly Connections report was being completed, news on the economic front turned decidedly sour, with Wall Street showing almost daily declines. What’s been surprising, though, is overall the economic news hasn’t been that bad, and the hiring outlook appear still positive. 

Specifically, according to the results of a proprietary survey of human resources professionals conducted for Piper Jaffray by Harris Interactive, overall hiring of full-time employees is projected to increase 5% this year above 2004’s levels. Specifically of the 320 human resources professionals who took part in this research, 44% said that they plan to increase headcount this year, compared to just 11% who expect to reduce it, while the remainder are expecting staffing to remain at current levels.

This positive outlook for the employment picture was further confirmed by the national results of the quarterly Manpower Employment Outlook survey. Of the 16,000 U.S. employers who took part in its most recent quarterly research, 30% indicated that they plan to add staff in the current quarter (April through June), while 7% are expecting to reduce their payrolls. Of the remainder, 58% anticipate no changes in staff levels this quarter, while 5% voiced uncertainly about their hiring plans.

Even the upcoming college graduating class of 2005 is expected to be greeted with new job opportunities, According to a survey of employers conducted by the Collegiate Employment Research Institute, more than half of those surveyed indicated a positive market for college labor, and with 47% of respondents reporting that they will definitely hire new college graduates this year – an 11% increase from two years ago. In commenting on the results of this survey, Valeria Patterson, senior producer of CollegeJournal.com (an online subsidiary of The Wall Street Journal), observed, “Hiring for college graduates this year is expected to expand by approximately 20%, and we expect job growth for a wide range of majors and degree levels.” So here comes the next generation of leaders!

In the meantime, here at EC we are already being positively impacted by all of the growth in hiring taking place. Many of the c-level executives we coach are actively engaged in adding to their staffs, at all levels of the organization. The number of new search assignments to fill c-level spots is increasing steadily – as we work to find the best talent out there for our clients’ own positions. 

As noted earlier in this Quarterly Connections Report, we continue to appreciate the contributions, and support of each and every one of you. We look forward to strengthening the connections we already have with you, as well as to building new ones!



Jeff

Jeff Gundersen
Executive Connections, LLC
Executive Search, Consulting & Coaching
917-834-9717 (mobile)
860-435-0555 (office)

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