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CWC 15: Joe Thornley on evolution of the PR business

Chip and Joe discuss the business side of communications, as well as how the changing landscape of digital transformation and workplace trends affects the communications industry.

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The newest episode of Chats with Chip featured a conversation with Joe Thornley, the CEO of Thornley Fallis Communications. Chip and Joe discussed the business side of communications, as well as how the changing landscape of digital transformation and workplace trends affects the communications industry.

After introductions and some background on how Joe established Thornley Fallis, Chip opened up the conversation to discuss the business side of communication. Specifically, Chip asked Joe how he approached P&L statements and how his approach is different than those of prior agencies with which he worked. According to Joe, having a third-party analyzing these statements fails to convey the stories behind the numbers.

In his analysis of P&L at his own business, he considers, “where can we get the best impact from the investments that we make and how will that get us to a point where the business will be healthier tomorrow than it was yesterday. That’s quite different from looking at how did we perform this month, simply as a snapshot, and demanding that there always be a particular margin.”

Chip then asked Joe about the kind of changes he’s seen during the two decades since his business’ origin. Joe cites digital transformation as a major influence on the changes he has experienced. He discussed his company’s creation of an online presence, including establishing social media accounts, podcasts, and a blog, in the early days of digital media.

Around 2011, however, these digital channels had become crowded with other businesses, which diminished the success and visibility these tactics had previously afforded businesses. “A lot of mid-sized agencies started to get themselves squeezed. We started to get ourselves squeezed because we had become a mid-sized independent agency,” said Joe. “That caused us to refocus again.”

Thornley Fallis refocused by expanding to create apps. Additionally, Thornley Fallis changed their approach to the traditional workplace. Joe explained that his company was redesigned to include a smaller team of core employees and a larger network of partners who work on an assignment basis. Chip and Joe agreed that having this broader community, rather than a robust internal network, is the future of the industry.

In their considerations of the industry’s future and how it will continue to change, Chip asked Joe how these changes will affect the incoming workforce of young professionals. Joe acknowledges that it’s unlikely for companies in this industry to retain young professionals and to build their career in a single environment.

Instead of focusing on retaining these people long-term, Joe advises to mentor and train young employees and to build a strong relationship with them. “That is what, as we’re assembling teams, we really need to do, which is build up that social capital with people who are going to be moving around and not view people as long term employees and definitely not judge the success of our company on the basis of how long people have stayed with us,” said Joe.

Chip and Joe wrapped up their conversation by discussing additional innovations Joe has introduced to enhance his workplace and its employees’ experience. Check out the recording and the full transcript to learn more about these innovations, as well as additional insight on the development of the business side of the communication industry.

This article originally appeared on Media Bullseye.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

You’re listening to Chats with Chip on the FIR Podcast Network.

Chip Griffin: Hi, this is Chip Griffin, and my guest today is Joe Thornley. He is the CEO of Thornley Follis Communications, based up in Canada. Welcome, Joe. Hi, Chip. How are you today? I am doing quite well. It’s a beautiful sunny day here in New Hampshire, a little bit warm for this time of year, and it’s always nice to see that, particularly as the snow melts.

Hopefully the same is happening up where you live. It is. It’s the season of hope. Everything is about to get green. Excellent. Well, speaking of green, you know, one of the things I wanted to talk about today is the business side of communications. It’s an area that, as I’m sure you can appreciate, many communicators don’t like to talk about quite as much.

We always like to talk about the strategy tactics, the cool new tools, messaging, all that sort of thing. But when it comes to communications, whether you’re in house in a corporation or you’re at an agency or you have your own agency or consultancy, The business side of things is important, understanding finances, understanding marketing and selling your own services, et cetera.

And so before we jump into some of that, though, I thought it would be interesting to hear the story of, of how Thornley Follis came to be. I know as an entrepreneur myself, I’m always interested in hearing those founding stories and I’m sure Thornley Follis, how did it come into being and when did it come into being?

Joe Thornley: Well, Terry and I founded it in 1995, we were both at other agencies, I started first, he joined me a couple months later, and that was really important because I was in Ottawa, my wife was a public servant, so I’m stuck in Ottawa, Terry was in Toronto, and if you’re a Canadian, Toronto is where the business community is, and if you want to, Toronto first lesson is go where the business is.

so we got together in 1995 and we had both come out of, large holding company agency. And, what we were looking for was the opportunity to do more, that we could define ourselves without having to respond to the spreadsheet folks back in New York. And I know that sounds odd for somebody who wanted to run his own business, decrying the spreadsheet folks.

But I just found that, the running of a PR business. was for me, something that was quite tactile and our principal asset is people. And very often when looking at utilization rates and the cells on a spreadsheet, you miss the real story of what’s going on. So, we set it up so that we could have more self determination.

We also set it up as corporate communicators. Both of us came out of government. We’d had stints in government. so we took for granted the fact that we were getting. appointments with CEOs and C suite officers. we didn’t realize how naive we were, but, we did have, access to those folks. And so they were quite welcoming of us, to work with them on their communications challenges.

Now, having said that, having come out of government, both of us had an aversion to government relations. There just was something that sat uneasy with us about trading on our relationships, with people who had the public trust. On the other hand, trading on relationships with people who were either public or private playing with their own money or, at the head of publicly traded corporations.

We saw that as being different. So we were driven in the direction of communications for corporations. and we stayed away from government relations and have to this day. Never done government relations. and then of course, and I’m sure we’ll chat a bit more about it. Once we got going, the world in 1995 is a whole lot different from the world in 2017.

So we have gone through several transformations of the basic business and it is a lot. Nothing like what we started out in 1995.

Chip Griffin: Well, I do want to talk about that transformation but first I wanted to zero in on something you said and that was when you were talking about the the spreadsheet folks and You know, I I think that is as someone who has run my own business, but also worked within larger enterprises there’s a giant difference between looking at the the P& L that you directly control and a P& L that you’re sending on to some you know, remote place for it to be analyzed, as you say, just, just by looking at the numbers, you know, not understanding the full story.

And so I, I wonder if you could talk a little bit more about that difference and how, you know, what you’re doing today with the P& L is different from what it was,

Joe Thornley: Sure. Absolutely. when I was part of a holding company, I knew that I had to achieve certain results because I was being assessed on my success on the basis of what I produced on the numbers.

And on the other hand, I looked at the mix of people I had, some of whom were new to the business and had great prospects, others who were well established. Some people who’d been well established were having a bit of a hard time. A rough go, others who were pursuing a new, a new opportunity in a new sector or whatever the case was.

There was a story all the time, which wasn’t really captured in the numbers. Of course, it’s my money on the line, because, you know, as an owner of a, of a business, I’m the financier. and so I watch. the PNL very, very closely, but now when I have discussions, with the folks who are running the company about the PNL, it’s more in terms of where can we get the best impact from the investments that we make, and how will that get us to a point where the business will be healthier tomorrow than it was yesterday, and that’s critical.

Quite different from looking at how did we perform this month simply as a snapshot and always demanding that there be a particular margin, which is what I found that we, that I had when I was a part of a holding company, I was. I was fitting into somebody else’s set of, of resources and expectations.

Chip Griffin: Well, it’s sort of like the difference you see in the business world generally between public companies and privately held ones, right? You know, the, the public companies are always managing to those quarterly reports and, and what the, the analysts are going to look at, which may or may not give you the best longterm business decisions.

And so I, you know, I think what, what we’re able to do as entrepreneurs is be able to take a look at and, and. Develop that relationship between the numbers and the reality in order to figure out, you know, what risks are worth taking, what costs are worth cutting, you know, what, you know, what, how is it that we can best grow this business into the, the end result that we want?

So the, you know, the thing is, in addition to the numbers, you know, we talked about, how there’s been a transformation over the last couple of decades. And. Certainly, that’s something that we’ve seen, again, from that tactical and strategic standpoint, I mean, you know, the way we’re communicating now over Skype is not something that we would have done back in 1995.

you know, we didn’t have podcasts, we didn’t have blogs, there was no Twitter. But, you know, I think that the, the business environment has changed as well, at least here in the U. S. and I’m sure probably in Canada as well. The way agencies work and partner with their clients, I think, is different now than it was before.

So, maybe you could just talk a little bit about some of those transformations that you’ve seen, in the two decades that you’ve, been at the helm.

Joe Thornley: Sure, for sure. It seems to me that my entire Working life has been driven by digital transformation, and, when I think about the impact on the public relations field, I think of us very often as I think of the one time corner grocer or the corner drugstore, Or the corner soda shop, none of which you find around anymore because the world changed and the big box economy, and the mall economy eliminated them.

So, for me, our business has been driven by transformation as, more and more communication went online. The big change was around the time that we founded the firm in 95, with the World Wide Web, with the first web browsers, with the first websites. So, for us, we started in a world where we were looking at an established environment that hadn’t changed a great deal, but we immediately started to change, and happily, I’ve always been a Fascinated by technology.

So we tried to ride that change. The first big change for us came in 2001 and the dot com became the dot bomb. People who had been trying to develop business, which we had been. We were working in an area with a lot of startups on. And if we’d been successful in developing that business, then we began it.

To rue that, that success because in 2001, we started to have a whole lot of bad receivables. We went from having clients to having bad debts. we went from a situation of health to a situation with a really bad balance sheet. and that was really quite harsh for us, because right up until that point, we’d been growing constantly, with a constant stream of profits, and the first time that you have to manage through a sustained period of loss can be a really scary thing.

There are times when you come home, and you feel like, you know, You’re on a ship that just won’t respond to changes in the rudder that you’re be calmed and you really have to have faith, in whatever vision that you have at that stage. so that was a huge change and that was a change that caused us to be much more serious as business people.

the next change really came for us, a couple of years later with RSS feeds. And, I remember going to a Counselor’s Academy conference in Phoenix, I think it was about 2003, 2004, and sitting in the sun with a bunch of other agency heads and, Giovanni Rodriguez was there and Giovanni was giving a presentation to the agency folks about digital.

Communications and he asked the assembled about 40 agency heads from all across North America. And how many of you are familiar with RSS feeds? And I stuck up my hand, looked around and realized I was one of about three. That was the point at which I realized, there was something quite. Interesting going on and that if I pursued that, I could be at the vanguard of, of a change that I saw coming.

So we moved our agency pretty quickly into social and, you know, you yourself, were there, when Shel Holtz was, started the FIR podcast with Neville. we took note. Terry Follis and David Jones started the Inside PR podcast, we all had blogs, we started video podcasts and, and became, became quite adept at that.

The great thing about that was that, the margins were incredibly good because a lot of people were intimidated by, the digital aspects. They had the communications chops, but. The technology wasn’t necessarily something they had and we streamed along through that, social media became content marketing.

it added on a number of other things, analytics, and then around 2011, the bottom dropped out of that. Everybody was on social media. It had become commoditized, and we really found that our margins were being, were being squeezed. The other thing that was happening was that, and you may or may not feel this, in the United States, but for people outside of the United States, the relentless march of consolidation by the holding companies, along with digital created an environment where you either had to be very big, Or very niche and a lot of mid sized agencies started to get themselves squeezed.

We started to get ourselves squeezed because we had become a mid sized independent agency and that caused us to refocus again, and more recently, The changes in the media environment have caught up to us as newsrooms and traditional media have just been collapsing in Canada. We’ve always been a couple years behind the U. S. in that. We were sheltered from that early on. and right now we’re sitting in a situation where we have newsrooms that are probably 50 percent the size that they were three years ago in Canada. It’s been brutal. It’s been quick and it has pulled the rug out from underneath, the traditional business.

So if you were to ask me today, what kind of a company I run, I tell you we run a public engagement company. We have moved into developing apps. we’ve developed several apps. Some have been commercial successes, others haven’t. but what we have developed is a Apps so that we can go after particular niches.

We work hard with, public institutions that need to engage with the public, need to engage with the public in a way that they can develop online where ongoing relationships that are trusted. and that brings into play a whole lot of, of other things. and that has become our growth area. We still do all of the other things, and we’re still quite good at it.

but we don’t have the margins that we once did in those other areas, and so our growth has, has driven us in this, in this, new way. So it’s been constant change, Chip, since 1995.

Chip Griffin: And, and I, I would really echo what you said with regard to the, the changes in digital over the past, you know, five years or so, because, you know, there was that period of time where it was, it was, it was high margin work, it was, it was exciting work, I think that in addition to, you know, lots of people getting into the game and it becoming more commoditized, I think the other challenge is that You know, a lot of folks, came into the space and, and promised the, the sun, the moon, and the stars to clients, and then weren’t able to live to deliver.

And that then, you know, made people much more skeptical than they needed to be of digital, you know, it’s a question of, you know, using it properly and having proper expectations. But I think that, that somewhere around that same 2011 timeframe that you, that you mentioned, a lot of that began to change.

Joe Thornley: It sure did. The other thing that has really happened to us as, traditional media people have come out into the communication side of things. a lot of them have been on partial payments, some of them have been on early retirement, and a lot of them have, Operated as sole practitioners and flooded the marketplace that along with Millennials has caused us as with lots of other agencies to rethink our approach to the workplace So we still have an office Because we really feel the need for that when you want creativity you want people to be looking across at one another and seeing one another but We work really hard to to look at the important indicators of success in achieving client objectives of being productive, rather than worrying about where someone is at a particular moment.

And our workforce has become much more distributed in their efforts. and, it has allowed us then also to, reach out to people who. Work with us as partners instead of being full time. So we’ve, like others, had to reinvent our approach to the actual company with a much smaller, core team and then a larger network of people that work with us on an assignment by assignment basis.

Chip Griffin: And that certainly has become far more common in today’s communications world overall, it’s something that’s been facilitated by this digital transformation we talked about because, you know, not only has the environment in which we’re working, changed as far as, you know, how we communicate, but it’s also how we all interact with each other and, and, you know, no longer do we need to have you know, robust internal networks where you share documents and you know, there are services like Dropbox that do that quite nicely.

There are, you know, video and audio conferencing apps. There are all sorts of collaboration tools that make it. You know, while it’s not a replacement for being together in person, I, like you, I still believe that that’s an important component of, of creativity as well as growth, but it, it, it does make it a lot easier to have a more creative structure, which then I think, you know, goes also to your point from, you know, back in 2001 when you had to, to make some tough decisions.

you know, it makes some of those tough decisions perhaps a little bit easier. It’s never easy when you’re dealing with people, right? Because, you know, it’s one of the challenges of communications is that, you know, we don’t have a lot of costs to cut in a downturn. It generally is the human factor that comes in.

but I think having the sort of the networked approach, you know, does allow you to more flexibly, both ramp up and ramp down as needed.

Joe Thornley: Yeah, I think you’re absolutely right. networks are the future for our industry in the short term. I think the industry in the long term, is doomed in its current, definition.

I think that, we will all be using our skills, focusing on relationships with other people. but the very. Change in the way that people obtain their information and interact with one another has, has caused a total change in what we do. Before I recorded this with you, it’s about noon today and I, I was up at about five sitting at my desk and I have spent my whole morning staring at the analytics, of a website, looking at the people who are coming to it, how they’re engaging, and looking at our communications, and the selection of channels.

based on, the experience that where I have actually having. There are people in our firm who spend a lot of time, still doing pitches, but I have not done a pitch in five years. and I started out doing that a hundred percent of the time. It’s not because I’ve, I’ve become more senior. It’s because.

I can make a living, not being a developer or a coder, but making a living understanding how people are interacting, with one another in a digital environment and how that affects our relationships with one another. It’s, it’s a totally different world and I think that is where the future is. is that people absolutely have to be seeing themselves more as social scientists, than as publicists.

Chip Griffin: Well, as you think about that, you know, what does that mean with the new workforce? You know, I think we oftentimes talk about millennia firms and former employees as, as, There’s a true alumni network because, you know, there are folks as you’ve noted who you can bring back into the fold. and certainly I’ve done that over the years where I’ve brought back past employees to my various companies at different times.

I’ve carried them as I’ve moved through different companies over the years. you know, but also it’s an opportunity, particularly if you’re an agency and someone goes client side, well, you know, there’s now an opportunity to, to pitch that business. you know, not that you would pitch it cause you don’t pitch, but someone else I’m sure.

could, you know, aptly pitch that business and win it. and so, you know, I, I think that, that we all need to be thinking about that side of the, the business of communications more, which means two things. One, it means developing good, positive, strong relationships with your employees while they’re in house so that they continue to look at you favorably even when they’ve moved on.

but secondly is finding ways to stay in touch with that network, particularly if you’ve got enough size that, you know, you’re, you have an alumni network that’s, you know, at least in the tens, if not hundreds, you know, so that you’ve got something that you can pull together perhaps for, you know, an annual picnic or, you know, something just to, to try to, to, to continue that dialogue.

Joe Thornley: Yeah, I think you’re absolutely right. One of the things that you mentioned along the way was the assumption that I don’t pitch. In fact, I spend. 95 percent of my time on client work now, one of the things that I realized in managing agencies, and you hear it all the time, you know, what’s, what’s the problem with, PR agencies.

It’s that you have truly skilled and talented communicators who you put in a management position for which they’re not trained, they’re not as successful as they want to be in things go south. we. have people who are running the business, which is not me. I’m, I’m still in involved in setting the direction, but on a day to day basis, we have people who are a decade or two younger than me, who are at a different point in their career, who.

Are running the business and only running it as much as they need to so that they can keep a hand in on the on on the client side. Terry and I do very little running of the business. We spend virtually all of our time with clients, which means also with pitching and that way we can take our our our ego out of the sense that we are defining.

The business, it helps us, to keep the business more relevant and to keep it more nimble because it’s not bound by our own sense of what is normal or our own predispositions, and it gives other people a chance for a period of time to try themselves out as managers. but again, we, we respect the fact that, they didn’t get it.

Get into PR to end up running HR or looking at spreadsheets. They got into it because they like communications or they like people. And the management part of the firm is just a learning experience that we can give to senior level people in the same way as we give learning experiences to junior level people.

Chip Griffin: I find that whole concept fascinating. And to be honest with you, I haven’t seen a lot of agencies that do it quite the way that you’re doing it. but I, but I think what you say makes absolute sense and it is, it would be a good way for more agencies to operate. And frankly, maybe more do, and I’m just not aware of them.

but it, it seems to me that, that so often you have folks who are at the highest levels of leadership within agencies who do very little client work. You know, they, they may say they do, but they’re, you know, but by that, they mean, usually we show up for our biggest clients and, you know, shake hands, wave at them and, and make them feel like we’re involved, but they’re not on the regular conference calls, they’re not on, you know, the, the in house meetings, all those kinds of things that, that are really critical to, delivering on the promise that you make.

to your, your clients and prospects.

Joe Thornley: Well, for me, I look at it and if we really want to be innovative in where our business is going in a changing environment, that means that we want to be constantly reinventing the services and the products. So we have a product called 76 Engage that we invented, that we developed for this online public engagement marketplace.

And. I spend my time working with clients using that tool and running online engagement. And the benefit that I and the company get out of that is that I am on the line with the clients when they’re saying, if only it could do this, or how does it do that? And out of that comes the next. Innovative idea for us to refine the product or as we have to invent a totally new products, which is what 76 engage was two years ago and so I think that, if I looked at spending my time as a senior person managing other people, there’s a certain amount of comfort in that, but it wouldn’t help the business to move forward.

I’d be driven back to those spreadsheet considerations and recruitment and HR. but we can be truly innovative if we are working on, the cutting edge of the business, which, you know, isn’t repeating itself. and, and, and so that’s, that’s where I think we gain an advantage to stay ahead of, the rent man.

Chip Griffin: And I think that’s a strong note to end on. I know that we could probably spend at least another hour or two talking about various issues here, but as listeners know, I have a hard and fast 30 minute rule because I want to respect the listeners time as well. So, Joe, before we part here, though, can you share how folks can find you online?

Joe Thornley: Sure. I’m On Twitter, Thornley, I’m, I’m, I’m Thornley pretty much everywhere, so, it’s pretty easy to find me there, people could listen to the Inside PR podcast that I do with Gini Dietrich and Martin Waxman, it’s also an FIR podcast, or Inside P2, which is about, public engagement, it’s a newer podcast that I set up, and, I still have my blog, ProPR.ca, because I’m a proud Canadian.

Chip Griffin: Excellent. Well, all those links will be in the notes here for this show. Joe, I appreciate you taking the time to be with us today. Again, my guest has been Joe Thornley of Thornley Follis Communications. Thanks, Chip.

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