Nontrivial Exercises

The Richards Group - Keeping a Big Company Small

The Dallas Business Journal recently ran a story about the Richards Group, a Dallas-based ad agency that many believe is one of the best in the industry. Stan Richards, the founder and principal, talks with Glenn Hunter of DBJ about his philosophy, his approach to the business of creativity and some of the elements that make the Richards Group such a unique company.

Since its founding (Stan Richards forming an official company in the 1970’s after doing do freelance creative ad work in Dallas since the 1950’s) in the 1970’s, the Richards Group has grown to a 662–employee and $1.1B company. Yet, to read Mr. Richards talk about his company today, one would never guess that it is that big. Richards works hard to make it function like a small, agile company through some very unconventional approaches.

For example, there is a ban on the use of most internal email. Email lends itself to misunderstanding, Richards explains, so he forces people to talk to each other more.

Also, Richards has a four-part criteria when considering a new business opportunity with a client, that he puts in the form of four questions they must answer Yes to:

1. Can we do terrific work?
2. Can we make a difference in the client’s business?
3. Can we make a profit?
4. Can we have fun?

If they cannot accomplish each of these objectives, then they will not take on the business. Sound strange and risky? Absolutely, but there’s no shortage of work for the agency. And, risk is something Richards says they continually challenge themselves – and their clients – with.

If turning down business because you can’t have fun doing it sounds bizarre, how about their approach to profit: Mr. Richards says in the article that at the beginning of every client project, they agree up front on a profitability target for the agency. If the project turns out to be more lucrative than expected and creates an excess for the Richards Group of the agreed-upon target, they will return the excess to the client.

How could a business today really remain viable with these practices? Perhaps it is just because they go against the norm, the convention of how most business works today, that they are successful. Who in a big corporate environment doesn’t long for that small-company feel, for an unconventional approach, for a more egalitarian atmosphere in cubeland?

Check out the entire article to learn more about Mr. Richards company and his unique and obviously effective approach to keeping his big and growing company work more like a small company.

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