Dallas-based Richards Group is almost certainly the world's biggest single-owner ad agency. Although founder Stan Richards controls 100% of the equity of the full-service shop, it has for many years operated an unconventional open-door policy in which there are no departmental divisions among staff and no one (except the CFO) has a private office. "A peaceable kingdom" is how Stan Richards liked to describe it. Another rule that breaks with the industry standard is that Richards traditionally declines to defend reviews of client accounts. Clients either choose to stay or choose to go, and the agency prefers not to get involved in competition for the business. Most have traditionally chosen to stay: as of early 2020, Motel 6 had been with Richards for 35 years; Home Depot for 27. In 2007, Richards overtook Doner to become America's largest independent agency by revenues, and maintained that position until 2016 (when it was itself finally overtaken by Wieden & Kennedy). Advertising Age estimated revenues of $201m for 2019. Despite the widespread consolidation within the industry, the agency has said repeatedly that it is not for sale, "not now, not ever". It is run by a group of principals, headed by Stan Richards, who turned 88 in 2020. He has pledged to transfer ownership to a non-profit foundation after he departs. The agency's profits are already shared out between all employees. In January 2020, Richards handed over the role of principal to Glenn Dady, a longtime member of the three-man leadership council. However, none of the staff held a specific title although they did have particular areas of responsibility. In Sept 2020, all seemed well in Stan Richards' "peaceable kingdom". All that was overturned by a few incredibly ill-chosen, racially insensitive words spoken by its figurehead during a client meeting in early October. The resulting defection of virtually all the agency's biggest clients - including Motel 6 and Home Depot - as well as several senior managers prompted Richards' own resignation a few days late. The surviving management team must now fight to win back their estranged clients. Some of the departed managers were tempted back in 2021.
Capsule checked 16th October 2020
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Adbrands Update 14th Jan 2022: In an attempt to distance its self further from founder and former leader Stan Richards, The Richards Group has confirmed plans to transition to the abbreviated name of TRG. That process is already underway on social media. A precise date for the changeover has yet to be confirmed. A spokesperson told AdAge, "There's a huge amount of work left to be done when it comes to our new visual identity and no final timetable on when we officially adopt TRG. But it is official that we are different - we are a people-run, nonprofit-owned creativity collective."
Marketer Moves 7th Jul 2021: New CCO at Richards Group. See Marketer Moves (members only).
Adbrands Daily Update 8th Jun 2021: In a further down-sizing of Richards Group, its former Hispanic marketing unit Lerma has reacquired the larger agency's 49% shareholding in order to go fully independent. Lerma has also taken with it at least two general market accounts previously held by Richards: The Salvation Army and Interstate Batteries.
Adbrands Daily Update 16th Oct 2020: A catastrophic week for Richards Group ended with the resignation of its 88-year-old founder and figurehead Stan Richards. It began when budget hotel operator Motel 6 terminated its 35-year partnership with the agency as a result of comments made a few days earlier by Richards. According to media reports, during an internal Zoom conference among 40 agency staff to review campaign ideas, Richards dismissed one suggestion as "too black" and said it would not appeal to the client's "significant white supremacist constituents".
Motel 6 got to hear of the incident a few days later and was quick to act: "Upon learning of these comments, we terminated our relationship with The Richards Group, effective immediately. We are a company who embraces diversity of all forms and have a zero tolerance policy for hateful comments of any kind, whether that be within our organisation, at third party vendors or at our properties. We will continue to work every day to ensure every one of our guests and employees is treated with the utmost respect."
Richards, who was still closely involved in day-to-day operations, subsequently issued an apology to agency staff, but his retraction was described by at least one staffer contacted by AdAge as "inauthentic". "Many people felt like it was not a true owning-up of his mistake, but just a strategic attempt to prevent him from losing his agency," said another staff member. That prompted a more fulsome statement of apology to the trade press: "I misspoke," said Richards, "and commented using words I greatly regret, including three I never should have said: 'It's too black.' To be clear, though, I have never used racial slurs about any ethnic group nor tolerated it from anyone around me. Those words were said innocently, but they were hurtful to members of our staff. I have apologised for that, as I should have. Having spent much of my adult life fighting prejudice, I should have known better."
That was not enough for several other clients. In a dramatic escalation of the crisis, the agency's single biggest client Home Depot followed Motel 6's lead and also dismissed Richards Group. That prompted a string of other defections: Keurig Dr Pepper, The Salvation Army, H-E-B and others also announced they would seek a new agency. There was only one possible response from Richards Group. On Thursday night, Stan Richards said he would himself depart. "If this was a publicly held company, I'd be fired for the comments I made. But we're not public, so I am firing myself," he said in a statement. "Our employees, first and foremost, deserve that. I made a mistake. The biggest mistake of my life. One I will never be able to adequately explain or take back. All I can say is that I was wrong."
"I guess the lesson in the whole thing is that one has to be awfully careful as to what one says, even in an internal meeting that was not intended to go any further than that," Stan Richards subsequently told the WSJ in an interview. He estimated the agency had lost around 40% of its business as a result of his comments and might be obliged to lay off as many as 40% of its 600 staff. That is the human cost of a few ill-chosen words.
Adbrands Weekly Update 25th Aug 2020: "Sandman". Richards Group has been responsible for several of the best ads ever for US truckmaker Ram, part of what is currently the Fiat Chrysler stable. (Soon to become Stellantis when - if? - the Peugeot Citroen merger takes place). This latest features spectacular scenery and stunt-driving, gorgeous photography and the haunting cover by SYML of that old 50s classic 'Sandman'. It's not quite as astonishing as Richards' all-conquering 'God Made A Farmer' spot for Ram, but it's not too far behind.
Adbrands Daily Update 16th Dec 2019: Stan Richards, now 87, will finally hand over day-to-day control of Richards Group in January 2020. His successor as principal and creative director is Glenn Dady, a longtime member of the agency's leadership council and a "lifer" who joined the agency out of college. However, Richards has no plans to retire. "Now is the time to name my successor, while I'm still active and engaged in the business," said Richards. "Glenn has been by my side for nearly four decades and has played a critical role in making The Richards Group what it is today. He has always been one of the most innovative, imaginative creative leaders of the agency - but maybe most importantly, no one has done more to identify and nurture the talent so critical to the work we do than Glenn."
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