We Can’t All Be Google

This article was published by Little Black Book Online on November 5, 2015

http://www.lbbonline.com/news/we-cant-all-be-google-deal-with-it/

 

It’s the depth of a client-agency relationship that is the single most important factor in delivering creativity that drives commercial success. Yet, clients are increasingly resorting to shallow, transactionary, project-based relationships with creative agencies.

Marketers are increasingly taking their lead from the most successful global tech brands and the way in which they work with agencies.

Take Google. The tech behemoth has become a byword for best practice and progressive marketing. Globally, Google’s largely project-based model for working with agencies has been replicated by many marketers, but some have failed to understand the difference between Google’s interaction with consumers and the reality of their own organisation’s relationship with its customers.

Google interacts directly with its consumers, learning more about each of them on a daily basis than a packaged-goods company might hope to learn about an individual customer in a lifetime. Not only does Google have a deep, data-driven understanding of consumers, but as a creative tech business it also has an innate understanding of how creativity engages, influences and motivates those consumers. By its nature, Google’s culture and organisational structure is geared to developing and executing creative ideas at speed.

By contrast, the majority of brand owners don’t have this intimate consumer knowledge. They don’t rely on an innate feel for creativity that will engage consumers and drive commercial success when developing and buying creative work.

The reality is that they’re likely to have a lengthy approval process involving multiple stakeholders that’s totally at odds with the development and delivery of content that’s capable of transforming the fortunes of their brand or business.

For those brand owners who don’t have Google’s constant interaction with their consumers, and whose current processes for approving creative work rely on testing and approval by multiple stakeholders, the transition to buying effective content-driven marketing communications is going to be a challenging one. The last thing these clients need is multiple project-based relationships with creative agencies.

What they do need are agency partners with a deep understanding of their business and the trust that this engenders.

Transactional, project-based relationships aren’t going to foster deep understanding of their business or engender the trust that will enable these clients to transform the way in which they develop and buy marketing communications, and transition into the new world of content-driven marketing.

Within the marketing function of some client organisations, the advent of creative excellence roles is a positive development – in as much that it elevates the creative agenda. What we need is a wholesale shake-up of how most clients buy creativity to truly and effectively leverage the power of branded content.

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Leveraging Female Leadership Talent

There isn’t a single female CEO leading a global creative agency network, and short lists for key leadership roles in communications agency groups continue to be dominated by men.  Why is this the case, and how can we leverage female leadership talent?   Here’s the link to my opinion piece in AdWeek.

http://www.adweek.com/news/advertising-branding/how-agencies-can-win-transformational-women-leaders-160844

 

 

The Last of the Adam & Eves?

The marketing communications landscape in the UK has changed so dramatically since Adam & Eve launched in 2008 that they may well prove to be the last in an era of start-ups that achieved overnight success.  Global consolidation, the shift to more fluid and project based compensation models, and client expectations in relation to multi-channel capability, are making it increasingly difficult for start-ups to land the transformational new business win that gives them momentum (and bankrolls their expansion).  This doesn’t mean there isn’t space for talented start-ups that are different and/or better.  But start-ups will take longer to get traction and their founders are unlikely to get rich quick.

To read my full article published by The Guardian, click on the link below;

http://www.theguardian.com/media-network/media-network-blog/2014/jan/14/agency-startups-mountain-to-climb

CQ – Commercial Intelligence

At the Cannes Lions 2013 International Festival of Creativity, I launched the concept of CQ – Commercial Intelligence – and identified CQ as the fundamental attribute that crystalizes what’s required for the successful leadership of creative businesses.  This is the transcript of my presentation at Cannes.

We at The Talent Business wanted to host a forum on leadership because we believe that above all else, leadership is the key determinant of business success.  Identifying, developing and securing future leadership is literally securing the future of the business. 

Now, more than ever before, the speed of the leader determines the speed of the organisation, and the vision of the leader, above all else, will define the corporate culture and give people in that organization the belief system and self-confidence to deliver sustainable business success.

No more is this the case than in ideas driven businesses.  In ideas driven businesses, people are the asset and if you have no people you have no assets, so it is ironic than many agencies have no strategy in place for developing their key asset – leaders of the future.  Agencies will instinctively promote the account handler who runs the agency’s biggest client into the CEO role and the creative who has won the most awards to ECD.  The assumption here is that a great practitioner must make a great business leader.  This is a flawed assumption and I will come onto why it’s a flawed assumption in due course.

Historically, the thing that agencies have been good at is nurturing emerging talent and developing great practitioners.  Most agencies have had a keen sense of what a great practitioner looks like, for creative, and across all disciplines.  And yet being a great practitioner is probably more challenging now than ever before.  In a technology driven world, new competencies have to be mastered, and more than ever before you need to have the ability to make the complex simple, you need to be able to handle ambiguity, and you need to be even more flexible with your thinking.

Being a great practitioner in a technology driven world is certainly a pre-requisite for potential business leaders – but it is not enough.

The other given for potential leaders is a well developed EQ.  I think it is generally understood that EQ is a pre-requisite for successful leaders but is still something that is ignored when identifying great practitioners with the potential to step up into leadership roles.

Broadly speaking, the key elements of EQ that we are interested in are self-awareness and empathy.  Self-awareness, because a successful leader is self-aware enough to recognise his or her own strengths and weaknesses, and will build a team around themselves that compensates for these.  Empathy is important to understand how ones behaviour impacts on other people, and to understand other people’s emotions and perspectives.

So in summary, super smart leaders of the future should be drawn from great practitioners who have a well developed EQ.

But that is not enough.

Based on our observations and experience at The Talent Business, we believe that there is one fundamental attribute that crystalizes what’s required for the successful leadership of creative businesses, and that fundamental, but widely unrecognised attribute is CQ – Commercial Intelligence.

We believe that the concept of CQ is uniquely important in creative businesses.  This is because creativity is not innately commercial.  Agencies harness the power of creativity for commercial gain.  And you can only harness the power of creativity for commercial gain if you have agency leaders with a highly developed CQ.

CQ can be learnt.  But not everybody can learn it.

For this reason, we’ve developed an observational tool to help identify those great practitioners who have the potential to develop CQ.  The rising stars who can transition from practitioner to leader.

We have devised three questions that address the three key areas of observed behaviours that, in our experience, indicate potential to develop CQ.

How do they define success?

How do they approach decision making?

Do they value relationships?

Looking first at how they define success, do they do this in terms of say business objectives, or brand transformation, or number of hits, or shifting stuff, or do they define success on the basis of a narrower, personal agenda.  Their vision or definition of success is the first important indicator of CQ.

Secondly, how do they approach decision making?  Decision making is an important aspect of leadership because creative businesses are fuelled by the generation and exploration of ideas.  Closing down ideas (and the myriad of constraints that force decision making in agencies) is often counter-intuitive.  I have seen first hand how the inability of a CEO or CCO to make decisions can literally paralyse an agency, or even a network.  Somebody’s approach to decision making and their preparedness to make decisions is the second important indicator of CQ.

Finally, do they value relationships?  I believe that great work that drives commercial success is born out of strong relationships (with colleagues and with clients).  Some people instinctively foster relationships.  Others find them a chore.  We believe that valuing relationships is the third important indicator of CQ.

CQ crystalizes what’s required of leadership in creative businesses.  Every creative business needs it in their leaders.  But current agency practices mean that it’s actually quite hard to find.

So if you believe, as we do, that in creative businesses, leadership is the key determinant of business success, continue to develop brilliant practitioners, place greater importance on EQ when promoting them into leadership roles, and above all else, start looking for, and spend more time nurturing, CQ.  

Selling The Baby

Selling your business is a big decision. You gave birth to this business, you built it according to your vision, you vacuumed the office before you had a cleaner to do it, and you didn’t pay yourself when you needed to invest in more people and new systems. If you had a brilliant idea in the shower one morning, you could make it happen that afternoon. Your DNA runs through this business and despite its size, you still control how it’s positioned and what it delivers. It may be your baby, but once you’ve sold it, it won’t be your baby any more. Too many acquisitions fail to fulfil their potential because the sellers and buyers don’t spend enough time talking about the emotional challenges involved in selling the baby.

The communications agency landscape provides us with many lessons for both buyers and sellers on what makes a successful acquisition and how to integrate or merge human capital businesses. It’s a sector that has been consolidating with a vengeance during the last ten years, as the holding companies have bought out the independent players, and this consolidation has been so effective that it has probably changed the landscape for good in most of the world’s key markets as far as start-ups are concerned. Never has it been more challenging to launch a mainstream creative agency start-up.

A number of factors have driven the volume of acquisitions in recent years. First off, there has been the need to establish a foothold in the key growth economies and emerging markets. If your proposition is global, you need to have a strong presence in China, and WPP bought some of the best independent communications agencies in China before the other holding companies’ feet had even touched the ground at Pu Dong airport when it opened in 1999. More recently, Publicis Groupe’s spate of acquisitions during the last three years in Brazil, and the multiples that they have (allegedly) paid, feel like a vanity project and knee jerk reaction to WPP’s success in China. Time will tell whether Publicis over-paid for these acquisitions in Brazil but the Brazilian economy has faltered (GDP likely to have grown as little as 1% in 2012) and WPP own two of the top three networks in Brazil (as they do in China), and have grown these organically in Brazil. The imperative to build a credible foothold in key emerging markets has driven a significant proportion of M&A activity.

The second factor is digital, and the failure, by and large, of the traditional creative agencies to develop a full service digital offering. The holding companies have been acquiring digital independents in all their key markets – some of which have continued to trade as stand-alone local or global digital independents, and some of which have been merged into creative or media networks. And when you consider that we’re not just talking about full service digital agencies (WPP’s acquisition of AKQA, for example, and Publicis Groupe’s acquisition of LBi), but also the acquisition of specialist shops that deliver web, mobile and app development, social media activity and search marketing skills, we’re talking about a huge volume of strategic acquisitions to ensure that the groups have future proofed themselves with a comprehensive digital capability. Mobile currently tops the digital acquisition wish list.

The third factor, and what has traditionally been the key driver for acquisitions, is the shoring up of creative agency brands that have been going through a period of managed decline in key markets, and where transformational leadership on its own is unlikely to restore reputation and deliver organic growth. DDB London’s acquisition of Adam & Eve is an obvious example. McCann-Erickson’s acquisition of W/Brasil is Sao Paulo is another.

And finally, the increased activity by the main Asian owned groups has changed the global landscape. Dentsu’s acquisition of McGarry Bowen, and Cheil’s acquisition of the Barbarian Group and McKinney (all in the US) deliver an entirely new cultural dimension to the concept of selling your baby, when the new parents have grown up in a totally different agency culture.

Even in staunchly independent markets like Germany, where the independents still control an estimated 70% of spend through creative agencies, one senses that the tide is starting to turn, as local icons consider selling to non-German parents.

This dramatic global consolidation has impacted on the smaller independents and start-ups in two ways. Firstly, it’s getting tougher and tougher to run a commercially successful independent when more and more of your competitors have been absorbed by the major groups. Yes, if you have great talent and a compelling proposition, there’s a narrative around being independent that can resonate with clients (predominantly local clients). And these agencies, with a strong sense of self, are often more appealing to agency talent. But in a world where retainers are being replaced by project fees, the time spent by independents on business development and maintenance of the pipeline is a disproportionate drain on resources, whereas the competitor that is now part of a larger group has more support in areas like finance and IT, and can shake all those existing client trees within the parent group to catch the hanging fruit. It takes far less time that they spent trying to get through the door of new business prospects when they were independent. Secondly, a lot more of the entrepreneurs who run independents know other entrepreneurs who have sold their businesses to major holding companies and groups than would have been the case ten years ago. I’ve been struck by how many of the digital specialist independents have a mate of a mate who recently sold their business to a group. This means that they often have a point of view on what it’s like to sell to one parent compared to another, and their mate’s experience helps to drive a better understanding of what it might be like to sell their baby. They understand that they will lose control, and they talk much more about cultural fit with the acquirer than they would have done even five years ago. When you combine these two trends, what you find is a number of successful independents who want to sell in order to accelerate their growth through ownership by a group and the access that this will give them to clients, but they’re frightened of selling to a holding company or group that doesn’t seem to have any cultural empathy with their business. Multipliers are important, but holding company ‘parenting’ reputations will become increasingly important as well, when competing for the very best acquisitions.

From all of this, you’ll have gathered that there are some important lessons to be learned when it comes to selling the baby.

Firstly, be clear about the key drivers for the sale. If it is about maximizing earnings from the sale, don’t just look at multipliers based on projected revenue and profit through the earn out. Think about which buyer is likely to deliver clients that will fund the earn out and deliver real revenue opportunities, and what kind of additional support the different purchasers might bring to bear.

Secondly, be clear about what it means to lose control and think about how you will have to evolve in order to remain motivated and engaged. If you don’t enjoy stakeholder management and quarterly financial reporting, put somebody in charge of this who does. Expect things to move more slowly and find deep reserves of patience that you didn’t know you had.

Thirdly, sell to a parent who respects you for who you are and who appears to get you, whilst ensuring that there’s mutual recognition and alignment on what it’s likely to be like post-sale. Be prepared, on occasion, to work alongside leaders from other group companies that you wouldn’t have hired to pour the coffee in your own business. View them all as one big, dysfunctional family and recognise that every family has its ‘uncle Bob’.

Fourthly, don’t forget your clients and your staff. Selling a business is a huge distraction and sometimes the clients get forgotten in all of this.

And finally, acknowledge that selling the baby is a hugely emotional, life changing thing to do. Don’t be afraid to show your human side when you do it. Your clients and your staff will appreciate the sentiment. After all, it’s their baby as well.

An edited version of this post can also be found on Brand Republic;

http://www.brandrepublic.com/news/1164641/five-key-lessons-selling-baby/

Great Relationships Deliver Great Work

In marketing communications, it’s great relationships that deliver great work.  It’s the reason that The Talent Business’ global pitch consultancy, Global Agency Search, does not partner brand owners who are determined to conduct creative pitches.  These are invariably a waste of everybody’s time (and huge amounts of money).  They’re predicated on the flawed belief that creative pitches can deliver creative solutions.  They don’t.

Picture the scene.  The client team has sat through lengthy creative presentations from the three shortlisted agencies.  This is the culmination of months of work, countless tissue meetings and thousands of man hours.  The client team retires after the final presentation to deliberate.  Before not too long it becomes clear that the agency the client team have grown to like the least has produced the idea that they, the client team, like the best.  It also becomes clear that during this process the client team have fallen in love with the agency that has presented the work they like the least.  The client team is bitterly disappointed and this is a tricky one to resolve.  It’s at this point that the most junior member of the client team asks why they don’t just take the idea they like the best and give it to the agency team that they have grown to love.  The CMO explains that this isn’t an option.  After much soul searching, the client decides to hire the agency that has produced the idea that they like, the idea subsequently fails in research and the research also reveals a flaw in the thinking that prompts a wholesale strategic review.  In the meantime, the client team have saddled themselves with the agency relationship they least wanted by the end of the pitch.  And not surprisingly, this relationship fails to deliver great work. Whilst many creative pitches do take initial work through research before appointing a winner,  the reality is that for one reason or another, the vast majority of creative work produced for pitches never runs.

Core competencies for agencies (global or local) are not difficult to assess.  This can be done through a comprehensive mapping exercise, intelligent assessments by advisors who really know the talent, the offerings and the capabilities in the space, and through anonymous RFI’s that can clarify a specific capability or KPI.  You don’t need a pitch process to verify these.  Ultimately, the role of the pitch process is to enable a client to make the best informed decision in order to secure a game changing agency partner.  In order to do this, the process needs to explore candidate agencies’ relationships with their existing clients and the conditions in which these agencies have done their best work.  This might mean looking at the way in which other clients structure their marketing functions and, more specifically, the leadership of the marketing communications functions in the client organizations whose work they most respect.  Understanding how an agency has delivered game changing work is as much to do with understanding its clients as it is to do with understanding the agency.

We do believe in strategic pitches (once core competencies have been assessed and verified).  These are a good way of testing how agency teams think and work together.  A strategic process can stress test an agency’s grasp of a client’s business and showcase an agency’s rigor, innovation and creativity in tackling a strategic problem.   By its very nature, this process will test agency-client chemistry, and as pitch consultants, we can ensure that it’s also an opportunity to explore, as transparently as possible, each other’s values and ambitions.  These will need to be aligned for a great relationship and it will be that great relationship that will deliver great work.

The Rise and Fall of the Control Freak

Successful business leaders tend to be control freaks.  They care passionately about the quality of their product.  They are perfectionists.  They are the architects of the vision and the strategy, and they understand their business and their brand better than anybody else. So they retain control of every aspect of the management of the business and no decisions are made without their approval.  Their leadership style is the key driver of business success but as the business grows, their leadership style is also potentially its downfall.

The reason for this is that the other defining characteristic of control freaks is that they find it difficult to trust.  It’s a self-fulfilling prophesy.  If they trusted others to make the decisions that they would make themselves, they wouldn’t be control freaks.  The challenge for the control freak is that the bigger the business gets, the more difficult it is to control.  If the control freak doesn’t evolve his or her skill set and management style, the desire to control will paralyze the business.  Decisions aren’t made, opportunities are missed, the organization becomes paralyzed.  It’s at this point that the control freak needs to learn to trust.

This wasn’t always the case.  Once upon a time the pace of business – even retail business – moved more slowly.  There was no Electronic Point of Sale technology. There was no social media, with the power to destroy a brand’s reputation over night. The walls hadn’t come down.  Decisions could wait until the control freak was ready to make them.  Not any more.  Retail strategy may need to change overnight and reputation management demands a constant grasp of the Twitter Handle.

Trust therefore becomes a business critical issue and successful business leaders respond to the challenge by evolving their management style to act in a totally counter-intuitive way.  It takes a high degree of emotional intelligence in order to do this.   They look for organizational structures and processes that seek to promote trust within a defined framework.  These structures and processes entrust management teams to distinguish between those decisions that they can make themselves and those that require the business leader’s input.  This may well feel like a huge step for the control freak but the only way to make somebody trustworthy is to trust them, and when this works, it is liberating for the control freak and transformational for the business.  There is another, corollary benefit.   Autonomy, mastery and purpose are what drive brilliant performance in creative businesses (see my earlier post), and control freaks don’t naturally foster autonomy.  So the need to delegate powers through an evolved organizational structure can actually motivate the broader team and drive improved performance.

The dangers for the control freak who cannot evolve their leadership style are serious indeed.  Firstly, their management team become ‘yes-men’ and tell their leader what they think he or she wants to hear, rather than what they really think.  They rationalize this by saying, ‘What’s the point of telling him what I really think?  He’ll only do what he wants to do anyway’.  This becomes exacerbated in a climate of fear.  Sam Goldwyn, the G of MGM, once said, ‘I don’t want any yes-men around me.  I want everybody to tell me the truth, even if it costs them their job’.   And if people are prepared to put their necks on the line to tell you the truth, you need to be an active listener in order to hear it.  The second, related issue, is that the control freak’s definition of trust becomes twisted.  When a business leader tells me that they need to know that they can trust me, I respond by saying that that depends on what they mean by trust.  If trust means to always execute orders flawlessly and without question, or trust means to take the bullet whatever the circumstances, I cannot guarantee to deliver against these iterations of trust.  If trust, however, means to always strive to give the best possible advice, honestly, and transparently, without fear or favor, this is a definition of trust that is likely to build functional and committed management teams, and deliver long term business success.   Yes, in the long term, trust is the only sustainable strategy to secure the rise and rise of the control freak.