Driving at 20 in fifth gear

<rant ahead>

Working as a planner feels like driving at 20 in fifth gear. The brain grates against the imposition of working full time but under capacity. It is held down with asks and tasks that require time, thought and concentration, but are largely inconsequential, often trivial and almost always misguided. (Inconsequential in cognizance of what is possible as against what is being done. Trivial in terms of how the role of brands has evolved and what role the agencies have now in it. misguided because as CXOs involvement with branding comms reduces or changes in nature, often client briefs are not in sync with client leadership’s priorities and objectives.)
We commence the tasks knowing fully well how useless often the work is going to be. But the ritual demands the rigor. After all, at many agencies, planners have become ritual performers – the song and dance before the creative reveal, the counter balance of knowledge & authority at the table against jargon & self-importance of client, the salvager of creative team’s mediocrity.

To switch gears requires agencies to rethink their business model, finding ways to build new things/ services with planner’s abilities. In an absence of such a strategy, planners are like the band that played out the sinking Titanic.

</end of rant>

Advertisements

The brown dwarf

Brown dwarfs are the universal in-between – neither a star, nor a planet. They were potentially stars, but failed short. They failed to shine. Unlike the sun, the nuclear reactions on a brown dwarf sputter unstably, sometimes being extinguished of that majestic fire altogether.
Its death is slow, degenerate. It contracts, cools, degenerates very slowly, forever.

Advertising industry is the brown dwarf of the capitalist 21st century.
It’s capabilities are falling short in the arms race for talent. It doesn’t pay to attract good talent at entry and mid-level. It won’t spend money to train the potentially great entry, mid-level talent either (almost every one is potentially great). So it’s stuck in a degenerative loop. It’s leaders spin furiously in their little cocoons at the top without affecting any change in the lives of people who actually get shit done. A lot of hot talk remains trapped inside air conditioned boardrooms.

Agency business is a good business with decent margins serving a need that is never going to go away. People will always need help with influencing others. But the ways in which people can be influenced changes with times. Other industries are stepping in and re-configuring the way people want, the way people seek and the way people connect. The tragedy is, the agency leadership still doesn’t get this. The margins are fat enough now for the leadership to remain complacent and live off the dividend. But the brunt of accumulating inefficiencies, incompetencies has to be faced by the entry, medium-level folks. As such, the best among them keep on leaving.

So this spinning circle jerk is contracting day by day, jettisoning the best and brightest among the young who feel – ‘i can do better than this’. This leaves behind the not-so-bright-but-cocky-enough-to-compensate folks at the center of accretion disk.

Unless agencies start paying, listening to and adopting ideas of its bright young folks, agencies are destined to deteriorate like a brown dwarf.

Home

Moving

I recently moved to my eighth house in ten years across five cities. Now that I look back at our movement, I am in awe of the amazing ability of my home in accommodating that frenzy and turning it into a simple peace. I moved with economic currents, with multiplying of love, with refusal to be taken advantage of. Every move was an emotional decision. To move so often, to have emotionally charged decisions to be made so frequently, points to a world in a flux, a world spinning at the end of the rinse cycle – manic, moving at breathtaking speed, unnerving. I am but a little flotsam, floating with the currents, trying to ride the wave, instead of being swallowed whole and spit out bitterly.

The first four houses were witness to my loneliness, my listlessness, my daydreams, my attempts at finding love and bouts of creative diarrhea. It was a place where time stretched out and wrapped around me like an anaconda; moving slowly and then suddenly. Sleep came from exhaustion from waiting, absorbing the cold bright light from glowing rectangles… that too slowly and then suddenly.

Gods

I come from hill country. Since childhood, hills, lakes and wide expanses were my gods. It was a spiritual necessity to return to them every evening. In an extended sense, hills were my home. When that was no longer possible in Mumbai, I turned to trekker groups for that necessary pilgrimage every other weekend. With Gurgaon, the hope was to experience the majestic Himalayas every month. But as it turns out, the travel doesn’t come cheap and there are only so many extended weekends in a year. So it became a yearly pilgrimage. I slowly lost my gods but thankfully found love in the meantime too. With that, the home changed from being a base camp to our own little haven.

Love

Love makes life worth living. Love turns a house into a home. A warmth, a lightness, a happiness permeates the air in the home. Things start to have a shared meaning. Milestones get etched into walls, refrigerators and scratched/ stained furniture. Things multiply. The meaning they carry weigh more than the utility they serve. The line between ‘mine’ and ‘yours’ gets smudged, obliterated, redrawn depending on how many of the chores were shared that day.

A triangular universe

Between the triangulation of homes of childhood and home we make together lies the entire universe. We can reach the farthest reaches of our capabilities, we can survive the deepest of falls and find unlimited happiness and weather new sorrows within this triangulated safe place.

Salmon

I am a salmon.

Talisman

Homes are not homes until it gets anointed with a few ‘things’ that must find the right and proper place in the house. For me its the books. The only constant in my luggage through all of our homes have been my books. Over the years, i have given away many and bought many. But there are always books in our home.
My wife is an artist and some of her beautiful and priceless artwork adorns our walls and display cabinets. Our home cannot be complete without the bowls, cups and platters made by her. So some of it travels with us in the in-between times. I can’t bear to drink tea/ coffee from any cup that is not made by her anymore. It just won’t feel right.

My books, her bowls and the two of us complete the home.

The lighthouse

Our hope is to build ourselves a home in the next few years that will stay with us, get old with us, that we won’t have to give up with vagaries of life. To make that a reality, we are planning on saving some money, which we have been terrible at so far. The roots of our future home is being laid in a habit of watching our expenses and being prudent with money, new territory for us.

Here’s to the hope of rising above the waves pushing us this way and that way. Cheers.

On how not to ‘disrupt’ advertising agencies

I spent quite a bit of my time this year on pitching ‘agency as platform’ idea. Over every iteration and every conversation the business case improved, the roadmap became more concrete. I now have a fairly robust idea of how it can actually be implemented, what we will need and what we can expect in return with what probability. And knowing thus, I have decided not to pursue the idea any further.

It seems a good enough time to contemplate on where I went wrong, what I did right and how can I improve myself. And along the way, I hope to convey what I feel about the business of disruption, which my idea intended to do.

So the essential promise of the idea is to expand access of creative and strategic services to SMEs and startups globally. The idea has huge potential. However, to successfully do it, to really make a user experience that becomes the new default of marketing personnel behavior, I identified key areas where we will need to build fairly complex AI algorithms. And this was the first big problem. We simply don’t have access to the kind of datasets and the AI talent we need. That is a HUGE problem. I don’t have that money or resources or the skillset to ‘Fake it till you make it‘.

So my real options were –

  1. Holding companies,
  2. Activist investors in the holding companies
  3. Private equity who can take over those holding companies and do the needful
  4. Platforms (Google, FB)
  5. Consultancies
  6. Companies like Adobe etc.

The proposition needed big investments which couldn’t possibly have come from anywhere else. Out of these options, I approached only the first one – holding companies. Firstly because, I assumed advertising agencies will understand advertising agency business of the future the best. Secondly, sitting in Sri Lanka/ India, I didn’t really have the wherewithal to reach the right people at many of these places. Thirdly, i don’t want to empower monopolistic platforms or flighty capitalists really. Screw them. Fourthly, all the others have markedly different business dynamics than that of advertising agencies. Lastly, holding companies do face an existential threat so they should be amenable to listen. Others don’t face such risks as of now.

Great folks make an effort to give constructive feedback

I contacted and was pleasantly surprised to actually get an opportunity to talk to some of the senior-most global leaders in some of the holding companies and one of the largest global agency too. (There is no NDA because I was giving out my idea voluntarily and they shared very little, but I think it is best not to let out names anyways.)

It was a deeply humbling experience. These were some of the nicest, kindest and sharpest people I have ever had the opportunity to converse with. I was quite surprised really. I learnt from these great leaders to be open to new ideas even if it comes from one of the smallest advertising markets and from somebody far below the pecking order. They not just listened to me but some of them offered constructive criticism too. And I know that useful feedback is hard work,  not everyone wants to do that mental work. I can’t thank them enough for their feedback.

Need to Set up Right Expectations

However, I wasn’t getting the kind of feedback I was expecting and conversations weren’t going in the direction I planned for. With hindsight I now realise that with each audience I completely failed to set up right expectations. For example, one leader spoke as if I was looking to raise funds from them for my venture, another misunderstood the scope of the idea. I was instead pitching to setup in-house/ work with their existing teams to build the new platform. I was foolish in not explicitly stating my expectations.

Lack of clarity

This told me a few things – none of them had really read what I had sent them beforehand. I started the phone calls with an assumption that they have a basic understanding of the idea – the publicly available part. I would then get into the details of it – what it entails, what is the likely payoff, what are the challenges, etc. I now realise that for the scope of problem I was trying to solve, it was foolish of me to talk to them through a year worth’s thinking in a 5-10 min pitch. It is by no means a simple business plan – it is a revolutionary idea that will require patient capital. For such a pitch, the conviction has to be earned first, before we get into details. I hadn’t painted the picture well enough, hadn’t gotten them excited, none of the things that we typically do for regular agency pitches. I did so partly because, I was talking to advertising folks and it felt a bit, you know, strange. I assumed that they knew what I knew, that they felt as I felt. Ofcourse, they must be under far higher pressure than I ever have been from the shareholders to return better profits and provide a convincing vision of the future for the industry. So I assumed, I do not need to string a story. These guys are the center of the problem I am trying to solve. Lets get to the solution quick.
I was wrong to assume. Assume nothing.

Old vs new:

What I didn’t realise was the fact that their perspective to solve that problem was the 20th century perspective, mine was 21st century perspective and i should have focused my efforts on convincing why they need the new perspective and how the old one would fail to provide the right solution.

I now realise that the existing Global leadership thinks in silos, even as they attempt to remove them. They cannot see beyond the logic of departments. Their thinking is – if you need some capability, hire the people with that capability; if you need to enter a new market, acquire a company in that market; if you need to simplify and organise, create a team/ department to do it. They have forever worked with such thinking. It is simpler that way, it is easier to delegate and ask for measurable results and it is cost effective in the short term.

So, when I propose a process solutions that improves capabilities and infrastructure to work together more efficiently, I am met with incredulity. ‘Why spend millions when there are off-the-shelf solutions?’ They fundamentally do not understand why platforms matter and how an upstart can steal their bread before they know what hit them. 

Helping envision alternatives to those who are unwilling:

AI can’t beat human creativity”. mic drop…

People who hear AI and advertising assume that the agencies perform only the creative process, forgetting that there are many other processes that agency folks perform.

Advertising process is notoriously inefficient. From discovering marketing problems/ opportunities to influencing consumers, there are a hundred processes at play which cumulatively can take eons. There are hundreds of inefficiencies in this process that can be improved with organizational restructuring, capability building and some bit of ML led digital infrastructure improvement. But that will require critical thinking among the key decision makers and an ability to envision an alternative.

Which tells me there is money to be made in helping these people envision alternatives and think clearly about it. And if I offer my ideas for free, it would be seen as worthless. I shouldn’t be giving it out for free.

Planning and rehearsals

I was pitching an idea with multiple moving parts. Complex ideas need proper narrative building to sell. And for that, one must plan and rehearse the presentation, prepare for all possible questions & remarks. I should have.

This is true of every pitch and every consequential meeting. If I must succeed, I must plan and rehearse. I haven’t done enough of it in the last year. I will hereafter.

Reading the room

I now realise that only a few of the people I spoke to really were in a position to do anything meaningful with the idea. A chairman may be enthused by an idea, but the CSO perhaps has incentives not to listen to an outsider’s strategy suggestions. Another top executive perhaps has been pushing an alternative agenda for years and can’t possibly shift gears now. Perhaps, all that the people in the meeting want to know is, how far ahead is the other guy come along. They just want to get a sense of possible competition. Perhaps, the people I talk to have incentives that are in conflict with what I am proposing. 

I am terrible at this and must try and get better at it. The trouble compounded since most of my conversations were on phone and not in person. Without a visual feedback of how the other person feels about what I am saying, a meaningful conversation was not possible. Hereafter, I must insist on in-person or in-video conversations atleast. If it can’t be arranged, it perhaps means that the other party doesn’t value the interaction as much. Which is a terrible place to be in. The other person must have read/ heard about what I am about to pitch. Work must happen to ensure that before the meeting ever gets fixed.

Making sense of it all

I read a very interesting article written by Tim Harford a few months ago, that gave me a valuable perspective to examine my experience through. He wrote about,

Why Big Companies Squander Brilliant Ideas

Tim helps us understand that ‘disruption’ is way too hard than the pundits would have us believe. Organisational architecture (and as such the established incentives and powers structures) is the key determinant of whether an organisation can change or not. As he quotes BP’s chief executive Bob Dudley, “If someone said, ‘Here’s $10bn to invest in renewables,’ we wouldn’t know how to do it.”

Essentially, it is easier for an organisation to adopt a technological change if it can be adopted within existing organisational architecture. For example, IBM adapted successfully from selling computational machines to companies to selling computers to companies. But it struggled with selling PCs to consumers. Or Xerox’s ability to sell laser printer fit in with its existing organisational structure, but selling GUI or personal computers did not.

So essentially, a holding company which essentially was a financial instrument that provided scale to branding efforts was relevant in 20th century. That need to scale is fully met now. Even then, the people who run the global ad conglomerates – the holding companies or the top executives of the constituent agencies, have no incentives to change. They are invested in status-quo. For a holding company to pivot to become a platform, the company will need a new set of leaders with newer capabilities. The old set will simply won’t do.

Hence, no such change is about to come from existing agencies/ holding companies. Publicis’ effort with Marcel is probably a PR project or a naive attempt at building a platform.

The platform idea, in this context, seems to be nonviable. It will require agencies to fundamentally change its architecture. Which is not going to happen. It will require patient & large capital. So it can’t be an upstart. And Googles and Facebooks of the world can’t enter this category without coming under regulatory scanner.

I guess the future is in the hands of independent/ relatively independent network agencies to pivot.

Future for me

“The people who bug large organisations to do new things are socially awkward, slightly fanatical and politically often hopelessly naive.” – Rebecca Henderson

Ouch. I can’t agree more. Must learn to be more pragmatic and diplomatically wiser. I will be on the lookout for independent agencies who have the capabilities, capital & willingness to shift gears. Until then, I am happy trying to do the best strategic planning that I can do for my clients.

The business of transformation

WPP is now a ”creative transformation” company.

I am cautiously optimistic about this facelift. I hope there is more to come. And that WPP will go beyond the facelift and the simplification. fingers crossed.

But…

After Ogilvy‘s ‘refounding’ and Publicis’ marcel attempt and now WPP’s structural simplification & brand identity ‘reveal’, it feels as if the creative industry is in serious short supply of imagination & ambition.

I guess, it will be worthwhile to understand WHY these agencies feel the need to change.

Tumbling down the priority list

Firstly, mass communications’ relevance to fuel business growth is in decline. Digital has opened up newer ways of creating products and reaching, engaging and servicing consumers. So businesses now have far more levers to crank growth, whereas in past it had just a few – mass communications being the most ‘scalable’. Now distribution, service and even products are scalable.
So the obvious implication for advertising agencies is to –
a. Accept the reality  that brand building remains important, but it is one among many things that a company needs to do. So premiumise our services, increase the value of creative offerings. After all, branding might not be essential to everyone, but it still remains essential to many. But we are not doing that.
b. Or accept the elevation of other service partners at the table. Consequently accept the declining share of client’s growth spends. And go find ways to ‘scale‘, reach more clients.
c. Or, grow capabilities to service newer needs of business growth.

The key thing here is to commit to a path – either of these three. If we try to straggle two paths, we are bound to falter. WPP, Publicis and the rest seem to be trying to straddle.
In this light, the ‘creative transformation’ doesn’t signal a strategy at all. It simply feels like an articulation to assuage fears of irrelevance. It is not committing to any one path. It is more of the same old. It is simply reducing silos, but still functioning with silos. It doesn’t understand true integration of capabilities. They seem to operate with the logic that to gain a capability, we need to simply add a department. But they have no point of view on enabling people with different capabilities to work together, learn together. This remains a crucial problem to solve. 

The incremental evolution perhaps is in the right direction, but not big enough, not fast enough. WPP, Publicis and most other creative agencies are bound to be turned into second tier vendors in the new economy, unless they fundamentally change the way they work.

Theater of precision

Secondly, digital tools create the theater of precision. Data gets sliced, diced, bundled, anonymized, aggregated, dimensionalised, granulated, distilled, contextualised… and so on. Much of it is useful, much of it isn’t. For now though, data enjoys the hype among CxOs that advertising enjoyed in the last century. Advertising relished in the indeterminate and chaotic nature of human creativity, while data gives a false sense of certainty and precision. In absence of scientific temperament, a theater of rationality is stealing the show. Advertising industry’s reluctance to engage with scientific processes meaningfully has given rise to a generation of clients who feel that the industry is opportunist at best, incapable-of-reason at worst.

The advertising industry needs to rationally dismantle both, the theater of precision and the theater of mystic creativity. It needs to stop acting as an opportunist salesman that uses complexity and mysticism to its advantage. The time is up for that. Scientific temperament can help gain confidence & value.

So my question is, how exactly does ‘creative transformation’ take place? what is the thesis? what is the scalable process here to deliver this transformation? Is there a precedent to this approach? How do we know that this strategy is superior to others in helping clients grow?

Instead of starting with a brand identity & design exercise, I believe WPP should have started with a rational approach to define a new way of working together, a new way of being more consistent with driving results.

Start: The industry needs to focus on their ability to create real value for businesses seeking growth.
Stop: Focusing on justifying our existence, articulating our way into relevance, feeding the parasites.

Must you merge?

WPP’s game plan is pretty clear – simplifying the holding company’s ‘holdings’, integrating agencies and driving for greater efficiencies.
In the last few months, it has folded Possible into Wunderman (digital), merged Maxus and MEC into Wavemaker (Media), merged five design agencies into one Superunion (Design), amalgamated Burson Cohn & Wolfe (PR) and two attempts at mixing digital and creative with VMLY&R and Wunderman Thompson.

I hope this strategy works out. And I believe there will be a phase 2 to this consolidation with a layer of AI backed efficiency improvements in the future. But if that was the case, why would WPP have given away some of its stake in Kantar? From an AI strategy point of view, the research agency’s knowledge could be made useful in a specific way.
The sale tells me that they have either,
found no usable database or
have found no way to turn its existing knowledge into usable database or,
have a different AI strategy in place that doesn’t need research data. (which i find implausible, but hey, what do I know? I am a thousand miles from decisions and people who matter.)

Merging People

Coming back to the present, I really hope the objectives of mergers are achieved. The merger is supposed to bring together “award-winning creativity alongside deep expertise in technology, data and commerce.” My first concern is, does it really happen like that? Can creative companies successfully  merge their people, their capabilities? Is the sum greater than its parts? I tried to find answers to these questions in research papers, but couldn’t find any.
Anecdotally, I have witnessed (and know of) more merger failures than merger successes. I guess, data companies (epsilon) and consultancies (Accenture, etc) have been fairly successful in bringing in new capabilities. But agencies aren’t as well positioned to integrate other capabilities as easily.
Let alone integrating capabilities, integrating people with similar capabilities hasn’t always been easy. Look at any of the mergers in Indian advertising industry for instance. More often than not, legacy clients leave the merged agency as soon as founder’s grip on the agency weakens. A merged agency is fundamentally a leaky enterprise – the brand gets absorbed, people leave and so do the clients. There is no intrinsic value enhancement with mergers (apart from providing scale. This proposition was deal maker in the last century. It is hygiene now though.) I don’t want to take agency names here; a cursory look at the history of most of the merged agencies in India will testify.

So if merging is so difficult to pull off for a 100-200 people enterprise, wouldn’t it be exponentially difficult for companies with 10,000 people in employ each?

Scalability

There are specific processes through which say a Oil refinery’s capacity, Google’s computing power or amazon’s warehousing can scale. Before they scale, they would have a roadmap to implement.

I hope WPP has thought about the processes needed to scale successfully. There is much to unpack here.

What would a successful scaling look like for an agency? For physical infrastructure scaling, installation and servicing are easy to monitor and measure. A failure would be apparent soon enough – an oil spill, a data security vulnerability, service outage, etc. However, the results of a failure for creative industry would not be immediate.

What failures do we need to look for?
Our success is measured in Marketing effectiveness, Creative excellence. To make this  a reality, we need capable people working together. So we have four variables to track our success/ failure.

Marketing effectiveness,
Creative excellence,
Talent’s capability &
Ability to work together.

Effectiveness & creativity – essentially a track record. You can put a dashboard ideally. (screw awards. waste of time.) But you will have to wait a year or two to see if this works. 

The second two are interesting. They are about people. Companies merge, people don’t. So upon announcement people won’t acquire each other’s capabilities through osmosis. Nothing is going to change unless there is a systematic plan to help people improve their processes, learn new skills, move across departments fruitfully, and so on.

Publicis potentially can have that capability, if it improves its Marcel attempt.

I hope WPP has such plans afoot. There are two components to it – process improvements to make collaboration and learning easy & training programs. Again, if past is any evidence, I haven’t witnessed any meaningful program to improve my skills, help me collaborate or even to make me aware of new emerging tools. (Well, truthfully, there was one instance in my first year, where i lead efforts to build an in-house Knowledge portal. I wouldn’t say it was a grand success though. We learnt quite a bit with that project.) 

So I am skeptical of holding company’s ability to institutionalize capacity building. Agencies prefer throwing money at recruiting new talent, instead of systematically investing in imparting skills.

I hope WPP institutionalises efforts to plan for and measure improvements in capabilities and co-operation.

The sum total

Successful mergers create value that would have been impossible for the merging companies by themselves. For a commodities & service companies, that value might arise from process & cost efficiencies or competitive ‘moats’. Marketing services/ advertising industry is different though. For Wunderman Thompson to be successful, it needs to change its processes so that its data, strategy, creative people work together meaningfully, resulting in a new experience for clients – where the client shares a marketing problem and agency provides a plug & play solution utilizing mediums and people effectively and efficiently. This will require creation of bespoke tools for collaborative work. But knowing agencies I feel the management will go for off the shelf solutions, creating newer silos. I am hopeful though – after all I certainly don’t know as much as the industry stalwarts do. They perhaps know of a better way to integrate than the ones I am suggesting.

Here’s hoping for the best.

An alternative – decentralize

I believe, there’s a better alternative to this merging mania – improve processes & help distinct companies with distinct core competencies collaborate better in a plug and play manner. I have written about the thinking behind this approach – here and here. I will write a followup about exactly what this translates to in the near future.

Cheers.