Markets & Corona virus

This post is not about brands or advertising. I had recently started investing. And the complete equity portfolio now is in deep red.

I wasn’t smart enough to exit early on. Now the question for me is – should i absorb losses and exit (fearing recession) or should i stay on with the assumption that market will recover in a year or so.

What do we know so far:

  1. World is shutting down. Today, domestic flights were grounded in India. There are curfews in all major cities.
  2. Not enough people are getting tested. nor do we have the capacity to take care of them once people get infected. so we don’t know the extent of spread in India as of now and can’t have confidence in the governance to manage the situation well. some estimates suggest that the death toll from this epidemic in India would be around 1 to 2 million. This will mean healthcare infra crashing down.
  3. We are atleast a year away from cure/ vaccine. so we are likely to remain quarantined for a long time.
  4. Food, essential shortage will create chaos. govt aren’t prepared for such curfews. chaos and fear will reign.
  5. Without cashflow, how will companies survive? unemployment will rise sharply. and during curfew how are these many unemployed people going to rage on religion and diversionary topics like that? recession looks inevitable.
  6. what could ensure normalcy in a few months? if social distancing actually works and infections are within limts. if the curve flattens out. china is opening up in three months. maybe India too can open up in three months. it will be a slow start but that’s the best case scenario.

The scenarios

  1. Best case scenario: The lock-downs are efficient. Indian heat has reduced virus’ ability to spread. But even then, the high density and low hygiene standards means that the casualties would not be like Germany, but more like Iran. A complete quarantine is a near impossibility in India. so the best case scenario will require public-private partnerships to manage to healthcare load, reduce economic uncertainty with free rations, services etc. Job losses limited to tourism, restaurants, events, aviation, travel, personal services etc. manufacturing coasts along with some months of without pay shut down and govt assistance to companies to remain afloat. services to build capabilities to WFH effectively.
    This scenario will see Indian economy to first suffer slowdown in next quarter and recovery post july perhaps. my portfolio in which case will fall further 5 – 10% (its down by 25% now) and then start recovering.
    I give this scenario a 30% possibility. its an arbitrary figure which i will tweak with new information.
    Its less likely that worse case scenario because – for it to happen, many efforts need to happen by various stakeholders in good faith. Its simply easy for the world to descend to worse case scenario.
  2. Worst Case Scenario:
    massive spread of virus -> spiraling casualties -> gloom & doom -> companies running out of cash -> govt unable to support companies or people -> rising unemployment and indebtedness -> rising NPAs -> finance sector stressed -> demand slump -> Depression -> lack of info/ panic – > chaos -> mob rule and breakdown of social life

Given the right wing forces, rise of misinformation, precariousness of finance sector and of personal finances of most Indians, and lack of info about possible infections – the worse case scenario seems more plausible.

70%. will tweak it with new information.

so overall should take at-least some of my money out of market, since markets will move downwards in most of 2020.

but to make decisions regarding individual choices, i am planning to analyse the companies along following parameters.

<when i get time> damn. WFH actually keeps me more busy. the to-do list never gets exhausted.

anyways, here’s the factors. will update about analysis when i get around to doing it. i must, soon.

Factors to consider

Nature of markets

1. Dynamic systems

Markets are a dynamic systems with many moving parts that affect each other in unimaginable ways. at an aggregate level, the complexity multiplies – it doesnt cancel out. 

so be prepared for events that have asymmetric impacts, for events that would develop quickly and cascade in directions we cant anticipate and events that surprisingly don’t affect a change or affects change slowly over long periods of time. 

how will climate change, right wing political landscape, move to e-commerce… affect each other and the market? 

2. Long term dependence
“Past continues to influence the random fluctuations of the present.” 

So what factors in our past will haunt us in the Corona-virus epoch? what choices now will influence long term prospects of companies?

3. Market turbulence tends to cluster 

Mandlebrot says that markets typically have periods of high volatility with long lulls. Right now we are in the high volatility phase. we are yet to see more turbulence. 

4. Variable speeds 

One, market movements will be ‘fast’ now.
Second, some industries will bottom out now. some others may take years yet to bottom out. Need to figure out which ones will bottom out when. 

5. Emergence

What would emerge from current situations – what new organisations might emerge? new civic minded coalitions? religious extremists seeing corona as god’s will? new

what new habits and behaviors will emerge? surveillance and open access to health records? Increased hygiene routines? 

Increased legitimacy of online living – gaming, AR, e-commerce etc.

Global factors.

1. State of information.
If stock exchange is an exchange of information, we need to have confidence about how much we know. if people feel that there is lack of transparency and control, the market will remain volatile. 

Modi enjoys a messianic appeal. He can use it to reduce the volatility and showcase control and transparency of key information relevant to markets.  

Crisis is a good opportunity for the govt to embrace facts for a change.

Will it happen? i give it 50-60% probability. the event of 22nd march with claps is a test of his charisma. more mobilising will follow at war footing. some of it i hope for the good. and as the situation gets worse, hopefully govt will be forced to work in partnership with private companies and as such make relevant data public. fingers crossed.

2. War-time economy doctrine: who benefits, who suffers?

Whose infrastructure/ resources will the govt need to commandeer to say manufacture ventilators, test kits at a war footing? which hotels would the govt want to convert into makeshift hospitals? 

3. Crisis are the moments in history when great changes take place.
Will authoritarianism take hold or the ensuing tragedy of millions of deaths lead to stronger democratic institutions and a new political force? will the world take left or right?

4. Global shock
US goes into recession, Oil price shock, weakening rupee, supply and demand shocks due to disruption.

refineries, airline industries are disproportionately affected by the oil shock, demand shock.

as the world re-orients itself around corona virus – it will require new companies that can help the health workers work more efficiently, create services for the affected etc. 

A whole new economy is yet to emerge.

Company specific factors

5. Financial strength to weather the disruption for a year

the ones with ample cash war chest. the ones not depending on short term cash flow to survive. the ones with low amount/ no debt. the ones with no/ little obligation in dollars or other foreign currencies. 

6. Dependence and risk to work force’s health

well, this affects everyone. for whom does it affect less? service sector yes.? but where is the asymmetric advantage highest? mostly new-economy digital services, but which ones?

7. dependence on raw material whose supply might be affected

well everything is made in China. we might see China slowly get back to business in the coming months. but would some Indian companies take this opportunity to grow capacity and grow? Govt is pushing for electronic component manufacturing and pharma ingredient manufacturing. There are some opportunities here in the long term. 

but as the situation gets severe in India, it might actually be a very difficult scenario. local supplies, if disrupted, would be problematic for most manufacturing companies. 

we are likely going to see severe disruption to manufacturing in the coming months.

Consumer related factors

8. dependence on consumers whose demand is affected

As pandemic spreads, companies will lose employees, people might lose jobs, bread earners might die. Great gloom will spread. Consumption will go down. we are entering recession, no doubt about it.

Outdoor social economy will collapse. 

rentals collapsing in europe where airbnbs were reducing the rental supply. with corona, low tourism so property owners are moving to rentals. real estate has been fucked since a few years. this will be death knell for quite a few real estate players. but yay! i can begin to imagine owning a house one day. if i manage to keep my job/ and if not, manage to make enough money to save some. 

In the medium term though, social distancing means a full stop to consumption at restaurants, pubs etc. but the rent payments, bills won’t stop. but home deliveries are booming. maybe home deliveries will start charging premium as panic grows?

Work from home services are booming – conferencing, collaborations tools, broadband, telecom etc.  

Entertainment at home is booming – OTT, gaming etc 

People are getting bored at home – will they end up spending money on fashion online? boom or bust for myntra?

9. Balance of capital

Rich people with enough money on hand and strong enough cash flows but too worried about volatility in market, might end up spending it on luxury items? luxury cars, real estate, art, cosmetics etc. 

the vast middle class might return to FDs and public bank deposits. and away from MFs, stocks etc. so large established banks like HDFC might gain somewhat? the upper middle and middle class will save as much as they can. 

the lower class will feel the disruption the most. social distancing is already playing havoc on daily wage earners and even house helps. in rural areas the distress might get acute – constrained cash flow, fewer opportunties and gloom of corona deaths. 

They might find succour in religion (dangerous tilt to right for the nation?), alcohol, small indulgences (snacks) and cultural identity based events/ activities?

Alternatively, will the urban rich/ upper class flee to hinterlands creating new economic opportunities in the interiors?

The very real Digital/ Mainline divide

Advertising business is a messy beast. The mess is a function of different medias it caters to – TV, Print, Digital, OOH…

These medias are fundamentally very different
1. The way it is consumed –
TV – passive, lean back, long form
Print – scan, quick, purposive, linear
Digital – exploratory, non-linear, lean in, active…

2. The way its content is created
TV – relatively high production value, expensive, periodic but not very frequent (more frequent than cinema, less than digital), hi-def motion picture
Print – more frequent that TV, less than digital, static, still pictures
Digital – many kinds of messages (txt, gif, movie, sound..), many frequencies, all possible resolutions (from hi-def movies to low def gifs), variety is intrinsic to it.

3. It’s effect
TV – appointment, collective, shared utopia, modernist
Print – stand-in for truth, modernist propaganda, images to navigate life by
Digital – gives agency, enables to do more, individualistic, post-modern, post-truth, hyperreality

4. Time scale
TV – takes long to create and used to linger for long in conscience. Culturally significant still. A good TV ad campaign can run for years.
Print – Can be used to drive a certain imagery in culture. can sustain for long, but often used tactically for temporal claims.
Digital – impulsive, in the moment, of the moment, pulsating with the pulse of the world. it is forever adapting, moving, remixing. it is forever building over history. It is a never ending meme-machine growing ever taller, larger.

How can one business align its processes to cater to these different medias?
The answer is inefficiently.

There are integrated agencies for sure. But there isn’t much data forthcoming to argue that they are more effective and efficient than a brand getting its branding done through multiple specialist shops. My bet would be on the latter.

The business incentives, economies, ways of working are different for each of these medias. And advertising companies are a mess because they have to reconcile with these divergences.

More often than not, agencies do not have a thesis on how to tackle the issue of multiplicity of media modes. They simply go through the motions. The chaos gets romanticized and junior poor suckers end up spending needless nights and days getting artwork out for the brands. There is no easy way for one team to manage across these mediums.

The farce of integration

I have been working for one ‘integrated’ agency after another for the last ten years. But none has been truly integrated. DDB was the most enthusiastic of the lot who put their money where their mouth was. Theirs was the tried and tested strategy of divide and conquer – create departments and get the leaders of the departments to meet often. In my experience, they were the best at this game. The leadership truly made efforts in knowing each others work and syncing their efforts. It’s down to chemistry though. The structure itself is not amenable for true integration. And I witnessed DDB ten years ago when digital was a completely different beast. Big Data, AI, marketing services… the game is different now.

I am currently working in Wunderman Thompson. With the merger, Wunderman’s data capabilities were supposed to work seamlessly with JWT’s advertising capabilities. I am yet to witness this synergy. Perhaps it down to the fact that most of our existing clients’ scope of work is traditional in nature. We get digital content projects on an ad-hoc basis. Often the economies of these are very different, necessitating different kinds of contracts. It’s understandable.

Social media, for all the songs sung regarding its importance, still doesn’t earn much monies for agencies. TVC still do.

Marketing services and analytics is a whole different ball game altogether. Frankly, I don’t even have the capability to serve that need.

To create a truly effective TV ad requires thinking that is very different from the most effective digital campaign, which in turn requires fundamentally different kind of thinking to generate leads with AI and so on. One single person can’t’ possibly master and act on more than two skill sets. And one team can’t possibly orient themselves to serve the need of both social and data needs or social and TVC needs.

If a person can’t learn more than two capabilities and if a team can’t orient and shapeshift to service two different medias, why even bother?

Lastly, even if miraculously someone does it – what brand are you building? integrated is a much abused capability – everyone claims it, nobody truly delivers it. I mean, clients who spend more on TVCs, prioritise that expertise when they are looking for an agency. Clients who prioritise digital, likewise prioritise that skill. the other way of looking at it is, the ones who prioritise TVCs, compromise on digital and vice versa.

The pitch

The pitch for integrated agencies is that of brand stewardship. People who are masters of branding will co-ordinate the work on the behalf of clients.

But why can’t that be sold as a specialist service as well? The question is does the integrated package deliver higher premium or would the un-bundled specialist services deliver higher premium?

So what does it all mean?

Mergers and integration is inefficient for branding. The future is fragmented specialism. Modern technology enables efficient co-ordination among multiple ‘vendors’. There’s no reason agencies will be exempt from this. For most other things, big corporations already have SAAS and teams to coordinate between thousands of vendors.

In this scenario, if I were a holding company, i wouldn’t be integrating. Instead I would be spawning small, agile, super specialist shops who can do what they do best. And on top of this layers of specialists, i will invest in code and brand leaders who can deliver the service of coordination and brand safety. Value unlocked.

I would bet the merger experiments to fail slowly and then suddenly in the next few years. I bet new smaller specialist agencies to pop-up to take up the space ceded by erstwhile global agencies if holding companies don’t invest in reinventing their business model.

Good places -> Good routines -> Good work.

Routines have a certain magical quality.
In my experience, good routines create a virtuous spiral – good routines increase efficiency, work quality and satisfaction with work. You feel in-control, you manage relationships well enough and manage to have fun while getting shit done.

The secret to forming these routines isn’t in our ‘will power’ or whatever the new-age gurus want us to believe. It is simply a function of good work atmosphere where we look forward to meeting co-workers and doing work together. (or at-least not actively hating the work or colleagues.)

In one of my earlier roles, I was handling in excess of 10 brands. It was made possible because clients were kind and considerate (so scope of work never was in doubt and we worked on actual problems, not manufactured ones. This was made possible by senior management setting the right expectations.), servicing team was smart and earnest (so I could delegate some amount of strategy work with them. This was possible because they were driven to grow in their career by the management.) and creative teams actually trusted me with my briefs and feedback (so we interacted more and more fruitfully. The agency had a culture of respecting the planner’s role. So when I entered the role, I did my best to preserve that expectation too.). The owner of the agency was instrumental in inspiring a hunger for success. He was a hard taskmaster but was generous too. All of these things allowed me to form a coherent routine.

I would start my day by writing for an half an hour – often this blog, or notes on a strategy project or a brief. This habit of writing everyday would intellectually stimulate me. Due to this, I would enter any new project with a charged up mind.

The second habit was to clarify the brief during the meeting itself. I was lucky to get some good clients who would engage in a dialogue and not misunderstand the questions with ego. Often, a well articulated problem statement is enough to kickstart great creative work. I would try to get that agreed upon during the first meeting itself.
The third habit was to write my brief as soon as I got back to office from the meeting, often on the way to office itself. I was usually excited by the brief, would have a few hypothesis already in my mind. Writing thoughts down helps find out errors in thinking. It helps build a coherent logic. So my argument/ ppt and briefs would be done on the day of meeting with clients itself.

Fourth habit was getting my brief vetted with the Chief creative officer. Thankfully, it was an excellent partnership where conversations led to interesting possibilities and ideation.

So essentially, good people enabled me to form good routine and consequently we did some great work together.

On the other hand, if there is no routine – chaos ensues. Chaos ensues because people don’t feel that they are in control. And that is a function of how badly the leadership runs the organisation.
At another place, we were forever fire-fighting – either imagined or real. Often because senior management had not set right expectations with clients or right processes internally. The work is forever delegated and junior-most person does all the work. this approach is bound to fuck up. A place where senior people do not deign to even write down their thoughts in an email or put together a slide or even think of an idea is bound to fail. The place was stratified – those who work as underclass, those who brow-beat (manage) the underclass during meetings/ email/ phone call as the ruling class. This kind of stratification cannot possibly lead to respect for work and hence creation of good work.

People would turn up late at work, because they were dreading what was going to hit them. So even a slow day would not bring a break, it only meant limbo.

There was a deep mistrust among people and leaders didn’t do much to change that. No one was celebrated, but blame was distributed handsomely. So people were busy avoiding blame, not chasing possibilities.

Which meant, I couldn’t depend on servicing team for basic things like competitive analysis, creative teams to listen to my briefs in good faith or have an honest conversation, leadership team to solve issues and not blame in return instead.

So we couldn’t plan our work well enough. Which meant no possible routine to build.

Without a drive to win, we kept on dragging. Projects took needlessly long time to get completed. There were numerous meetings that only served to break the flow and waste time. The agency was forever on backfoot.

The agency is on a downward spiral. The organisational structure ensures it. It is not led by owners but by ageing bureaucrats. They are whiling their time until they hit retirement. They hide behind hierarchies. They are jaded and can’t will themselves to learn new things. Which is not to say that they don’t know the buzzwords though. They throw meetings and new hires at new problems, instead of pausing, thinking and honestly changing something about the way they work. They have no thesis for their future. They are hurtling blindly into future and they won’t let the young unfetter their vision. They are doomed.

People are not idiots. They sense this. They call it bad energy. They call it a dump. The sincere most among them try to patch things over, work hard. The cynical merely enjoy the chaos. Neither can form a routine. Neither can work meaningfully.

Slow down to break the stride of bullshit surfers

Surfing Notions

Is candy no longer an impulse purchase?
Is the world still on the ‘liberal progressive’ journey?
Will Amazon/ Facebook ‘surely’ cede control to regulators?
Will they fight misinformation honestly?

From the trivial to the profound, I find myself in the midst of rushed debates where beautiful questions are raised and then summarily decapitated with bland certainties informed with nothing but an overactive ego propped up by a scrap of a half-baked notion. People in power build straw arguments on the back of one ill-informed notion after another.

Surely, candies are not impulse anymore because people are asking for leader brand by name. ergo….
Surely, people of the world still want freedom, liberty, equality. (they better be. my whole worldview depends on it. if they don’t, who am I? what would I do with my fractured beliefs?) Also, How else to justify the progressive brand shtick? Also, how else to win at gold tinged bubbles named Cannes/ Effies?
Surely, the big tech will cede control. (I don’t even want to imagine the alternative. The owners are heroes, someone that I could have been. I can’t imagine them as villains or worse as simple humans capable of pettiness, narcissism or greed.)

Meaning drowned under the deluge of notions

Questions are such beautiful things. They are an invitation to explore, to understand, to meditate. They tease us to dig deeper, to dive in the richer complexity of the world.

Instead, questions are increasingly treated as simply the setup for a punchline.

This is a profound shift. It is the curse of the information age. The deluge of information is so profound that we can survive only by surfing it, not diving in it. The victim of this is meaning. meaning doesn’t matter anymore. what matters is appearance of meaning.

Information theory X Modern day management

Successful Managers embody this. They confidently keep spouting intelligent sounding bullshit that they can get away with. In Trumpian times, the secret of success is to overwhelm the others with bullshit, the constant stream of bullshit rendering the logic / truth seeker impotent. It is the DDOS attack on consciousness. Overwhelm, confuse, slash and burn.

Bullshit is always faster than truth. Truth emerges only slowly, deliberately. Bullshit is not taxed with effort or intelligence. all it requires is confidence and ability to surf over one straw-man argument/ logic/ fact to next.

Slowing down

As the responsible one, as the people who actually get shit done, it is important to slow down, to break the stride of the bullshit surfer.

It is important to throw the lasso of reason on the question raised and hold onto it.
Why is Candy no longer an impulse purchase? or did you mean that they are impulse purchases but brand matters? so some kind of mints solve a problem (post-smoking masking) while some don’t? or has there been some fundamental shift in the way human desires are triggered?…
So world is actually much more complex now with the rise of right-wing politics? the David of progressive politics versus the Goliath of racism/sexism/…ism is the right narrative to build? So the statement is a political wish, not a fact?
So why would the big tech cede control? is it in their interest? has there been any historical precedent of people ceding control willingly? what forces have been successful in ensuring that powerful cede control to the less powerful?

If we are persistent enough (and polite enough) with our questions, maybe we can unearth the real questions to answer.

As a planner, it means to physically slow down the meetings, hold clients longer until sensible questions and answers emerge.

As a planner that means to say no to unimportant projects that keep you needlessly busy. Need to free up that RAM.

It means to point out bullshit from where ever it might be emanating from – senior management/ clients/ fellow planners/ creatives… and politely help them arrive at a sensible goal to chase.

Future of Creativity: Convivial Creations & Collaborative Commons

“Man is born to inquire and create, and when a man or a child chooses to inquire or create out of his own free choice then he becomes in his own terms an artist rather than a tool of production or a well-trained parrot.”

Wilhelm von Humboldt (Chomsky, 1970)

Creativity is a fundamental feature of the creature called human. It’s not a plug-in. It’s not a bug. It’s the defining feature. Take away her freedom, her creative pursuits; you might as well take away her life.

Even as the whirlwind of technological changes transform our lives, the creative spirit of humanity remains alive – adapting and changing perhaps, but never getting extinguished. In fact, new technologies and platforms are enabling people to be creative in new ways- giving people power to be producers and not just consumers. With new found power, people are creating new currencies, building guns in their garage with 3d printing, imagining new governance models and even editing their own genes with CrispR. The brave new world is full of possibilities.

This is truly a watershed moment in the history of human creativity. The world is going through a creative renaissance. But can the same thing be said about Creative Agencies? It seems as if the world is racing ahead even as agencies remain fixated on the rear view mirror, its glory days.

It has never been as convenient as it is now to create asymmetric disruption with creative innovations. By Asymmetric, I mean the disproportionate impact that a small group of people can have. Consider WhatsApp. The company that created WhatsApp consisted of a handful of people. The app they made now facilitates communications between billions of people across the world. Or for that matter, consider the alleged Russian hackers causing havoc with US democracy. Both are cases of relatively small groups of people creating big impacts in the world.

Historically, creative agencies thrived in a world where the asymmetry didn’t exist to this extent. The brands with more money hired better creative shops and spent more money on media to create culture defining commercials. They created a shared consumerist utopia that continues to shape our worldview to this day.

The organisational structure, the technology they used, reflected this reality. The tools of trade were inaccessible to common folks in proximity & capability. The structure was hierarchical, reflecting the importance of a few people’s expertise in the organisation. The organisation practically revolved around a few stars. This suited well for a world where speeds of culture dissemination were comparatively much slower and people had few choices when it came to consumption of content or brands.

The world has completely changed now, but the advertising industry has not. Speeds of cultural dissemination and tool of creations have accelerated, but we still think through the prism of slow-moving culture of film scripts & print layouts. The hierarchy and culture of hero-worshipping doesn’t always allow for younger talent to autonomously react to emerging cultural memes. And lastly, the tools and capabilities in an advertising company now are in no way superior to that of a successful group of Instagram influencers.

How can advertising industry excite its creative people if the industry is a laggard now and not a vanguard? What new roles can agencies assume in this amorphous, ever changing world that is as exciting at its fringes as it is at its centre?

To answer these questions, lets first get a sense of the nature of the beast we are talking about.

1.     Shift focus from Titillating tech to Transformative Tech.

Digital technology has upended long established ways of working. People working in the industry are fundamentally confused about the impact of technology on the industry. There’s merit in revisiting the thoughts of the great Marshall McLuhan here. He famously said, “the medium is the message”. His statement suggested that a medium/ a technology, affects the society in which it plays a role, not by the content delivered over the medium, but by the characteristic of the medium itself.  We shape tools for our ends and in the process, the tools mould us.

When we talk about Technology, we have been focusing on the ‘content’ of technology – ‘which tools should our creative partners use? Which Social Network are people using?’ The truth is – these questions are trivial at the broader level. Facebook, the social media platform, didn’t upend our business models, by monopolising attention of people. The secret weapon of the platform is its egalitarian promise of enabling people to do what was not possible before. New platforms like Uber, Amazon, Facebook, Google create fundamentally new ‘agencies’ for people – new capabilities that people didn’t have access to before.

Platforms are egalitarian spaces for enhancing one’s agency – in a sense uber provides hyper limbs on demand, google is a vast brain at our disposal and Facebook is the nerve-centre of our social lives. These platforms are enabling people to supersize their capabilities and be creative in new ways. That is the fundamental promise of platforms.

The promise is not just about ‘liking’ a brand or dancing to a Tik Tok track. The promise is that of building on top of the new freedoms, new ‘agencies’ that platforms offer. Consider the brand ‘Glossier’ for instance. It turns its packaging into an interactive canvas for users to personalise their products with stickers, designed for Instagram followers. On the other hand, consider Google search and Amazon Echo’s impact on Brands. L2 Inc.’s research suggested that queries for non-branded products increased in every CPG Category, at the expense of branded products! For everyday use product categories, brands might soon become redundant. One of the freedoms that people expect from platforms is the freedom to not remember brand names!

To survive in this rapidly evolving world, agencies need to learn from these platforms.

 The tech that we should focus on is the one that helped them build the platforms: The tech that helped them create new agencies, new capabilities for humanity.  To do that we need to first look at how they built their teams – the way they work, collaborate, take in feedback and improve.

We don’t need to ape them. But we surely do need to learn from them and identify the systemic changes that technology can help us introduce.

Creative transformation principle #1

FOCUS ON THE WAY TECH CAN IMPROVE THE ‘SYSTEMS’ OF OUR INDUSTRY: THE WAY WE WORK, COLLABORATE, RESPOND. 
HOW CAN WE EXTEND AGENCIES OF PEOPLE TOO? 
DON’T FOCUS ON THE PARTICULAR TOOLS OF CREATIVITY. THOSE WILL KEEP CHANGING.

2.
From mass media manufacturer of desire
To Culture Creator among people

Unlike past, when a cultural content would last for years, big campaigns made sense. In an age where even blockbuster billion-dollar films get consumed and relegated to past in a matter of a few months, do planned campaigns with long gestation period and diminishing lifetime, make sense?

Brands might as well play lottery with that money.

Now, content is consumed and created instantaneously, built over, remixed & spread memetically. By the time an agency or a client catches hold of the coat-tails of the trend, the meme has transformed into something else. The MEME is ephemeral and yet leaves its imprint on the culture by letting others build over it. This duality of ephemerality and timelessness of memes is quite beautiful and intriguing. Even digital agencies, with their siloed structures, have not even begun to appreciate how to deal with this new beautiful beast. Agencies are simply not BUILT to host, curate or influence these memetic trends.

CREATIVE TRANSFORMATION PRINCIPLE #2

BUILD FOR INSTANTENUOUS CULTURE OF CREATION & CURATION. 
 BUILD FOR PARTICIPATING AND CREATING AT THE SPEED OF CULTURE.

3. FROM IVORY TOWER OF EXPERTS TO
FERTILE GROUND FOR DIVERSE INTELLIGENCE

Digital collaborations are increasingly frictionless, due to the zero marginal cost paradigm. This has enabled people from across the world to network and work together in new ways, that was not conceivable even a few years ago.

Take the case of FOLDIT for example. It’s an interesting experiment that gets gamers to solve complex long-standing scientific problems. Anybody can participate in these ‘games’ – some are high-school students, some without a science background. Yet, this collective of video gamers helped monumentally in a decade long effort in mapping the structure of an enzyme used by retroviruses similar to HIV. (This is references from Joi Ito & Jeff Howe’s book, Whiplash)

The experiment harnesses the superior abilities of gamers of recognising patterns, an innate form of spatial reasoning that most of us lack. The organisers of experiment filtered through hundreds of thousands of people who are experts at this very specific skillset. This they did, by using the data generated by the game, intelligently.

Big Data’s big advantage is in finding the precise capabilities, trends, insights that would have been simply not possible to find otherwise.

Among the many other implications that this has for advertising, I want to bring to your attention, one fundamental myth that ails this industry. The myth of expertise behind closed doors.

If gamers can help microbiologists in their very specialised tasks, why can’t salesmen & bus conductors help us solve brand problems? Why can’t agencies harness big data to find and match expertise in ways that allow it a greater play in culture? (And Publicis’ Marcel is not the way for it. I have a few ideas, will share it in a book I am writing now.)

The way we leverage expertise is counter-productive. The prevalent practice is to hire creative talent and make them work exclusively on select client projects. But history tells us that best ideas come at intersection of minds, in open fields of free association, when mind delves in diversity-rich societies. The closed doors of agencies only accelerate the decay of creative thought processes.  

For effective creative transformation, agencies need to engineer greater diversity in our work-streams.

Creative transformation principle #3

ADOPT TECHNOLOGIES & POLICIES THAT ENHANCE DIVERSITY OF EXPERTISE.

4.   FROM AUTHORITY TO EMERGENCE

Diversity leads to dialectic dialogue. The organisational systems and incentives need to be designed in a way that these dialogues build over each other and not end in internecine politics. For that to happen, the management needs to cede control strategically. The power must move away from the centre and towards edges, become fluid and transitional. An organisational chart of an agency should be closer to the participatory democracy of Switzerland rather than the iron fist of Soviet communist party.

Joi Ito & Jeff Howe, in their book Whiplash, make a persuasive argument for this shift. Traditional systems depend on decisions made at the top. Consequently, the processes are slow, encrusted in layers of bureaucracy and encumbered by a conservative proceduralism.

To respond rapidly, the organizational structure must allow for ‘emergence’. Emergence is the ability of a collective to do something that individuals couldn’t do on their own. Ants exhibit it when they navigate challenges to their colony or to source food, without a central decision-making body. They do so, by following a few simple principles encoded in their genes that guide their behaviour around certain stimuli. 

There’s a lesson here. Organisations that institute simple principles which empower autonomous behaviours among its workforce can respond to new threats and challenges much more effectively. This is already happening to an extent with online tools that reduce much of the friction that defined business in 20th century – in raising capital (with Kickstarter), in communicating (with Slack/WhatsApp), in manufacturing (with 3d printers, Shenzhen supply chain) and so on. With on-demand manufacturing in Shenzhen, on-demand access to cloud with AWS, on-demand access to capital on Kickstarter/ VC, on-demand access to talent through gig-economy, anyone can respond to an emergent threat/ opportunity now and start an organisation. 

It’s a brave new world out there. To navigate changes in these rapid waters, we must take a few brave decision and pivot towards being an emergent organization.

Creative Transformation principle #4

RESILIENT ORGANISATIONS ALLOW FOR EMERGENCE. 
CREATE ENVIRONMENTS & SYSTEMS IN WHICH PEOPLE CAN BE FREE TO CREATE, INQUIRE & RESPOND AUTONOMOUSLY. 

5.    FROM WATER–TIGHT SILOS TO PERMEABLE SYSTEMS

The creative industry clings dearly to siloed structures. When traditional agencies were found wanting in their digital capabilities, they created a separate department for that. Now digital transformation is the talk of the town and voila! There’s a sister concern catering to that demand. It is almost a knee jerk reaction. Need to increase gender diversity – hire a gender diversity officer. The ideas have been lagging in execution? Create a position of chief delivery officer.

For every objective, the modern agencies simply hire a person whose headache it would be to run the agenda. Agencies these days are ballooning with senior level hires who seem to spend more time convincing clients that transformation/ diversity hire/ delivery indeed is improving, rather than systemically doing something to solve those problems.

The costly hired hands can’t do much anyways. In a global firm, how can a person or a department truly influence other departments? The problem is systemic, the solution too must be systemic. It can’t be anybody else’s headache. It has to be the CEO’s headache.

How does an agency CEO deal with this situation effectively? By enabling a more permeable culture – getting more people to work/ interact with people from other departments – agencies can improve diversity of thought and create more opportunities for emergence of creative opportunities and responses to threats. Intellectually, the most fertile grounds for innovations are the intersections of an organisation.

CEOs should work towards ensuring a permeable structure that rewards exchange of expertise, inter-departmental conversations and ability to self-govern.

Creative Transformation principle #5

USE TECH TO INCREASE THE OPPORTUNITIES FOR PEOPLE FROM VARIOUS DEPARTMENTS TO WORK/ TALK WITH EACH OTHER. INTELLECTUALLY, THE MOST FERTILE GROUND IS AT THE INTERSECTION OF DEPARTMENTS.

Summation

At the heart of the issue of Creative transformation of our industry are people who create and inquire freely. The industry will thrive as long as these creative heroes have an enabling, free and autonomous environment. For them to rise to the challenge of changing times, their environment must evolve along the following principles.

  1. Focus on the way tech can improve the ‘systems’ of our industry: the way we work, collaborate, respond. Don’t focus on the particular tools of creativity. Those will keep changing.
  2. Build for instantaneous culture of creation & curation. Build for participating and creating at the speed of culture.
  3. Adopt technologies & policies to enhance diversity of expertise.
  4. Resilient organisations allow for emergence. Create environments & systems in which people can be free to create, inquire & respond autonomously. 
  5. Use tech to increase the opportunities for people from various departments to work/ talk with each other. Intellectually, the most fertile ground is at the intersection of departments.

It will do well to remember Ivan Illich’s famous words when we plan for creative transformation. People need tools that extend their freedoms, not limit them.

“People need new tools to work with rather than tools that “work” for them. They need technology to make the most of the energy and imagination each has, rather than more well−programmed energy slaves.”

Ivan Illich, Tools for Conviviality

Four Principles for Building Brands in the Climate Change Epoch.

How dare you.

You have stolen my dreams and my childhood with your empty words.

Greta Thunberg

How dare we?

Even as ecosystems collapse, climate change exacerbates refugee crisis and our survival becomes more and more precarious, we continue to go on with our business as usual. We tell ourselves that it’s someone else’s job. We tell ourselves that market will correct itself. But will it really? Do brands & brand-creators really have no role to play in the fast approaching tragedy of climate change?

Brands alleviated the pain of the Sisyphean tragedy of modern capitalism. Brands taught the world how to want. Brands gave the notion of free will and choices when it comes to consumption. It made the powerless feel powerful – that their choices, their consumption mattered. The consumptive soma that advertising created, filled the world with euphoria, making people forget about the differences that divided them, for a while. The promise of abundance, growth, prosperity united the world in a beautiful hope.

Essentially, brands created the over-consumptive world that is now hurtling down towards climate catastrophe. If brands, collectively, had a role to play in getting us to where we are, we surely can find ourselves a role in the new world. We can be one of the guardians of humanity in the new epoch of reckoning with the abundance-without-consequence era. We must.

Gradually and then suddenly

We humans are reasonably capable of imagining future worlds, of estimating the possible shape of things to come. Climate change won’t come as a surprise to many. However, what we positively suck at, is estimating the speed with which we rush headlong into the future. No matter how well we might estimate the future, we always arrive there surprised.

 Most Brands too would find themselves unprepared to cater to a world that has suddenly shifted on its consumptive axis. Climate change awareness is increasing rapidly. Corporates and brands need to catch with the rest of the global population.

To ensure that brands don’t fall through the cracks when the chasm of climate-change-consciousness opens, we need to start charting a course for our brands for that future, right now. Like a stock exchange, where it is nearly impossible to gauge when a stock’s price will bottom out/ max out, it is just as impossible to predict when the cultural tipping point regarding climate change would pass.

Climate change will become an all-encompassing social reality sooner than later and there’s no time better than now to start working towards it.

Brands in Good faith

The problem with fighting an amorphous, all-encompassing situation is its overwhelming nature. There are no ready answers. There isn’t even a complete appreciation of the problem. At the first instant when humanity confronts reality of climate change, our faces are painted with shades of bafflement and our spirits shrink rapidly with the recognition of what we have collectively done.

Our instinct tells us to deny, to dust the awesome, under the carpet.

But the time has come for each one of us to be bigger than that: To muster the courage to see the situation as it is, to feel helpless along with others and to seek out help and help each other out.

Time has come for brands too, to examine the world it created, in good faith and be prepared to change RADICALLY: By seeking help, by collaborating with other organisations.

Climate change poses an existential risk. And as such, every organisation, every individual must be a soldier in the fight against our own extinction. It is not a fight that one can opt out of.

The primary ‘purpose’ of every organisation in 21st century must be to help humanity survive and thrive as climate change’s impacts become more and more apparent.

A comprehensive awareness of our brand’s impact on the world is critically needed, the assessment of which, must be done in good faith.

4 Principles of Building Brands in the Climate Change Epoch

Prof. Jem Bendell’s paper, ‘Deep Adaptation: A Map for Navigating Climate Tragedy’ has been deeply inspirational to me. I have used his Resilience, Relinquishment, Restoration framework to inform the four principles of brand building in climate change epoch.

We, the brand-builders and brand owners, must ask ourselves,

  1. Does our brand’s existence harm anyone in anyway? If yes, how can we change?
  2. How do we help people overcome emerging challenges?
  3. How much are we willing to give up in the interest of humanity’s survival? How do we plan to relinquish things that might make matters worse?
  4. What in our world can we help restore and strengthen against the coming dangers of climate change?

1. Does our existence harm anyone?

A brand might be fighting against patriarchal standards of beauty, but if its packaging ends up clogging world’s oceans, the net impact is negative, isn’t it?

The time where brands could externalise environmental costs is over. As climate change consciousness takes hold, a brand would be forced to reckon with every decision it takes, every act it perpetrates. ‘Eternal vigilance’ will be the price of humanity’s survival.

2.    How do we help people overcome emerging challenges?   

A consumer’s need is a market opportunity. With climate change, there will be newer opportunities for brands to cater to. However, unlike 20th century, where profit motive and shareholder returns were the Raison D’être of corporate (and hence brands) existence; 21st century brands cannot afford to be sociopathic. Profit must be balanced against ensuring equitable access. As economic inequality increases, brands that profiteer are bound to tip the world towards violence and anarchy.

3.     How much are we willing to give up in the interest of humanity’s survival? How do we plan to relinquish things that might make matters worse?

Going forward, relinquishment would be an integral part of our way of life. We can’t have it all. Science tells us that there are limits to resource exploitation and their rate of renewal.

This impacts the fundamental aspect of capitalist economies: competition. Competition can’t externalise its cost anymore. Competition can’t run unchecked.

Industries and brands would need to compete in a new scenario where the most aggressive player gets kicked out. Sportsmanship, if not exhibited, will be enforced soon enough with regulations.

In this scenario, brands must be willing to relinquish things that might give them an advantage but are detrimental to people. Can brands relinquish profit margins that affect access to critical medicines for climate affected refugees? Can a fast food brand relinquish its star of the menu – beef burgers – to reduce methane emissions? Can an electric motor company relinquish its IP and help accelerate adoption of green tech?
Some brands are already doing the right thing. Consider Tesla and its open sourcing of IP for its electric car designs and Neuralink.

4.    What in our world can we help restore and strengthen against the coming dangers of climate change?

Would you want your children to grow up in a world where lakes don’t exist, where urban birds are extinct, where traditional dances and festivals have been confined to documentaries?

Over the last few centuries, we have been losing much of humanity’s treasure trove of indigenous knowledge systems and cultural practices. Embedded in these knowledge systems are secrets to ways of living in harmony with the world, ways of appreciating beauty, methods to survive with natural world.

 Brands can find purpose in helping restore some of these. Restore a lake, restore a cultural practice, restore a community’s way of life.

***

The world is too beautiful and wondrous to give up on. It’s time for brands to engage in good faith with the world. It’s time for brands to help humanity thrive as climate change accelerates.

I would be happy to work with brands in this journey.

Perils of specialism

In the age of specialism, everyone’s an expert.
And when everyone’s an expert, no one listens to others.
And when no one listens to others, the human collective cannot work together consciously. It can only work together through the specialist narrow systems of incentives and capital.

Narrow systems of incentives are a recipe for disaster. For instance, when growth is the only incentive, climate & communities become the ‘externalised’ victims. And the bubbles of specialism do not let emerging threats and opportunities be addressed by humanity with an united front. Look at climate scientist crying hoarse with urgency, while wall street bankers go on griping about growth as if without a ‘skin in the game’ of human survival.

End of the world as we know it.

Specialism creates bubbles of concentrated wisdom that does not cross-pollinate with ideas from other stream and adoption of those ideas with appropriate urgency (or not). Any resilient system needs diversity, and specialism doesn’t allow for that diversity to bear fruits.

The only way out of current challenges of polarisation of societies, increasing inequality & climate crisis is through incentivising multiplicity of perspectives, capabilities, functions, goals and enabling cross – communications & intermixing of work streams.

Must embrace multiplicity and diversity in our lives, economic systems and work culture.

The end of Monoculture and what that means for agencies

Flying over Kuala Lumpur, one can see huge expanse of palm trees, beautifully arranged in rows and columns. Fly over Thailand and you would see similar geometry playing out with rubber trees.
The human sense of geometry imposed on nature, seen from the human invented vantage of flight. It’s wondrous and beautiful and awe inspiring.

What you saw was monoculture in its full glory. Monoculture is beautiful for the bird’s eye, but it is destroying the biodiversity of this globe. We might wake up to a world tomorrow, skidding to a halt, when the rubber plants in Thailand are infected with deadly fungus. Say bye bye to tyres, grips, stethoscopes and condoms. It’s the end of the world as we know it.

Monocultures make us vulnerable.

A similar monoculture had been taking root in the 20th century. The memetic monoculture of TV and mass media.

We had shared cultural references – shaktimaan, ramayan, chandrakanta, hamara bajaj… it was easier for brands to be built with ‘campaigns’; one iconic campaign and you are sorted for the decade. agency leaders were celebrities and being in an agency felt great. After all, advertisers were the architects of the monoculture. One culture to rule them all, and advertisers were molding that ring. We wielded great power and we rue loosing hold of it.

21st century is different though. Internet is the fungus that has killed the monoculture of mass media. These days I am hooked to The Bugle podcast by Andy Zaltzman & Post Malone’s song, Sunflower. And no one knows of my addiction to these content pieces – not even my family! I am consuming that content mostly by myself. Unlike the 20st century where content was sparse and people welcomed content, we live in a world where we shield ourselves against the onslaught of it. I don’t want your forwards and in return i won’t send you links to podcasts and videos i like. 🙂

From mono culture to culture of one! The world has been turned upside down.

What does it mean for agencies? Isn’t it obvious? advertising was the powerful ring to rule them all. Now that ring is destroyed. You might create campaign that is creatively 100 times better than Fevicol’s legendary campaigns or Nike’s just do it campaign. But unless those efforts are now backed with content – retail – experience strategies, you are bound to sink.

The point is not that advertising is dead. But rather that it’s relevance is dwarfed now. It will always exist, but no longer in the spotlight, but it will grow in the shadows.

It will remain an important tool in attempting to create shared cultural references. But it’s ability to do so is being challenged with end of monoculture.

Strength in Diversity

Marketing gurus like Mark Ritson & Les Binet are ardent advocate of the notion that advertising, especially TV advertising, is crucial in creating that shared cultural reference, the brand. I don’t dispute their claim. But I wish they wouldn’t discount the opinions of people who feel that software will eat the world, beginning with advertising world.

Mark Ritson’s argument is simplistic – look at the number of people spending time on TV! Look at people talking about ads during superbowl! TOM Matters!

Yes it does. No one’s discounting it. Otherwise, we wouldn’t have seen growth in ad spends.

What is being questioned is the primacy of mass media and TV in particular. And that is an excellent question!

With proliferation of medias, strategies, approaches… the diversity is strengthening the capitalist culture. The new culture might require more brands, perhaps fewer platforms and a billion segments of consumers who consume things in millions of different ways.

That is an opportunity to advertising agencies, not a threat.

A brand now needs to do more – engage in culture more, meet more needs, be more proactive, delight more often…
Why fight and complain about it?

It’s great that the ‘big idea’ is dying and marketers have to do more, improve faster to retain customers. this is natural in the paradigm of growth through fast feedback.

By fighting it, all we are doing is showing our ignorance, our inability to adapt. we need to Pivot.

Here’s how – Pivot.

Moving through time

We can count on time to move ahead regardless of anyone or anything. No one can petition, cajole, bribe time into moving differently. Yet, that doesn’t mean people won’t try.

For us corporate stooges, time is defined by the rhythm of deadlines and weekends. And as such, some of us work towards those deadlines and weekends, while some others stumble, knock through or slip through them.

The latter half among us never fail to request extensions, curse the Mondays or spill the coffees.

We resent time on Monday for it flows too slowly: And before, deadlines, not slow enough. We drag ourselves against the currents of time, trying to find the pace that suits our mood. Music helps, though not many people know it. Caffeine helps too – it puts a little booster to our internal clock and gets us going.

But there are times when nothing seems to help. We remain unprepared to meet the deadlines. At times like these, the deadline ceases to be that gentle current and instead turns into the fearsome category VI rapids. We paddle through frantically with bullshit, bluff and bombast. Sometimes it works, sometimes it doesn’t. Our stocks accordingly rises or drowns.

To rebel against the rhythm of your world is foolhardy. It’s better to rebel against the world instead.

Sponges and Rocks

Sponges absorb. Rocks don’t.

Increasingly I feel that the advertising agencies are populated with rocks while all the smart sponges who absorb knowledge, references, culture are going to start-ups, consultancies and so on – the new capital makers.

I see fairly young creative teams who churn out the same old ‘manifestos’ characterised by 2000’s era semantic bullshit. I see senior leadership struggling to grapple with fundamentals of digital age consumer journeys. I see copy writers who don’t know age-defining shows and cultural references. They still don’t know Flume, Gesaffelstein or the Casteless Collective. They don’t know mainstream nor the niches. They haven’t seen Kurosawa, Truffaut nor Pa Ranjith or Nagraj Manjule. They have not read film scripts, nor tried to write one. Basquiat & Grayson Perry are aliens to them. So is the work of Sagmeister & Walsh. They have not read Amitav Ghosh, Vonnnegut, Philip K Dick or even the contemporary thought leaders like Harari or Gladwell.

What to do with these rocks? You make available books, interesting chats, video links to them, which duly fall sideways as they remain busy wallowing in their mediocre existence bereft of the beauty that the world offers all the time.

It feels as if we live in different eras & cultures and we are accelerating away at light speed. I am a voracious reader, curious about new ideas and content. and the only people who share that curiosity are outside advertising – artists, film makers, new age capitalists. You step into an Advertising office and increasingly it feels like stepping into retrograde timezones. The flotsam industry flowing downstream helplessly and without knowing it is going downstream.