Ad Industry Leaders Storm the Exits and Start Innovative Marketing Communications Companies.

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Escape To Entrepreneurship

Increasing numbers of senior people are quitting their ad industry jobs. Some out of sheer frustration or exhaustion, but others are starting innovative new marketing communications firms. This is a critical time for an industry in desperate need of reinvention. By joining & supporting these start-ups we can help build a better industry of Marketing Communications Professional Services.

Nine months ago in “Leadership, Management & The Rising Tide”  I wrote of the 150% jump in already employed people looking for jobs. There were 3 main reasons for the surge:

1. my company is going nowhere and our management is clueless at the helm;

2. our bosses keep beating us up because their bosses keep beating them up;

3. my company retrenched so many colleagues I can’t stand working here.

Most wanted a new job because their managers were too useless, too awful, or had damaged companies too badly for quality people to want to work near them any longer. What had been a growing problem before was magnified by the pressures of the Great Recession. Poor managers had been shown up and quality people wanted out!

Now that the economies of many countries are improving and marketers are increasing their communications budgets, people are on the move as predicted. However, there is now a further and more vital driver of their movement – the Escape To Entrepreneurship.

Talented Leaders Are Quitting, but not Leaving.

In June 2009, Omnicom announced Michael Birkin’s resignation as Vice-Chairman of Omnicom Group Inc and CEO of Omnicom Asia-Pacific. Birkin is no holding company leech. He was global CEO of Interbrand for 8 years, during which he invented their Brand Valuation model. He sold Interbrand to Omnicom, who were so impressed they made him head of Omnicom’s Diversified Agency Services division – half the revenues of the entire holding company, then later, CEO of Omnicom Asia-Pacific.

Last month Birkin launched The Red Peak Group. Brand Strategy & Design, Experiential, CRM, Sponsorship… Their clients? Anheuser-Busch, Intel, McDonald’s, Sony Ericsson… Birkin isn’t just the CEO. He’s hands-on as their Chief Strategist and leader of the Intel relationship. How many other CEOs, Presidents and similarly rewarded heavies can you say that about? Most clock few if any billable hours against paying clients. Ask any agency group CFO.

Last week the two top leaders of JWT North America quit to start their own company. Colleagues in JWT and seniors in WPP expressed surprise; even shock. There was probably envy and shame too.

Recently, self-styled “working class heroes” Iris Nation relocated their founder CEO and several top leaders to Asia. They have made it clear they’re not your average UK- or US-centric network. They know where their future revenues, and retirement funds, will come from and have the independence and wisdom to act on it.

Ad agency leaders feel like they’ve been tossed in a river with their arms and legs bound. They get no respite from holding company strictures, so the best they can hope to achieve is to keep their heads above water and be carried down-stream. It’s soul-destroying and prevents them delivering the service improvements marketers need. Rumours are now circulating of breakaway talks among top mar-comms industry leaders, and those talks are including marketers who are equally frustrated with the situation.

Entrepreneurship To The Rescue

There has always been a healthy trend of entrepreneurship in the marketing communications industry. A steady flow of visionaries, and of the frustrated, leaving to do their own thing. It used to keep the industry fresh, creative and adapted to the changing world, but in recent years too much of that innovative energy has been siphoned off into holding company acquisitions and management service fees.

Many of the best brains in the business work in the holding companies which acquired their businesses. From there they can do little, despite all their talent and skill, to reinvent the industry that made them rich and famous. These are the people who have done it before, know how to succeed, have the money to break away again and are a powerful force for good in starting or helping new ventures in marketing communications.

Rumours are that more of these, like Birkin, are starting to move en masse. If so, that’s great news. It couldn’t come at a better time to save the marketing communications industry.

Critically, marketing communications entrepreneurs must address the 7 pressing issues of:

1. Delivering consulting grade recommendations with fully integrated planning, technology, content management and business building ideas;

2. Getting paid fairly for all that despite the rise of qualitatively illiterate Procurement departments;

3. Tracking and proving the value they add, instead of just winging it old-school style, which will help keep Procurement at bay;

4. Recruiting, training and retaining top quality people including industry outsiders with the new skills needed – content strategy, mobile technology, data analytics and visualization & neuroscientific research included;

5. Rewarding all their people honestly and properly for their efforts;

6. Staffing to the right levels instead of driving their people to exhaustion, stress, despair and depression, none of which produces great thinking, unique ideas or added value and;

7. Resisting the temptation to sell to one of the holding companies as the exit strategy. A good-sized block of stock in a thriving independent will make a much better retirement annuity.

It takes the right people in the right environment with time to think and work things through to deliver a professional service. Pressure, fear and panic give bad advice.

Treat them any other way and quality, professional people simply storm the exits.

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9 responses to “Ad Industry Leaders Storm the Exits and Start Innovative Marketing Communications Companies.

  1. Brilliant.

  2. A brutally open and honest window into an old-order business reality, confused, aimless and disconnected from those that matter most – employees and customers. Born of having walked the road too, this is insight from inside the ring, and is a refreshing dose of objectivity, to a degree, as well as heads up awareness and commentary.
    Mike inspires, and challenges, and this is just on paper…well done.

  3. Spot on article.
    Very insightful and timely indeed. Today’s agency business dynamics are fascinating…

    To me the rise of new technologies and Digital are the fundamental driver for change though, and the “crisis” is merely accelerating the pace of change… and clients requirements for higher value output. It was all bound to happen…

    I must frame these 7 pointers to make sure we never forget them :)

    • Thomas, thank you. Yes, digital and new technologies are accelerating the pace of change and that has compressed all the issues into a bigger crisis than most ad people have the means to grasp.

  4. Timely and excellent article, Mike. It compels me to quote my own company’s “Ironic Inspiration” which reads as follows:

    “Companies that say one thing and do another. Firms that focus only on their own siloed products. Organisations with opaque values and shallow beliefs. Businesses where the most senior talent is unduly burdened with internal bureaucracy, politics and justification work. Companies that pay lip service to cultural differences or drive strategy from the centre. Companies which treat constructive feedback with suspicion. Egotistical greedy leaders. Superficial spin and corporate myopia. Companies that call themselves “global” because they have dots on a map. Firms that fail to grasp the new rules of engagement and the need for change.”

    You can find this and more at http://www.watatawa.asia

    Keep up the good fight!

    • Bill, thank you. Watatawa strikes me as being less likely to invest in new models of marketing communications firms and ad industry renewal. Right?

      If wrong I may have some candidates for you to talk with.

  5. Couldn’t have said it better.

    If all that passion is channelled into real-work instead of M&As and fighting red tapes, I am sure the corporate world would be a better place to be in.

    • Hi Emilyn and thanks for your comment. Yes, too much make-work and not enough real work done at the top of most agencies. Red tape / holding-company paperwork, political posturing and manoeuvring to cope in unwieldy management matrices when they should be clocking billable hours leading the building of their client’s business. Or their own. It is unproductive and unsustainable versus the independent route.

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