Leadership Trials of the Agency CEO

Television was new and growing in 1958 amp160There were only 40 million TV households today39s number is 120 millionamp160and the agency39s creative challenge was how to get better at TV and print and grow even faster than the postwar economy amp160Remuneration was a fixed percentage of media and on a normalized adforad basis it was at least fiveamp160times as high as today amp160Agencies were privately owned and based in New York City amp160Ogilvy ampamp Mather was only 10 years old with only 200 employees amp160If an agency won a client it could expect to keep it for decades if not forever and agencies would be in the driver39s seat about media plans and Scopes of WorkSmall wonder then that the CEOs of this past era wrote books drafted inspirational memos and promoted creativity to the highest standard Compared to today39s CEOs Ogilvy Bernbach and Burnett had easy lives amp160Advertising was a red carpet ride to fame and fortune amp160Mediocrity was the enemy inspired creativity was the god amp160Economic growth was strong amp160The rest took care of itselfKevin Roberts the former CEO of Saatchi ampamp Saatchi identified with this past and he chided me in 2014 for my quotmodernquot concern that industry changes were getting the better of agency executives amp160quotFarmerquot he said to me quotyou39re an MBA management consultant and you see the world through numbers amp160That39s what you do amp160It39s understandable amp160You39re otherwise an ok guy amp160But this is a creative industry amp160It has entirely different needs amp160I don39t believe that anyone can run a firstrate creative shop with organizational diagrams and spreadsheets amp160That kind of BainandMcKinsey stuff would kill our creative capability amp160A creative agency needs to operate more like an ant colony where every ant knows its job and has the freedom to do itquot amp160Kevin went on to remind me that ant colonies did not have CEOs who managed the colony39s ants or activitiesAntcolony management was Kevin39s forte and he saw it as a required cultural continuum stretching back to the successful days of David Ogilvy Bill Bernbach and Leo Burnett amp160Success and freedom went togetherAgency CEOs of 2018 would not go as far as Kevin in proclaiming that anthill management is appropriate in a world where agencies are caught between feecutting clients and profithungry owners and where clients call the shots and change their agencies every two or three yearsToday39s agency CEOs have more challenges than highly skilled executives can expect to master amp160They must balance economic and aesthetic factors that compete with one another amp160The clients39 desire for lower costs and greater efficiencies conflict with client calls for higher creative quality amp160In the meantime holding companies want and expect growing revenues and profit margins even though client fees and spend levels are declining amp160How can these circles be squaredThere are organizational dilemmas as well amp160The agency culture still celebrates the freedoms of an ant colony amp160Office heads do not measure and review the performance of client heads for example amp160Scopes of Work are invisible or nonexistent amp160There is considerable organizational freedom for agency office heads account people and creatives to quotdo the right thingquot by their own standards without the expectation that anyone will look over their shoulders and review their performanceHowever none of the conditions that permitted anthill freedoms exist today amp160There are neither surplus revenues surplus resources nor surplus profits amp160Under these conditions management theory states that quottightquot rather than quotloosequot management approaches are appropriateHow though does an agency CEO who has grown up in an anthill culture become late in his or her career a leader that tightens things up amp160The need for quottightnessquot is a global need amp160Agencies are global federations of offices amp160I39ve seen agency CEOs attempt to influence the operations of international offices like London and be told quotthat won39t work here and we won39t be doing itquot amp160The initiative in question involved documenting Scopes of Work in a uniform formatamp160amp160Office heads can veto CEO initiatives and this doesn39t yet lead to a job terminationAgency CEOs and their network of offices face the same kind of jurisdictional conflicts as the US Federal government and the sovereign states amp160The agency culture developed during the good old days was a culture of states39 rights amp160CEOs now need to strengthen the center and override the anthill freedoms of the states if they hope to survive economically in the current environmentLooked at from afar what changed was the power balance between clients and agencies with clients developing the upper hand amp160Since clients have the power of the pursestrings the shift has been very consequentialToday39s agency CEOs have to reverse this trend It39s just one of the many challenges amp160creatively economically and culturally that makeamp160their job so difficultCartoon credit Charles Barsotti The New Yorker The Cartoon Bank With permissionClick the social buttons above or below to share this story with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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Leadership Trials of the Agency CEO

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Michael Farmer

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