I sold my agency to a consultancy three years ago... Here's what happened

Heat CEO John Elder gives an inside scoop about being acquired by Deloitte Digital, as well as some advice for shops thinking about selling to consultancies in the future.

Like every great idea, the plan to create Heat was hatched over tequila. I’d known of Steve Stone, founder of the legendary shop Black Rocket, but we’d never worked together. After a decade of knowing of each other, we finally met for drinks. Turned out we both loved making ads but were falling out of love with the way most agencies made them. We wanted to create something new. So after a couple ginger margaritas, we decided to create something bold, brave and different.

We founded Heat on the principle of using surprising creative to solve all types of marketing problems. Our biggest break came in the review for EA SPORTS, facing off against some of the most creative agencies in the West. We prevailed and walked away with the account. As wins have a tendency to snowball, we picked up several more clients and grew rapidly. We purposely embraced all creative styles and media types, not wanting to be pigeon-holed or limited in the way we could solve problems.

At our 10-year anniversary we took stock of where we were and where we wanted to go. What we saw was an industry in transition. Where advertising had been primarily media driven since well before the Mad Men era, the industry was now tech driven. Clients were struggling with shifting consumer loyalties. Ad spending was increasing, but ad awareness was steadily decreasing. The writing was on the wall - traditional agencies with traditional approaches were not going to survive, much less thrive. Despite a strong decade as a business, we needed to evolve. And fast.

John Elder, CEO of HeatSkeptically, we embarked on a process, meeting with a wide variety of suitors and fell in totally-work-appropriate, platonic love with Deloitte. At first, Heat + Deloitte Digital might seem like an unlikely marriage. What could a small San Francisco-based creative shop have in common with a global consulting powerhouse? Turns out, we saw the world similarly -including the gap in offerings for clients. We both believed in putting the client first and building around them to solve their problems in unexpected ways.

So, after a few more ginger margs to steady the nerves, we took the plunge and never looked back. Admittedly it wasn’t all rainbows and pixie dust. Suddenly we had complex processes to follow, including mandatory compliance training, SEC rules, Sarbanes-Oxley considerations, and detailed background checks for all of us (spoiler alert: Stoney eventually passed). At times it was challenging, and we lost some good people. (They didn’t die, they just left the company. Don’t want you to get the wrong idea.)

We probably shouldn’t have been surprised by the challenges. Gartner has plotted out what happens in technology acquisitions, from the "peak of inflated expectations," right on through the "trough of disillusionment" rebounding with the "period of enlightenment." We were spiritually aligned with our new owners, but there were bumps in the road. Now we’re three years in and we’ve learned a few things:

Form teams around client challenges. 

We have embraced the Deloitte process; tailoring a team around client needs and thoroughly attacking their challenges. The consultant’s output is a clients’ business strategy, for instance solving a call center problem or driving website traffic. The agency’s output typically takes the form of advertising. But regardless of the problem we’re solving, we track client relationships the way consultants do; on the ground, in the office, in lockstep with our clients. Together we ensure the client’s success. 

Don’t just make ads, make change

Client roles are changing, responsibilities have increased, but budgets haven’t. Yet clients have more control over the customer journey than ever before. So, we’ve learned to bring ideas and solutions that are way upstream of traditional agency offerings. New products, new supply chain ideas, and new philosophies that go way beyond ads. We still make ads of course (nothing wrong with those), but we don’t have to stay in one narrow lane any longer. If the idea can affect change, we can help run it through every aspect of how a client’s business operates.

Above all, elevate the human experience 

Our focus along with Deloitte Digital is all about the humans at the other end of the conversation. While technology can help drive efficiencies, it’s never a differentiator, it merely levels the playing field. Creativity, and its ability to connect with people, is the competitive advantage. We create ads that reward them for their attention. We create digital experiences that are seamless with less friction. It’s easy to get distracted by innovation, when the focus really needs to be on the human on the other end.

Three years into the acquisition we’re like any toddler—getting our feet under us, starting to master our surroundings and learning to use the big boy potty. You don’t often get to pick your parents. But if you’re lucky enough to do so, make sure they meet a few basic criteria. They should help you embrace change and technology faster than you think you can. They should help you accelerate into the next best version of yourself. And they should scare you a little, too. Do all that and we’ll bet you, your clients, and their customers and employees will be happily surprised by the result. 

John Elder is the CEO of Heat.

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