Sometimes I have trouble maintaining a balanced perspective. Unsurprising since I am so largely driven by my own beliefs and values. It’s hard to stay calm when you see something you’re passionate about being threatened.
So let’s talk about holding companies.
As an entrepreneur, I appreciate how holding companies represent a direct, proven route to financial success. If you want to get in, make money and get out, there’s no better way. But you could see the writing on the wall (and on his face) the moment Don Draper sold to McCann.
The truth is, there has been for many decades a pretty strong correlation between selling and the erosion of that which made your agency unique. I don’t even think the holding companies themselves really understand how it happens, but evidence suggests it correlates strongly with the introduction of "controls," "processes," "ratios" and "consistency."
Of course, other options are increasing these days. You can stay independent and push on through, accelerating only at the rate that you can collect cash from your clients. You can take investment from the even-madder men running VCs, who are dying to leverage our collective brand expertise. Or you can do what we’ve done, which is take an investment from a company like MDC, which — despite often being included in the holding company conversation — is more accurately described as a backer of talent and ambition, one with no discernible interest in mucking with entrepreneurship.
But what about all those traditional Holding Company benefits like new-business introductions, those partner agencies that will connect you to all their clients, access to the "expertise" held at a corporate level? All those "economies of scale" they can offer? The "integration" from a set of collaborative companies?
The truth is, the transformed media landscape has made incremental cost efficiencies much less compelling to clients than the value of a huge idea and a highly creative communication strategy. To an enlightened client, the scale of your resources pales in significance to the power of your ideas.
And the "collaborative" companies’ speech is so discredited I feel cruel jumping up and down on it again. To bastardize a very old ad — "I don’t know you. I don’t really like you. And I want your share of the client’s money. Why should I collaborate with you?"
So I see very little appealing to the passionate entrepreneur or to an enlightened client in the land of the traditional holding company. But these companies are run by incredibly smart people who know what they’re doing? That, in fact, is true.
So, as I strive for that elusive balance, I acknowledge it can’t always be like this for the entrepreneurs; that there are some good relationships where the fit was excellent; that there must be some clients who want an efficient machine to keep grinding it out. And clearly the concept of what a holding company is must be evolving.
I watch with fingers crossed, skeptical eyebrow raised, sipping on my Old Fashioned.
Carl Johnson is global CEO of Anomaly.