A global banking brand recently banned the word transformation from its internal and external communications – a stance that means communicating its latest transformation programme requires a significant change of tone. After attempting two similar programmes in two years, to little effect, the bank banished the term (alongside the management consultancy behind the initiatives) to history.
The brand is not alone in appearing to jump from one change-management programme to the next. In the midst of a revolution in consumer consumption habits, the marketing industry has found itself at the sharp edge of transformation. Indeed, many marketing directors have found themselves "transformed" out of a job. Such is the scope of this change and the corporate restructures that inevitably accompany it that one headhunter opined that if a creative leader in their late thirties hasn’t been made redundant yet, they "have not taken enough risks".
'Many a marketer and business leader have been sold a vision that is not matched by the ability and investment required to deliver transformation on the ground’
Yet embarking on the thorny issue of transformation and managing the risks that accompany it, both professionally and personally, remains one of the greatest challenges for the industry today. Despite the cult of the start-up and the belief that any business is only one disruption away from irrelevancy, turning the tide is no mean feat for established companies.
Legacy businesses have struggled to measure up to the pace of change at fledgling start-ups, which are not hampered by existing structures and cost bases. As Sir Martin Sorrell, chief executive and founder of WPP, explains: "Transforming an existing business is akin to changing the engines on the plane – while it is still flying."
If fear is one of life’s biggest motivators, it would stand to reason that creative leaders, in a sector under pressure, are a finely motivated bunch. Yet in the midst of fundamental changes in technology, the danger is that transformation has become a zero-sum game in which talking about it has become a sop for actually delivering what can be a painful process of re-engineering a business to thrive in times of seismic change.
Risk-taking and tackling the uncomfortable decisions that come with true transformation are increasingly vital to success. Leo Rayman, chief executive at Grey London, says that lurching from one transformation to the next is just a natural byproduct of the search for a meaningful and profitable role in a world that doesn’t sit still any more. But it is also a state of play that reveals a deeper truth – that most of these so-called transformations are › just not transformative enough. He explains: "Changing titles, renaming departments and hiring one creative tech dude isn’t deep transformation, it’s rearranging deck chairs on the Titanic. Real transformation means sacrifice. It means shifting your energy and resources from what is (kind of) working now into a bet you are making on the future. It is risky and it is scary, so it is hardly surprising few have the stomach for it."
The change agenda
Change is the lifeblood of creativity, and taking off in new, often uncharted, directions can be both liberating and exhilarating. However, according to Matt Hurst, chief operating officer at Edelman, it’s all too easy to label everything as transformation and hide the myriad examples where change isn’t being experienced by many in both business and society in the way it should. He explains: "In business, in a context where much becomes contingent and likely to change, you have to place greater emphasis on the mindset we all need to deal with it."
This is a shift that requires agencies to be better equipped to deal with ambiguity. He continues: "Rapid change exposes in agencies any cultural problems, as old structures resist change. You need a team culture that is open, curious and ready to keep learning. That kind of agile mindset helps you navigate continual change rather than be surprised by it, or think it is novel. It also means you stay open to where transformation and change isn’t being experienced in society and business in ways it could positively."
Building this positive change can pose a challenge when there’s the growing potential for any given job to be outsourced to an algorithm or chatbot. Transformation may promise change, but there is no denying that executive anxiety is rising. On a day-to-day basis, marketers are facing a complex ecosystem and the associated web of egos, where corporations and business leaders are competing to own the transformation agenda.
Matt Charlton, chief executive at Brothers and Sisters, argues that there are too many leaders in the advertising business who are happy to make it appear they are doing a good job without achieving much. "The rise in influence of chief financial officers since 2008 has exacerbated this – they tend to feel more comfortable around cautious leaders rather than anyone they perceive to be a ‘risk-taker’," he says.
Risk and reward
Yet it is these risk-takers, mavericks and creative thinkers that are the source of much of the industry’s greatest success and spirit. Is there not a danger that the creative industries face transforming themselves out of existence? Rick Hirst, chief executive of Carat, says that the language of transformation doesn’t help the sense of eternal hand-wringing: "There has been a heady mix of denial and fear and a sense that we weren’t ready for the change. Some of the business has lost its swagger as the old models and ways of doing things has run aground."
Yet despite these challenges, Hirst is optimistic. As the industry faces up to more pressure on budgets and strengthening competition, there is no choice but to embrace change. "Uncertainty can create a sense of inertia in which people get lost. What we have to do as employers is ensure there is a goal that people can be inspired by and believe in," Hirst says. In essence, if the creative and media industries want to get their long-lost swagger back, they need to ensure that at least 70% of employees can articulate their business strategy in a single sentence. "At a time of huge uncertainty, the one thing people need is a positive vision of where you want [the business] to go in the first place," he adds.
Juliet Haygarth, chief executive at BMB, believes that transformation is as much about managing emotions as it is about changing structures, internal messaging or staff engagement, as these are the areas where the battle is won or lost. She says: "Getting the best out of your people is an overlooked area when people are going for a transformation. Too often, chief executives worry about their own egos and the external messaging instead. Sod that. Focus first and foremost on your people and managing them through transformational times, and the rest should follow."
A roadmap for change
However, vision alone is not enough to transform a business. Many a marketer and business leader have been sold a vision that is not matched by the meaningful ability and investment required to deliver transformation on the ground. The industry is awash with tales of companies seeking talented individuals to drive a shiny new agenda, only to baulk at making the structural changes and investment necessary to deliver. No creative leader can drive transformation without buy-in from the chief executive, while shareholders regularly take exception to any short-term decreases in share prices. Across the board, agencies and marketers have been burnt by briefs for transformation that turn out to be anything but.
Kathleen Saxton, founder of The Lighthouse Company, says the key question for marketers to ask is: is this a real and genuine transformation? She adds: "Transformation is the new authentic, in that many businesses are talking about it but few are actually delivering it."
According to Saxton, transformation requires a fundamental pivot in the business to a new product or service – the rest is simple evolution or digitalisation. "What you see in certain sectors, such as publishing, is that businesses are trying to make better what they already have rather than focusing on true transformation," she points out.
For while technology has driven the demand for transformation, the fact is that successfully delivering change remains about people. This may be uncomfortable for those industry leaders who are not equipped with the skills or desire to drive a significant change in the business. Yet on the › flipside, the growing pool of traditional agency chiefs and creatives who have successfully landed at the likes of Facebook and Google reflect the fact that the core skills of creative leadership remain in high demand.
But such leaps of faith are not for everyone, as Daren Rubins, chief executive of The Lighthouse Company and former chief executive of PHD UK, points out: "The horrible truth is that a third of the people that will come out of the industry over the coming years will find themselves asking what are they going to do next. No-one thinks this will happen to them." He divides the industry into those that crave the future and those wedded to the past – and believes that those who hanker for the "good old days" will always struggle to re-engineer a business so it is fit for the future.
Being fit for the future demands a significant shift in approach from marketers and business leaders. Transformational leaders reshape culture from within as opposed to broadcasting the need for change. "The job of leadership is not to sit behind a desk or a podium – it is to remove legacy boundaries and get people collaborating," Hirst explains. "Modern leaders have to be comfortable with receiving feedback on the floor."
Collaboration, rather than the empty rhetoric of "blowing shit up", is key to driving meaningful change. "We work with many large brands and the most successful recognise their weaknesses lie in the different cultures and silos within their organisations," Pip Hulbert, chief operating officer at Wunderman, says. Successful transformation therefore involves building bridges between different functions. "The landscape of business is only going to become more complex, so having people who are willing to compromise and admit when they need to put in different learnings is vital," Hulbert adds. As is creating a culture where dissenting voices are not only heard but also encouraged.
If, in the past, transformation simply de
manded the creation of yet another strategy document or brand-positioning concept, successful leaders are now taking a more inclusive, tangible approach to driving change. Richard Dunn, chief strategy officer at Wunderman, says that having a consistent vision or "North Star" for the business is key to success but is pointless without the will to execute and deliver meaningful change: "It is all too easy for transformation to become a meaningless ambition statement rather than a clear focus." According to Dunn, the worst possible outcome of a transformation programme is a PowerPoint presentation: "You need to have speed and you need to have tangible outputs."
In an ecosystem that is always evolving, the onus is on individuals to continue to develop their skillsets and retain their appetite for that most important of creative pursuits – curiosity. Chris Baréz-Brown, author, and founder of Upping Your Elvis, believes that tech solutions offer the conditions for change but do not inspire people to shift. "If you want change to be embedded within your business, everybody must feel that there is something in it for them that’s exciting and rewarding," he says. "They need to feel confident in delivering the change and know that when they get it wrong, it’s all part of the process."
In a world of ever-decreasing certainty, perhaps the biggest constant is the continual change of the fourth industrial revolution. Rachel Forde, UK chief executive of Spark Foundry, says that while you can’t predict the future, it is important not to simply bury your head in the sand: "The key is to focus on speed and agility in order to keep up with the pace of change. Don’t get bogged down in detail, don’t accept the status quo, and test and learn continuously." This approach to testing and learning is one that must exist not just in the employee mindset but also in the support functions and structures of a business. "You need to have a constant sense of how future-ready your business is. Change can’t afford to lie around in strategy documents – you have to cut through the layers and the egos," Forde adds. It is a shift that she believes calls for an ongoing analysis of just how future-ready the business is.
Breaking through demands a change of approach for some. Saxton says that business leaders have to become comfortable with ambiguity: "When I started out in TV sales, I knew every single thing about TV. Yet now that everything is in transit, it demands that you have to be vulnerable enough to be comfortable not knowing everything."
Challenging assumptions and being comfortable with those around you questioning your own is vital to success. There is a reason why the covers of business books could easily be mistaken for the ever-increasing sea of self-help literature that act as a salve to our always-on, digitally driven economy. Being open to change, criticism and challenge demands that leaders embrace a level of vulnerability that comes with its own set of emotional issues. The mental and physical demands on leaders are only growing. And in the social-media age, executives are being asked to open up in new ways.
Technology is driving change but delivering it remains a resolutely human endeavour – one that demands a shift in approach for leaders. "I do believe that you have to look after your whole self. In the past, you had to be fat to go to the gym but today we go to the gym to stay fit. It is the same with careers coaching and continuous education programmes," Saxton adds. Business leaders who lack the ability to transform themselves and move beyond the hierarchical, broadcast approach to business will increasingly find they lack the skills to bridge the transformation gap.
‘Opportunities become threats if you ignore them’
By Sir Martin Sorrell
Founder and chief executive, WPP
It seems to me that it has always been easier to launch a disruptive new business than to reinvent one that is already well established.
Transforming an existing business is akin to changing the engines on the plane – while it is still flying. Some are better placed to perform this balancing act than others. At WPP, for example, we have always had a healthy paranoia about changes and threats in the marketplace. Opportunities become threats if you ignore them.
Another way of saying that is that we are market-driven. As the market starts to change, we change – often faster and more effectively than the competition. Whether we’re talking about investing in fast-growth markets, the focus on digital and data, the creation of Group M, horizontality (for example, the pioneering of global client teams and the increasing integration of our operating companies), or the application of technology to marketing services.
Ours is a history of rapidly and successfully adapting our businesses by developing and acquiring new skills to meet market and client needs. Sometimes this means doing things that run counter to the industry consensus, the key being to put in place the right structures, led by the right people, and to be persistent.
In digital transformation, we have taken three routes: building digital capabilities in our legacy businesses; growing our existing digital businesses; and learning and experimenting through external investments and partnerships. Sometimes, if you don’t eat your own children, someone else will.
We don’t underestimate the size or complexity of the transformation our industry is going through, and the pace of change will only increase. We live in a digital world dominated by the duopoly of Google and Facebook, in which the competitive set has expanded to include consultants and software providers. And becoming ever more important is Amazon, perhaps the one organisation capable of eating the duopoly lunch – and the lunch of many others.
However, over more than 30 years, we have seen many changes in the weather. For the most part, not only have we navigated them well, we have been able to turn them to our advantage.