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Why are agencies so bad at handling leadership changes and succession planning

“The agency business is built with a lot of insecurity. It’s easy to set up an agency if leaders leave.”

By  Priyanka NairAug 2, 2022 5:20 PM
Why are agencies so bad at handling leadership changes and succession planning
Given the personality-driven nature of the business, succession planning strategies, particularly on the creative side of the business, are all the more important in agencies. But there are challenges. (Representative Image via Unsplash)

Advertising agencies get rocked and shocked when they are hit by abrupt leadership changes, and don’t typically cope well with these changes, given that the ad business is heavily personality-driven.

In 2019, there was practically an overnight change in guard at Publicis Communications in India following the abrupt and sudden departure of its chief. This led to a series of top-level exits in the French advertising network’s operations in India. According to industry executives, the leadership changes were discussed over a couple of days and the new CEO started taking charge with full force, taking on the task of finding the right people for her core team; which was filled quickly.

Last year, Dentsu International India also witnessed a wave of high-profile exits. The only difference is that it’s been well over seven months and the Japanese network company still hasn’t found the right candidate to lead the company.

Go local

Given the personality-driven nature of the business, succession planning strategies, particularly on the creative side of the business, are all the more important in agencies. But there are challenges.

India’s leading big agencies like Ogilvy, McCann Worldgroup, Lowe Lintas, Wunderman Thompson, Dentsu India and Leo Burnett are all networks owned by the big five holding companies with headquarters in the US, the UK, France and Japan.

According to Wieden+Kennedy India’s chief creative officer Santosh Padhi, network agencies leaders should understand local business needs in order to draw the right succession plans and having a unidirectional leadership approach will never help creative shops to grow. He also adds that “today, creative chiefs are leading client discussions. They are equally a part of the business decisions. There are more responsibilities of a CCO today than 10 years ago. It is important for agencies to keep these aspects in mind before changing the guard.”

Many advertising agencies have multiple chief creative officers. Industry insiders say the main reason for this approach is to keep “everyone happy”. But having a succession plan is critical when there is a leadership change, and having multiple potential leaders may create friction.

Padhi observes that clients, especially long-term partners, want certain high-profile creative leaders in their boardroom discussions. Sometimes the creative lead is a larger figure than the agency. It has its pros and cons, he adds candidly.

'A collective failure'

Agencies don’t take enough time for succession planning, says advertising veteran and brand strategist Ambi Parameswaran. It’s not a common practice, which is why not all agencies handle leadership crises well. He admits that “advertising is indeed a people’s business.” Parameswaran adds, “Let's be honest, there are some leaders who are hanging on their chairs for too long and aren’t focusing on building future-ready leaders.” Tough questions are not asked and answered in agency management meetings. “It’s a collective failure,” believes Parameswaran.

It’s high time agencies stopped depending on certain people and their stature. It is natural for some people to feel uncomfortable when there are leadership changes, however, these numbers usually are a handful. That shouldn’t stop agencies from getting their succession plans in place. “Every leader in advertising becomes larger than life,” that’s the reality of the business, says Parameswaran. 'A victim of a personality cult' Meenakshi Menon, founder of Spatial Access (which is now a Deloitte business) agrees with Parameswaran. She says, “Agencies are a victim of a personality cult. A talent usually will join an advertising agency to work closely with a personality.” Leadership changes aren’t rampant in advertising. That’s because “top-level executives don’t leave easily. There are no fixed terms and the business models are always target-driven,” she adds.

Menon thinks it’s a global problem and that’s because of the way the business is structured. “The agency business is built with a lot of insecurity. It’s easy to set up an agency if leaders leave.” She says it is important to bring structured processes in place. “Why shouldn’t a leader not exploit his power and position? He gets all the freedom from the management.” The solution is to make advertising a business that respects processes and discipline. Succession plans and talent problems will get fixed along the way, she concludes.

First Published on Jun 8, 2022 3:05 PM