Just what the business needs: another crisis. Never before has the demand for experienced leadership been greater, particularly among multinational agencies. There are huge offices that need running. Global accounts have become a reality. Ironically, at a time when the demand for stellar senior talent has never been greater, it has never seemed scarcer.
"I think the industry has a real long-term problem," says O. Burtch Drake, president and CEO of the American Association of Advertising Agencies. "There is a management gap that goes back to the recession in the late 1980s. It cleaned a lot of people out of the business. A lot of people in their 50s were wiped out. Now [agencies] are looking for the next generation. They are not there." The problem manifests itself in various ways.
A number of agencies devoid of promotable talent are poaching others. True, this has yielded some success stories: Rick Boyko at Ogilvy & Mather, Jim Heekin at McCann-Erickson, Linda Srere at Young & Rubicam and Brendan Ryan at Foote, Cone & Belding are a few examples. Unfortunately, there are just as many misfires.
Those who misfire carry the stigma that not working out means failure. The blame shouldn't always rest on these souls. Often, the cross-pollination of cultures won't work, and those making the hires should be in a position to sense that. Sometimes, the hirer miscasts the hiree. And, obviously, sometimes a person is not ready for or never will be up to handling a senior management position.
Drake, among others, cites a number of reasons for this. The first is compensation. "We can't afford to hire the best talent," he says. The lack of training programs, one of the internal agency programs sacrificed in the face of decreased compensation, is also an issue.
A third reason, particularly in New York, where the multinationals are based and have significant offices, is that an increasing number of the industry's bright lights shun Madison Avenue for other pastures. "There are great agencies outside New York being run by people we would have looked at to run them here before," says Drake.
Some companies are attacking the problem head-on. WPP Group PLC actively recruits the brightest MBAs it can find and disperses them among its companies. That's its plan for the future. But agencies are facing the crisis now.
Soon, the problem will be shared by clients as key agency jobs go unfilled or underfilled. One agency CEO, alluding to David Ogilvy, summed it up by saying, "Pay peanuts. Hire monkeys." Of course, some clients seem to subscribe to the theory that 10,000 monkeys tapping at a typewriter could randomly produce Shakespeare.
I don't. Money is the only thing that will stave off this crisis for agencies.
I'm not saying that clients are wrong for scrutinizing what they pay their agencies, particularly after the excesses wrought in the past.
But at some point, clients must recognize that in squeezing agencies, they are hurting themselves. While agencies should have to earn every dime a client spends, clients need to give agencies a fighting chance. --Kevin McCormack