Monday, August 20, 2007

Solving A Problem Like Advertising

Adland is not exciting anymore. Whatever could be said about it in the past, we used to know how to have fun. The excess of the 80's and dot com party at the end of the 90's has given way to monolith firms managed by accountants whose primary goal is improving profit margins with creativity as a means to and end rather than the end itself.

Rory Sutherland has written a brilliant article on the way that creatives industries can marry the conflicting requirements of the consumer culture and a good work life balance. Rather than link through to this - though you can at the end if you want to make comment - I have unashamedly replicated the whole article here:

"If you heard a friend of yours had landed a job at the Playboy mansion, your first question probably wouldn’t be “What’s the pension plan like?”

Or how advertising people could have a much better life on less money.

I am old enough to remember a time in London when friends would spend the odd evening trying to work out what our contemporaries were earning. Back then, someone’s salary was an interesting source of speculation.

Nowadays there isn’t much point in asking what someone earns. Instead you can find out all you need to know about a Londoner’s wealth by asking two apparently innocuous questions instead. These are “Do you work in banking” and “when did you buy your house”.

A third, supplementary question “are you a Russian criminal of some kind” may occasionally clarify matters.

The first question is important. The last few years have seen rewards in the financial sector move far beyond reach of any other salaried economic activity. Of my own university contemporaries, with one exception, every single person who works in banking or finance is richer than everyone who does not. Along with that spectacular exception (Dr Michael Lynch, the onetime billionaire founder of Autonomy) I am one of only a few people not working in finance or law who could be described as vaguely prosperous.

But the housing question is just as much a cause for concern. Someone brilliant in our industry who has not yet bought a flat, or who has bought one only recently, cannot reasonably expect to be well housed in London in their lifetime. Contrastingly almost any minor advertising staffer who borrowed heavily in the mid 80s is a millionaire. If this iniquity affected people by gender or race rather than by age we would consider it appalling.

These problems aren’t unconnected. The property issue is certainly worsened by the city/oligarch factor (it is an eye-opener to see how well senior advertising colleagues live outside London, New York and Tokyo where they do not have to compete with large financial or expatriate communities). It is compounded by a tax policy which taxes earnings derived from work at 41% but gives vast allowances to money made from selling your house, engaging in Russian criminal activity or peculiar banking practices. Taxing the proceeds of hard work more heavily than the proceeds of luck and deviousness seems odd behaviour from a chancellor who is supposed to be a Socialist and a Presbyterian, but there you go. It’s also a bit galling to see London endlessly celebrated as a “centre for the creative industries” when the city’s real wealth goes to people of high numerical ability yet limited imagination working in a culture of stultifying conformity.

So how can we compete? We can’t.

So, er, don’t.

Everything we have learned as marketers surely teaches us that you should never tackle a competitor in a field where they enjoy unassailable strength.

It is now almost impossible to out-earn people in financial services. It is, however, amazingly easy to outthink them. They are not imaginative to begin with. But, on top of this, their herd mentality has rendered them incapable of independent thought, action or taste. A successful banker simply aspires to be an even more successful banker. (You can see the effect of this in ghettos such as Clapham or Fulham where the uniformity of aspiration has created something resembling a council estate only with the average income multiplied by 50.)

Indeed, so driven now are such people by competing with each other (rather than asking whether the game is worth winning) that, in the Anglo-Saxon world at least, almost all people with type-A personalities (what I call ‘Nature’s BMW drivers’) have completely lost the plot of capitalism. The purpose of which is surely not to accumulate as much money as possible but to accumulate as much money as is necessary to have a good time with as little effort as possible.

In asking the question “who has more money” we have completely lost sight of the question “what is this money for?”

Look at the strange people who are admired in business nowadays. Twenty years ago it was people like Hugh Hefner or James Goldsmith, people with lives worth emulating: now it’s a bunch of austere workaholics – or septuagenarians who still go to the office every day. Do you think Hefner (a pioneer of the working-from-home movement, incidentally) ever took a Blackberry into the grotto? Now there was a man who really understood work-life balance.

Today, no sooner is the word out that Conrad Black knows how to throw a decent party than the vultures start circling.

We, as a creative industry should fight this trend. We should ignore the senseless greed and purposeless effort of other areas of business and set out to establish ourselves as simply the best place for sane, imaginative and thoughtful people to work anywhere in the UK. Which isn’t far from what the business was when I joined it in 1988.

Back then we earned a lot less than our banking colleagues too. But I don’t think we doubted for a second that we had other benefits which compensated for the differential. With a little imagination (and that is our USP versus bankers, remember) we can restore those benefits.

Here’s how we could do it at Ogilvy.

1) Move at least half the agency out of London. Brighton or Ashford might be a good idea for a second location. New electronic means of communication no longer require everyone to be in London all the time. Ashford (with fast trains to Victoria, Charing X and St Pancras) is a hideous place but the surrounding countryside is glorious, with apple-cheeked barmaids serving large tankards of frothing ale on every village green. An agency which offered the option of living out of London would attract more than its share of those bright young talents who can’t afford London. Your agency could have its own cricket pitch (better than a pool table, no?). Best of all, people could stay in Whitstable all week.

2) Cut all senior people’s salaries by 20% and cap them at around £100,000. As part of my rejection of senseless capitalist thrust, I occasionally ask myself whether extra money would actually add to my happiness. The answer is the opposite. When given more money than you need, one is prone to engage in foolish, uncreative, status-driven activities such as buying second homes abroad (only sensible, frankly, if your idea of a good summer holiday is going to the same bloody place every year and then spending two weeks learning the Italian for “my septic tank appears to have exploded”). Yachts - no more than floating caravans that make you sick - are even stupider still. The rising levels of wealth, coupled with the low prices of consumer goods, mean that differential displays of status require increasingly foolish expenditure.

3) Use half the money saved in senior salaries to create a large bonus pool to be shared among younger staff – who generally need lump sums more than senior people do.

4) Use most of the remainder to join Netjets and keep an Ogilvy Gulfstream poised on the tarmac at Lydd or Biggin Hill 24 hours a day. As Hefner, Warren Buffett and Conrad Black have all found, private aviation is the single compelling reason to be rich rather than merely prosperous. And, as Conrad found, the very best kind of private aviation is the kind you don’t pay for yourself. (It’s more tax efficient, too.)

5) Award bonuses not of money but of working perks. After a certain length of service people earn the right to work from home weekly or to work irregular hours.

6) Spend well on hospitality and entertaining (Paris, remember, is only an hour and a half away). If they are having a good enough time, people don’t mind what they are paid. I mean, if you heard that a friend of yours had landed a job at the Playboy mansion, your first question probably wouldn’t be “what’s the pension plan like?”

7) Instigate a four-day working week of 10 hours per day. I do most of my best thinking at the weekend, which means a three-day weekend would make me 50% more productive. And what a USP that would be for future recruits.

8) Remove payment by the hour and replace it with – well, anything frankly. This system of payment maintains the absurd pretence that value created is proportionate to effort expended –the very belief a creative organisation should be fighting. According to payment by the hour, the value of a song is directly proportionate to the time it took to write it. This conception leads to the encouragement of unproductive but time consuming activities in agencies: account management, for instance.

9) Kent Grammar schools would amount to a saving of perhaps £30,000 in pretax income for most senior staff with children – partly offsetting my swingeing pay-cuts. Private education is another rich man’s folly – generally a means of ensuring that your children can eventually lead professional lives in banking and accountancy involving just as much grinding tedium as your own. (Fortunately I have different aspirations for my two daughters: my dream is for them to become country and western singers, and hence I have told them that an expensive education would be a serious setback to their careers versus, say, time spent waitressing at a truckstop.)

10) Restore compulsory company cars (au fond people really prefer cars to salary – but if you give them – or their wives – any choice in the matter, they tend to choose the boring option of money instead). The agency should also operate a small stable of really flash motors to loan to younger staff. If a 23 year old can turn up at a wedding with their banker chums in an Aston once a year, who cares what they actually earn?

Money is, in short, a commodity. As believers in differentiation, we should seek to reward people in currencies that our competitors cannot supply in greater quantities – such as civility or quality of life. Unusually this approach could actually hold appeal to our shareholders and ourselves.

How do you react to this proposal? I would be very happy to discuss it further – wither in the
space below or at a meeting held at a country pub some time after 11am.

Too radical? It is only a later expression of David Ogilvy’s dream of moving the agency to Princeton from Manhattan, a plan vetoed by cowardly colleagues. It’s time has now come."

This is impressive and thought provoking stuff, what is equally impressive is that we have time allocated to discuss it at our board meeting tomorrow.



neilperkin said...

Hi Giles. Hadn't read Rory's article in full before but now but it's an amazing think piece. How brilliant that it's not remaining as that but being discussed at your board.

Brimodin P generic said...

wow great i have read many articles about this topic and everytime i learn something new i dont think it will ever stop always new info , Thanks for all of your hard work! Keep it up.