Subhash Kamath, CEO, Bates Enterprise
<p align=justify>No merger can be without problems. In our case, the whole thing took longer than expected.... I wish we’d been able to complete everything a few months earlier. But it took its due course. To my mind, the biggest challenge, however, is really managing people’s sensitivities during this period. Because of the natural transition that an organisation goes through during a merger, people have a lot of questions and concerns that need to get addressed. Some get resolved very quickly, while some take time.
No merger can be without problems. In our case, the whole thing took longer than expected.... I wish we’d been able to complete everything a few months earlier. But it took its due course. To my mind, the biggest challenge, however, is really managing people’s sensitivities during this period. Because of the natural transition that an organisation goes through during a merger, people have a lot of questions and concerns that need to get addressed. Some get resolved very quickly, while some take time.
Bates Enterprise is an example of industry beliefs that consolidation will play a major role in the road ahead for growth. The agency, which is the merged entity of Bates and Enterprise Nexus, faced several challenges when the changes in the structure were injected beginning early 2006 – following the announcement of the merger made in September 2005.
For Subhash Kamath, CEO, Bates Enterprise, the challenge was to shape the new entity in a manner that would retain the strengths of both units. In this interview with exchange4media’s Noor Fathima Warsia, Kamath speaks about how the merger was executed, challenges faced by merged entities and Bates Enterprise’s plans ahead.
Q.
Finally, how do you see Indian advertising growing on the global platform?
Well, at one level Indian advertising is certainly getting more ‘proudly’ Indian, and more culturally relevant today. To that extent, some of our big local successes may or may not cut ice with international audiences or juries.
On the other hand, I believe Indian talent will become more respected and recognised on the international arena, especially creative people and strategic planners. I do believe we have the ability to generate ‘universal’ ideas and brand themes that can resonate anywhere. Truly global brands have understood this and are willing to access talent across geographies to get the best solutions. So, there are lots of opportunities coming up for our talented youngsters. I truly believe India’s time has come to shine.
Q. What are the changes in day-to-day operations post the merger?
Oh, there are plenty of changes to speak of. In Delhi and Mumbai, where both agencies had full service operations, the teams are actually sitting together as one now. That took quite a bit of planning. New systems and processes are being put into place. New strategic planning tools are being cascaded. New training initiatives are being planned. New creative benchmarks are being set. New talent is being recruited to fill up the gaps and to keep in line with the growth. Life has been one big change all these months..... very hectic and chaotic, but exciting at the same time.
Q. On a more general note, you’d once been quoted saying that the changes that you had seen in the last 19 years weren’t really for the better and that people were not having any fun anymore. What is the impact that this has had on the advertising industry?
No, I never said that. If you recall, I had said that many things had, in fact, changed for the better. Agencies have been forced to become more accountable for their brands, and the remuneration systems clearly reflect that. I believe the strategic thinking has improved vastly and is most robust and in-depth today. The creative product has changed radically over the last decade to become more culturally relevant, more entertaining and more involving. Even technologically, things have changed. Our commercials are much better produced today than they ever were.
But yes, on the flip-side, I also believe people are not having as much fun as we used to. Probably because things are so competitive these days, and people are more ambitious.
I genuinely believe the talent crunch is the single biggest problem the industry is facing today, especially when the economy is booming. As an industry, advertising is not attracting the best people from B-schools anymore and we are losing a lot of good strategic thinkers to marketing, which pays a lot better. Also, good creative people are shifting to movies and television, to find new creative outlets for their talent. Instead of spending energies on creating more awards shows, the industry bodies should focus on ‘talent’ induction and retention as a top priority.
Q. If there were three things that you could change about the advertising industry today, what would they be?
One, I would instil more pride and passion, and second, I’d sack all ‘posturers’ and intellectually dishonest people. Thirdly, I’d encourage more fun in the workplace.
Q. Has the merger accelerated the growth of the agency in any form?
Absolutely. The merger has made us a top 10 agency overnight, and it gives us the critical mass to compete in the top league. From here on, I see a strong growth curve for the agency, hopefully well above the industry average.
Q. To begin with, the reigning hot topic of life after the merger with Enterprise Nexus, how has the experience been so far?
It has been exhilarating and exhausting at the same time. An incredible amount of stuff needed to be done and a lot of it is still in progress. More than just a merger of two companies, I really see it as a creation of a totally new agency called Bates Enterprise. So, it can be quite challenging and exciting, but at the same time, quite exhausting. Hopefully, a few years down the line, we’ll all look back and smile at a job well done.
Q. Could you share a little more on the kind of changes that have come in the management as a result of this merger?
We’ve had to restructure the top management team to some extent. We had to choose the right people for the right jobs, for example, Alok Agrawal heading Delhi, Charulata Ravi Kumar moving over to Mumbai, Abeer Chakravarty taking charge of Kolkata, and Ashok Vidyasagar at the helm in Bangalore. We’ve also created a management committee at the top, which meets every month to review, discuss and debate on various issues pertaining to the agency. It’s a collective responsibility, really and good teamwork amongst all the leaders that will take this agency forward.
Q. Looking at Bates Enterprise now, how has the performance in 2006 been so far?
2005 was good for us as we met all our targets. 2006 looks quite good so far and we’ve set ourselves an ambitious growth plan. I’m confident that we will achieve that as well.
Q. In 2005, you had mentioned that Bates in 2004 had managed a reticent and non-aggressive performance due to lack of focus on new business in the year. How did this aspect change in 2005?
I think we did extremely well on the new business front. We pitched quite a bit in 2005 and were able to convert some big ones. IDBI bank, Marico, Sony, Optimix, Elder Pharma, and more recently, Yamaha Motorcycles and Emaar MGF real estate, are all coveted brands. I think we are getting better and better at pitches with each passing day.
Q. The advertising industry seems to be facing a problem of over-specialisation and the fact that an advertiser has to speak to five people before he has one media plan in place. How do you view this problem?
Well, that is fallout of specialisation. And it is the client who now has to integrate all the different solutions coming from his different partners. Agencies are, to some extent, moving towards a 360-degree approach in terms of services. But media is a separate business now. Simply put, every team needs a leader to lead it… so if clients want to work with different partners for different disciplines, then they will have to lead the team to provide one comprehensive solution for the brand. So, while there are obvious benefits to specialisation, it helps if all the different disciplines are part of the same agency network at the very least. Otherwise, the client will have to provide the integration on the brand.
Q. What are the kinds of problems that you faced in the merger process – on the day to day level – and if there were any at the overall level as well?
No merger can be without problems. In our case, the whole thing took longer than expected.... I wish we’d been able to complete everything a few months earlier. But it took its due course. To my mind, the biggest challenge, however, is really managing people’s sensitivities during this period. Because of the natural transition that an organisation goes through during a merger, people have a lot of questions and concerns that need to get addressed. Some get resolved very quickly, while some take time. That has been a really exhausting and emotional experience for me. Thankfully, we’ve been able to put a lot of it behind us and things are settling down nicely now.
Q. In addition to the organic and new business, where else do you see growth for the agency coming from?
Marketing services, for sure. I see a huge potential there for 141 (Bates’ direct and interactive division).
Q. The ad industry has been abuzz with the issue of pitch fees. Do you think this is a suggestion that will work out?
I certainly hope so. I know it will be difficult as there are lots of questions yet unanswered... but I know it’s happening in some other countries. Some clients are really fair and transparent about pitches. They shortlist their agencies well, the brief is clear, expectations are clearly outlined and a decent amount of time is given… and usually, these clients seek just a strategic point of view on their business from the agency. No creative needs to be done.
But there are many others, and some big companies at that, who just exploit the desperate competition amongst the agencies by inviting a large number of them to generate lots of creative ideas, and then use those ideas without compensating the agencies for it. I do think it’s time that our industry stood up for itself and created a dis-incentive for such clients. Pitch fees could be one solution.
