Is this the New Model for Services Organizations?
A leader of one of the world’s largest agency conglomerates, one that includes Leo Burnett, Saatchi and Saatchi, Razorfish, and Sapient, recently made news with a bold statement.
Jarek Ziebinski, CEO of Publicis One, a new unit designed to gain more economies of scale and better leverage talent across Publicis subsidiaries, went on to say he believes Publicis is “leading the industry towards a more profitable future by revolutionizing the way agencies will think about how they structure their business.”
So what’s revolutionary?
To paraphrase, it’s how they’re taking a global approach to getting the right people working on the right projects, planning and collaborating across businesses and geographies, and delivering work predictably and profitably. I find it fascinating that a business of this size and stature went to the trouble of creating a separate unit dedicated to facilitating better connections, collaboration, and performance across its network. And, I think they’re onto something.
Today’s agencies face immense pressure on their business models — clients are demanding more and more diverse range of services, agencies are competing with newer entrants who are giants in the consulting industry (for example Accenture Interactive’s content practice alone employs roughly 5,000 full-time staff globally and collected $600 million in revenue in 2015), and competition and margin pressure are forcing fundamental considerations in how they deliver their services.
Ziebinski provides more insight into challenges agencies face today.
“All of this nonsense of silos, separation and separate P&Ls will die. Collaboration is the future. Leveraging of our assets is what we need to do more of and we have to be smart about how we produce growth and profitability. We have to be competitive in the world for talent and if we don’t improve our financial health, talent will not stay with us.”
At Mavenlink, we speak with agency, consultancy, and IT service firm leaders every day. There is a feeling of anxiety building — what used to work just fine has become inadequate today. They know changes need to be made in order to compete more effectively in today’s environment. And they’re right.
Global resource management, collaborative project management, leveraging expert talent, and doing so in a scalable and profitable way are some of the greatest keys to success in the new Service Level Economy.
Two Takeaways for Your Business
So, how will this impact you? Let’s shine some light on two specific key concepts highlighted by Publicis in their new agency model that we believe are important for your business to understand and get right — effective global resource management and expanding your pool of resource expertise.
1) Leverage Centralized Resources
Getting the right people on the right project is critical to your client’s satisfaction and your financial success. Today a significant portion of your work will most likely occur remotely, so location of a resource is less of a constraint. This allows you to tap into a broader talent pool, across less costly geographies and even globally. As a result, establishing a central resourcing capability, as virtual as it may be, can drive lower costs and higher margins. It allows you to put your best resource on a project and fill gaps quickly with excess internal capacity before looking outside to a partner. Publicis is forcing resource centralization by consolidating the teams across units and offices under one P&L. Alternatively, if you don’t go to that extreme you can create incentives that encourage usage of centralized resources.
2) Leverage Deeper Expertise
Work is increasingly being broken into highly specialized chunks and the expertise required to complete it, as explained in the Harvard Business Review article “The Age of Hyperspecialization.” The market now demands a depth of skill beyond almost any previously required. Skills tracking amongst your team is a challenge, but it is required to effectively deliver work to your clients’ expectations. By incorporating skills into the planning process, you ensure you get the best resource for the job. Consider incentivizing your team to keep skills current within their profiles so resource planners can stay on top of the wealth of skills already present in your organization.
We think Publicis One is a microcosm of trends and shifts taking place in the broader services economy. New models are emerging, and we believe the best practices of these trailblazing, successful services firms will be cascaded around the globe.
As Ziebinski states,
“I believe that Publicis One is not only the most interesting thing in the group’s restructure but I think it’s the most interesting thing that’s happening in the whole industry.”
And, we tend to agree.