Obsolete and Flawed Business Model?
From AdAge today, there’s a good article by Jonah Bloom that’s worth a read.
[Despite an overwhelming mass of evidence that their business models are fatally flawed and their service offerings out of step with many marketers’ demands, the biggest agencies have done remarkably little to substantially reinvent themselves. It doesn’t seem to matter how many of their clients shift projects or even full-scale brand assignments to smaller, nimbler, flatter structured, less-30-second centric agencies, the biggest agencies seem reluctant to really blow up their model.
That’s not to say there have been no moves at all. John Dooner’s McCann Erickson has made smart use of Worldgroup to offer a multidisciplinary approach to marketers’ problems; Andrew Robertson’s BBDO has shown willingness to make personnel changes and is evolving from a 30-second-obsessed agency into a flexible organizer of collaborating Omnicom shops; and Ogilvy has shifted to a single P&L to eliminate financial barriers to collaboration among its disciplinary units.
Layers of bureaucracy
But all the big ad agencies still have layers and layers of bureaucracy, rampant job-title inflation and hundreds of people whose chief role seems to be managing up. Their product has barely changed (you could count the genuinely big ideas from the last 12 months on one hand), and I’ve heard at least three separate first-hand reports of people within those organizations who’ve had good non-TV ideas for a client being told that they’d have to be turned into TV commercials before they could be pitched.I’ve recently been rereading “Re-imagine!,” management guru Tom Peters’ brilliant look at the new business order, wrought in large part by the Internet and which, he says, requires every modern business to constantly destroy and reinvent itself to survive.
Fear incrementalism
He takes issue with organizations that tweak rather than reinvent: “MIT Media Lab boss Nicholas Negroponte said: ‘Incrementalism is innovation’s worst enemy.’ Sad fact: Big organizations, by their very nature, are addicted to incrementalism ... they seldom make the changes necessary to deal with a discontinuous environment. ... Most big enterprises that survive a challenge from an upstart do so as shadows of their former selves. Still alive. Still big. But no longer the pathfinders.”]
This post was written by: Kim Mickelsen