Changes at Propaganda - up the evolution

It is intriguing to say the least, but as Kynaston begins to explain the situation, it quickly becomes evident that there is more to this plan than simply moving 40-plus staff ten miles down the road to The Calls.

Harking back to a Propaganda board meeting held around three months ago Kynaston says: “We were getting blitzed by people saying in trade magazines that we all have to ‘evolve or die’. To our mind, nobody had actually broken ranks and evolved at all. We asked ourselves whether we needed to evolve and while we had not suffered directly from the credit crunch we did see some projects wiped out as they were downwind of the construction sector. What that said to us was that while we had been lucky financially, we were vulnerable and we accepted that we needed to do something.

“We tried to distil down what we felt agencies will be facing in this tough climate and we came up with a one liner, that ‘clients need better strategic advice faster’.

“I have not been a fan of the account manager and account executive role for years. Invariably, when an account executive aspires to be an account manager or an account manager aspires to be an account director there is an inherent compulsion on that journey for those people to make an enthusiastic attempt to offer clients strategic counsel or design critique. While that is fine for the structural growth of the agency I think that we have to be big enough to say that that is an awful lot of pissing around with a clients money.

evolution

“Our simple viewpoint here is that good business does not look like junior people trying to practice their art on a client’s budget. So, part of our evolution will see us remove the titles of account manager and account executive from our structure. In place of those titles we will simply have project managers. Those project managers will sit to the side or the back of the account director and we will see almost a return to the good old fashioned apprenticeships, where the apprentice learns their trade by watching their mentor deal directly with the client... but they do not learn at the expense of the clients.”

This approach to only allow senior account directors to deal at a strategic level with clients certainly appears to answer the one on-going client gripe: “I saw the account director at the pitch, but I’ve not seen them since they won my business,” but what about at a staff level? Is this approach not cutting off promotional opportunities for staff?

Kynaston says: “I suppose you can see the old agency head viewpoint on this. We are breaking down the sustainability of agencies, we are removing promotional and aspirational lines and even more so, we are daring to tinker with a structure that someone, somewhere has deemed effective for a long time. I do not think it is effective. The truth of the matter is that currently account managers and executives get a schooling in winning business and losing a piece of business in six to 12 months. That, to me, is not a great schooling. What we are abdicating here is a change in the account director’s role, a much longer apprenticeship, a much longer time to gain experience and a pegging back of the desire of an individual to hint it might be done a better way, but to watch the account director and learn from them – and one day we may very well have an account director recruit.”

Does Kynaston envisage any members of staff not going along with the new structure? Perhaps for an account manager working towards account director status, to have this snatched away from them only to be re-badged as a project manager could come as a bit of a blow?

HARDCORE

“I don’t mind declaring this, but Propaganda is a hardcore of around 40 people. Around that hub we have people who serve us well and they come and they go. But you can look at this organisation and, over the past six or seven years, change to this hardcore group is minimal. I’m not saying absolute, but you could count the changes on one hand. I suppose the changes are quite volatile. That volatility brings us fresh energy and allows us to cope with fluctuations and changes in our operating model. I think people who work here trust the directors enough to do what we do to keep them in employment for years to come.

“This is exciting and we will make three hires on that front, in terms of bringing new project managers into the mix. Also in terms of the existing teams, we are deploying two into that new role and others will be brought into the agency.”

The last major evolution at Propaganda came around 12 months ago when Kynaston launched his Brand Multiple offer, a highly strategic board level consultancy service which explores methods of increasing business value through harnessing the value of the brand. This new approach is currently being demonstrated first-hand by Propaganda with the launch of its Illamasqua cosmetics brand, which hit the beauty floor at Selfridges in London in November and is now being rolled out across the UK.

Through its Brand Multiple expertise Kynaston and his co-owners of Illamasqua are aiming for the brand and business to be worth around £100m in five years, at which point they may or may not pursue their exit strategy, which was put in place at the very outset of the business planning process.

According to Kynaston, now Brand Multiple has had a year or so to bed in, it is a real focus for investment with his business and has already been responsible for bringing £500,000 worth of fee income into the agency.

It is also Kynaston’s dogged belief that Brand Multiple is the future for his business that started the jungle drums beating about the agency’s move back into the heart of Yorkshire’s investment and financial community at The Calls in Leeds. Well that, and a few members of the Leeds marketing scene spotting him and his fellow directors checking out their new offices one afternoon.

“This move to back to The Calls will be our sixth so we are getting quite seasoned at moving.” he jokes. “The principal reason is that we have had all of our growth recently from our Brand Multiple venture, so predominantly most meetings are with management teams, the institutions and private equity firms, and the inconvenient truth is that most of those are ten miles down the road in the heart of Leeds. We feel we need to be right back in there among them. Also, I suppose, for the growing reputation of Brand Multiple it is not the kind of offer one would expect to find out in the sticks.”

With six moves in 14 years under his belt Kynaston is not daunted by the prospect of packing up and shipping out of Garforth and has now come to view the relocation process as an opportunity to re-fresh the culture and creative spirit internally at Propaganda.

REFRESHED

He says: “The need to keep a creative agency refreshed is critical and we have almost come to treat our moves an an opportunity to have a spring clean, have a re-fresh of our positioning and use it to re-launch and re-invent. There was a lot of positivity when we moved from The Calls to Garforth, but that centred mainly around the fact that we had a lot of parking. What the staff did lose was the social life of city centre agency life. I don’t think anyone here has ever actually been to the local pub. The move back into the city, going out for drinks or a meal after work will be fantastic for the staff.”

Another aspect of the agency’s evolution, and perhaps one of the most surprising, is that the agency is going to begin to outsource all of its tactical work to a creative agency based in Huddersfield called Bang. Again, harking back to the integral nature of Brand Multiple to the agency’s future, Kynaston believes that outsourcing this aspect of the agency’s work will enable them to focus and invest further in Brand Multiple.

He says: “The one thing we have debated here over the years is whether Propaganda will ever get to a point where we do the clever stuff, as we call it, and get someone else to handle the tactical work for us. That sounds quite disrespectful to the tactical side of what we do, but we recognise that it takes a lot to make strategic thoughts materialise. We did once trial an outsourcing relationship in the past, but it failed, however we have always been looking for someone who works the same way that we do.”

Huddersfield-based Bang has been around for some 13 years and its relationship with Propaganda began around six months ago, with a few projects being passed its way. But what impressed Kynaston particularly about Bang was the fact that they get as excited about the results of their creative work as they do in delivering the creative product, he says.

Propaganda will, in year one, put tactical work worth £250,000 into Bang and that increased workload is expected to see up to three staff from Propaganda invited to move across to work with Bang. Also, current joint managing director at Propaganda, Laura Kynaston, will take up a non-executive director’s role at Bang, and other senior members of the Propaganda team will take part in a mentoring scheme with staff at Bang to share their experience and knowledge.

Despite this arrangement with Bang, Kynaston is keen to ensure that the creative reputation of his own business continues to grow. In line with this, Mark Williams, who was with the business in 2002, has joined as senior art director from Leeds agency Fourninety to work alongside current creative boss Lu Dixon. Since his time at Propaganda, Williams has spent time working at The Leith Agency and Saatchi & Saatchi working on clients such as Toyota, Sony, Morrisons, DFS and Irn-Bru.

Now, it remains to be seen if where Propaganda is leading others will follow? That said, Kynaston is not concerned with how this move is received by competitors as he and his board are convinced this is the right way forward for their agency.

“The first indication that we have got this startlingly wrong would be if everyone bought into it. That is a basic of branding. A brand is not a brand by pleasing everyone. A brand divides through which it conquers. We get closely watched by the competition. I would watch us too, as we are constantly changing and evolving and we are certainly still in a market where there are some leviathans of advertising.

“The market has fundamentally changed and their practice is not working anymore. Their practice has not evolved and they are more preoccupied with nothing more than some affectionate love story with their past, which has no relevance to modern day clients.

“We don’t care what our competitors think of us, they actually do a good job for us, acting the way they act.”

What Kynaston is referring to here are the smaller agencies that he feels give the marketing profession a bad name simply by promising clients results that they simply cannot deliver on the budget they have available. Despite these changes, Kynaston knows that 2009 will be a year of real difficulty for the industry.

LIAR

“If you are a big agency claiming you are not affected by the credit crunch, then you are either a liar or, like us, you have evolved and taken action to alleviate that.

“I think any agency with 50-plus staff right now will be scratching their heads. Traditionally when agencies scratch their heads they know what they need to do, but the biggest threat to them is what other agencies think about them when 20 people are let go.

“If you want to get some bad news out there, now is the time to do it. If that means that the long term preservation of your agency means to make changes, you fund them by dropping a few heads. It is a great business judgement to do just that.

“Now is the time to do things. It is not a time to sit hoping that this period will come to an end. This will not end, it will metamorphasise into another place, but that new place will not allow some of the crazy things that have gone on in the past to go on any longer.

“My view is that it will be a return to good old fashioned business. There is no defeat or failure in changing your operating model. The feeling should be of deep excitement. And the challenge is for us all to go back to the very heart of what we do.

“We need the best equipped people and management teams in all sectors to look and evolve positively and come out this with a much better proposition for the client.”

And with that thought, The Drum departs Brookfield Court for what will no doubt be the last time. So it’s back to The Calls for the next chapter of the Propaganda story.