Dentsu chief Wendy Clark: ‘If you don’t like change, you’ll like irrelevance even less’

And like the parent company’s own transition, an effort to ”overhaul” and rationalize the Japanese firm’s sprawling empire, working life at Dentsu Edinburgh is not yet settled. Most of its staff are still working remotely, coming in for occasional collaboration days or a visit to the pub.

Plenty have turned up on the occasion of global chief executive officer Wendy Clark’s visit, though – she’s stopping in before heading over to the Cop26 climate conference in Glasgow, accompanied by chief sustainability officer Anna Lungley.

There they’ll be meeting Dentsu’s clients, themselves interested in showing how far they’ve come and how much they’ve committed to limiting the effects of climate change.

Dentsu, which has committed to hitting carbon neutral by 2025 and zero emissions in its supply chain by 2030, aims to help businesses ”go further” to engage in ”deep decarbonization” of the economy, according to Lungley. Although the ad industry has come in for some heat for its links to carbon emissions (both directly and through their clients), Dentsu was the first of the big ad companies to establish carbon targets.

It’s a handy illustration of the conundrum facing Dentsu's leadership. Even as the company attempts to prepare for the next 100 years of business by taking a long view on the environment, on recruitment, and on its wide-reaching restructure, short term challenges are mounting.

Taking the reins during a restructure

As well as her flying visit to Cop26, Clark is also in town to continue the work of introducing herself to the company she leads. Before the pandemic, this might have meant months flying around the globe meeting agency leaders and making her presence known. But most of Clark’s tenure has been spent on Zoom.

”I’ve probably met 100 people in 14 months, out of 45,000. I haven’t met all my direct reports; our head of APAC is India, he can’t come out. Our head of media is in Amsterdam, unable to leave.”

While Clark will likely meet more of her colleagues in the coming months, a more removed style of leadership will be a necessity going forward. Dentsu has committed to reducing flight emissions by 65%, and Clark says she’s ready to be ”direct and purposeful about when I get on a plane.”

”Earlier in my career, if the client said ’I’m not happy,’ I’d go and run and get on plane. We and our clients are now programmed to be much more mindful of what really requires in-person [meetings] and what can be done over camera.”

Clark joined Dentsu at a curious time. In her own words, the corporation is midway through a ”dramatic overhaul,” one that will see over 160 agency brands eventually condensed into six, conducted ”from people’s kitchen tables and homes in 145 countries around the world.”

”We are probably a third of the way through that journey,” she says, noting that the merger between Vizeum and iProspect went without a hitch. ”If we can take it at that level, the smaller ones are easier to do.” Though she inherited, rather than initiated, the remodeling, Clark is adamant it’s what clients want from the agency.

”I was a client for most of my career, so I understand... it’s less about an agency’s shingle and more about: ’Can I have him and her and a little bit of them? Give me the people I want, and you call it what you want.’

”It had been the most acquisitive network in the world and in six years had acquired all these capabilities that weren’t working together... they were just sitting vertically rather than working horizontally. That was the job to be done; we're still doing that.”

Much of that process has been the ”hard work” of connecting ”narrative to action,” she explains. Becoming ”the most integrated network in the world,” means in reality reviewing hundreds of building leases, merging corporate legal entities, rationalizing HR systems and financial arrangements.

”It’s necessary work and it has taken a lot of our time because you have to get it right. You’ve got to have that commonality... you can’t imagine the complexity that existed. That’s what's been going on behind the scenes over the last year and that work is well underway.

”I can give you a narrative of the most integrated network, a narrative of our sustainability commitments. But if the if the hard work behind it doesn’t exist then it's just narrative. And there’s a gap from narrative to action and that's where leadership has to drive accountability.”

The work isn't all inward facing. Clark says Dentsu may return, tentatively, to the acquisition table in the near future, and is looking at agency targets that are a good fit for its new model. Its acquisition of LiveArea in July is likely to set the tone for future buys. ”We’re going to do fewer, more targeted and bigger acquisitions,” she says, with specific areas of interest ”digital, data, commerce, loyalty, some B2B, and cloud.”

”We’ve got a broad swath of capabilities where we need them. Now, we’re going deeper into those capabilities and filling gaps.”

Keeping staff on-side

Though she says Dentsu’s environmental goals are motivated by a ”siren call to do the right thing,” it’s also motivated by siren calls from clients and prospective hires. She says RFPs now include sustainability performance thresholds as standard, while Lungley shares that Dentsu's environmental footprint is a subject repeatedly coming up in job interviews. With a median age of 27, Dentsu's employees want to work for a company that does its bit.

”This isn’t optional,” says Clark. ”We have attrition challenges... if we didn’t have this, I think we’d have an even bigger retention problem.”

That ”attrition challenge” isn't just due to external pressures – it’s linked directly to the company’s restructuring plan. In December, well before the ’Great Resignation,’ it announced 6,000 redundancies. That left it hard-pressed to meet demand from clients when spend rebounded in early 2021, and when veterans in the ad industry began migrating into other sectors later in the year.

”The industry bounced back much more quickly than we anticipated, which is a good thing. but it did put us collectively our back foot,” she admits. ”That created a gap between supply and demand. We’ve been filling roles as quickly as we can.”

The upshot, she says, is that it’s put the group's diversity efforts into overdrive. As it's refilled staff rosters, more new recruits have come from pipeline programs such as The Code. In the US, it’s seen unprecedented interest in its internship schemes; Clark says two thirds of those on the program ended up joining the business. In the UK, it's offering everyone at the beginning of their career a formal apprenticeship.

”You have to start looking for other sources where you can pick up the talent you need,” she says, noting that a greater commitment to development and training should strengthen retention in years to come. ”That drives loyalty... because we were the ones inviting them into the industry.”

But despite the expansion of its pipeline programs, the gender pay gap at its UK entities widened during the last two years (Dentsu London's gap increased 1.4% since 2019), reflecting the fact that women were more likely to be let go during the pandemic, and the proportion of men employed by Merkle, which was integrated into Dentsu during the latest reporting timeframe.

”Attrition has impacted women more than men, it’s impacted moms more than women without children. Moms are four times more likely or leave their job right now than women who do not have children, and that’s unfortunate because the fragile progress we have made has definitely been impacted [by] the pandemic.”

It’s an issue Clark is determined to remedy. ”That doesn’t sit well with me at all. We have to fix it. We have to work harder to recruit women and advance women within that network [Merkle].” The appointment of Anne Stagg to lead Merkle as UK CEO, and Margaret Wagner as EMEA president, are evidence of progress, she says.

”It’s something that for the majority of my career I have focused on and championed. The way we communicate and engage with our employees... you have to be transparent about what you’re doing. There’s no hiding in the corner office any more.

”We’re looking at progress over perfection. We’re not a perfect organization but our commitment is we will constantly make progress. We won’t mistake activity for progress; we’re going to really measure that progress. That’s why we have externally stated goals like being gender equal by 2025 at all levels of the business, not in aggregate, but level by level – including my direct reports, which are 40% female right now but we've got to get that to 50%. There’s no other choice.”

The restructure may also affect Dentsu’s ability to attract top talent, Clark concedes. But, she reflexively quotes a former boss who told her: ”If you don’t like change, you’ll like irrelevance even less.”

”You can’t be in this industry and not like change. People in this industry, pound for pound, they like change. They like to be part of architecting and delivering change. That’s what the overhaul, the transformation of our business has really been about. I think it’s been attractive to many. We’re pivoting to where we believe the future of the industry is.

”I want to be someone who's grabbing the thistle. From a leadership perspective, I’ve never met anyone who goes: ’Oh, it’s running perfectly, sign me up.’ You want to come in and put your mark on something.”

Clark is optimistic about Dentsu, and the industry as a whole, becoming a fairer, healthier place to work. The ”false choices” staff formerly had to make between family and career were an ”absurdity” that the pandemic has buried, she suggests. ”Gen Xers and Boomers have to get over their rites of passage. We did things in our careers that these upcoming generations are simply unwilling to do.

”I moved my family, I worked nights, worked weekends. [Younger staff] have no respect for that, they think I’m crazy. These are false choices that they are unwilling to make. That’s not going to happen anymore. We’re going to become a company that is much more balanced in its outlook, that really cares about the total health, both physical and mental, of our employees.”

Proof of progress

Proof that Dentsu’s restructure is gaining ground in the present, not just for the future, will come in two forms – the balance sheet and client wins.

Although iProspect’s overhaul was successfully pulled off without losing a client, observers expected Dentsu to be in with a shout for the Coca-Cola review, given Clark's time as president at the soda-maker. Its rosette for second place, or “complementary media partner” in Korea and Japan, will likely come as a disappointment. On the former, the holding company's quarterly results later this week will hold crucial clues to whether it’s keeping pace with rivals. Clark says she’s ”feeling like we’re very much in the pack with our competitors.”

While she cautions that ”there's not an ounce of me that’s waving victory... I feel very positive about the journey that we're mounting, the performance we’ve had in Q2, and where we sit on the transformation journey.”