It’s a rodeo that Scott Kauffman had been to many times before, being asked by a board of directors to take the reins of a company. Cutting his teeth in the breakneck pace of Silicon Valley, Kauffman took the front seat in environments that were often resource-constrained, filled with a young staff and inexperienced management. But this situation with MDC Partners was a slightly different challenge.
In 2015, Miles Nadal, founder of the company that boasts some of the world’s top creative shops including Anomaly, 72andSunny, CP+B, Colle+McVoy, KBS, Redscout, Mono and others, stepped down amid a US Securities and Exchange Commission investigation. Kauffman was presiding director of the board and was then appointed to the chief executive role at that turbulent time. What made this situation for Kauffman different was the fact MDC was on very firm footing.
“In this case, this is a company I knew well — and loved — with a team of people that were consummate professionals that I was also well aware of,” says Kauffman, now officially chief executive of MDC Partners. “It was also a company I had been a part of for a long period of time. In many respects, it was a lot easier than the jobs I had been asked to do previously as chief executive.”
Despite the noise around him and the company, the constant rumor swirl of impending disaster was inaccurate. The transition was smooth and a fundamental issue of great importance was to maintain momentum and keep a healthy business moving forward, culminating in a strong second half of 2015 for the company. His steady hand was by design.
“I believed MDC to be the best working model in the advertising agency industry, writ large,” notes Kauffman. “I didn’t feel a particular need or compulsion to put a unique thumbprint on the company. Job one was to make sure that we maintained our momentum.”
Pulling up a seat at the big table
One of Kauffman’s big aces in the hole is his early industry experience. In fact, Kauffman has used pieces of each of his experiences along the way, both from advertising and the tech/startup worlds, and uses them to great effect. Internally, his time in the ad business, where he started as an assistant media planner in 1978 at what was then Benton and Bowles, isn’t lost on MDC’s partner leadership.
“One of the unique things about Scott is his first-hand industry experience — not just from his media days, but subsequently in publishing and, more recently, operating on the tech side of the business,” says Lori Senecal, the global chief executive of CP+B.
Building a global footprint and profile, all with an eye on growth, was and remains always on Kauffman’s mind. Seeing an opportunity to scale, the company put more weight behind MDC Media Partners, its media operation. By getting it more organized and into one entity, it afforded a greater chance for the company to compete in pitches.
“A year ago, there was the ‘reviewpalooza’ where $25bn to $30bn of media business was up for grabs [in summer of 2015]. We were pretty much sitting on the sidelines because we didn’t have the scale and media operations that could participate in those larger media pitches. That was very frustrating to me.”
However, the savvy pivot by the company not only got MDC a seat at the table but, in some cases, it got it to the head of the table. As proof, Kauffman points to MDC agency Assembly being on the 21st Century Fox roster: “It’s a material uptake in size of business for us, that we are now able to play at a much larger level in media pitches.”
Global expansion is another key growth driver. A number of legacy MDC agencies currently have outposts in Europe, Asia and South America that grew from North American roots. One notable exception was the acquisition of highly regarded and awarded Stockholm agency Forsman & Bodenfors, which has a partnership with CP+B.
Where the mutual benefit lies is in an agency’s ability to move to the next level and a holding company’s opportunity to nurture talent and grow their business as well. In Kauffman’s mind, there is ample opportunity for both.
“It has never been easier to start an ad agency. All the technical and infrastructure is in place. Three people can leave one of those monolithic holding companies, hang a shingle and they’re in business. It’s never been easier to start an agency, but it’s never been harder to scale an agency.”
An entrepreneurial culture matters
For its part, MDC has a decidedly unique culture. It’s certainly not the largest holding company — a term Kauffman dislikes: “I hate to use the term ‘holding company’. I don’t even like the term ‘parent company’. I think of ourselves as a partner company.”
There’s validity in this statement, especially with Forsman & Bodenfors for example, in that the relationship with CP+B is malleable, allowing for a unique creative freedom that results in such high-quality work. In fact, Kauffman is acutely aware of the delicate balance between autonomy and collaboration — and it shows in the perception that MDC’s partner agencies just ‘feel’ more independent.
“We spend a lot of time thinking about where the line is, how hard to push, and how that relationship ebbs and flows between us and our partners.
“You can rattle off the names of our agencies and know that they operate autonomously, but have the backbone and the support, network, presence and collaborative environment you need in order to navigate agency life. When we think about the value we provide and the collaboration that happens here, it’s in part because those we choose to partner with are born out of this inherent entrepreneurial spirit of wanting to do great work.”
Optimism is one of Kauffman’s superpowers and his initial exposure to the company’s founding agency partner teams, chief executives, chief financial officers, creative leaders and others reaffirmed his belief that the company was continuing in the right direction both in talent and entrepreneurial philosophy, no matter the market.
The ‘e’ word, entrepreneurialism — often bandied about carelessly — matters. As does talent. Kauffman lived, saw and experienced the former for years in Silicon Valley. The latter, as it related to MDC, was a 30,000-foot view while he was on the board.
“Scott has a clear commitment to MDC’s entrepreneurial spirit which is core to the way we operate,” says Christine Fruechte, chief executive of Colle+McVoy in Minneapolis. “He shares our passion for talent and his belief in our culture helps fuel our mission.”
Another ‘e’ word is important to Kauffman: efficient. MDC’s size plays to its strengths and has seen hot ‘boutiques’ transform into global powerhouses. “Our agencies tend to be smaller, more nimble, modern, efficient, have less of a physical footprint, yet operate globally on behalf of clients. That’s a fundamental difference that we bring to the table, and global agency of record assignments are no longer a rarity. We’re getting more than our fair share of invitations to participate in those pitches and the pipeline looks very good for us right now.”
Lessons for the future
A little over a year on, Kauffman has learned a few things he’ll add to his career ‘bag of tricks’. “The biggest lesson was how singularly dependent we, and I think this whole industry, is on the vibrancy of its talent. I got into this role and realized just how much time and energy my predecessor put into creating that sense of family and culture.”
It’s a reminder that talent trumps all and the way Kauffman approaches his role makes a massive difference. “You could very easily fall into the game of, ‘I’m a holding company, I’m a public company chief executive, and I’ve got to make a number, and it’s all about the spreadsheet’. The way you get there is by creating and sustaining a culture of entrepreneurialism, innovation and creativity — and I think there’s a true sense that the individual matters here.”
In some ways, the internal talent at MDC is the advocate for a person who matters a great deal to Kauffman and MDC — and that’s the person who’s often under the most fire, the chief marketing officer.
“The chief marketing officer is the most endangered member of the C-suite in many of these consumer companies,” says Kauffman. “We’re in the business of helping that chief marketing officer keep their job, which is a mutually beneficial outcome for us because when that role changes one of the first things that happens is an account goes up for review. That’s an inefficient process for our industry.”
Kauffman has accomplished much in his first year in the role but knows there’s still plenty room to evolve, especially through initiatives focused on expansion, media and talent, and is grateful for the chance to see his vision through.
“I’ve been a student of [the industry] for four decades and now I get to take everything I have learned over that period of time and put it all in a nice bow and come here to work for what I think is one of the most dynamic entities in the advertising marketing landscape that there is today. I’d call it a blessing.”
This article was originally published in The Drum's quarterly US edition.