Gordon Young’s leader: could the internet supplant networks?
There’s not much to a bank, except its licence, computer systems and reputation... so said Martin Taylor, the former CEO of Barclays as part of a Radio Four item on the scandal engulfing his former employer. It is an insight that stands true across a swath of big business, and is summed up in the advertising industry clichés: ‘In this business the assets walk out of the door every night.’
The truth is that for many organisations their real value is their organisation. What they actually do can be secondary.
Just ask any truly global client on the brink of appointing a truly global network if they have got down to looking at the work. Historically to them the logistics – the ability to deliver in their key markets – has been the primary criteria.
Historically size has mattered because it has ensured networks have global reach. But it has also been important for another reason. Big organisations – with their finance, personnel, estates, IT and admin needs (not to mention the cost of paying their top people) – are expensive to run. They need to be big to achieve economies of scale.
And most choose to grow through acquisition which is instructive in itself. Take WPP’s recent acquisition of digital agency AKQA. Despite being one of the world’s largest creative companies – employing 158,000 people, across 2,500 offices, in 107 countries – the premium they paid is an acknowledgement that they lacked the ability to replicate this sort of business from within.
What WPP is bringing to this party is organisation. What AKQA adds to the mix, is its innovation. AKQA will now get the infrastructure to expand into new markets, and WPP will get a strong digital offering.
But I suspect they’ll also get a wake-up call. Because AKQA is the product of a movement that will ultimately disrupt models such as WPP’s – as well as any organisation, like the banks whose primary offering is being an organisation.
The whole point of digital is that it brings producers closer to the ultimate consumer. It gives bloggers, writers and small corner stories access to an international community. It allows small business to operate on a global scale and start-ups to crowd-source their funding.
It is a low cost equivalent of what a network agency or large bank were devised to deliver. In theory it could render much of what WPP does as a corporate entity redundant. The past may have belonged to those with an ability to organise. In my view, the future belongs to those with an ability to produce.