afaqs!

Mudra: A New Architecture

By Devina Joshi , afaqs!, Mumbai | In Advertising | December 14, 2009
How an ad agency became a communications group. The story of Mudra

When Madhukar Kamath returned to take charge at Mudra after six years, there was a whiff of change in the air. Kamath, the new managing director and CEO, took over from founder A G Krishnamurthy (AGK) who had just retired.

When Krishnamurthy set up Mudra nearly three decades ago in Ahmedabad, it was a company with a single client (Vimal) and a 500 sq ft office. Today, the 26-office Mudra Group no longer has its offering limited to advertising in the traditional sense. It now calls itself a holistic communications group.

& #BANNER1 & #afaqs! tries to understand the difference in the light of the recent management and organisational structure revamp at Mudra.

Four-pronged strategy

Mudra now has four verticals - Mudra Communications, DDB Mudra Group, Mudra Max and Ignite Mudra. It is being run in a manner that is atypical to a regular agency structure, culture and functioning.

To understand Mudra fully, however, one has to go back in time.

Since its launch as Reliance Industries' in-house ad department-turned agency, Mudra had built itself a fierce reputation for working with Indian companies, particularly entrepreneurial ones. Post Vimal, it won itself clients like Dhara and Rasna.

All those who passed out of the Mudra 'school of thought' (and we're not just referring to MICA, the communications institute it set up in 1991) will testify that there was something different about those who worked at the agency.

The Mudra brass (Krishnamurthy himself, Dr Naganand Kumar, Dr Ramachandran, Dr Arun and Ravi Ratan Arora) could be spotted a mile away amidst other agency folk. They dressed differently, spoke a real-world lingo and were understated, shorn of showmanship.

Mudra, with its stress on being a good person before being a good professional, produced some of the finest admen today. It showed in some of the work too. It wasn't all smooth sailing, however, all the way.

The flip side

While Mudra concentrated on traditional advertising, it also tried to do things differently but the ventures went awry over time (Videotec and Interact Vision were two such) and most eventually shut down.

What was also dispiriting was that despite DDB buying a 10 per cent stake in Mudra in the early '90s (a stake it continues to hold), the association didn't reap many benefits back then, be it in terms of international business alignments or methods and processes. Kamath attributes this to a mindset that "focused on Mudra as it traditionally was," - a powerhouse of traditional advertising which was minting money and hence the favourite baby.

That mindset led to the quick termination of anything else that was attempted. Further, as a challenger brand, Mudra took risks in the early '90s, but as it became bigger, it started getting 'safe' and formulaic, which was how Kamath found the agency to be once he rejoined Mudra in 2003 (after having quit in 1999 to go to Bates India).

"I had quit Mudra because I thought the agency had reached a plateau…a sense of complacency had set in," Kamath shrugs. Having spent four years away from the agency, he had the chance to view it from the outside. "I didn't see Mudra as an aggressive competitor back then. It had lost its sheen somewhat," he says.

Comeback man

So when Kamath was called upon by Anil Ambani to head the agency in 2003, he hit the ground running. "I realised that the agency had excellent client relationships, good talent, and a fantastic unexplored potential. I also saw Mudra happy in its traditional agency format, with 98 per cent of its revenues coming from traditional advertising," Kamath says. Despite all this, Mudra's perception had changed for the worse. It wasn't 'keeping up' with the times, its creativity had question marks raised and the spark for which the agency had been famous for, had dimmed.

Kamath's first day of rejoining Mudra was AGK's last. "I had a half-hour conversation with AGK and he simply told me, 'You know Mudra, you've worked here. All the best'," recalls Kamath. Timing-wise, Kamath couldn't have chosen a more tumultuous entry. Mudra had just lost two of its largest clients: Reliance Infocomm (now Reliance Communications) and Samsung (it moved to Cheil). Further, a "fractured" relationship with DDB had to be repaired.

On the plus side, MICA had begun growing at that point of time, and Mudra was launching more offices and trying to shed the 'only-Ahmedabad' tag (in fact, Mudra moved its head office to Mumbai in 2003 itself.)

Vision statement

The first thing Kamath did was pick up Louis Gerstner's book, Who Says Elephants Can't Dance? which was about IBM's turnaround and give it to senior colleagues. "In turn, I was also presented a book called Execution by Anil Ambani. It spoke about how you can't have a vision, unless it is executed. Ah, it was a fantastic book," he smiles.

The next couple of years were spent in changing mindsets within the agency. "Don't be content or happy with what Mudra has. Mudra has to change," went the messages. This was based on the truism that the customer was changing and had developed several touch points apart from print and TV, where he ought to be reached. The enormity of the task at hand included working out the game plan for converting the organisation into one with the times and identifying the set of leaders who would help achieve this.

The HR team led by Ajit Menon was briefed on creating the next set of leaders, in an attempt to make Mudra a learning organisation. "Having worked in Mudra earlier, I had the benefit of knowing what not to do. I had learnt from the mistakes of my bosses," says Kamath.

Taking its first step towards becoming a communications group, Mudra acquired Kidstuff Promos & Events in 2005. It also unleashed Mudra Marketing Services (MMS) and OMS, a media offering. These two functions were brought under Mudra Max. Tribal DDB, Rapp, and DDB Mudra were quiet but steady launches in India.

The Mudra team is pleased about how things have turned out. The agency now claims to be four times larger in terms of revenues than it was in 2003. Traditional advertising at Mudra now constitutes 60 per cent of revenues. "Today, Mudra Advertising is as large as the entire Mudra was when I took over. And Max, in 12-15 months, will be the largest vertical in the Group," says Kamath.

The difference

No respectable agency today underestimates the power of unconventional or 'new' media. Some popular ones such as Ogilvy India, JWT and Lowe Lintas have several divisions that foray beyond the regular. What makes Mudra different?

"Many agencies talk of 360 degrees. I feel like telling them, first do the 60, and we'll talk of the 300 later!" quips Bobby Pawar, chief creative officer, Mudra Group, to whom the fact that Mudra doesn't have a majority investment by an international network makes all the difference. A typically networked agency, he says, has its culture defined by the headquarters in Madison Avenue. Pawar should know having worked for over seven years in O&M New York and BBDO Chicago. He came back to India and Mudra in 2007.

Mudra is making significant investments in each of its verticals, systems, processes and talent. "Our restructuring," says Kamath, "doesn't put the client in the centre - it puts the consumer in the centre. And that is how we're different from other agencies.

It isn't just about client approvals. What do we produce? Ideas. What do we provide? Creative business solutions."

People power

The culture of Leadership Learning and Change (LLC) was born a few years ago, in order to build leaders who would thrive in change, not cope with it. Leaders were not selected solely on the basis of seniority. Those with people skills were preferred to ensure better productivity. In 2004, Mudra had 550 people. Now, it has 1,000. If one adds the employees in Mudra Multiplier that figure goes up to 8,000. Part of Mudra Max, Multiplier is a trade marketing venture specialising in merchandising and maintenance, sales channel management and recruitments among other functions. According to Bose of Mudra Max, there is a minimum of, say, 70 people in each division.

Mudra's HR plays business partner to the vertical heads, by taking the administrative job out of their portfolio, doing timely reviews of the vertical performances and help chart out their course. "The culture of a place is defined by the people working in it. We check out whether every individual fits into the greater Mudra culture, while retaining the individualistic or entrepreneurial bent of mind," says Menon. The average age of employees is 30-32, which is 10 years younger than it was in 2003. Every year, 2 per cent of the Group's revenues are dedicated towards training. This year, Rs 2 crore has been allotted for this purpose.

Creative balance

Pawar has played a key role in upping the agency's creativity quotient since his appointment in 2007. To turn the ship around, he even challenged the way veterans at Mudra thought. It was about taking a leap of faith, and everyone was given a chance to speak.

"Yes, there have been casualties. People who couldn't adapt to the new way of thinking (who felt 'This is not for me') probably moved on. Although there was a temptation to hire young boys, we tried not to lose loyal people at the agency," Pawar says, adding that youth is overestimated in this business. One has to have a balance of guts and maturity, and people who matched that were hired.

For Pawar, change is a cathartic process, and there is a fair bit of pain involved. This change shouldn't be about changing advertisements, it should be about changing the place, beliefs and goals. The advertising would change automatically then. Pawar coined the creative culture of 'Broad Ideas' as opposed to 'Big Ideas'. Broad Ideas are supposed to go beyond a baseline, script or a campaign. Their roots are deeply ingrained in a sound strategy.

"I started off by writing a book on what Mudra should be and showed it to Madhukar. Whenever any of us were to veer in another direction, the book served as a reminder on what our larger goal is. Madhukar often quoted the book back to me as an argument," Pawar laughs. "The fact that we were asking uncomfortable questions of each other - was good."

There has been much talk about DDB's growing interest in Mudra. Ask Kamath about the possibility of selling off to Omnicom, and he comes up with, "Who knows what might happen in the future? All I can say is, it feels good to be wooed!" In a more serious vein, he adds, "Besides, it isn't right to assume we are fattening Mudra only to sell it off." Point taken.

Mudra Max

Mudra Max is clearly a frontrunner in Mudra's dream to be a business solutions company. Pratap Bose, who joined just over 18 months ago, is CEO, Mudra Max, and COO, Mudra Group. "When I joined, in banking analogy I perceived Mudra to be a solid Grindlays Bank and not a Citibank!" he jokes. Before joining Mudra, Bose was CEO of Ogilvy India.

Bose was clear that he didn't want a two-member team and call it a separate division. What clients seek is specialisation in new media, be it rural, viral, word of mouth, digital, PR, events or trade marketing. And these don't work in isolation: it is a combination of them clients look for, and such divisions require scale and expertise. "Very few agencies can talk of this spectrum, the core competency of having a critical base in these areas, of a large set of clients, of delivering $2 million (Rs 10 crore) worth of revenues per year per unit," Bose reveals. Mudra Max's strength is 400+ and it has 16 sub units. At any point, 2-4 units work in tandem for a client, which is an effort in becoming real partners to clients and not just their ad agency. Mudra Max is growing at the rate of 50 per cent annually and calls itself a 'no line' arm, as it doesn't prescribe to ATL or BTL.


DDB Mudra Group

The formation of the DDB Mudra Group is a culmination of the seemingly now on-now off relationship that Mudra forged with DDB around 20 years ago. It is also an answer to the perception that Mudra is only good with Indian clients. "One of the key reasons for DDB and Mudra to join hands was Keith Reinhard and AGK's belief that their value and belief systems matched," says Sandeep Vij, chief executive officer, DDB Mudra Group, adding that the last five years have, on the foundation of mutual trust and respect, helped cement this relationship.

DDB Mudra Group comprises DDB Mudra (the ad agency), Tribal DDB (digital agency), Rapp (data-centric media agnostic marketing solutions) and Mudra Health Lifestyle (communication in the healthcare space). Some of the clients include Volkswagen, Neutrogena and Clean & Clear (Johnson & Johnson), Henkel, Lipton Lever, ADAG, Infosys, Wrigley and Tata AIG.

The senior level team comprises Venkat, president Rapp; Rajiv Sabnis, president, DDB Mudra Advertising; Max Hegerman, president, Tribal DDB; Soumitra Sen, president, Mudra Health & Lifestyle; Rajeev Raja, national creative director, DDB Mudra Group and Mike Follett, group strategic planning head.
"My primary mandate is to mould an internal culture that truly inspires internal collaboration enabling us to build and harness our collective creative energy," says Vij.

The next goalpost for Tribal DDB India is to further build specialisation in mobile, gaming and technologies that transcend platforms. Rapp in India will further invest in analytics, loyalty platforms, and digital solutions. The same is true for the health & lifestyle offering.


Ignite Mudra

Ignite Mudra is Mudra Ahmedabad reborn. The vertical, currently operating out of Ahmedabad with 40 clients under its belt, services Indian entrepreneurs exclusively (in line with the spirit of what Mudra Ahmedabad stood for).

However, Ignite is more national: these entrepreneurs need not be from Gujarat alone, they can belong to any part of the country. For instance, it handles Jalgaon-based Nilon's Group or, in Jaipur, the Derewala Group of Jewellers.

One of its biggest clients is Paras Pharmaceuticals, where it partnered brands like Moov, Dermicool, Itchguard, Recova and Livon right from deciding the brand names to category research, to packaging, to sales growth and so on.

Chandan Nath, president, Ignite Mudra, says, "Our job is to identify non-metro based brands or products that are itching to go national." New entrepreneurs might be struggling with PR, for instance, or distribution, HR inputs for structuring their organisations, or they might need new business models. The agency has a bank of professionals that provide such expertise.

Even the clients help with work. "We encourage new prospects to meet with our existing entrepreneurs for help in setting up their businesses. This is the difference between an entrepreneur and a professional wearing a suit," laughs Nath.


Mudra Communications

Headed by CEO Jude Fernandes (a veteran at Mudra for 17 years), this vertical has ad agency Mudra under it along with strategy and design consultancy Water, and localisation and pre-media services arm, Maatra.

Mudra Mumbai started the success journey by winning the Hong Kong Bank account in 1993-94. Its business with Godrej Consumer Products also grew. A big thrust came with MaxTouch - a JV between Max, a pharma company that had no clue about the telecom business and Hutchison that had little clue about the Indian telecom market. Within a year, MaxTouch (1995) had given market leader BPL tough competition, by grabbing a 60 per cent market share. Today, the Future Group business is big.

Successful campaigns such as Zindagi Ke Saath Bhi, Zindagi ke Baad Bhi for LIC, Humko Binnies Mangta for Binnie's (Mudra Delhi) brought in the money - as well as some trophies.

Fernandes reveals that the gameplan for his vertical includes a new business drive in sectors - like newspapers, automobiles and two wheelers - that it is not present in. It is also looking at improving the quality of work and being more visible about it; pitching for large businesses and work like a challenger for smaller ones. "After all, in mindset, we still belong to the heartland of India," Fernandes says, adding, "we invested in people when others were cutting back - many of these recruitments, particularly senior level, are of those who hail from smaller towns."