Managing agency succession: Walking the tightrope - Part I

"Leadership has a harder job to do than just choose sides. It must bring sides together." - Jesse Jackson, American Congressman.

Almost every year, the Indian advertising industry comes to hear of at least one or two high-profile departures from one agency or the other. Now, typically, the reasons cited for the departures range from ‘a tiring of the job' to ‘the need for a break' to ‘the desire to seek new challenges'. (Some departures are, of course, tenure-led.) And usually, the industry buys whatever reason is tendered, and settles back to its routine without much ado.

However, once in a while, the industry - and the media - puts certain departures under a magnifying glass, and therein begins the process of speculation over the ‘real' reasons behind the resignation. Such departures, by nature, are totally unexpected, and pertain to people who held key positions in the agencies they quit. In fact, the departures are unexpected because the concerned individuals were also seen to be playing even more crucial functions within their respective agencies in the days to come.

Last year was no exception. While there were many ad folk who shifted agencies - even careers - the three most ‘analyzed' moves were those of Ketaki Gupte, Sunil Gupta and Rajiv Agarwal. Admittedly, all three resignations came out of the blue, and all three people held key positions in the agencies they quit. With Agarwal, the speculation was all about his seesawing five-year partnership with Mohammed Khan (chairman, Enterprise Nexus). While vis-à-vis Gupte and Gupta, the rumour mill was full of how their respective resignations had to do with an "unfulfilled ambition of making it to the No. 1 post". (This ‘reason' wouldn't have applied to Agarwal, obviously.)

In the case of Gupta and Gupte, the historical background was that Gupta was senior vice-president and general manager, HTA, while Gupte was senior vice-president and executive media director, HTA. And both were old HTA hands. That's all. Here onwards, everything is in the realm of hypothesis.

Apparently, Gupta was seen as the man most likely to take the helm at HTA, once current chief executive Mike Khanna retired in 2003. And Gupte was widely expected to take over as CEO of MindShare India, the joint media buying initiative of WPP-owned agencies HTA and O&M. Gupta, it is rumoured, quit HTA because of a "power struggle" within the agency, while Gupte is believed to have left once she saw her chances of making it to the apex of MindShare India receding.

Incidentally, O&M's ex-media head, Kalpana Rao, was also seen by some as a strong candidate for MindShare, and there was a small episode of her supposed resignation from O&M - a rumour which she quickly quashed. But, her statement, "I am not leaving O&M, but I am not joining MindShare," allowed a lot for people to read into.

Of course, the MindShare and HTA situations have since been sorted out. Andre Nair was appointed CEO of MindShare India and South Asia in September 2001, while Khanna has gone on record stating that Kamal Oberoi, president, HTA, will be his successor. In that sense, yes, it's water under the bridge. But the recurring issue of succession is still to be suitably addressed. After all, MindShare and HTA were not only aberrations… talk of people quitting agencies because of an inability to make it to the top have surfaced quite often in the past.

There is little room for doubt that succession is critical to both the agency, and the people lining up for the CEO's post. "The number one man impacts everything at an agency - its strategy, culture, output, performance and future," says Arvind Sharma, managing director, Leo Burnett India. "Therefore, a cherished job among professionals, and a serious decision for the men making the choice. The chosen one impacts careers of people who work with him, and he has direct or indirect influence on the health of clients' brands. So it is critical for people working in the organization. It is even critical for key clients who have reposed huge trust in the agency."

With so much riding on one job, the stakes are that much higher. "Succession is a major issue everywhere - in all businesses," points out A.G. Krishnamurthy, chairman and managing director, Mudra Communications. "This is more so in professional organizations because, in owner-managed organizations, the succession plan is crystal clear - it is a family member or relative, more often than not. In professional organizations, succession is an issue because, in general, there are equal opportunities and no one is more equal than others; there are at least a few eligible suitors for the top slot; and all of them believe they are more equal than others."

One reason why power struggles occur is that Indian ad agencies, perhaps, do not have clear-cut succession plans. Rajiv Agarwal (currently managing director, Enterprise Nexus, and soon-to-be national chief, rmg david) agrees in part. "We have not had a rich tradition of planning for the future," he says. "We think we are immortal… that we'll always be around. But then something unfortunate happens, and the agency is suddenly left without a leader. And because no leader has been designated, tussles ensue." However, he also adds that the advertising environment has changed dramatically over the past three-four years, upsetting whatever planning happened. "There has been so much consolidation, so many mergers, that there are fewer top jobs around. A MindShare or a Starcom is a consortium of three or four agencies, but both can have only one head. Nobody could have planned for that."

Colvyn J. Harris, president, Contract Advertising, insists that among JWT agencies (HTA and Contract Advertising, here in India), a clear succession plan exists. "We have a process where, once a year, we record a succession plan across all disciplines and all grades," he says. "This one-down is a broad listing of people who can take on new responsibilities if the occasion demands, and is sent to our regional head. It's a process of ensuring that the company continues, irrespective of who leaves." Sam Balsara, chairman and managing director, Madison Communications, also feels that succession planning has not been lacking in India. "It is not that agencies don't have a succession plan. They may not want to make it public, or known even internally, for strategic reasons."

Everyone agrees that having broad succession plans is a must. "Serious thought has to be given to how people will grow and be rewarded, and who will take over," Agarwal insists. Krishnamurthy feels that whatever the policy, written or unwritten, there will always be some grey areas. "However, it is better to have well-articulated succession plans and processes in large, professional organizations including advertising agencies," he adds.

© 2002 agencyfaqs!

(To be concluded tomorrow.)