Creativity is not enough
More and more, creative agencies and consultancies find themselves targeting the same client accounts.
The good news for creative agencies is that if they are able to combine their design, innovation and creativity with the intellectual discipline, analytical skills and scientific rigour from consulting, they will be very well placed to take the fight to consulting – but crucially, creativity on its own will not be enough.
In this Point of View article, we outline the key skills and behaviours we believe agencies need to develop in order to enter the strategic consulting arena…
That’s how former WPP CEO Martin Sorrell described the idea of consultancies threatening his company’s turf in a third quarter earnings call last year.
It’s easy to understand why Mr Sorrell might describe the rise of consultancies as false and sensationalist. He wants to reassure both his troops and his clients and undermine the credentials of the unwelcome competition.
However, as those who cry “Fake news” often discover, there’s no escaping the facts, and in recent years – as this diagram shows – consulting firms have been acquiring creative agencies on a large scale.
Only last year, for the first time ever, four of the ten largest creative agency companies in the world were consultancies – Accenture Interactive, PwC Digital, IBM iX and Deloitte Digital – with a combined revenue of $13.2 billion. There is no doubt that management consulting firms are winning client accounts that just a few years earlier would have gone to creative agencies.
Why? Because marketing and brand are now key elements of company strategy. Chief Marketing Officers and other board members want to work with firms who can use data analytics and strategic ‘nous’ to solve the big marketing and branding problems facing their businesses – capabilities which creative agencies have traditionally struggled to match.
What’s more, as incumbent companies face disruption from new market entrants, now more than ever they need to create the ‘wow’ factor to compete in the customer experience stakes.
This ‘wow’ factor cannot be generated by brilliant creative alone but increasingly requires a combination of consulting (strategy, complex problem solving and insight) and technology (digital expertise) and creative.
Consulting firms already had the ‘consulting’ and ‘technology’ capabilities. Now with the addition of ‘creative’, this ‘wow’ factor is well within their reach.
And clients want it.
But agencies are very well placed to compete
Despite claiming that “There’s nothing to see here”, agencies seem to have decided that they will no longer tolerate seeing their market share eaten up by consultancies.
As an example, WPP started 2018 by launching Kantar Consulting, ‘a sales and marketing consultancy’ and has already further bolstered its consulting operation by acquiring London-based firm Mash Strategy.
And there is much for agencies to be optimistic about. Like consultancies, they too have C-Suite connections and access to decision makers at some of the world’s largest organisations.
What’s more, when compared to consulting firms, agencies appear to have the upper hand in several key areas. Namely: creativity, user experience and campaign execution. To compete in the world of consulting, agencies must make the most of these competitive advantages.
Creativity vs. Consulting
Creativity is in the cultural DNA of agencies. Imagination, originality, and inspiration are all traits that are encouraged within the organisation. When clients choose to work with creative agencies, it is to tap into this creative culture for themselves.
The same cannot often be said of the culture of traditional management consulting firms, which were typically process-driven, analytical and scientific.
As Martin Sorrell recently said, consulting and creativity are very different:
“If you ask the Accenture consultants whether you can buy culture, they would say no… At McKinsey, they say: it is a fact that. At WPP, they say: I think that.’… One is more science, and one is more art.”
When expanding their service offerings, we would argue that it is easier for agencies to learn the skills to become more analytical in nature and embrace the intellectual discipline and rigour found in consulting firms than it will be for consulting firms to become ‘creative’.
Similarly, if consulting firms try to impose their ‘analytical’ culture onto the agency’s creative talent, they are likely to walk away. In the creative industry, where individual talent is everything, this could be highly damaging to the consulting firm.
Empathy vs. Analytics
When it comes to user experience, creative agencies still have the upper hand over consulting firms. Agencies have always understood that to create great user experiences, to influence the hearts and minds of real people, you have to combine your insights with empathy and imagination. The success of creative campaigns depends on a clear understand of the ‘human’ side – emotions, reactions, and sensations.
The challenge for consultancies is that you simply cannot get this empathy and human understanding from the output of a machine that has analysed a big data set.
Campaign execution vs. Intangible value
Finally, when consulting firms and creative agencies do find themselves occupying the same middle ground, it has been suggested that agencies will have the upper-hand when it comes to campaign execution.
Agencies have always been judged by their clients on the results of their campaigns. In order to ensure an ongoing relationship with key accounts, agencies have become used to delivering exceptional results – based on clear performance metrics – after every campaign.
Consulting engagements, on the other hand, often involve delivering high level strategic recommendations and leaving the client to implement, or undertaking a wider implementation, the results of which may not be seen until long after the consulting firm has left.
As a result, it is often hard for clients to define the true value of a consulting project.
As Greg March, the CEO of independent ad agency Noble People, argued recently:
“The knock on [consultancies] has always been, they give you decks and then leave… They’ve got to change that. If you are going to charge somebody $2 million for a strategy that’s one thing, but now they are going to have to execute.”
But despite these three advantages, when competing with consulting firms, agencies still face a major competitive disadvantage. In short: creativity, empathy and campaign execution will not be enough to compete with consulting firms on their turf.
What do agencies need to do to move into realm of strategic consulting?
Having worked with the world’s top consultancies for many years, helping their people to learn and refine the core competencies required for success in consulting, we believe there are certain core skills and behaviours that creative agencies have to develop compete in the world of consulting.
The core skills and behaviours that must be developed by creative agencies:
- Analytical skills required to take a robust, structured approach to problem solving and opportunity generation
Agencies need to learn and adopt a structured approach to problem solving and opportunity generation – and develop the associated analytical skills – as found in the majority of the top consulting firms.
While many of the world’s leading agencies have rich data sets to match those found in consulting firms, they need to develop the structured analytical thinking skills to generate insight and robust recommendations for their clients out of the millions of customer interactions this data represents.
Where ‘creativity’ is in the DNA of agencies, so ‘insight’ based on data is in the DNA of the top consulting firms – agencies will have to learn the skills and behaviours to compete in this new arena.
The good news is, in our view, it is significantly easier for agencies to develop the intellectual discipline, rigour and problem-solving skills found in consulting firms than for consulting firms to develop a ‘creative’ culture.
- Skills and behaviours to take a consultative and strategic approach to business development
Secondly, agencies need to take a more strategic approach to business development and client work.
When pitching for work, it will not be enough for agencies to simply “meet the brief” anymore. Even the notion of ‘pitching’ – defined as “a speech or act that attempts to persuade someone to buy something” – is outdated.
Instead, agencies need to take a more collaborative, consultative approach to business development and act as much more of a ‘strategic thinking partner’ for their clients.
Typically, this will include offering the client new perspectives, a point of view, identifying an unseen problem or opportunity – before being asked – and shifting attention towards the value of the relationship rather than the merits of a stand-alone campaign.
In our experience, the majority of presentations given by consulting firms still rely on data heavy, unimaginative PowerPoint slides and are constrained by strict brand guidelines. Although consulting firms are improving in this regard, there is great potential for agencies to highlight their creative power whist still demonstrating the rigour and discipline typically associated with management consulting.
- Skills and behaviours that prove you are adding value to the client, not just adding cost
Finally, agencies need to demonstrate in every interaction with the client that they are adding value and are not just a cost-driver.
As Sarah Hofstetter, CEO of Dentsu-owned digital marketing agency 360i, has argued, consultancies position themselves as ‘cost-savers’, while ad agencies are perceived as ‘cost-drivers’: “Of course, they [consultancies] charge a lot more than the agencies do, but it’s all about the [client’s] perspective.”
In a previous analysis of leading consulting firms, we argued that when it comes to determining value, “It ain’t what you do, it’s the way that you do it” that distinguishes the top performing firms.
Knowing how to translate creative expertise into relevant and unique points of view and having an ability to communicate this strategic insight in a way that the client understands and can relate to, is what will determine the level of value created for the client by a creative agency.
Leading consultancies have already identified the core skills and behaviours required to create value in the client’s mind in every interaction with the firm. For agencies to not be seen as simply a ‘cost driver’, they must identify, learn, practise, develop and refine the same critical skills and behaviours.
The battle has only just begun…
The world of marketing, advertising, and branding has changed. Creative agencies are now in direct competition with consulting firms, targeting the same clients in the same industries. In this new competitive environment, firms that can offer their clients the ‘wow’ factor (consulting + technology + creative) will be best placed to thrive.
The good news for creative agencies is that if are able to master a core set of consulting skills and behaviours and therefore combine their empathy, campaign execution, innovation and creativity with the intellectual discipline, analytical skills and scientific rigour from consulting, the battle for control of the agency-consulting space will have only just begun…
How Openside can help your creative agency
The Openside Group design and deliver development programmes for leading professional services firms worldwide. For over 25 years we have worked with most of the world’s leading consultancies to develop the core skills, competencies and behaviours needed to thrive in the world of consulting, including:
- Analytical problem solving and opportunity generation
- Consultative business development behaviours – not ‘selling’
- Cognitive flexibility
- Critical thinking
- Logic development
- Storytelling and Presentation skills
- Structured analytical thinking – the core consulting process
For agencies to compete in the world of consulting, they too will need to learn, practise, develop and refine these core consulting skills.
That is where we can help.
If you’d like to know more, we’d be delighted to speak to you.
Image Credit: myhq.in