Goafest 2011: “Managing a service business is different from managing a product business”

The Advertising Conclave preceding Goafest 2011 gave an opportunity for advertising practitioners to discuss and look at the various issues pertaining to the industry. The second panel discussion, chaired by Nagesh Alai, president, Advertising Agencies Association of India (AAAI) focussed on what advertising agencies can learn from other service agencies. 

The panellists for the session included Farokh Balsara, partner and national leader, Media and Entertainment, E&Y, Sanjay Behl, chief executive officer, DTH and IPTV and president – brand and marketing, Reliance ADAG, Arun Tadanki, chief executive officer, Yahoo! India and Thomas Simon, vice president, Tata Consultancy Services.

 

Simon drew parallels between the engineering talent and the creative talent recruited by the IT and advertising industries. Elaborating on the employee recruitment and development strategy at TCS, he elaborated on the methods adopted by the firm and urged the agencies to follow similar practices. He said, “At TCS, we do not just hire the talent, we also help develop them. We have partnered with institutes and also help our employees learn new skills to develop them as brand custodians of the brand.”  

 

During his presentation, Behl was quick to point out that managing a services business is different from managing a product business. He elaborated on the various tools that need to be implemented for a successful services business, and talked about the importance of admitting that the company cannot excel in everything as well as the need to define experiences created by the brand and not the features on offer. Noting that excellence comes at a cost, he added that service companies should charge customers for privileges and invest in technology to save recurring costs. Highlighting the importance of presenting a team effort, Behl remarked, “In agencies, I don’t see team jerseys, but I see individual jerseys. Employee heroism needs to be checked; and not everyone can be a hero. Being in the service industry and especially with over 50,000 employees, we cannot afford to that.”

 

Balsara was of the opinion that all the specialist agencies should be brought under one big umbrella and focus on getting the best out of the single-agency model. Sharing his thoughts on the agency business he pointed out the importance of people measurability and suggested hiring fresh perspectives for clients by recruiting 10 percent of the workforce from other places (overseas or people with PSU backgrounds) as well. He urged the agencies to automate support functions as there is a lot of wastage of resources in that area, and said, “While we do media audits for our clients, we have seen instances where agencies have lost out because the system and processes employed have let them down.”

 

Tadanki observed that advertising agencies and technology service companies like Yahoo face similar issues. Citing examples from Yahoo’s approach to the business, Tadanki highlighted the importance of agency differentiation, importance of letting go of certain clients to focus on the value generated, accountability, reaching out to newer customer segments, investing in growing categories like digital and mobile, and exploring new ways to attract and retain talent. “Issues faced for hiring talent in agencies is similar to ours where engineers are important and difficult to retain. Over the years, what we have realised is that smaller towns are great resources for finding new talent and maybe agencies should also focus recruitments from that areas.”  

 

Following the presentations, Alai posed a few questions to the panellists pertaining to the industry and one of the points raised was on the issue of conflict business handled by agencies. In response, Behl observed that he does not have a problem with agencies managing conflict business as long as systems and processes are in place at the agency. “Moreover, I am open to this if there is a clause inserted about the core team not being transferred to manage the competing business within 12 to 15 months of handling our accounts,” he added. Balsara also welcomed the prospect of agencies handling conflict clients and stressed that it will help the agency specialise its offerings. However, he also pointed out the importance of compartmentalising the systems and processes in place for managing the businesses.