Global Best Practices ICOM Regional Meeting Lisbon September 23, 2005

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<ul><li><p>Global Best PracticesICOM Regional MeetingLisbon September 23, 2005</p></li><li><p>Best Practices is Not StandardizationGlobalizationCentralizationRigid ControlHalf-and-Half SolutionCompromiseLowest Common Denominator</p></li><li><p>INSTEAD Intelligent and FlexibleAdaptation ofAgency Management to Client Structurefor Ultimate Satisfaction</p></li><li><p>International Clients Clients who are increasingly managing their business on a regional or global level prefer multinational ad agencies that can create a unified brand image and positioning around the worldThey are looking for improved efficiencies and effectiveness of operations between the two parties</p></li><li><p>The ICOM Promise A network of idependently owned and operated communications agencies in 55+ countries where every agency treats a network client as its own.</p><p>A lead agency and an account manager who directs the activities of the other ICOM agencies with a set of documents so that these clients see the same information presented in the same way in each country on their account</p></li><li><p>The ICOM Promise A real alternative to the growing sameness and bureaucracy of the multinational networks </p></li><li><p>Global Best Practices Next to Creativity the Best Practices model used is the only true differentiator between agency networks </p></li><li><p>Global Best Practices Role Model</p><p>No such thing</p></li><li><p>Global Ad Decision Controls</p><p> 26% Centralized 34% Decentralized 40% Hybrid Strategy</p></li><li><p>Agency ResponsesThe predominant organizational principle is </p><p>to meet the needs of global accounts </p><p>to adapt their structure to client requirements</p><p>to standardize service delivery as much as possible </p></li><li><p>Delivery of Best PracticesA shared understanding between agency and client of </p><p>Responsibilities and lines of communicationTasks to be performedStrategies for maximum effectivenessMethods for exchange of learnings across borders</p></li><li><p>Shared UnderstandingIndispensible for a long-term profitable relationship</p><p>Do not start work before a negotiated agreement</p><p>Buying a creative idea is no guarantee for its delivery </p><p>Mutual respect is no substitute for operational clarity</p><p>Anticipate all client demands made of the network</p><p>Elevation of quality standards and human resources through training</p></li><li><p>Responsibility &amp; CommunicationHarmonize Client structure with Agency network</p><p>Appoint the individual that delivers </p><p>Create and instruct support groups </p><p>Tie down client responsibilities by name/function</p><p>Agree procedures for approval, time, and recourse</p></li><li><p>Strategic Tasks &amp; DeliveryBe clear on what is and what is not bought by client</p><p>Establish monitoring principles </p><p>Agree patterns for client review and agency evaluation</p><p>Ensure concurrence with all network offices </p><p>Consider even the most unlikely</p></li><li><p>Execution of StrategiesHere agencies lose money and clients lose faith </p><p>Set standards that avoid waste and frustration</p><p>Discourage muddeling between agency and client but also within the network </p><p> Agree adjustments with client asap when necessary</p><p>Create an internal monitoring system </p></li><li><p>Manifestation of Best PracticesTechnically a manual between all partiesEmotionally a personal contract for each team member with the clientPersonally a way to advance knowledge and careerFinancially an insurance for long-term income and profitability Competitively a method that puts ICOM at par with big global networks while retaining individuality.</p></li><li><p>Global Best Practices </p><p>Thank You</p><p>Thank you for the invitataion and the kind introduction.You will not find any books written about the subject of Best Practices and so many people believe this is a big myth and deosnt really exist. But in truth it is the real contract between a client and an agency. And because clients and agencies are all different, different people have different concepts about what it means. I have been asked to talk about it as those that have asked me believe that well applied and well managed it can be huge competitive advantage for your network. It is a process and a method designed to ensure smooth and flawless interface between a client and its agency. It is all about Managing an Agency Relationship for sustained client satisfaction. Dont we all know that keeping a happy client has many more financial rewards than chasing a new client every month. Agency Management has the responsibilty to put the systems in place that will deliver ultimate client satisfaction. And Best Practices is the contractual method that ensures this.Let us analyse why international clients are so keen on Best Practices. International operations present multiple and almost daily opportunities for failure. Cross border handling of an account can turn this quickly into very expensive lessons for an agency network.</p><p>Taken from your 2004 Backgrounder this is how your network is positioned against the competition. And you hit a couple of important points such as independent, owner operated, and account importance.This is true also. But who and how will ICOM deliver its network? Who takes ownership of the account, how you will manage a clients business, is not sufficiently clear. If you can define this, it will become a huge compeititve advantage for your network and one that you can go out and sell aggressively. If the CEO of a global network known for its creativity is convinced that Best Practices is almost as important as the primary product agencies produce then one must conclude that it is equally important for much smaller networks. I am convinced of that. And especially for independent networks as in the case of ICOM. So let us look at a model. Even if you look very hard and strain your eyes, you will not find it. No role model exists of Best Practices that is universally applicable or would fit all agencies and all clients. When you think about it,this is obvious. No two clients are alike and no two agencies. But it goes beyond what a client might manufacture or how an agency defines creativity. It is really a reflection of the structure and processes that either party have developed over the years and that ensure their functioning as business entities. Lets look at the client side for one moment.And while this reflects a snap shot of the industry in 2000 as reported by Ad Age International, few marketers stay faithful to one model when under pressure to perform better. Everything is in flux. Hybrid incidentally reflects a strong central strategic direction and local execution. Against this background what options do ad agencies have but to adopt their service structure to the client. In doing so the agency faces a huge dilemma. A client can easily define his own best system. An agency never can. Not because the agency lacks the capability but because it runs a very different business. So even if the agency has a very successful operation in other words has found its ideal Best Practices model there is no guarantee the agency will convince the client to adapt his operation to their structure. Water never flows upstream.As there is no common role model it is clear that you will have to develop one for your client. And the first step in this exercise is to look at what you absolutely must agree with the client in order to be effective. Here we offer you fourbasic criteria. They are fairly straight forward and should not be surprising. There may be others dependent on special client circumstance. And I do have a reason to put repsonsibilities before strategic tasks because it is in this area that most mistakes are made on both sides.The critical word here is shared. There is no comfort to be taken from hitting it off well with the client. That may refer to personal accomplishment between a couple of individuals and is by no means unimportant. But remember that it will not translate to a mutual understanding between organisations. Think of this as taking inventory of a client. A clients structure can tell you a lot of things about how they work as an organisation and this can be very different from what your contact may want you to believe. It is typical for creative tasks that most everybody on the client side considers himself an expert. But what you need to know is lines of authority and approval processes. Beware if a client has a multi-layered structure. This can be quicksand for approval efficiency. It may be helpful to even agree on a specific time the client has for approval of agency work.Most agencies do more than what a client wants or is willing to pay for. The hard encounters occur when agencies substantiate their cost and negotiate their fees and the client says I did not buy this from you. How come you spent so much time on it. So, try to anticipate that situations and make it part of the definition of the strategic tasks. This covers all aspect of agency involvement. You may have a very clear view of creative approvals but what about other tasks the agency is assigned? Make sure you treat those with the same attention to pitfalls as your primary area of interest. What you must try to understand is this: the Best Parctices model for a particular client eventually becomes a piece of paper. But putting words down alone will not help. In fact that will only increase the cost on the account. What will make it work, is a Mind Set within the agency, supported by the management and all employees. The critical issue is the preparedness to accept that agency structures and work principles must be adapted to client need. Doinfg business as usual may work for one client but will not work for others. So, if you can accept this challenge then you can reap big benefits from Global Best Practices.I am now happy to take your questions.</p></li></ul>