Building a New Model for Agencies and Consultancies in China and Beyond

Reinvention is a constant that all businesses and industries go through. Ad Agencies, Media Agencies, Market Research Agencies and Management Consultancies are currently going through one such reinvention, and a dramatic one at that. These professional services help organizations interact and influence the end individual. They exist and thrive in what I call the Insight Economy.
The future for these kinds of companies are not very clear. Industry and organizational experimentation is happening in all areas. The successful new professional service will be one that accurately understands the nature and needs of the new industry environment.

Source:http://boldink.co.uk/
The Pains of an Industry:
The Digital Disruption has made interacting with the individual exponentially more complex and nuanced. The plethora of new channels not only makes reaching a segmentation more difficult, but traditional segmentations are obsolete as individualized digital experiences are creating people with multi-faceted, multi-layered and unique identity points.
Digital has lowered barriers of entry to many industries and professional competition is on the rise in all domains. Tech companies are becoming media agencies, management consultancies are becoming digital agencies, and digital agencies are becoming traditional/creative agencies.
Competition is not only rising in the professional practices, but where it actually counts too: the ability to influence. Digital has enabled each connected individual to potentially be the king of their own domain, or the multiple domains in their sphere of influence. The open stream of consciousness that now exists means the work and influence offered by professional services is even more at risk of being belittled and relegated to irrelevance.
The ever-evolving nature of Digital means everyone, including those traditionally seen as ‘experts’, has fallen perpetually behind.
And so clients have lost confidence in the ability of these professional services to provide a reliable and appropriate return on investment. If the professional service’s influence on the end individual is diminished, if they don’t even know what would influence the end individual, and if they may not even have the capacity to learn what could influence the individual, why should clients pay?
What makes matters worse is that most professional services are still organized in large, lumbering, un-adaptive institutions that derive their revenues from over-charging on services that are fast becoming obsolete themselves.

In other words,
Its chaos out there
We’ve got our backs to the wall
And we don’t know what to do

So what is the most promising and versatile business model for the agencies and consultancies in the Insight Economy?

Formation & Scale:

1) Be Lean & Tactical, Modular in Growth
Lets take a page out of the geopolitics strategy playbook. Traditional military units are ineffective in engaging trans-border terrorist groups, but we’ve now created tactical military cells specially equipped to handle specific needs and objectives in specific circumstances in specific locales. Professional services need to be reformed the same way. No longer can we operate with large, generalist divisions. We need to live in small cells of tactical units; each designed to be the expert on a specific purpose, in a specific environment, in a specific localization. Only then can we be flexible and focused enough to stay on top of the learning curve, and adapt to evolving situations. It’s also cost-effective. Operating a smaller group means the unit can survive at a time when the work required becomes more piecemeal while still requiring a high state of intensity.
Lean and Focused doesn”t mean alone. Like terrorist cells or elite military units, professional services need to live in fluid integrated networks that work in tandem, coordinated to achieve one objective. Different units of the same expertise should be built in different localizations to master the nuances of the diverse geographies. Professional services should drop in and out of different situations, working with different partners, and solve different problems.
It”s the only way to operate in this influentially-fractionalized environment.

2) Be Upward+Downward Scalable

Fast Company recently published a fantastic article about advertising, and in it they described a company called Co, a 5-person consultancy that can draw upon a network of 44 multi-disciplinary partner agencies in the event they take on a project more than their 5-person team can handle. In this way they can scale up and down to precisely fit the project size. In addition, they can invite the right combination of talents together that fit the project scope.
Upwards+Downwards Scalability may not be the most job secure, but its more sustainable than the status quo. Clients and the work require greater and greater customization. If you cannot offer the exact solution, a competing team will. The industry can no longer afford or tolerate redundancies. Those that expected an advertising or media job to mean a steady paycheck should wake up. The future of this industry will look a lot more like the film-production industry, where everyone lives project by project.
Such frequent scaling may pose problems for quality control, but this is the challenge of the new professional service. Creating replicable guidelines, procedures and methodologies to ensure highly integrated collaboration from Day 1 will be the mark of a successful company.

Scope:
3) Be Highly Specialized, Non-Integrated, and Positioned to Frame the Question
AdAge published an article by TB Song, Ogilvy’s Greater China Chairman that talks about the changing trends in China. Song states:

“Marketers often spend 10% of their budget to produce the average TV spot and 90% to blast it across mass media. In the coming years, budgets will look more like those of movie studios –80% for production and 20% on promotion. The stronger the content, the less one needs to spend on publicity.”

Indeed, today’s individual will only pay attention if there are nuanced, resonating, and timely personal meanings and relationships involved. But in this chaos its not only content production that will grow, the more important issue is What the content production should be, and Who it is for.
Song proposes that Ad Agency Planners will break away and form their own niche practices. I agree with Song’s forecast. Successfully answering “What content production should be and Who it is for” requires long-term, immersed specializations in categories/practices to develop the proper insights and trust. As traditional segmentations give way to tribal rituals, secrets, and micro-social interactions, the important question becomes which tribe, ritual, secret, and interaction should the organization/brand be involved with. Only a highly specialized professional service has the chance to answer this question. Specialists need to detach themselves from their present integrated service units in order to focus on particular areas and find the greatest relevant value – that”s what clients are really ready to pay for.

Unfortunately not all specialists –and by extension agencies– are created equal. Planners are already positioned to capture high individual value because they are helping make sense of the chaos, and helping to frame the question. By the same logic specialized market researchers and management consultants may have a similar value-added.
This leaves Creatives in a particularly difficult position. In an age where one ‘Big Idea’ has a harder and harder time convincing its value and ability to resonate, Creatives are at risk of becoming a commodity. The earlier mentioned Fast Company article suggests that the way to capture higher value is for Creative Strategists to evolve from story-tellers to story-builders, meaning they curate, participate, and add to a never-ending storyline/lines in co-creation with the end individuals. This again would need to be highly specialized, as story-builders need to be adept at maintaining and innovating intricate interactions that are relevant to the cultural nuances of the particular community.
There are some services following de-integration that will be commoditized, and have already begun so. Media buying, media metrics, and to a lesser extent creative production are becoming more interchangeable and will become generally support-services, because they don’t answer the main value question “What content production should be and Who is it for”.
Those that will offer the highest value, and reap the greatest rewards, will be those professional services that can de-integrate, and be highly specialized with the ability to Frame the Question.

Value:
While the above Formation, Scale and Scope sections deal with organizing oneself for tomorrow’s industry, this Value section is about defining and defending a sustainable positioning.
4) Give Free Data-Points, Get Paid for Insights
A great blog article interviewing the founder of PSFK reveals the new nature of information value-creation, and anyone in the Business of Information –professional services, publishers, media– should pay attention. The small team at PSFK navigates through an immense amount of information and data points at a voracious speed. Acting as a media platform, they freely share and broadcast the information they come across with the public. PSFK instead gets work and makes its money consulting on concept development and trends. Their value-added is not from the selection of information they broadcast, but from linking disparate data points, synthesizing patterns into insights.
Why freely publish what you’re looking at? Shouldn’t keeping it secret give you more advantage?
Source: celinecelines
PSFK has embraced the new reality that information flows free, and the benefits gained from free broadcast outweigh the loss of potential revenue from taxing that information access. Consider why you use Twitter. What benefits come from freely tweeting and re-tweeting all those links? For one, you gain a following of people who begin to associate you as a credible source for a specific kind of information — sounds to me like the best kind of advertising you could hope for. Perhaps more importantly, you build conversations and relationships with a growing network of like-minded and equally amazing people. A network that will elevate the quality of information you consume by in turn sharing with you what they’re looking at. In this new insight economy, professional services are only as good as their information community. The traditional model of market research that ignores community immersion and commitment is dead. Give free data-points. Build your information community. Get paid for deeply nuanced insights.
5) Narrow-Casted Community Connectors
Your community is your long-term defendable competitive advantage because it is one of the most difficult assets to build and copy. Ask any Web 2.0 platform and they’ll attest to this. Communities are not just important for social media, but as we’ve just discussed, for professional services as well. Once you have immersed yourself with credibility and trust in a distinguishable community, clients won’t just want to draw on your insights from that community, they’ll want to connect to the community itself. And they’ll hire you to help them do it. This is the professional service’s next value added beyond insight. This is the real influence industry.
As a community connector, a professional service will ‘narrowcast’: strategically identifying and working with a small group of community leaders who influence the influencers. Each company will narrowcast in the community they’re immersed in. PSFK offers connection to high-level creative thinkers. Co, narrowcasts from their extensive network of media, branding, technology and other experts in North America. Victor & Spoils, another company mentioned in the Fast Company article, crowd-sources creative production from their base of operations in Boulder, Colorado. China Youthology, the company I help lead, will explore connection opportunities between passionate organizations and the China Youth community.
Being a connector can produce powerful win-win opportunities, but can only be achieved by first having credibility with the community. This credibility is rooted in deep immersion, commitment, passion and membership.

“Won”t you be my neighbour?”

Where could we see this new model of professional service enter mainstream use?
It would have to be a place that a) Clients are willing to try new things and are thirsty for an edge b) There is less dominance by conglomerate holding companies c) There is a sufficient supply of talented specialists d) There is an entrepreneurial spirit by those in the industry e) There are growing communities of interest
I’d say that China has some challenges when it comes to growing the supply of quality talented specialists, but this problem is already on its way to solving itself as more and more talent migrates to Asia in search for new opportunities. The other hurdle for China are the clients. It is not that China’s domestic clients aren’t willing to try something new, but the unsophistication, immaturity and general lack of standards in the client-agency/consultancy relationship has in the past made progress difficult. A lot of education, hand-holding, and culture-building continues to be needed. But perhaps this is also China’s saving grace. With less legacy impeding the breaking of convention, maybe China will have an easier time embracing a new agency and consultancy model.
However, I can also see other regions being the first to champion this model. All have their weaknesses and strengths, but all are in desperate need for change, and a model — like this one — that can help solve their ills. I would also surmise that the adoption of this model may arise by industry instead of by geography. Ad agencies and Market Research agencies I would expect to be the first.

Some last thoughts:
With all this reinvention going on in agencies and consultancies, the onus is really on Clients. In the new Insight Economy marketers will not be able to rely on a one-stop-shop to answer all their questions and do all their work. It won’t be only a matter of assigning budgets and deliberating on pitches. While able to help clients frame the right questions and connect highly nuanced strategies, new agencies and consultancies will only be able to add value if the client is sophisticated enough to know what kind of professional service they need, and what kinds of value creation really matter to the organization.

If you’re finding yourself in the Insight Economy, and feel the pains of the industry, start your reinvention by first asking, What’s your specific community of connection? How do you immerse to capture the right, relevant insights and build to provide a unique, value-added professional service?

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Music Review: Christian Scott ‘Yesterday You Said Tomorrow’

‘Yesterday You Said Tomorrow’ came out earlier this year to much anticipation and fanfare around the world. Christian Scott, the Grammy-nominated boy wonder who took the jazz community by storm with his 2006 album ‘Rewind That’, this year came out with his 4th album in five years.

Scott, since the last time I wrote about him, has been hard at work creating new music and gaining priceless experience touring. Scott’s last album, a live recording of his concert at the 2008 Newport Jazz Festival, was solid and provides a more raw experience of his work and sound. But I feel this year’s ‘Yesterday You Said Tomorrow’ is the rightful continuation of Christian Scott’s journey last visited in 2007’s Anthem.

Seven of the ten tracks on this album have titles that try to elicit sharp commentaries about hotly debated issues in American politics and society. Songs like “The Roe Effect”, “American’t”, “Jencide”, and “Angola, LA & The 13th Amendment” are examples of this. While the album ‘Anthem’ was fiercely angry, crying out in anguish and pain, ‘Yesterday You Said Tomorrow’ has internalized this grief much more. You can clearly feel that the same feelings of frustration are present in this new album, but they are now coming from a much deeper place, and have shifted Scott’s music to be more muted, more reserved, more pensive. But I feel this album has even more energy than ‘Anthem’ if that is all possible. I think what I am hearing is evermore maturity coming from Christian’s horn.

The music, as it has since Scott’s first album, signifies another step forward in the sound of contemporary Jazz. He takes every opportunity to display his “Whisper Technique”, a distinct breathy, airy, hazy effect on his sound. Scott is said to have perfected this technique over the past couple of years, and found his breakthrough when trying to mimic the sound of his horn to the sound of his mother’s voice. The “Whisper Technique” is also accentuated by Scott’s custom-designed, custom-made trumpet, nicknamed “Katrina”. To elevate this whispering sound, Scott’s music is dark, deep, and moody, the perfect atmosphere to envelope an eerie, whispering lyric.

Christian Scott’s music is rich in deep, tonal hues. It is, admittedly, very impressionistic of Miles Davis’ earlier era, though with very contemporary arches. One of these contemporary pillars is Matt Stevens’ guitar work. Having been with Scott since the beginning, these two have matured their sound together, and have almost become two halves of a whole. Pay attention to Matt on each of the tracks he plays on.

My favourite songs on this album are: American’t, Isadora, and most of all, The Eraser. There is an edginess to these songs that is so deliciously subtle. The songs move forward at a hypnotic pace, and I often find myself swaying back and forth or nodding relentlessly to the onslaught of their tight tempo. These songs make my forehead frown in concentration. I am exhilarated.

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Music Review: Hiromi Uehara

Hiromi Uehara

Over the past couple of years I”ve been attracted to the progressive sounds of the electric guitar as it has been one of the more defining voices of contemporary jazz in the past couple decades. Lately though, I”ve found myself listening and buying more albums from jazz pianists. Similar to my last jazz review of Rober Glasper, a pianist from the US, today I”m writing about Hiromi Uehara, a pianist from Japan.

At the age of 31, Hiromi is still a toddler in Jazz-years, but her accomplishments already show she will stand shoulder-to-shoulder with some of the most accomplished jazz musicians of the modern era. Starting piano at the age of 5 and introduced to jazz at the age of 8, Hiromi played with the Czech Philharmonic Orchestra at the age of 14 and played & recorded with Chick Corea, one of the leading jazz pianists of our time, at the age of 17. Talk about a great start to a career. She went on to study under Ahmad Jamal, another of Jazz Piano”s great”s, while at Berklee. Since 2003, she has been touring the world with her trio, sometimes quartet, and has released 6 albums under her name and 2 DVDs. She”s only 31!!!

There is a reason why she is already so decorated. Listen to her Music. Just listen to it. Every single song an intimate masterpiece in its own right. Thoroughly trained in the Classical tradition, you can the heritage and structured theory in her music. It is almost unbelievable that her sound is only a trio/quartet, when in fact it does often sound like an entire orchestral composition. Her music is colossal. I think it is a pleasurable by-product of those Jazz composers that try to utilize more of their classical roots in their music, very much like Brad Mehldau.

Hiromi still keeps it swinging though. She plays with a ferocity and fire that only comes from a jazz syncopation. But her swing is one that is very rare in the jazz world. While many contemporary jazz greats, like Roy Hargrove, Christian McBride, Esperanza Spalding, push the boundaries of jazz style, jazz theology, jazz rhetoric, Hiromi pushes the boundaries of jazz”s definition. The only apt metaphor I can think of is from Visual Arts: Hargrove, McBride, Spalding are like Impressionists, Cubists and Surrealists while Hiromi is like an abstract expressionist. The first group explores and redefines the subject matter in new dimensions, while the latter explores the medium itself.
It is such a pleasure to listen to each of Hiromi”s songs. Each one is fundamentally different than the last, in a different paradigm, on a different plane of existence than the last. Hiromi is deeply intrigued by time signatures and musical space. I am guessing this is the direct influence from Ahmad Jamal. Her 2006 album ”Spiral” and 2007 album ”Time Control” are wonderful examples of her exploration in this area.

Hiromi Uehara

Yet, within all of this structural experimentalism, Hiromi is extremely lyrical. I think that is probably what holds all her music together so tightly. She presents to you with a lyrical quest to follow while she challenges you to absorb & engage the redefinitions she places around you. Whenever I play her music, I cannot help but stop whatever else I am doing and just exercise my mind and ears. It is mesmerizing work for both the performer and listener.

One final thought I want to tack onto Hiromi”s post. For all you jazz fans out there, if you have never been to Japan, and Tokyo in particular, GO. It is a jazz lover”s fantasy. I am not totally sure about the clear figures, but Japan represents either the #1 or at the very least the #2 jazz market in the world. Its the reason why so many jazz musicians intentionally build their tours to include Japan when they release a new album. Its the reason why Bluenote jazz clubs, the most successful jazz club franchise, at one time had 4 jazz clubs in Japan versus only 2 in the US. But what is more important, is the density of jazz and real jazz lovers in Japan. With America, even in New York, jazz competes with so many other native and popular music forms like hip hop, pop, electronica. Europe, while loving jazz has a deep obsession with classical and electronica. But for some reason, and I think it is the Japanese”s attraction to technical excellence and complex hierarchy, they have since the second world war, fallen head over heels for Jazz. While they also deeply cherish Classical and many other musical forms like hip hop and electronica, Jazz has captured a much larger portion of the listener”s ear. And as is typical of Japanese culture, when they like something, they get obsessively passionate, geeky, and hardcore about it. Walking on the streets of Tokyo I can often find boxes of second-hand classic jazz vinyls on sale, or their record shops have huge sections dedicated to jazz. Jazz artists, even those that are minor names in North America, have significant followings in Japan and Jazz concerts in Japan command a higher price-point and sell out more often.

With this kind of incubative atmosphere, is it such a surprise that a musical genius like Hiromi Uehara can be identified at such an early age as a jazz prodigy and be so intentionally cultivated to her extreme level?
Listen to her music. Hear and feel jazz at its most refined.

Hiromi Uehara

*Some of facts about Hiromi”s life were taken from her Wikipedia Page.

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