Mumbai: At a pivotal juncture, Harsha Razdan’s appointment coincides with Dentsu Global's strategic decision to streamline its agency brands into three core verticals: Dentsu Creative, Dentsu Media, and Dentsu CX. This consolidation process has been an ongoing transformation.
Over the past few years, Dentsu India has been undergoing a significant transformation as it integrated 23 of its agency brands into the Japanese agency holding network. This transition led to the departure of its entire senior leadership and the loss of key clients, including industry giants like Maruti Suzuki and Reckitt in the media business.
However, a turning point arrived when Harsha Razdan assumed the role of CEO, South Asia in May 2023. Razdan brought a fresh perspective to Dentsu India, leveraging his background spanning consulting at KPMG, technology at Accenture, and FMCG experience with Hindustan Unilever (HUL) and PepsiCo India.
What's remarkable about his appointment is his departure from the conventional trajectory in the Indian advertising industry, which typically witnesses professionals moving from one agency or network to another in a somewhat insular fashion. Notably, Razdan is no stranger to Dentsu, having previously served as a brand manager at PepsiCo when the network first entered the Indian market.
In a rapidly evolving global landscape, the narrative of Asia's ascendancy has become impossible to ignore, encapsulating the immense potential and dynamism that the Indian subcontinent offers to the world. This story transcends mere media and creative spaces, delving into the intricate fabric of India's socio-economic, cultural, and technological transformation.
When the global CEO embarked on a journey to India in October, the objective was clear: to truly grasp the India story, one must witness it firsthand. India is a tapestry of innovation, entrepreneurship, and unprecedented growth, and to appreciate its full magnitude, immersion is essential. During a week spent here, a profound realisation dawned upon the CEO, as they began to fathom the trajectory of this remarkable nation.
Razdan said, “One might harbour preconceived notions about the business approach of a Japanese company, expecting a strict double-hatting of operations. However, our relationship with our Japanese counterparts is distinct. It's characterized by a framework that allows for independent operation while maintaining continuous dialogue and collaboration. This unique approach has now enabled our Japanese colleagues to comprehend the Indian story in all its complexity.
Previously, Dentsu operated with a complex structural hierarchy, with separate entities for Dentsu International, Dentsu Japan, and India reporting to different global centres. However, a transformation has occurred. The locus of control has shifted from India to Singapore and the larger Asia-Pacific region, streamlining operations and facilitating direct interactions. Crucially, the autonomy to wield the considerable resources and assets at our disposal has been devolved, granting us the freedom to innovate and adapt.”
This East-meets-East approach is not limited to internal restructuring alone. It extends to South Asia, encompassing India, Sri Lanka, and Bangladesh, each of which functioned independently, with creative and media divisions reporting to the Asia-Pacific and global headquarters. But now, a significant shift has occurred, consolidating profit and loss (P&L) responsibilities into one unified structure. This change has opened up new horizons for talent mobility, enabling individuals to explore diverse opportunities and facilitating the seamless exchange of expertise.
Crucially, this transformative narrative of Dentsu's operations in India underscores the dynamic interplay of East meeting East, forging a powerful alliance within South Asia and beyond. It's a story of breaking down barriers, fostering innovation, and creating a platform for talent to flourish, thereby aligning with the promise of "Asia's decade and India’s century”.
Indiantelevision.com in conversation with dentsu South Asia CEO Harsha Razdan on his role, the challenges he tackled both internally and with clients, new strategies and much more…….
On taking over as the CEO, and the challenges you faced
Today marks exactly six months since I took on the role. The most significant challenge during this time has been establishing stability within the organization, particularly concerning leadership in India. Following the departures of Ashish and Anand, there was a noticeable void here. My primary task was to reassure our team here that there was now a strong presence and to reestablish our focus on our clients.
Internally, there was a great deal of confusion, and it seemed that everyone's attention was fixated on the internal changes within Dentsu, causing us to lose sight of what was happening externally. This internal turmoil had also affected some of our client relationships, which added to the complexity of the situation.
My third crucial responsibility was talent assessment. I had often heard about the remarkable talent within Dentsu and the numerous awards the company had received. I found myself pondering what kind of talent we needed and whether the vision I had for the company would resonate with them. I was curious to see if our visions were aligned or if there were fundamental differences that needed addressing.
Reflecting on the past six months, I would characterize it as a period focused on achieving stability, regaining the trust of our clients, and gaining a deeper understanding of our organization. Looking ahead to the next 12 months, our primary focus will shift towards reorienting the company for growth.
On motivating the employees and the clients after the difficult phase Dentsu went through the past year
I have always been a people-oriented person. Even in the past, whenever I moved, I made sure to host 6-7 farewell gatherings to connect with people. I've tried to apply the same principles here at this organization. Despite the hierarchy, I believe in being fully accessible to all employees.
Upon my arrival, I initiated a campaign with Anandita encouraging everyone to come forward and share their thoughts. One positive development was that within a week, I conveyed the message that employees could approach me without mentioning names by simply leaving a post-it note on my cabin door. One common topic was the appreciation for my car, so I made it clear that when I'm not using it, anyone can go for a ride.
I also started a Friday evening 'Cup of Chai' gathering with no specific agenda. In the first 15 minutes, people often enjoy their tea in silence, but later they open up and share their concerns. This has provided valuable insights into their preferences. For example, the younger generation expressed their challenge in being typecast into specific roles. They wondered if there was an opportunity in Dentsu for them to explore different avenues.
I took the initiative to walk around the building and enter various offices. When one young girl asked me who I was, I replied that I was the CEO. Despite prior communication about my arrival, the information hadn't fully reached everyone. This led her to inform others, and they came down to meet me and share their thoughts. Being human, accessible, and making people comfortable is essential.
We've held two town hall meetings, with the first having a 25% attendance and the second 40%. While it hasn't gone beyond 45-50%, people are gradually realizing that someone is listening and taking action. The key is to be genuine.
Shifting to the client side, I wanted to meet them individually, without the team. I've met around 80 CEOs, and they sometimes asked where my team was. These meetings were not meant to be performance appraisals; I wanted genuine feedback from the clients. I also met with CEOs of clients we had lost, expressing gratitude for our past collaboration and seeking insights into the issues. This exercise aimed to rebuild client access and confidence.
Surprisingly, despite negative news in the media, there was still considerable equity in our brand, and clients were welcoming. I brought the advantage of not coming from the advertising sector. Clients believed I could listen and understand their problems better. I emphasized the importance of finding solutions for the client and, if not feasible, communicating that honestly. This approach may lead to short-term losses, but clients could return stronger later. Every client expressed gratitude for my willingness to listen and tell a new story, leading to subsequent meetings with CEOs.
This approach boosted client confidence because, upon my arrival, there were many negative perceptions, including doubts about my ability to understand the advertising business. However, clients realized I could provide a more holistic understanding of what I could do for them beyond just the agency's creative or media offerings, elevating our discussions to a higher level.
On moving from the client side to the agency
This journey feels like completing a full circle, and the remarkable part is that Amit Wadhwa, who used to be my client servicing person at JWT in 2005, is now part of this journey. During Dentsu's entry into India, I often wondered why this new agency was gaining attention in our organisation, even though our current agency was doing good work. It was during this time that I gained insights from a client's perspective.
Afterwards, I ventured into consulting, witnessing significant digital transformations over the past decade. I then transitioned to U and focused on budget optimisation in marketing for major multinational corporations. As a sharp consultant, I questioned every dollar spent, leading me to scrutinize marketing expenditures and how digital transformation could impact companies.
Now, being on this side of the industry, I find myself in pitches and wondering why some think in a particular way. I believe this journey has provided me with a well-rounded perspective, allowing me to understand their viewpoints much more comprehensively despite not coming from a traditional industry background.
On being one consolidated agency today
I would express this as follows: Some of our clients have reached a level of maturity where they are looking at the bigger picture, and they have been requesting this for quite some time. Their request is straightforward: they want a single point of contact who can address their needs. At the end of the day, what the client desires is to get the job done efficiently, whether it involves services from various Dentsu companies. That one designated person becomes the face of the agency to the client, handling all their queries.
On the other hand, there are clients who, while not as large, possess strong brands that we continue to strengthen. We are not explicitly informing clients of our consolidation since we continue to maintain individual brands that they can access.The mindsets of many clients won't change in the next few years; they will continue with their existing operational methods. Our focus remains on the top 75 clients, with gradual expansion to 100, then 120 clients over time.
Given the pace of India's growth, I believe that even in the next 7-8 years, we won't transition to a single point of contact for every service across all companies. India's rapidly emerging middle class will seek smaller services, emphasizing the significance of brands. Even if you happen to be our 800th client, you still receive one-point attention, and we won't push you to purchase something you don't need. However, we are here to provide specific services when you require them, with a strong sense of accountability. We hope that as your needs and scale grow, we can offer you a more comprehensive portfolio.
This is our strategy, and while we haven't officially launched it in the market, starting in January, we will be fully equipped to enter the market with this approach.
On the festive season, the ICC World Cup and the ADEX performing and do you see it spilling over to Q4
This year, the first half performed well with double-digit growth in advertising expenditure (ADEX). However, the second half has witnessed a pullback, primarily due to the cautious spending of e-commerce companies as their funding dried up rapidly. On the other hand, FMCG companies have been spending reasonably well, although they have become somewhat cautious due to stock market dynamics. Nevertheless, the FMCG industry remains robust and is less likely to rapidly reduce its advertising spending compared to the e-commerce sector. The second half appears to be softer, and while the ICC World Cup has seen increased advertising activity, reactions to the spending have been mixed.
As for the upcoming Q4, it is expected to be reasonably similar in terms of advertising spends unless there is a notable industry-wide improvement, particularly in rural areas, which remains a challenge. Once the rural segment experiences growth, FMCG companies may also increase their advertising budgets. The anticipation of general elections next year may help mitigate the downturn to some extent. However, a substantial upswing depends on overall economic improvement.
To achieve a significant upturn, the economy needs to recover, and funding must return. There is optimism regarding funding returning to the country, driven by government initiatives and banks reinvesting in the economy. While challenges exist, the industry is strategically positioned, and the hope is that any downturn is short-lived, leading to improved ADEX numbers.
On the debate on TV+ Digital
The question at hand remains unsolved by many, including us. Like others in the industry, we utilize our toolkits to address this challenge to the best of our abilities. In essence, I believe that every brand we serve should strike a balance between performance and traditional marketing approaches.
We work with numerous start-ups, which often lean towards performance-based strategies because of the tangible results they deliver. However, many of these start-ups eventually reach a point where they realize they've overspent and saturated their existing audience. When they inquire about the issue, our response is that they've approached it with a one-dimensional mind-set.
Likewise, some established brands may favour a single media channel, such as outdoor advertising, and beyond a certain point, diminishing returns are inevitable. Our plan for the upcoming year involves experimenting with non-traditional media tools in collaboration with our partners to strike the right balance for each brand.
There's no definitive right or wrong approach; it's all about aligning with the brand's unique life cycle and its position in the market. Newer brands, for example, may not have the resources for mass media campaigns, so they invest in performance marketing. My perspective is that an overemphasis on any one strategy can lead to challenges, so it's crucial to maintain balance and employ our toolkit effectively.
On the vision & mission for Dentsu in the next 2 years
We don't simply categorize ourselves as just an advertising or media agency. As our leaders, APAC CEO - Rob and our Global CEO – Hiro-San, emphasize, we've evolved into a Marketing Technology company. This transformation signifies our commitment to embracing all aspects of marketing and acknowledging the undeniable trend towards a tech-centric future. What this means is that we are well-equipped to assist brands with their diverse marketing needs, bridging the gap between marketing and technology.
Under our umbrella, you'll find a spectrum of solutions. One facet of our company might be crafting compelling advertisements, while another aspect involves strategically broadcasting those ads through traditional media, outdoors, or exploring alternative avenues. We've labelled this comprehensive approach as CX, where we seamlessly integrate data and commerce. It could encompass initiatives like developing a customer data platform, building first-party data resources, or establishing a robust CRM system that seamlessly connects with our creative campaigns and media releases.
Over the next three years, our business model is set to undergo a significant shift, with a substantial focus on third-party engagement, particularly in the domains of data and commerce. We've made a clear commitment to channel 50% of our global business into CX by 2029-2030, with an even more accelerated timeline for India due to the dynamic market conditions here.
To better serve our clients, we're working on a strategic approach that will address their needs comprehensively. By March, we aim to offer end-to-end solutions through strategic alliances and targeted acquisitions. While we will continue to invest in media and creative spaces, our expansion into data and commerce will be incremental and bring new talent into the fold. This strategy not only streamlines our services but also eliminates traditional boundaries within our organization.
Our progressive approach also offers opportunities for young talents to explore diverse roles and career paths within the company. For example, someone who starts on the creative planning side today could potentially become a CX Head in just 15 years. We believe in fostering an environment that encourages experimentation and provides the flexibility and empowerment to pursue one's core aspirations.
On retaining talent
Undoubtedly, we face a significant challenge, particularly when it comes to addressing salary and compensation concerns, and I must admit that resolving this in the next two years may be a tall order. However, for this transformation to become a reality, our business must experience growth. The good news is that we have robust strategies in place, and our efforts are expanding in various directions. The widening of portfolios presents new avenues for growth, enabling us to advance at a faster pace and, in turn, accelerate compensation opportunities for our team.
Looking ahead to the next two years, if we haven't yet achieved the desired scale and are still in the process of scaling up, transparency and openness are key. It's essential not to pigeonhole individuals into specific roles. To this end, we've launched an internal job posting platform, encouraging our team members to express where they aspire to be, and we are committed to making those opportunities available.
Moreover, we've introduced a forward-thinking initiative called the Next Generation Council. This initiative involves selecting 30 emerging leaders in the age group of 28 to 33 and dividing them into 10 teams to collaborate on various projects. These projects encompass a broad spectrum, from revamping the cafeteria and the Dentsu lab to reimagining company culture and delving into how we can infuse startup ethos. By fostering this diversity of projects, we aim to infuse excitement and innovation into our organizational culture.
This journey is indeed a work in progress, and over the past six months, we have witnessed a growing awareness among our team members. They are beginning to grasp the intent for change, seeing how the pieces fit together within a non-hierarchical framework. With the hope of continued progress, I envision that over the course of the next two years, we will witness substantial transformations and learn from the collective wisdom of those around us.
On gender diversity and women leaders in Dentsu
My commitment to this cause is unwavering, and my passion for it knows no bounds. I've consistently maintained that all other factors being equal, gender diversity is paramount. When I represent our organization in front of a client, I am adamant that an all-male team would be a source of embarrassment. Women bring a unique perspective that is often indispensable in aligning with our clients' perspectives and needs.
To bolster our commitment to gender diversity, we've established both a young women's group and a senior women's group. During a recent visit from our global CEO, we facilitated interactions between him and these groups. Fortunately, in comparison to my previous experiences in other organizations, we are in a relatively better position when it comes to gender diversity. However, we are not content with the status quo; we intend to elevate our efforts significantly. I've consistently emphasized the importance of having as many women in leadership roles as possible, and I am actively working towards bringing more women into these positions as we make organizational changes. This commitment is unwavering, and I will not compromise on it.
