Comments on: Scaling in an evolved world http://www.darrenherman.com/2008/12/22/scaling-in-an-evolved-world/ Marketing, Media, and Technology Conversations Wed, 8 Feb 2012 19:55:30 -0500 http://wordpress.org/?v=2.8.6 hourly 1 By: Sam Huleatt http://www.darrenherman.com/2008/12/22/scaling-in-an-evolved-world/comment-page-1/#comment-76638 Sam Huleatt Tue, 23 Dec 2008 16:30:01 +0000 http://www.darrenherman.com/?p=866#comment-76638 Darren,<br><br>I agree with you and Roger although I think there are two crucial components complementng size: relative cash position and transparency. Yahoo has a large market cap (or did) but they need cash and transparency in order to leverage the benefits of that size (the stock is worthless without). On the flip, a small company is not necessarily any better positioned if it lacks cash and transparency than a much bigger firm. There was a meme two years ago about the death of venture capital since small companies no longer needed big cash reserves; I think that mindset may be changing even as companies can do more with less. <br><br>Happy Holidays<br><br>Sam<br><a href="http://twitter.com/squasher98" rel="nofollow">http://twitter.com/squasher98</a> Darren,

I agree with you and Roger although I think there are two crucial components complementng size: relative cash position and transparency. Yahoo has a large market cap (or did) but they need cash and transparency in order to leverage the benefits of that size (the stock is worthless without). On the flip, a small company is not necessarily any better positioned if it lacks cash and transparency than a much bigger firm. There was a meme two years ago about the death of venture capital since small companies no longer needed big cash reserves; I think that mindset may be changing even as companies can do more with less.

Happy Holidays

Sam
http://twitter.com/squasher98

]]> By: jon burg http://www.darrenherman.com/2008/12/22/scaling-in-an-evolved-world/comment-page-1/#comment-76580 jon burg Tue, 23 Dec 2008 05:28:17 +0000 http://www.darrenherman.com/?p=866#comment-76580 In the financial world, I couldn't agree more. Some agencies run like finance shops, commoditizing media and chasing the cheapest impressing rather than the most valuable. To these shops all spots and dots are created equal. To others it's more of an art, with no two cultures creating the same product. This is not to say that the end result will be drastically different. Truth be told, I do not have enough experience to say that they would be drastically different. But there are differences. And I can say first hand, that many of the principles involved in these discussions value the differences, the culture and the outcome. In the financial world, I couldn't agree more. Some agencies run like finance shops, commoditizing media and chasing the cheapest impressing rather than the most valuable. To these shops all spots and dots are created equal. To others it's more of an art, with no two cultures creating the same product. This is not to say that the end result will be drastically different. Truth be told, I do not have enough experience to say that they would be drastically different. But there are differences. And I can say first hand, that many of the principles involved in these discussions value the differences, the culture and the outcome.

]]> By: Sherri http://www.darrenherman.com/2008/12/22/scaling-in-an-evolved-world/comment-page-1/#comment-76576 Sherri Tue, 23 Dec 2008 04:52:05 +0000 http://www.darrenherman.com/?p=866#comment-76576 I have to disagree with points A & B above. While my experience is the financial services industry and not the agency world, business is business and the fundamentals are virtually the same. From my personal experience at a major company which merged with another financial institutional over 10 years ago, the cultures could not be more different...one the quintessential investment banking culture and the other a retail banking institution that was more of a blue collar than white collar culture. The key to blending cultures starts with the management team from the top down. If the senior executives strive to blend cultures and drive change in their organization it will eventually trickle down. It may take time for that to happen and I'm not saying it happens over night but blending of cultures can and does happen and therefore should not be a reason for 'not merging'. It all starts with the right attitude, education, compromises and a little time and patience. <br><br>Secondly, as a 'mega brand' in the financial world, conflicts of interest are inevitable as we get in and out of various businesses. We often create those conflicts ourselves as we choose which businesses we deem appropriate and viable for growth in the future. While this may result in a loss of certain businesses/clients those are conscious decisions that are made. Businesses need to look forward and reinvent themselves to stay competitive even at the sacrifice of certain relationships and/or business lines. Think Goldman Sachs or Morgan Stanley...to stay in business they had to reinvent themselves as bank holding companies requiring both companies to exit certain business. This however, created business for others so it's not always a negative. <br><br>Just my two cents.... I have to disagree with points A & B above. While my experience is the financial services industry and not the agency world, business is business and the fundamentals are virtually the same. From my personal experience at a major company which merged with another financial institutional over 10 years ago, the cultures could not be more different…one the quintessential investment banking culture and the other a retail banking institution that was more of a blue collar than white collar culture. The key to blending cultures starts with the management team from the top down. If the senior executives strive to blend cultures and drive change in their organization it will eventually trickle down. It may take time for that to happen and I'm not saying it happens over night but blending of cultures can and does happen and therefore should not be a reason for 'not merging'. It all starts with the right attitude, education, compromises and a little time and patience.

Secondly, as a 'mega brand' in the financial world, conflicts of interest are inevitable as we get in and out of various businesses. We often create those conflicts ourselves as we choose which businesses we deem appropriate and viable for growth in the future. While this may result in a loss of certain businesses/clients those are conscious decisions that are made. Businesses need to look forward and reinvent themselves to stay competitive even at the sacrifice of certain relationships and/or business lines. Think Goldman Sachs or Morgan Stanley…to stay in business they had to reinvent themselves as bank holding companies requiring both companies to exit certain business. This however, created business for others so it's not always a negative.

Just my two cents….

]]> By: jon burg http://www.darrenherman.com/2008/12/22/scaling-in-an-evolved-world/comment-page-1/#comment-76573 jon burg Tue, 23 Dec 2008 04:32:09 +0000 http://www.darrenherman.com/?p=866#comment-76573 There are a few reasons that agencies cannot merge, all of them incredibly practical from an insider perspective. <br><br>Consider, (a) each agency has their own culture. And I'm not talking about the color of the walls, I'm speaking of the mood, the pulse of the office. Each culture inspires a different breed of productivity, of inspiration, a different perspective on a challenge. This diversity creates scalable "personalities" that cannot be duplicated in a boarderless environment. <br><br>Secondly (b), there are conflicts of interest. Separate agency subsidiaries allow a holding company to include many conflicting clients in their overall roster. A megabrand could not do this (in many cases) without losing business. <br><br>Thirdly, (c) nearly all agencies are started as independent shops that are later purchased. Few are built from within. Because of the demand for subsidiary revenue growth, the holding company models do not allow for true border-less collaboration. <br><br>That being said, in an ideal world there would be far fewer walls and far more collaboration. And one way or the other, we're going to get there, so long as collaboration and openness continue to drive business. Then again, there's Apple. Locked down, largely unresponsive, iconic and successful. There are a few reasons that agencies cannot merge, all of them incredibly practical from an insider perspective.

Consider, (a) each agency has their own culture. And I'm not talking about the color of the walls, I'm speaking of the mood, the pulse of the office. Each culture inspires a different breed of productivity, of inspiration, a different perspective on a challenge. This diversity creates scalable “personalities” that cannot be duplicated in a boarderless environment.

Secondly (b), there are conflicts of interest. Separate agency subsidiaries allow a holding company to include many conflicting clients in their overall roster. A megabrand could not do this (in many cases) without losing business.

Thirdly, (c) nearly all agencies are started as independent shops that are later purchased. Few are built from within. Because of the demand for subsidiary revenue growth, the holding company models do not allow for true border-less collaboration.

That being said, in an ideal world there would be far fewer walls and far more collaboration. And one way or the other, we're going to get there, so long as collaboration and openness continue to drive business. Then again, there's Apple. Locked down, largely unresponsive, iconic and successful.

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