Reference no: EM132298177

Vivaki (Case study)

This case was written by Herminia Ibarra, the Cora Chaired Professor of Leadership and Learning, Professor of Orgarusationel Behaviour at INSEAD, and Cristina Escallon Director of the INSEAD Leadership Initiative. I is inter.ded to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.

August 2009 was anything but a quiet summer holiday for David Kenny and Jack Klues, Managing Partners of VivaKi. Instead, it was a season of intense work on the high-profile acquisition of digital agency Razorfish, from Microsoft. VivaKi itself was barely a year old, created in June 2008 by Publicis, the founh argest communications group in the world in order to accelerate the growth of its new media and digital operations. The Razorfish acquisition was a moment for celebration across the company, yet ongoing challenges remained. Both managing partners weie convinced that VivaKi could change Publicis - and fast -but, as Kenny put it: It is my belief that within five years most media will be digital and most television will be done in a more digital way. Making sure we keep pace is the thing I am most worried about. [...] We have this theory with VivaKi tht we are going to retrain analogue people to do digital. Learning digita s like learning a second language. You have to start over, and change the order in which you do things and also find the right nuances. You have to be willing to sod stupid at first, and to start again at the beginning. Some people can do this, and others are too uncomfortable Klues also expressed his concerns: Maybe VivaKi is allowing us to keep pace wth, if rot get a bit ahead of, the unbelievable rate of change and development fiom a technology perspective. But once you have the product, the tools and the tehniques, you have to disseminate them into an organization of 12,000-plus people, and that isn't an easy thing to do. Or perhaps you havc to reverse [the question]: Can the people with the digital expertise today explain themselves in such a way that the concepts can be understood by these hundreds and thousands of people who need to learn them? Just as importantly, can they be understood by our clients as the solutions to marketing problems? Creation of VivaKi From the purchase oí top Briush agency McCormick in 1978 to the assimilation of Saatchi & Saatchi in 2000, and BCOM3 in 2002, CEO Maurice Lévy's 30-plus years at the helm of Publicis Greupe had been characterized by a policy of dramatic growth and diversificationn through acquisition. David Kenny himself had joined Publicis as a result of its acquisition of Digitas, the digital agency of which he was then CEO. When Digitas was acquired in 2007, Publicis consisted of three major separate ad agency networks, Publicis Groupe Media, which combined media-buying giants Starcom MediaVest and ZenithOptimedia, headed by Jack Klues, and other media services.

Approximately one quarter of the group's revenues were digital. The integration of Razoriish tipped the scales' of VivaKi to a majority digital composition and made Digitas/Razorfish the biggest of its "brands" (as the companies are called internally). The media agencies broughi buying clout and scale to the VivaKi proposition. Now, with Razorfish, Publicis corainitted to minimum guaranteed aggregate purchase levels of search-and-display (digitai) advertising. Microsoft, in turn, committed to retain Razorfish as a 'preferred provider for digital straiegy creative and experiential marketing'. Changes in the Advertising and Media Business VivaKi's creation was played out against the backdrop of a shift in the advertising and media business - from so-called 'analogue' to digital. The economic dewntun of 2008 only seemed to accelerate the move away from the traditional 30-second TV sloi or glossy print ad and towards digital media, as the absolute costs of an online carapaign were estimated to be as little as 10 % to 20 % of comparable television spending . " In 2008 , only 12 % of global ad spending was on internet and mobile, but analysts at PricewaterhouseCoopers estimated that in 2009 it would rise by 7.7 % to $ 86.7 billion , and that by 2013 it would be up to 19 % of total spend. 'In particular, the American television iadustry was said to be facing a S2 billion shortfall between 2009 and 2013.8 But it was aoi simply that the marketing budget holders perceived digital as cheaper than so-called anaiogue; they were also attracted by the immediately measurable results of digital campaigns 6 The challenge for Publicis and its competitors was to make the shift count in their favour; lost revenue from traditional media had to be clawed back in digital spending. In spring 2009 WPP and Omnicom, the world's two largest advertising groups announced poor results, with like - for - like revenues down about 6 % . Publicis , ranked fourth in the industry , appeared to be bucking the trend. Its results for the same quarter showed slightly smaller negative growth at 4.4 % , and a J.P. Morgan equity report for the same quarter showed Publicis as the number one ranked player for net new business. At the Cannes Lions festival the advertising industry's annual awards - of June 2009, the most prestigious 'graid prix' prizes went to digital campaigns, including Barack Obama's use of new media to buiid grassroots support among the US electorate. But the changes in the industry ran deeper than the distribution of awards. As John Gapper put it in the Financiail Times in April 2009 In the analogue world, everyone's job was fairly clear. The creatives devised catchy siogans and wacky visuals, and media agencies plotted how to place them before as many of the right consumers as possible. This clarity has dissipated as the divide between the content and the means of distribution has narrowed Good digital campaigns do not simply involve banner ads on internet sites.

Brands get attention when their agencies devise some interactive stunt that is entertaining enough or provocative enough to make customers engage, for example, by forwarding videos to friends, entering a competition, or signing up io an online club. True success is when a brand campaign spreads virally. This demands a lot of creativity... it draws on the entire range of the industry 's fragmented skills David Kenny summed up the resulting change in mindset required by the indastiy The typical planning process was to start with your product, rosition it, find oui what's different about it, make a little 30-second film about it, raybe some print- outs, tell a story, then decide the positioning and spend your money on pushing your message to all the right people. Now, I think we start at the very end of that process. We start with human beings and really understand them what they care about, where they get information, how they eniertain themselves, what communities they belong to, who they trust, and who they don't That leads you to a very, very fragmented media plan, and then you have to put the message into that context. You can 't just slap it on to FacebooKyou have to be relevant. So would say the biggest change is that we have come io recognize that the people are as important as the product and that ihe real value of marketing is to serve people VivaKi Organizational Structure: Scaie and Skill While the newly-launched VivaKi combined the locomotive power of its main brands, each continued to exist in its owi right. The organizing principle was scale', reputedly one of Kenny's favourite words, which he explained as follows VivaKi is the parent oj the hrands, so all of the brands are within VivaKi - they 're units if you will. Most clients, most advertisers work with one or sometimes two of those brands oi heir digital and other media. VivaKi pulls together all of their needs - across the brands - and the VivaKi organization faces the media owners. So, for exavipie, we cuit go as VivaKi to Microsoft and strike a deal on behalf of all of the brands and their clients. It's also the way we face the technolog)y companies, like the DoubleClick division of Google "We had two prenises," recalled Kenny. "One, scale will matter; two, skills l really matter. Staicon MediaVest Group alone consisted of 5,800 experts operating across 110 offices in 73 countries. ZenithOptimedia was a similar size: 5,500 employees and 218 offices in 72 couniries. Digitas had grown to 3,000 people and 30 offices in 16 countries. Razorfish brought an aaditional 2,000 people in 21 offices worldwide. In order to capitalize on this scale, VivaKi added technology and talent as pillars. Kenny explained: VivaKi is also the R&D center. There are many new things we are working on now: social networks, advanced forms of search, different forms of digital.

Advertising for the television screen - and we can do this once on behalf of all of the brands, so it's a parent and an R&D center. [...] We are helping more peopl.e learn all the things they need to know in the digital area and we have created the VivaKi Nerve Center, a very po confident about taking to their clients - and delivering werful set of core tools that everyone can feel Cheri Carpenter, Director of Corporate Communications, summed it up: "When Jack and David go to Google, they go on behalf of $57 billion in ad spend, 14,000 people 2 and a client roster of several hundred clients as opposed to each of the agency brands going on heir own." On the flipside, recalling a recent pitch in which the brands were struiggling to align on the overriding idea to be presented, Carpenter observed, "It's a really tough job because you have agencies that have been competitors forever and now they are working to be collaborators The second pillar, 'Talent & Transformation', aimed to transform rising stars from within Publicis into digital experts and to attract existing digital talent from elsewhere. As VivaKi helped clients go digital, so digital shook up the internal working metiods of each of its own units. As David Kenny said: We put the data on the category managers and the clients' desks every day, so that they can act that same day. Before, it was a case of getting the data, processing it, producing PowerPoints, sending them oat and then acting. The initial reaction was 'You've eliminated my job '. But you need the full information as fast as possible ifyou 're going to speed up the cycle. It's very transparent and authority is flat VivaKi, however, was also the central engine for buying traditional as well as new - media. While the Nerve Center and Talent reported to Kenny, Laura Desmond, Steve King, Laura Lang and Rishad Tobaccowala, CEOs of Starcom Media Vest, ZenithOptimedia, Digitas and Denuo respectively, all reported to Klues. There was a single P&L, the management team was rewarded on joint results, and Kenny and Klues continued to co-lead VivaKi. Klues himself explained The only way we were going to succeed on behalf of our clients and their customers, was if we put our resources and our brains together. I knew one world intimately and lived in it for 30 years, and David obviously knows the digital world iniimately and in all aspects. So what it has become is a very valuable and, in a weird way, a necessary combination of the two of us working together.

The Question of the case study are :-

Vivaki (CLO: 2, 4 & 5)

1. How would evaluate the leadership of David Kenny? (CLO What aspects of his leadership style do you think help o Is his style well suited to the current situation at 4) and hinder his effectiveness? Vivaki? At what other situations it might be effective? In what situations it might be in effective?

2. How would you evaluate the leadership/management style.

What aspects of his leadership style do you think help o Is his style well suited to the current situation at of Jack Klues (CLO 4) and hinder his effectiveness? Vivaki? At what other situations it might be effective? In what situations it might be in effective?

3. Dose their co-leadership arrangement make sense in their given organizational behavior settings? How do they work together? How do they split up the work? (CLO 5)

4. What would happen if Kenny were leading Vivaki alone? What would happen if Kenny were leading Vivaki alone? (CLO 2)