As media conglomerate Dentsu undergoes a change of guard in India, Noor Fathima Warsia talks to the leadership team - Yuzuru Kato, Chairman, Dentsu India Group, Rohit Ohri, Executive Chairman and Seiichiro Hayata, Executive Vice- Chairman - to find out what is on their agenda.
The last few months have been eventful for Dentsu India. Every day has brought some news - be it old hands leaving the organisation, businesses being reviewed, management changes or shift of major accounts. All this began the day Dentsu Inc., Tokyo, took over complete control of the agency’s India operations, buying off the 26 per cent stake held by entrepreneur Sandeep Goyal and his wife Tanya.
Goyal had built Dentsu in India from scratch and took it to unprecedented heights in a very short time. When he quit the company, there was a slew of exits from the founding team including Gullu Sen and Rajesh Aggarwal. The resultant instability also led to the exit of one of Dentsu’s biggest clients– Aircel. Many raised questions whether Dentsu India would work the Japanese way or the Indian way.
The speculation has now been put to rest with industry veteran Rohit Ohri joining the team as Executive Chairman. In fact, industry-watchers say that this is the best thing that has ever happened to Dentsu. But with so much happening in so short a time, Ohri’s stint will not be an easy one. Dentsu Inc., Tokyo is now focused on reviving its presence in India with full force. While the senior leadership team is
in place, it aims to combine threads of its existence around the world and emerge as the strongest network challenging the big media conglomerates. The changes are happening not only in India but also in Japan, reflections of which will soon be visible here. The new chapter of Dentsu in India is going to focus on two things: a client-centric approach and increasing their bouquet of services to become a onestop shop for clients across domains.
While the agenda is localisation, and the India management will take decisions independently, the tethers would be in the hands of Dentsu Japan. Would the model lead to a consistent working pattern?
Would there be a battle of ideologies or would this set an example of two ideologies coming together and creating a harmonious and successful future? Only time will tell, but it is certain that the entire industry is looking at Dentsu closely to see its renaissance in India.
The Dentsu India Group comprises Dentsu Communications, Dentsu Marcom, Dentsu Creative Impact and Dentsu MediaTech and a digital agency, Clickstreamers.
INDIA EXPERIENCE SO FAR
Ask Yuzuru Kato, chairman, Dentsu India Group, to grade the agency’s work, and he gives it a 6-7 out of 10. On his first take on India operations when he assumed chairmanship, he says, “When we started eight years ago, our revenues and profits were zero. By the time I became chairman in February this year, we had achieved a lot. My first thought was how to grow further in line with the growth in the Indian market.” In the new structure, Kato continues to be the Indian chairman, while Rohit Ohri has taken charge as executive chairman. But will working out of Tokyo disadvantage Kato? He does not think so. “I’ll be in close touch with Rohit and rely on him greatly to manage the business and operations here,” he says. “My role will be to ensure that our Indian operations can grow together with and as part of the overall Dentsu network.”
HOPES FROM NEW LEADERSHIP
In Dentsu’s objectives of globalization and growth, two important points are localisation (or geographic customisation) and rejuvenation. “It’s very important for us to look at localisation. In each of our regional markets, we would like to invest as much as possible in the region-specific management that leads operations in their respective markets. In this case, Rohit will be the leader. While I’ll work closely with Rohit for our India operations, my larger role would be to ensure networking between India and our operations in the rest of the world, finding business opportunities and linkages among our various network offices. Collaborations emerging from networking are important.
“We will try to avoid situations where India remains isolated from our other global operations. I want to make sure that all our efforts are aligned and there is a good amount of co-operation and support for each other amongst the regions,” Kato says.
INDIA’S SHARE IN REVENUE
For Dentsu Inc. worldwide, the income from non-Japanese markets is approximately 10-14% of the total revenue, says Kato, and of this, India contributes around 10-15%. So what is the percentage increase in revenue targets set for the India team? Kato finds this difficult to answer because “one, the business environment in Japan is going through a major transformation and two, India has a new management and a new organisation”. He calls this a turning point. “We are trying to adapt to new ways of doing things. We must adjust to the changing business environment. More investments have to be made to move forward from this point. We will perhaps aim to break even in India, or even less than that. This is the phase where we invest and prepare for our next stage of growth. We’d like to take the end of fiscal year 2011 as the point where we prepare, make investments, and take steps so that by 2013 or 2014, we see growth and results,” he says.
BUNDLING SERVICES FOR CLIENTS
Most companies claim that they have a client-centric approach. So does Dentsu. But how does the agency demonstrate this to clients? “We are a one-stop integrated communication design provider, that’s what differentiates Dentsu from other networks. In Japan, we provide ‘one-stop shopping’ to clients and forge long-term relations with them. Outside the Japanese market too, we aim to develop such trusting relationships. In India, we will make investments to achieve this,” says Kato. Seiichiro Hayata, executive vice-chairman, Dentsu India Group, feels the proprietary assets of Dentsu Japan will differentiate it from other agencies. “For example, we can bring digital technology to the Indian market because every medium is being digitised. The Japanese market is already very advanced in digital and mobile technology. We could bring these technologies and customise them for the Indian market,” Hayata says. “We have the know-how in below-the-line, content, creative or design from our operations in Japan. We will invest to strengthen ourselves in these domains.”Hayata expects to apply combined network efforts from Dentsu operations worldwide to enhance the India action plan.
INDIA KNOW-HOW FOR OTHERS
“If something has worked in India, we would like to take the learning to other parts of the world. That’s the strength of our business. For example, take our work for one of the Japanese automobile clients in India. We have successful case studies that we are trying to take to certain BRIC countries and implement a similar format there,” Yamagishi says.
ALL ABOUT ‘THE DENTSU WAY’
Kato says, “If you ask 100 different people to define The Dentsu Way, there will be 100 different answers. May I refer to our company’s age - 110 on July 1, 2011 - and the speech of our President. That would be my answer. “Over the years, we followed the footsteps of our predecessors. We continued to repeat innovation in accordance with our clients’ needs. In turn, they trusted us to support them as partners. Constantly taking on new challenges and reforms has helped us advance over the past 110 years, and that itself is ‘Good Innovation’ or ‘The Dentsu Way’. It also means change, growth and moving ahead.”
Hayata recalls that to start off the journey of network inclusion, they had a big Dentsu Way seminar for all India employees in May this year. At New Delhi, more than 200 people attended it. “We invited speakers from Japan to conduct this seminar. They shared many Dentsu Way case studies with our India teams. But as Kato mentioned, the best thing is on-thejob training. Talent exchange is very useful too. We need to collaborate across our networks on several projects,” he observes.
According to Executive Chairman Rohit Ohri, many global agencies operate in India, but they don’t have expats actually living and working in the country like Dentsu does: “We have a strong base of Japanese expats in India, who have worked across our global networks. A lot of them have been in Dentsu for 15-20 years. We are a truly global agency because we have diversity within the organisation. It’s not just a case of local talent trying to import knowledge. We try and embed knowledge within the agency, because the talent is here, on the ground, living and working with the Indian talent. So it’s not just a seminar or two but about living, breathing ‘The Dentsu Way’ every day.”
‘We’ll harness global network resources for the Indian market’ - YUZURU KATO
Can you compare Japan’s advertising scenario with India, given that technologies there are so advanced? Now that we see 3G and 4G here, what are the challenges Dentsu may face in India?
Dentsu proposes digital to clients and consumers after understanding various components of the digital medium and finding the ones that would be most effective. We put together an overall integrated media plan (not just digital) that provides the optimum output for clients.
In Japan, we have 3G, 4G mobile, PC, social networking and so on... It is critical for us to understand consumer behaviour specific to the digital medium. Having consumer insights through solid data mining would enable us to collect, analyse and come up with ideas on how best to utilise such knowledge and insights in the digital world. In Japan, Dentsu has in place a lot of technology that allows us to harness such deep consumer insights. Also in the United States and Europe, where we have operations, we have acquired cuttingedge digital technology companies which work together with our network offices around the world. Thus, through a combined effort, we provide integrated digital media plans inclusive of the latest, advanced technologies to our clients.
Our goal in India is to be able to harness our network resources from our headquarters in Japan and from other parts of the world so that we can match them and customise them to the needs of the Indian market.
Specifically in the realm of digital and technology in India, we must increasingly learn more about the key drivers and consumer triggers in the Indian market and understand what is most suitable for Indian consumers. Through a thorough understanding of the online behavior of Indian consumers, looking onward towards 2012, we aim to provide in India powerful, integrated digital solutions that are at par with what we provide elsewhere in the world.
Did the earthquake in Japan have any impact on Indian operations? If yes, are you out of it now?
Our clients from Japan who have operations in the India market are mostly into the automobile industry, precision equipments or fine machinery. The north-eastern region of Japan was where the effect of the earthquake was most heavily felt. There are a lot of manufacturing plants of our Japan clients in those areas. So for a while, manufacturing of products had stopped completely. Things are returning to normal. The plants have started production again. Toyota or Canon will start production in full force by the end of August or September. The business impact of the earthquake in India will eventually be minimal.
Most India operations are different from the Japanese way of working, with regard to teamwork, collaboration, discipline, attention to detail – what is the experience Dentsu has had in India on these counts? How will it infuse The Dentsu Way?
In the past, we made efforts to try and make people feel a part of ‘The Dentsu Way’ and hence be able to follow that way. We had human resource exchanges, seminars, training sessions for people to understand the various points and share a common vision. Now, we will try even more aggressively to implement ‘The Dentsu Way’. We will ensure that our India staff are included as part of the Dentsu Group in network activities and have the opportunity to work in Singapore, Tokyo, New York or elsewhere. Human resource exchanges and training sessions are very important. Networking, communication and getting to know colleagues from the Dentsu Group companies around the world is even more important. That can lead to collaboration on business opportunities, allowing us to service clients together in ‘The Dentsu Way’.
‘We will live and breathe integrated communication’- ROHIT OHRI
Dentsu offers bundling of services with PR, marketing, content, design and many others. So what would your priority be?
For a few months, I will work closely with Hayata and look at opportunity areas. We will meet our clients and understand their market ambitions. Then, we will put together a plan which we would share with Kato to take it to the next level. This is a long-term vision. That’s the way Dentsu looks at markets - not short-term gains, but longterm leadership. We will live and breathe the philosophy of integrated communication. It’s really not lip-service. We have to look at opportunities that our relationship with clients provides us. It is important for us to look at PR, activation, digital and design. I will work closely with Kato too to understand the philosophy that Dentsu has about the integrated, one-stop solution for communication needs so that we can implement it in India.
How do clients see this bundling?
We have had challenges in terms of individual units. We will take it to the next level and look at full-solutions for clients.
Competition is very tough in India. How do you plan to handle it?
Yes, competition is very tough here and in Japan too. Other agencies are already in the leadership position and talking integrated, but our key is knowledge of integrated communication and how that really works for clients. We want to quickly bring that to India so that we are ahead of the race, because a lot of the global networks (and I have been part of one) are struggling to understand how that actually works. Large networks have unbundled their services. When you unbundle your services and have a bundled vision, it is really difficult to make it work for brands. Dentsu is bundled and conceptually created to provide integrated solutions. Even as we talk of 3G and 4G, there is a tipping point in India. We will find India rapidly going digital. Today, every media is digital. I read newspapers online, watch TV online, listen to music online. The mobile platform is the big opportunity for India to move forward and that’s the opportunity we are going to utilise.
Dentsu India operations face a lot of challenges. The entire senior management team has moved on, some key businesses are reviewing their partnership with Dentsu... how do you view this?
The trick is not to look back. I only look ahead, focusing on the vision that we have for the market, how we approach it, the new thinking and philosophy that we have to share with clients. We have chalked out a plan for the next three years. This may be a temporary setback, but our vision is clearly a long-term one. If you have to win in India, you really need to have wide vision.
Talking of bundled and unbundled services and the integrated point, it mostly happens for business interest or shared revenue. At Dentsu India Group, it’s about sharing of ideas. Sharing makes our ideas bigger. Other agencies often fall apart because they don’t find a share of revenue in the partnership.
But if you are bundled, you are focused on the idea from the very inception. What is the idea that you are creating, how that idea can be made more impactful in the marketplace with partners... I have worked with several clients in India and the majority of them still say “If only we could go back to the old way...”
Will there be customisation of Dentsu services for India?
Quite honestly, this is what I also need to understand, because I have just started. To my mind, the principles of The Dentsu Way are sound. So it’s just a question of interpretation and making it relevant to Indian markets. It’s a challenge for us.
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