Amidst a string of senior-level exits over two years, Dentsu appointed Harsha Razdan as CEO - South Asia this May. Taking over at a time of crisis, he faced the challenge of getting the company back on track.
In an interview with e4m, Razdan shared that the company has achieved its first priority of stabilisation in six months and is now ready to embark on the next path of growth. He also spoke about the company's new and future strategies.
Excerpts:
You joined Dentsu in May 2023 when the agency was going through a rough time. What were the initial challenges when you took over as Dentsu South Asia CEO?
The first challenge was achieving stability. Since the agency was going through a challenging time, we had several leaders from APAC who were managing the India business but they needed a local person. I wanted to assure people that I was here and that they would be heard, and that took up the majority of my time for the first four months.
I was surprised by the kind of talent we have. I was always intrigued by the ‘One Dentsu’ vision. The Dentsu world, I knew before entering, was all about creativity, tremendous talent, many acquisitions, and a lot of action in India, but then there was a period of lull. Many of those who left did so for a valid reason because we are 23 companies condensed into three service categories. However, people have now joined back and they are slowly beginning to buy into the story. We are reasonably happy where we are because I have begun to understand people and they're starting to trust me.
It's been six months since you joined Dentsu. What has changed?
The first aim was stability. The second is providing direction to our internal employees, and especially to our clientele. We are clearly developing the future for our clients. We are a marketing, technology, and consulting firm. At the core of this is our creative set-up. We, therefore, aim to democratise creativity and innovation via everything we do in marketing and technology. The first task was to make sure that for FY24, we power the core, which means a creative side, given our capabilities in media and creativity. Powering the core today, which we are proud of, is as important as building the new.
What was your priority when you joined Dentsu in May and how has it changed now?
Keeping employees stable and reassuring clients that we will be around for the long run with a renewed avatar were the top priorities. We used an acquisition strategy starting in 2014 to develop talent, and in 2019-2020 we underwent consolidation, splitting up our 23 companies into three business groups. It is a natural approach. We are here to develop a new core in marketing and tech. That is the story that lies ahead for us and our clients. We will make significant progress in the domains where we are least strong, namely data and commerce, as these sectors have a significant impact on marketing. Now we are transitioning into the phase of getting into growth.
What made you interested in a job that was so challenging at the time of taking over?
I have always been a people person and I believe that as a person, I can only do so much. The more I empower people, the more they can do better. Dentsu is a totally people-oriented company. I knew there were challenges but Dentsu, as a Japanese company, believes in having long-term careers. I have the philosophy that if I do the right thing for my 3,500 people in India, they will have better careers in a company that gives me the most happiness.
How has business been this year at Dentsu? Also, the agency lost two big clients this year. How are you making up for the loss and filling the gaps?
The first half was difficult for Dentsu because we lost a few clients but that was only media. We have also retained some clients. In the case of Maruti Suzuki, we have lost only the media account, the creative mandate is still with us. We have won clients like Berger Paints, Carlsberg, Xpresso, Torque Pharmaceuticals, Aditya Birla Capital and there are more coming in. I would say I want to only talk about my current business, which is creative and media powering it. Yes, I will strengthen it faster but I would like to look at the new for us, which is all about data, tech and commerce.
We are not facing the challenge of retaining clients. The challenge we are dealing with is something every other agency is facing - big clients reducing spend and tightening purses for the second half of the year.
In the past two years, we have seen many people exiting the agency. What is the current scenario at Dentsu? How do you attract and retain talent?
Two reasons – First, everyone is typecast into a particular role. The ability to grow has been limited, at least in our company. I can't comment on others and maybe that's the way growth existed in individual areas for so many years. We have to find ways of cross-skilling people. At Dentsu, we will cross-skill rapidly. We have 3,500 people in India and 8,000 in the Dentsu global service setup. So, if someone wants to work for a different business within the company they are allowed to do that.
Secondly, we have the next generation council, which is a group of 30-odd leaders under 30 to 33 tenure in the company. They were divided into ten teams and they worked with our leadership team on projects - for instance, culture, sustainability and projects on startups. We have also built the Dentsu Lab, an amalgamation of creative thinking, design thinking and new-age media, to workshop with our clients. Also, get the basic things right, like building a nice cafeteria, designed by our next generation people.
The industry is going through a difficult phase with ad spending being cut. How do you think will the industry tackle this?
We need to balance our revenue and the profits that we make because we are finally running a business.
It's not easy and I am sure the market will open up sometime next year and will be better. Globally, we set ourselves to be 50% in the customer domain by 2030, but I think we'll do it in the next two-three years. We can do it much faster and that's where there is new talent, and maybe new acquisitions will come into play.
How do you see AI playing an important role in the industry? How will it help clients?
It's changing a lot of things, and we are not adopting it well enough to be honest. I keep telling people don't fear it, and adopt it. If you don't opt for it, the client is anyway going to go ahead and use it. So, adopt and learn how to use it in the best way. Globally, we're taking a very aggressive stance on it, and are open to partnering with AI tools. We are going aggressive on leveraging AI for two reasons - clients and internal efficiency.
What is going to be the focus area for the next year?
Three things - one is the client. Pivot around the client and not around your own solutions. We were not honest in the past. We were so interested in selling our own service that we forgot what the client brief was. For the top clients, we will pivot into a single point of contact. Let the one person understand what the client needs rather than be desperate to offer your own services.
Two, I would say is collaboration. We have combined our P&L into one and we don't have a strong connection to a vertical P&L globally.
Thirdly, I would add that as we move forward, reinforce the new, and aim to create a lively culture, this is the most important thing for us. I always tell people that catapulting is the key. We are in a good situation, so don't be afraid to fail; it's alright to fail quickly. If you don't learn from your mistakes, someone else will catch up to you and run faster than you. People will stick around if they know what the career vision is all about.
