A notably relaxed and confident Michael Roth, global chairman and CEO of IPG, told a Spikes Asia 2019 audience that commitment to inclusion is not only an important initiative but a competitive advantage over the rest of the industry.
"It's a business imperative," he said. "It's not just because it's the right thing to do. 57% of our managers are female now, but if you look at our industry, it's fairly pathetic in terms of representation of women. And then when you look at people of colour and Asians and...we just don't represent the marketplace, as an industry."
Clients not only respect a company that emphasises representation, but are also demanding it, he added. Roth claimed that holding managers accountable for reaching diversity goals isn't a tick-the-boxes exercise, but part of a larger commitment to doing the right thing for clients and people.
"This is a business of communication," he said. "How can you communicate with the consumer and do quality work and represent your clients in reaching those consumers if you don’t understand the consumer? And if you look at the marketplace, the consumer is diverse individuals."
That IPG has been outperforming its peers for a number of years now is no accident, Roth claimed, because his goal upon taking over and beginning to reorganise was to create a holding company that was different from the other holding companies.
Throwing some shade, Roth talked about the holding-company model, and how strange he found it when he first joined the IPG board (prior to taking the CEO role). "If you look at the history of the holding companies, the genesis was to do hundreds of acquisitions and just have these disparate businesses with no connection at all," he said. "And the holding company, all they did was count up the profits. And that was it."
The process of hoovering up companies "with frankly, no great thought to the strategic plan for the future” was a "formula for disaster", he said.
Besides disposing of 50 or more businesses in two years to focus on core capabilities, Roth said IPG's turnaround depended on a single message getting through.
"We became very client-centric," he said. "This business wasn't about just our own siloes. It was about meeting the needs of our clients." The focus was on building entrepreneurial spirit and fostering collaboration. But importantly, Roth said, IPG still believes in the power of its agency brands, so it has sought to maintain their distinctiveness even while boosting integration.
"That's who clients like to deal with," he said, referring to brands such as McCann and UM and R/GA and Initiative. "That’s who people want to work for. That's where their careers are."
Roth welcomed other holding companies to continue to "focus on things that are not client-centric and not human-oriented".
"We'll continue to outperform," he said.
After showing a piece of Cannes Lions Grand Prix winning work for Ikea, which focused on 3D-printable add-ons that make the brand's furniture more accessible to those with disabilities, Roth elaborated on the impact of such work.
"It's not just the consumers that are using the product," he said. "Think about how people think about that company now. ... [This kind of work] develops a relationship that can't be broken. And in today's world, when everybody is fighting commerce competition, and price competition, the only way you can compete with that is to develop the value of the brand."
Roth also took a few moments to defend IPG's $2.3 billion acquisition of data-services company Axciom, saying some people still misunderstand the importance of the purchase.
"Two-thirds of the Axciom business is first-party data management." he said. In that capacity 50 of the top 100 companies and financal institutions entrust it with their data. "If you take that competency, and overlay the issues today with privacy, for example ... and couple that with our creative capabilities and media capabilities and PR and experience, all together, that’s the holy grail of our business. And we're seeing positive results."
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