If Small Is The New Big, How Long Until We See Multinationals Become Micronationals?

March 30th, 2009

Is small a measure of size or accountability, and if it’s the latter, how is that best delivered?

I have just finished reading Peter Bregman’s sanguine (and hopefully prophetic) article Why Small Companies Will Win in This Economy and I couldn’t help but ask myself the question, “How will the big publicly-traded agency behemoths respond to this bit of news?”. Being a bit excited, I inadvertently blurted out the question aloud, and Ray, who was sitting across the boardroom table from me, answered, without skipping a beat or even so much as an upward glance, “They’ll reinvent themselves as mini-companies and remarket themselves as a collection of smaller agencies, restructured away from the holding company that brought them together in the first place.” If you’re not sure of the veracity of this prediction, you need look no further than to the “Robber Baron” model practiced by Saatchi & Saatchi in London in the early 90’s during the last recession; a model which, unfortunately for the agency, resulted in at least three breakaways in as many years.

I’m not sure if Ray really meant his prophecy to be literal or whether it was meant merely as a metaphor or a cautionary tale, but it got me to thinking that every agency starts small, and remains small by necessity at least until it becomes successful. It is only after the arrival of that success can the agency make the decision about whether or not to pursue size as a corporate goal, and thus must cross this “success” milepost before it can make a legitimate claim to having made that decision. So how does one measure smallness as a defining quality? Is it head count? billings? number of accounts? If so, then current thinking would put the head count maximum anywhere between 50 (St. Luke’s) and 200 (Malcom Gladwell). And if that’s the case, perhaps the division of macrocompanies into a collection of microcompanies might be a viable solution. But to what end? Is small really an issue of size, or is it an issue of accountability to a common cause?

It seems that the real reason that clients liked to work with (and employees liked to work for) big companies was for security. But if we extrapolate Mr. Bregman’s observation that, ” I don’t know a single person who works for a large company who feels confident they’ll have a job in 6 months. Not one.” to the broader public at large, this doesn’t bode well for the multi-national agency that typically has tens of thousands of employees spread across hundreds of offices around the world. And if you’re a client or a supplier, it’s not much better – Ray, who drives a Saab 9.5, was just informed by his dealership’s service department that they are no longer performing warranty work because they have no expectation of being reimbursed by the company!

Small is the new big. Sustainable is the new growth. Trust is the new competitive advantage.

This thought comes directly from Mr. Bregman’s article, but it’s something that we have been selling here at Hey Harry since we opened our very small doors. After careers spanning over 50 collective years at multi-nationals, we craved getting back to the situation where decisions were made by real people in open rooms with open agendas that made sense to the all of the other people involved. Selling ideas for the value of the idea, investing in the ideas as if we (and because we) own the outcome of those ideas, and relying on (and rewarding) people to contribute more to a client’s business than a time sheet. Now I’m not saying that that is all that a big agency can offer – that would be unfair and insulting to the people who run them and the people who hire them. It just strikes me that before agencies took themselves to the city and promised shareholders a process of selling billable hours or media commissions, they were coming into their own as groups of thinkers working together around a central idea or tenet of delivering creative thinking to client companies. And in these groups lay the very definition of small that we should be searching for as an industry. Small is not really a size issue, it’s a mentality. Small means small enough to be accountable. Small means small enough to be responsive, flexible and maneouverable. Small means small enough to make proportionately mighty contributions to the world of business. Small means small enough for clients to call the chairman on any given day and get meaningful answers to questions about any aspect of their business. And most importantly, small means small enough to know that your real shareholders are your clients and your employees, not Wall Street or Bay Street.

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