Dentsu will prioritize customer domain acquisitions in its upcoming phase: Harsha Razdan

In the last three to four years, dentsu India has experienced a massive transformation characterized by significant organizational changes. In May 2023, with Harsha Razdan assuming the role of CEO, South Asia, the network’s journey took a positive turn. Since then, through his fresh perspective and strategic vision for dentsu India, Razdan has been focused on gradually rebuilding trust within the organization.

Razdan brings with him a diverse experience of working with renowned brands like PepsiCo and Hindustan Unilever, followed by significant roles at Accenture and KPMG.  His journey reflects a full circle in his career, transitioning from industry and brand roles to consulting and, eventually, the agency side.

Highlighting one of the network’s key primary goals, Razdan stated that they are focused on engaging with as many global clients as possible – in alignment with the overall vision of the global company – in the realms of marketing, technology, and consulting. Next on the network’s agenda for the year is to acquire companies in the customer space. 

In addition to these acquisitions, dentsu will also place significant emphasis on artificial intelligence (AI) by integrating AI into operations and accomplishing 25% of their work through AI within the next 12 to 18 months.

Razdan further tells us about dentsu’s positioning strategy, agency culture, AI trends, and more. 

Edited Excerpts:

A lot has changed at dentsu in the last two years, from structural adjustments to leadership shuffles. Now, as dentsu turns a new leaf and enters a new year, how is the network positioning itself?

As we move forward, our positioning will revolve around the intersection of marketing, technology, and consulting. This aligns with the global CEO's description of our focus, and it is how we've chosen to position ourselves. Essentially, our goal is to engage with clients in the domains of marketing, technology, and consulting, as opposed to merely selling specific products.

Another core theme integral to our ethos is centered around the concept of B2B2S (business to business to society). As a company, we aspire to engage and work in areas where we can genuinely make a positive impact. These two key levers—our focus on marketing, technology, and consulting and our commitment to the B2B2S model—are pivotal in positioning ourselves and will continue to guide our direction.

Now, we are not just stable but poised for aggressive growth. Client Obsession, Creativity & Innovation, Artificial Intelligence, and Sustainability will be our cornerstones for 2024. We have reached a point of stability where our global colleagues from Japan have expressed full confidence in the India and South Asia teams. Moving forward, we are dedicated to strengthening our positioning in the realms of B2B2S and our focus on marketing, technology, and consultancy. 

What strengths did you observe in dentsu when you joined the advertising giant in 2023?

Many strengths - actually, quite a lot. As a company with over 70,000 people, we serve 10,000-plus clients across more than 150 countries. The diverse pool of talent, spanning creative, media, and the customer side, impressed me. Dentsu has earned numerous awards at Cannes, including the Agency of the Year. Just imagine the collective power of all these experiences, talents, and ideas for clients and society.

The industry is at a cusp where it can take off, and there is a significant positive disruption due to technology and AI. I believe this is the right opportunity to help chart the next wave of the dentsu story, in conjunction with the global team, and take it to its next phase of growth in India.

Harsha, with your fresh perspective on the agency business, did you identify any missed opportunities on an industry scale? For instance, you've mentioned how multiple agencies confused clients. Could you share your thoughts and suggest a modus operandi for advertising agencies?

I believe that, at least at dentsu, we may have confused clients to some extent with multiple brands. While brands are important, they also need to be strong enough to command their respect with clients. Also, too many brands can be confusing. Over the last eight to 10 years, we've consolidated around 20 companies into a single force under the dentsu umbrella. That's one significant change we've implemented. Also, we offer a unified approach to enable a seamless flow of talents, ideas, and solutions across specializations and regions.

Another crucial aspect is listening to clients. When I say listening, I mean understanding the core issues that keep clients awake at night. Instead of only offering our existing solutions, we should try to help them solve their specific problems. While we may have been listening to clients, there were times when, under pressure, we rushed to sell our creative work or a media deal without fully grasping the client's bigger problem. In my interactions with over 100 CEOs, a common theme has been the need to listen carefully, understand their perspective, and provide an honest answer from their side of the table. This, I believe, is crucial from a consulting perspective, as listening to clients often leads to more sincere solutions. 

During this internal transformation at dentsu, can you provide insight into its clientele—where it stands today and how the network has retained and gained trust from its clients?

I firmly believe in the strength of our network, and my interactions with numerous CEOs and CMOs have only reinforced my confidence in dentsu as a brand. Despite facing challenges over the last two years, we have left a lasting impression on our clients.

In fact, over the past eight months, we have achieved several victories that significantly contribute to our portfolio — more wins than losses. These victories include securing customer jobs at Dr. Reddy’s, media duties with Berger Paints, Bharat Benz, and Welspun, as well as multiple creative projects for John Players, Pernod Ricard, Swiggy Dine Out, Aditya Birla Capital, Torrent Pharma, and many others.

In the eight months since I joined, we have strengthened our position, and I am confident that we will continue to do so. While we faced some setbacks due to the chaos within the dentsu setup in India in 2021 and 2022, we are on the path to recovery.

Acquisitions and mergers have reshaped the landscape of advertising and marketing in 2023, signaling a proverbial war. How is dentsu fortifying its arsenal in 2024 to attract stronger clients? Can you share the network’s client wishlist—the big fish it is eyeing? 

Our primary goal is to engage with as many global clients as possible, aligning with the overall vision of our global company. We aim to target clients in the realms of marketing, technology, and consulting. When we talk about clients, it goes beyond traditional aspects such as client spends, creative work, or media deliverables. Our focus extends to expenditures related to technology and marketing, covering areas such as data, websites, marketing technology, advertising, ad technology, and CRM platforms. We are interested in anything at the intersection of marketing and technology that can create influence. Innovation scaling client businesses, CX delivering targeted, personalized solutions, and our keen focus on sustainability will be our arsenal for 2024.

In the realm of acquisitions, amidst the ongoing industry war, we are actively exploring multiple companies. As you are aware, we own three significant businesses in South Asia. It includes the creative business, which is the reason we exist globally and in India, a media business with notable brands like Sokrati and iProspect. Together, they are the largest performance marketing company in India, and in the growing customer-tech domain. While our primary strategy is acquiring companies in the customer space, we are open to possibilities in the creative or media sectors. Any acquisition must avoid duplication, be lucrative, and offer innovation; it must align with the dentsu network for consideration and integration.

With over 25 years of experience in consulting, technology, and FMCG, what key learnings do you bring to leading an advertising network like dentsu?

My FMCG experience provided a client's perspective, enabling me to effectively manage brands in my roles. In the consulting world, I gained insights by working with multiple clients across various industries, addressing sales and marketing challenges.

Transitioning into the agency network completes the circle, offering a 360-degree view. Having understood the needs of FMCG and other industries, along with consulting perspectives, I believe I have a comprehensive view of what is expected of us. The most significant learning has been listening to clients, providing answers to the best of our ability, and charting a path forward.

I believe our competition extends beyond traditional creative or media agencies; we are a company at the intersection of marketing and technology. Anyone worldwide working in marketing – tech or non-tech domains is our competition. Our landscape has expanded far beyond the traditional creative or media domain.

I've read that dentsu aims to be a 'client-obsessed marketing tech consultancy.' Could you elaborate on what this means? 

Being 'client-obsessed' is our commitment to understanding and listening to clients. While we've been attentive in the past, the current objective is to focus on solving our clients' bigger problems rather than merely presenting our existing solutions to fit their current needs. Our aim is to sell offerings that align with and address the broader needs of our clients.

The client holds paramount importance, and this philosophy extends to every department within the company — be it creative, media, customer service, legal, finance, or HR. Everyone is dedicated to significantly improving our client service. We've also launched a Net Promoter Score (NPS) survey, expanding its reach to numerous clients to gauge how our service is perceived. Simultaneously, our larger clients remain a focal point for us. Whether they are existing clients or potential future collaborators, I personally ensure regular and frequent meetings with them to keep them updated on the new dentsu story.

What sets dentsu apart from other networks in the market? 

Positioned at the intersection of marketing, technology, and consulting, we guide clients through the complexities of the digital economy, creating value for all stakeholders. Our superpower lies in our expertise and skills in sustainability. The key differentiator is our identity as an integrated agency network. Unlike operating with separate P&Ls for creative, media, or customer tech businesses, we prioritize the significance of the country P&L. While various units and businesses exist, they all serve the country or cluster P&L. Our focus is on optimizing the country's performance based on client needs, making it the sole objective. Success is not measured by the performance of individual creative or media units alone but by the overall performance of the company. This is the message we aim to convey.

Another significant update shared publicly is that dentsu is on the hunt for acquisitions. How do you plan to approach acquisitions, and what criteria will guide these decisions? 

As mentioned earlier, we operate in three major business areas: creative, media, and CX. Our focus will shift towards a more strategic approach, centering on CX -  sales & marketing & technology rather than pursuing bulk acquisitions. While we have executed numerous acquisitions in the creative and media space in the past, we have now reached a stage where our operations are stable, and we have successfully synergized our brands. The upcoming phase of acquisitions will prioritize the “Customer and Tech domain” -  encompassing data, adtech, martech, websites, and platforms such as Google Cloud, AWS, and Azure, Adobe among others.

We are not completely ruling out acquisitions in the creative and media space, but any such acquisitions must be distinctive, creative, and complementary to our existing creative and media portfolio, avoiding duplication. This will be our approach as we move forward into 2024 and 2025.

Can we now discuss dentsu’s culture? Since you joined the network, what are some of the prominent cultural changes you’ve brought about?

The first significant change involves building a sense of security and comfort in everyone's mind. The network lacked a leader for some time, resulting in a gap in strategic direction and a lack of trust. My primary focus is on rebuilding trust, ensuring the well-being of the 3000-member dentsu family, and addressing their needs.

I continue to meet people every Friday in the office, dedicating an hour for individuals to share their thoughts. This practice allows me to keep my ears to the ground and empowers our leadership team to address areas where people feel we have fallen short.

The second change involves encouraging a culture of ‘fail fast’. By this, I mean it's acceptable to fail as long as you're attempting something new. While meeting budgetary goals at the end of the year is essential, I value those who aim for stretch targets, even if they fall short. I am willing to embrace failure as long as there is a commitment to learning, falling, and then getting up and running faster.

Lastly, I emphasize the importance of having fun at work. As a creative organization with diverse talents, we need to foster a workplace that is both enjoyable and productive. Creating a fun atmosphere is an ongoing effort, and these three aspects are crucial components of our evolving culture.

On an industry level, given the influence of AI, are there new roles or specific skill sets that dentsu is incorporating into its workforce to stay ahead of technological advancements and industry trends?

I firmly believe that AI itself won't lead to job losses. However, individuals effectively utilizing AI may replace jobs if others fail to adapt. Our strategy involves integrating AI into our operations, with the goal of achieving 25% of our work through AI in the next 12 to 18 months.

To stay ahead, we are also dedicated to upskilling our workforce, enhancing their efficiency and effectiveness in client discussions. Additionally, we are exploring collaborations with startups and tapping into the expertise of the global dentsu team. Our objective is to establish safe environments, or ‘safe gardens’, for experimentation. This approach allows both our teams and clients to learn more effectively and improve efficiency in our work.

What are the short-term and long-term goals that the network aims to achieve? How do these goals align with the broader industry landscape?

The objective of dentsu South Asia is to achieve sustainable and profitable growth, with each word holding specific significance. Sustainable growth implies consistent positive growth over time, avoiding fluctuations from one year to the next. The network aims not only to grow but also to be consistently profitable.

At dentsu, we follow a global philosophy focused on driving the CXM (Customer*Tech) business, which is currently a priority for us. This holds true for India as well. Leveraging dentsu's strengths in media and creative businesses, we aim to nurture and grow this focus area. Additionally, we plan to integrate talent from the creative and media sides into the customer side, allowing individuals to enhance their skills and contribute to both domains.

Over a three to four-year period, our aspiration is to double all aspects and the size of dentsu in India, provided all factors align favorably. This growth is envisioned to be the cornerstone of dentsu's profitable and sustainable expansion, aiming to enhance people's careers and foster a positive work environment at dentsu. 

Can you share some of the trends that you foresee in the A&M industry? 

One major trend revolves around the impact of artificial intelligence and how companies navigate and adopt it. It is essential for every company to contemplate how they can integrate AI rather than avoid it.

Social influencers are rapidly gaining ground, particularly in the domain of short-form videos, marking a significant trend. Additionally, there is an emerging emphasis on highly customizable content at the digital level.

These are substantial areas to monitor, especially considering the shift in viewing habits from traditional TV to digital and OTT channels. The challenge lies in how companies, including us and advertisers, can seamlessly transition between traditional and new-age media, OTTs, ensuring the optimal impact for their expenditures and getting the best value for their investments.

What are some important skill sets that agency heads of 2024 must-have 

One of the key skill sets is the ability to adapt. Our industry is undergoing disruption, as are many others, and leaders need to navigate the new ways of working and address the challenges that it puts there.

Another important skill for industry leaders is the capacity to identify the hidden potential of individuals within the company. Everyone in the company has a different zeal and a different superpower. In times of disruption, instead of minimizing people's weaknesses, it's essential to amplify their strengths. Leaders should explore where individuals can contribute to new challenges, such as those posed by AI, short-form videos, and other emerging trends. Cross-skilling based on hidden skills will be critical.

Lastly, agency networks must strive to stay relevant. This involves being client-focused, listening to clients, and effectively representing the client's voice when engaging with brands. To achieve this, a deep understanding of the client's business and the ability to empathize by putting oneself in the client's shoes during every interaction is vital.

What’s your vision for the agency two years from now? 

In the next three to four years, I envision our revenue doubling, with the initial two years setting the stage for this accomplishment. My hope is to witness our talent extensively cross-skilled to tackle new challenges, effectively leveraging their strengths across dentsu's significant client base.

In the short term, I anticipate dentsu evolving into a force for good, particularly in the B2B2S (business-to-business-to-society) space, rapidly strengthening our position in sustainability. The dentsu brand, combined with our Japanese heritage's focus on sustainability, forms a robust foundation for advancing our positioning in this area.

Furthermore, our commitment is to remain highly client-focused and client-obsessed. We will continue to adapt our model not based on the companies we acquire or the service lines within creative, media, or CX domains, but rather on what the client demands. Our teams will form, and change based on the evolving needs of our clients.