Ask a colleague for their definition of an entrepreneur, they'll probably say that they're people who take risks. The entrepreneurs, on the other hand, don't see themselves as risk takers at all and they don't "process" risk in the way that most of us do. Entrepreneurs see a world of opportunities and success. If they're moderately talented, their self-belief makes their success a self-fulfilling prophecy.
In the U.K. and the U.S., networks have lost some of their most talented leaders to smaller and more entrepreneurial creative businesses. What's behind this?
Lack of control
Well, first off, some of the defectors from the big agencies want to pursue their own vision of the future and didn't see any opportunity to realize that where they were. They are the evangelists -- the Jeff Goodbys, the John Hegartys, the Dan Wiedens, the Pat Fallons of the future. Not to sound cynical, but these days we're seeing fewer and fewer start-ups driven by a vision of the future, and when they happen, they're more likely to be driven by the generation of digital and new-media talent. So if today's entrepreneurs aren't on a mission, why are they abandoning the networks?
The entrepreneurs are frustrated by the lack of control when it comes to the commercial management of a network agency. They cite relentless financial reporting, a sense that they're hostage to the fortunes of 300 other offices in the network and a holding company that's focused on its stock price and shareholder value as reasons to leave a network agency and go it alone. And in a changing world where some kind of business transformation is required, CEOs rarely get any short-term flexibility on margin to finance the re-engineering of their business.
And entrepreneurs see more opportunity to accumulate capital by having a stake in a smaller business. Above all else, the networks and their holding companies have failed to deliver long-term, stock-based incentive plans that give them a better chance of retaining their most talented senior managers. Yes, entrepreneurs process risk in a different way than most of us, but let's at least make their decision to leave the corporate fold more difficult by making them surrender a lucrative long-term incentive plan. As things stand, great CEOs have little to lose (in terms of capital) if they decide to do something more entrepreneurial. And they know that if their new venture doesn't live up to expectations, they'll almost certainly get an equivalent role because of the shortage of CEO talent.
There are other things big agencies can do to improve their chances of retaining top leaders. A clearly defined culture is likely to be a more familial and therefore attractive culture. And while CMOs move on at least every two years and get promoted for not taking a wrong step, agencies might do better to foster a bit more passion and entrepreneurialism by encouraging agency CEOs to take calculated risks in the knowledge that they won't be penalized if they trip up a little.
The networks actually have a lot going for them. Their scale, the quality of their clients and the canvas they provide should make a network career challenging enough to keep the most talented agency managers and business leaders totally engaged. But if the agency networks are serious about fostering and retaining entrepreneurial talent, they'll need to offer the most talented individuals a greater incentive to build a business for their shareholders, rather than building a business for themselves.