How do you turn around a huge agency in a downward revenue spiral—one not winning new business and full of unhappy employees?
For Initiative, the answer was a gut renovation.
The multi-pronged remake began in 2016. It included a new planning process called “cultural velocity” to help brands be relevant; organized teams from buying and planning departments into five “craft centers” focused on areas like strategy or partnerships; and kicked off a “reverse upfront” so that Initiative could present its brands to media sellers. The agency’s leaders say it also turned over half its talent in the U.S. during the first year of its reinvention program. And the plan is paying off.
In 2017, agency revenue dropped 12.2 percent in the U.S. By 2018, it was projected to grow about 8 percent.
“There were obviously the typical pains you go through when you try and reorganize a company of this size. ... It sets you back before it sets you forward,” Global CEO Mat Baxter says (it has 4,000 employees, including 800 in the U.S.) “And then, of course ... you come out stronger.”
Only a handful of Initiative’s leadership remains; many were replaced by people from shops such as Wieden & Kennedy, Refinery 29 and Hearts & Science. That team allowed it to retain Amazon’s global media business while also taking on Canada Goose, Converse, Lego, Revlon and Liberty Mutual. Today, the agency says its growth is roughly split between organic growth and new business.
That’s not to say Initiative did not sustain losses. It lost Arby’s (which it says it had to retire because of a conflict); Burlington Coat Factory (which went to Horizon Media); and Papa John’s. (It had fired the pizza chain after it was reported that founder John Schnatter used a racial epithet during a meeting with another agency and in general created a toxic workplace.)
Initiative rather relishes being an industry firebrand. Last year, Baxter rebuked Facebook on his LinkedIn page, urging the industry to take a “collective stand against the egregious behavior” of the company. It linked to a story claiming that Facebook allowed Netflix and Spotify to access users’ private messages. “[There was] nothing in that post that wasn’t being said privately by [members of] the industry everywhere. I just had, in my view, the audacity to post about it,” Baxter says. “I take our role and Initiative’s role as an agent of our clients seriously.”
Sticking up for what they see is right makes people happier, and when people are behind the company, the client satisfaction is higher, say Baxter and Initiative’s U.S. CEO Amy Armstrong.
The company’s leadership has also pushed internal cultural initiatives to make sure people remain in the loop, such as “Ask Amy,” which allows employees ask anonymous questions that Armstrong personally answers.
Initiative says its internal Net Promoter Score was a negative 36 when it kicked off the turnaround. “Even if you’ve got the best product in the world with the best brand philosophy, vision, best tools … if your staff is at a minus 36, you’re done,” Baxter says. “The minute that Net Promoter Score creeped into positive territory, when it got to a 2, at that point I said to myself, ‘This is going to work.’”
With its rejiggered company, creativity in media has grown, Armstrong says. Take its work for IHOP, which this year staged its memorable “IHOb” campaign, devised by Droga5. “It was exciting to take a long-term … client and help make their brand relevant again,” she says. “And media was a critical component of making it happen.”
Brad Haley, IHOP chief marketing officer, says Initiative’s mix of media, including experiential components that used influencers, helped make the campaign a success.
“It’s not just buying demographics,” says Haley. “It’s buying individuals that are most likely to respond to the message. It’s obviously a huge step forward in the media world.”