Accenture’s acquisition of creative agency Droga5 created a predictable stream of industry chatter. Most of that chatter has focused on whether Droga5 will retain its creative chops and culture operating inside a consulting behemoth like Accenture whose culture may seem at odds with Droga5’s. Here’s what I think:
Welcome to the Future
The Accenture/Droga5 acquisition is the future, folks. Big consulting firms are hungry to provide stronger and more comprehensive solutions to the C-suite, where they famously have access. And for consulting firms with robust digital offerings — such as Accenture with Accenture Interactive — they want to lock in AOR relationships, a strength of creative agencies but a challenge for digital firms. That’s why the acquisition of Droga5 was done by Accenture Interactive — and why Sapient bought Nitro Group in 2009 and Deloitte Digital acquired Heat in 2016. Creative agencies give consulting firms a way to tout more comprehensive services for the C-suite and a stronger entrée to AOR relationships.
Accenture and Droga5 Have a Lot of Work to Do
It’s not going to be easy for Accenture and Droga5 to make this relationship take flight. Whether they succeed depends on a number of factors:
· CULTURE. Will the well-honed Accenture integration process preserve or snuff out the creative culture within Droga5? Accenture has demonstrated an ability to roll up dozens of digital agencies into the massive Accenture Interactive business unit. But a world-class boutique creative agency is a different animal in terms of culture and capabilities.
· PROCESS. Figuring out both where and how to collaborate on new business pitches will be extremely complicated for Accenture and Droga5 because of how they’ve traditionally operated. For example, consulting firms manage potentially competing brands through vertical practices. But creative agencies view working with competitive brands in a category as a conflict. These are important differences affecting how well the organizations can collaborate on business pitches. These differences won’t resolve themselves.
Clients Will Need to Be Patient
If you’re a client of either Droga5 or Accenture, don’t hold your breath waiting to see benefits of the acquisition anytime soon. Parking the differences in skills sets and cultures for a moment, just the sheer discrepancy in terms of scale (i.e. 500 people in two offices from Droga5 inside a 477,000-person global organization) guarantees a level of rationing access to Droga5 that’s rather mind-boggling. While surely this acquisition provides a boon to Droga5’s new business pipeline just from Accenture, processing and prioritizing what is sure to include a lot of noise will be frustrating for all involved — most notably clients that are either impatiently waiting on responses or concerned about potential conflict notifications they are receiving (or, worse, concerned that they’re not receiving).
And while Accenture and Droga5 can cross-sell, in effect maintaining the status quo for clients in the near-term, really rallying their combined skills around the needs of clients and delivering collective value is a different issue completely. What kind of training, business process mapping, and organizational changes will be needed to ensure that these radically different entities work together in ways that are perceived as valuable internally and externally? These are just a few of a long list of questions that need to be dealt with before they can even consider delivering an integrated offering at any kind of significant scale to clients.
A Hit and a Miss
I’ve seen this movie many times (and been in it). Sapient’s acquisition of Nitro Group for $50 million in 2009 was supposed to give Sapient entrée into creative. Ten years later, it’s hard to find the value inherent in that acquisition. The Nitro brand is gone. Of course, Sapient was bought by Publicis, which wrote off $1.5 billion from its digital operations (thanks to Sapient failing to hit its targets) before being merged with Razorfish. And after that? Razorfish, one of the most storied and valuable brands in the industry — and a business that cost Publicis $530 million to buy — was crushed and the brand ultimately retired.
In 2016, Deloitte Digital acquired Heat, which seems like a blueprint for the Accenture acquisition of Droga5. Note that Heat became part of Deloitte’s digital arm, such as Droga5 is now part of Accenture Interactive. Deloitte crowed that it had created the world’s first creative digital consultancy. Two years later, Heat was telling a credible story to Adweek about its growth under Deloitte, with Deloitte bringing Heat in on assignments and feeding Heat work through its long-standing client relationships — work that Heat would have not have had access to on its own. Rather than dying, Heat is growing, as evidenced by the agency opening offices in New York (in 2016) and Chicago (in 2019).
The Havas Village Model
Accenture and Droga5 may very well try the Deloitte/Heat model of relying on each other to strengthen their business development efforts. But I think the larger question that these acquisitions (Accenture/Droga5 and beyond) raise is how integrated teams should be organized to deliver on the complicated needs of the CMO. One of the reasons I joined Havas Chicago is the opportunity to deliver a diverse set of talent, ranging from strategists to analysts to creatives, to help CMOs build meaningful American brands through cultural relevancy. Havas Chicago has created a model that works: the Village.
Through the Village, Havas has cracked the code for organizing disparate skills and mindsets around the needs of each client. We operate more than 50 villages comprising more than 20,000 professionals in 100 countries. Each Village operates as a tightly knit culture that integrates and rallies multiple skill sets around the needs of clients locally. At the same time, each Village enjoys the support of the global network to rapidly scale up as our clients’ needs dictate. Our global scale gives our clients a navigable, easily accessible network of offices and unique capabilities beyond our Chicago Village.
The Village is a compelling and proven model for knowledge sharing and collaboration at a scale that is truly meaningful to clients now. While I am personally intrigued by the Accenture and Droga5 tie-up and believe it signals a new level of convergence within the broader professional services industry (don’t be surprised to see more M&A activity within the next 12–18 months by other consulting firms or agency holding companies in direct response to this move), my assessment is that clients will need to wait several quarters before any tangible benefits become clear (and they’re not guaranteed). While modern CMOs should be taking note of this deal and the pending impacts to the overall landscape, they should actively embracing their own flavor of a “village” model to accelerate knowledge sharing, collaboration, and preparing their culture for the relentless pace of change that is now required for any business or brand to succeed.