Gideon Spanier
Jan 31, 2023

Omnicom high-flyer Alex Hesz on holdco strategy: ‘Clients want one arse to kick’

The recently-appointed global chief strategy officer talks about “reverence” for agency brands and reveals why he pulled out of that big Dentsu job.

Omnicom high-flyer Alex Hesz on holdco strategy: ‘Clients want one arse to kick’

Alex Hesz recently did a speed awareness course, after being caught driving too fast, and describes the experience as “one of the most useful things I've done in years”.

It was “a four-hour, completely off-piste qual group, with people from around the country, talking about what motivates them, what makes them angry, what makes them sad, what makes them distracted, what makes them believe in their own worth — and you think this is gold,” the former account director turned global strategy chief said.

“Every planner on earth should do a speed awareness course without having to go 24 [miles per hour] in a 20 [mph zone], which is what I did.”

Hesz may be happier about his speedy ascent in the agency space.

He worked for Omnicom’s Adam & Eve/DDB in London for a decade, rising to be global chief strategy officer of DDB, before quitting in December 2021 to join his old boss, Wendy Clark, in a holding company role as global CSO of Dentsu International.

But he never formally started at Dentsu. Clark lost her role in a global restructure in September 2022 and Hesz, who had turned 40 in August and was still on gardening leave, did a U-turn.

In a highly unusual move, he was welcomed back by Omnicom in a newly-created, bigger role as executive vice-president, chief strategy officer, reporting directly to John Wren, the long-serving chief executive.

A key attraction for Hesz is that he is operating at a higher “altitude” for the 72,000-strong US agency group, the Omnicom high-flyer told Campaign, giving his first interview since starting in the global CSO role in November.

He is one of a series of new appointments that Omnicom has made to broaden its leadership at the holdco level. That is in response to the growing number of clients who want integrated work across multiple agency disciplines and a single point of contact. Or as Hesz puts it: “One arse to kick.”

Strategy has a pivotal role to play because it is a “horizontal” discipline and a “connective tissue” that can bring Omnicom’s federated collection of agencies together for clients, according to Hesz.

“Part of my job is linking arms” with the different agencies  and “creating connections where they've been a bit informal and ad hoc in the past”— so that they collaborate better and “turn up as Omnicom”.

However, Hesz rejected suggestions that Omnicom needs to become more like its main rivals, WPP and Publicis Groupe, which have been pushing a single “global marketing partner” or “Power of One” solution for some clients — with less focus on agency brands.

“It's about finding the correct balance that allows us to do what WPP and Publicis haven’t done, which is really maintain reverence for the constituent brands and to be a federation but also to have practitioners sit between and above those [agency] businesses,” he said.

Hesz was also bullish about the wider agency sector as it finds itself competing with consulting giants such as Accenture and McKinsey on strategy.

“A brilliant piece of intervention from a holding company like Omnicom” can drive an outcome for clients that is on “the same scale” as an intervention from a top management consultancy, he said.

Hesz, who is British, has a reputation as a brainbox. At the time of his appointment, Wren described him as “one of the most brilliant minds in our industry” and Hesz himself includes his “double First Class” degree in English from Oxford University in his LinkedIn profile.

He joins an expanding holdco team, which includes Daryl Simm, the chief operating officer, who stepped up from running Omnicom Media Group (OMG) in 2021, Andrea Lennon, the chief client officer, who was promoted in October, and Kathleen Saxton, the global chief marketing officer, who joined from MediaLink in January.

Omnicom has more than 5,000 clients, with a rough 50-50 revenue split between the US and rest of the world, but it made clear in the  job announcements about Hesz, Lennon and Saxton that a key area of focus is the biggest “enterprise-level clients”.

The most recent annual report shows the company’s largest client was worth more than $450m (about £380m) a year in revenues and the top ten were worth an average of $300m each. In aggregate, that represents close to 22% of the company’s $14.3bn in global turnover.

No clients were identified but the biggest spenders are likely to include Apple, PepsiCo and Volkswagen Group.

In this wide-ranging interview, Hesz talked about clients’ changing needs, why agency life is a “competitive team sport” and how advertising can attract the smartest talent.

Operating like a “migratory bird around Omnicom”

In his first few months in the job, Hesz has been in learning mode — operating as “a sort of migratory bird around Omnicom”, he said, sitting at a long table in a sparse meeting room with only whiteboards on the walls for decoration in Bankside, the US group’s London headquarters.

He wants to be “an asset” to the different agencies across the holding company and talks about “trying to ‘unmuscle’ the muscle memory of having been in a creative network”.

Hesz doesn’t have a desk in Bankside and has been getting to know other disciplines such as media, CRM, data, public relations, shopper and technology — as well as BBDO and TBWA, the creative networks that sit alongside DDB. He has also been travelling frequently to the US.

Omnicom, like most of its peers, is something of an alphabet soup of agency brands and acronyms. An annual results presentation from last year shows it has nearly 50 specialist agencies:

Hesz pointed out Omnicom agencies already collaborate a lot: “There's been an assumption, incorrectly, that because of Omnicom’s respect for the agency brands — because of Omnicom’s respect for giving specialists the opportunity to work within specialist agencies, because of that federative [holdco] structure — that Omnicom doesn't show up as Omnicom.”

Sometimes one agency or discipline will take the lead — so an account “will be led by OMG or led by BBDO or led by OPMG [Omnicom Precision Marketing Group]”. But, increasingly, clients are looking to the ultimate parent company because “sometimes they want one arse to kick, they want a centralised, brilliantly orchestrated offering of specialists”, he explained.

“And when we show up as Omnicom. that requires us to have certain things that are connective tissue, and my belief is that strategy is a horizontal. Strategy can connect to customer experience, to precision, to shopper [marketing], to creative.”

For now, at least, Hesz does not have a team that reports directly to him. He describes working with “a group of cross-functional strategists” from across Omnicom’s different disciplines who can “huddle around the most exciting, highest-value, most intractable, most exciting problems, opportunities, new business opportunities — whatever they may be”.

Some of this work might be “pro bono” or “incremental” or collaborating with Omnicom’s client leaders, he said.

”The ability to recruit internally and borrow resources like that [to drive growth and integration] is really exciting. In time, I'd like to move towards having less of a borrowed resource and more of a semi-owned resource.

“But that’s beholden on me to prove that out, to prove that model and to scale it. It is a new function within Omnicom — to have a practitioning/strategy function within the corporate tier.”

“Thinking several moves ahead”

Industry observers say Hesz’s ability to corral different parts of Omnicom and, in particular, to win the co-operation of agency bosses across the group will be a test.

Hesz has started with several advantages because he has a mandate from Wren, he knows how the company works from his DDB days and a lot of Omnicom’s agency leaders are “familiar faces”.

Former colleagues say Hesz is good at thinking ahead and adapting to different clients.

David Golding, co-founder of New Commercial Arts and previously of Adam & Eve/DDB, said: “Alex is almost unique among strategists I have worked alongside. He’s capable of talking to the highest powers in Silicon Valley and to the category manager on a local FMCG brand with equal levels of enthusiasm and inspiration.”

Golding went on to use a chess analogy about Hesz’s new holding company role, saying “his ability to see the whole board, while thinking several moves ahead” will help in “landing and keeping big and complex global clients”.

Xavier Rees, the chief executive of Havas UK, who was previously group managing director of Adam & Eve/DDB when he worked with Hesz, also highlighted the Omnicom strategy chief's ability to work with a broad range of clients.

“Alex is an incisive thinker who’s as confident working with a start-up as with the biggest brands on the planet,” Rees said. “He’s also a great story-teller which made him pretty compelling in front of clients — particularly in a pitch room.”

Others who have worked with Hesz described him as “extremely fast”, in contrast to “a lot of ponderous planners”, and an “armour-piercing individual” who thinks about the bigger picture for clients.

Some mentioned he can also be a “lone wolf”. On that point, Hesz said: “I like doing work.” When some people move into management, there’s an expectation that they become “delegators”. But he is happy to get involved — “writing the deck and then coming back to the team and going, ‘Here's how I've put some thoughts together’” — even “if it means that sometimes I get seen as a lone wolf”.

Holdco vs agency brands

Hesz says that Omnicom will talk more in the coming weeks and months about its offer. There is a sense that these are still early days in the articulation of Omnicom’s evolving strategy — despite Wren having been CEO since 1997.

“We want more information,” one Omnicom agency executive told Campaign privately when asked what they thought of the parent company’s recent hires.

Wren keeps a low profile but the appointment of Saxton, who started in January as CMO, was a sign that Omnicom wants to be more vocal and get better at telling its story publicly.

There is a perception in the market that Omnicom is becoming more like WPP and Publicis, which have both elevated the holdco brand in recent years.

Lucinda Peniston-Baines, co-founder of The Observatory International, which advises clients on agency selection and runs pitches, said: “Historically Omnicom was fiercely protective of their agency brands — in many respects rightly so.

“However other holdcos have recognised client demands to drive integration by bringing together teams with top talent from multiple agencies within their portfolios, and that’s inevitably placed pressure on Omnicom to follow suit.

“Indeed they moved to demonstrate this on two global pitches that The Observatory managed [and Omnicom won], resulting in Team O.P.E.N. for Peugeot in 2020 and Team X for Mercedes-Benz in 2021.

“These recent senior hires [such as Hesz and Saxton] signal a doubling down on this strategy. It will be interesting to see how this plays out against the competition who have a longer track record in this space.”

Hesz maintains that moving to more of a holding company solution is “not a pivot away of some existing strategy” for Omnicom.

“This is the distillation of an existing strategy into a sharper value proposition that reflects what clients need right now, which is performance, growth, outcomes,” he said.

“They don't necessarily care which logo has delivered those outcomes for them but we do because we need to respect those [agency] businesses and their ability to recruit the world's top talent.

“We know that the world’s top talent responds to the world’s top agency brands, not to homogeneity, not to huge corporate brands.”

The pushback against this narrative about “reverence” for the agency brands is that Omnicom has been moving its agencies into shared buildings.

“What I love about this place is it scales,” Hesz said of Bankside (pictured above), the home of virtually all of Omnicom’s London agencies — with the exception of Adam & Eve/DDB.

The different agencies are “respected” and have their own physical spaces, with “radically different cultures and working practices”, but they also have areas to “connect with one another” and for “serendipity to drive creativity”.

Not joining Dentsu

Part of the reason why industry observers are interested in Hesz’s new role at Omnicom is the dramatic way that he pulled out of his job with Dentsu — and what that said about the fortunes of the two companies. Campaign’s news story that revealed his U-turn in October was one of our most read of the year.

Hesz says “it's very easy to sensationalise my decision” as a reaction against Dentsu’s merger of its Japanese and international operations, which led to Clark’s exit, but he found it “relatively easy” to turn down the job.

When he initially agreed to join Dentsu, he was looking to “start a new adventure” but as he waited to start, “the corporate strategy of Dentsu changed” and “the nature of that adventure changed”.

Dentsu’s restructure would have meant he had to move to Japan and he did not want to relocate with his wife and children from London. “There are certain things in life that are more important than a paycheck and a big title,” he said.

He won’t criticise Dentsu, saying “it's really important to respect people” and “the last thing people need is negativity”.

How far in advance did he know Clark would be leaving, before Campaign broke the news on 1 September? There were discussions during “the latter half of my waiting for my start date” when Dentsu was talking about bringing Japan and international closer.

“It became clear” that a change of corporate strategy was on the agenda — “Wendy was very open about that, Dentsu were very open about that, there was no cloak and dagger,” he said.

However, Hesz admitted he only found out about Clark’s departure “relatively soon before it became public knowledge”. He added: “It wasn't by any means the decisive factor in my decision” not to join Dentsu.

Hesz started talking to other companies and Omnicom wanted to take him back. Importantly, he felt the US agency group would allow him to do “the type of work I want to do” and is moving in “the direction in which I believe the industry is headed”, he said.

One insider suggests that Omnicom first put the global CSO role on the table in 2021 when the company made a counter-offer in a bid to persuade him not to go to Dentsu. Hesz won’t comment directly, saying only that he had committed to Dentsu and didn’t want to get into a “tit for tat negotiation”.

Why not a start up?

Hesz has an interest in the world beyond advertising. He has done some work for the Tony Blair Institute and his family opened their doors to two young Ukrainians, Victoria and Olha, who lived with them after fleeing the war last year.

But he has stayed loyal to the agency sector, describing it as a "competitive team sport". Now he is working with $100m clients but why not try another path — as a founder?

Hypothetically, he had ideal partners at Adam & Eve/DDB in Tammy Einav, now the chief executive, and Rick Brim, now the chief creative officer (pictured, respectively, sitting in the centre and standing top left, alongside their then colleagues, Anthony Falco and Mat Goff, with Hesz, far right, in 2016).

They rose together during the 2010s and took over from the founders after their earn-out.

“Theoretically” he could have tried the founder route and “there were clearly times when I had conversations with different people around the possibility of doing a start-up”, Hesz admitted, adding he doesn't know a better account handler-creative duo than Einav and Brim.

But he recalled a piece of advice from James Murphy, another of the founders of Adam & Eve, who told him at the time of its sale to DDB that it was good either to be “really small” and the “underdog” or “really big” when “there's no problem you can't legitimately look into, there's no client you can't sit down with”.

Having tried small at Adam & Eve since its days as a start-up, Hesz reflected: “What I'd never done was operate at this scale, operate at this altitude, in terms of saying, from the top of one publicly traded company to another, let's have a [client-agency holdco] conversation.

“And that's a different type of relationship, that's a different type of strategic partnership, and I’m at the right time in my career to try that out.”

Attracting talent

Hesz has a planning background and cites Golding at Adam & Eve/DDB and a whole generation of planners from Bartle Bogle Hearty where he worked in the early 2000s as influences.

Asked if he has a guiding philosophy or ethos, he said: “The philosophy of planning is fundamentally a reductive practice. It's about taking an absurdity of data from as many sources as you can — from client briefs but also from the world and your experiences of how you look at the world.”

Hence why the speed awareness course turned out to be a useful experience, he explained.

And using insight to develop strategy is what clients crave, according to Hesz.

“I still believe that agencies are as strong as the ideas they give to their clients,” he said. “Executing those ideas is mainly what you do for consumers. Consumers respond to execution, clients respond to strategy.”

Coming up with the best ideas depends on access to talent but many advertising leaders worry that the industry is struggling to attract the smartest brains. Does Hesz agree? “We have no divine right to attract smart people,” he replied.

One factor is that “we now live in a world of purpose” and that is “a huge driver, particularly for first-job employment”, he suggests. “Smart graduates want to go and work in environments where they're immediately and measurably making a positive difference to the world.”

The ad industry needs to do better at selling itself. “We have an opportunity and a need to show the positive impact of creative communications on the world. To show that growing economies, growing businesses, doing it honestly, doing it in a way that contributes to culture and contributes to the world positively, is in everyone's interest. Not just in the interest of our clients but in the interest of the world.”

However, Hesz and his colleagues at the holdco level will be judged primarily on how Omnicom performs.

The company had a rocky time at the start of the pandemic but had a decent 2022 – with full-year revenues forecast to be up as much as 8.5% on an organic basis. Omnicom had the best-performing stock price in the agency sector, up 11%, in the 12 months to December.

“2023 is going to be a really interesting year,” Hesz said. “We need to come out confident that we can help our clients navigate what will be a very difficult year for them as human beings, for their businesses, for the economies they work in. And we have to prove our worth.”

Source:
Campaign UK
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