Friday, July 27, 2007

The Creative Conundrum

So many of us dream of a windfall gain. Winning a lottery, or a game show. Or suddenly finding 1000 shares of ACC bought by a grandfather but forgotten in some cupboard.

Never do we think our employer will call us in and hand over a Rs 15 lakh cheque. But that's exactly what happened at Lintas late last week.

Lintas India employees were pleasantly surprised on July 21, when all of them who had been associated with the agency for more than six months received a payout. Some cheques were reportedly in the range of Rs 1 crore.

Now being touted as one of the biggest disbursements ever by an advertising agency in India, this development came soon after the Interpublic Group acquired Lintas.


The windfall accrued from the fact that 51% stake in the company was held by the 'Employee Welfare Trust'. Of course no one actually expected such a bonanza. There are many such 'technical' arrangements in the world of business but cheques with several zeros are rarely handed out by the management.

And just 2 months ago Prem Mehta had clarified to ET that 'not a single employee or trustee owns a single share'. He added: “I hope people who are just waiting to collect the money don’t wait.”

Well those who did are sure glad! Cheques were distributed as per a formula which is apparently along these lines: number of years in service X current salary X 0.4. Beneficiaries included all categories of employees - from secretaries to MD.

So far so good. But there is a catch. Most of the creative department has received zilch. Nada. Nothing.

ET reports: The reason? Quite simply the fact that while their counterparts in other functions have made a pretty packet, most creatives, including national creative director Balki, have been left out in the cold. This has happened because most people working in the creative department of the agency prefer to work as consultants rather than be on the employee rolls.

....An angry creative who did not want to be named spoke on behalf of the group: “We have contributed as much or more to the success and growth of Lintas, and this differential treatment has appalled us.


Prem Mehta clarified in an interview with ET this morning: There is a legal charter of the trust that was created 20 years ago. The charter of the trust defines who will be the beneficiary and hence the benefits can only go to the beneficiaries of the trust and no one else.

Well, sure but it seems to be more of a lucky break for those who are permanent employees - they didn't make this choice because they knew there would be any particular benefits. In fact most of the recent employees had no clue about the Welfare Trust's existence.

Mr Mehta further elaborated: "No permanent employee is allowed to have activity outside the company, and consultants can and they do. They make films and so a lot of other stuff."

Uh huh. Obviously there are egos involved but let's go beyond the specifics here.

The creative mindset
I think Mr Mehta well knows that whether employed as consultants or employees, creative people work on a freelance basis outside. That's something which runs in their blood and can't ever be completely stopped. Every management just wisely looks the other way.

Even if one is employed as a 'consultant' it does not mean you don't turn up in office and work, just like the regular employees. You just get extra tax benefits (by offsetting all expenses against the consulting income).

Companies are quite happy with this arrangement because otherwise they would have to cough up higher tax burdened salaries to keep employees happy.

When everyone is clear that consultants are employees in spirit, if not in letter, leaving them out of the bonanza makes no sense. Technically, the trust may be correct. But will logic work at this juncture? "Sorry your appointment letter only says... " The affected will quit in disgust and if that includes a lot of creative people, what's left of the agency?

In which case, what has Lowe bought after all? There is no plant, machinery or other fixed assets. Even a brand name means little as an agency is only as good as its last few ad campaigns. And the core of an agency is the creative.

Maybe they get new creative people but where goes the whole idea of rewarding 'those who have made the agency what it is today'?

I suspect a compromise will be hammered out at Lintas in due course. But at the heart of it all lies the eternal 'who's the more important department' question. Creative and management are often on collision course. Although they need to work together, to bring out the best an agency can deliver.

Increasingly Creative Directors are being elevated to MD/ Chairman position - Piyush Pandey, Prasoon Joshi and now Sonal Dabral (he takes over from another creative-turned-MD Mohammed Khan).

The point is that creative is a very important resource but it is difficult to 'control' creative people. And to motivate them and keep them happy. Which is why the 'creatives as MD' formula makes sense. If the guys with the anti establishment feeling become the establishment... they won't be tempted to set the house on fire, just for kicks.

The other point to ponder is the lack of defined pathways for a career in advertising, on the creative side. There are schools like MICA and even Northpoint by Lintas. But they focus on the management or media side of the business.

Even in creative, On the art direction side, qualifications exist. But if you want to join as a copywriter it's the same old route. Give sundry copy tests, eke out a living at low wages, hope you get noticed or hop agencies till you do.

That's the way it's always been you might say, and it's worked. But times have changed. It makes sense to build a talent pool the same way as other industries are doing. Identify potential through a Centralised Copy Test, train them for a fee, place them (if they make the grade). Then put them through the agency grindstone.

I agree creativity can't be 'taught'. But there are a lot of people who have the raw talent who can be polished into diamonds. People who never make it to agency doorsteps. They opt for a life of misery in the better defined career paths. And remain mere lumps of coal.

Who loses out? The agency, the individual and we the audience - subjected to 'yet another campaign from my stale idea hat' brand of advertising.

May creative live long and prosper. Because advertising will have to work harder in years to come. As consumers get more cynical, more immune to its charms. Like Urvashis and Menakas seeking the attention of an oblivious Vishwamitra!

Update: Stephen Gatfield, worldwide CEO of Lowe has stepped in and made a statement to ET:"It is clear that Prem (Mehta) has been the biggest beneficiary of the trust; and the trust, whose chairman is Prem, has used a very narrow definition to distribute the money from the sale proceeds."

Lower says it will incentivise talent that has 'not been given its due'. Mr Gatfield added,"We find ourselves in a very unusual position... as the people from whom the company is acquired are not essentially the most important people in the company and in this case are close to retirement."

Read Creative Crisis: Lowe-Lintas-Prem-Balki Fight gets ugly here... if you can find the blessed link!

15 comments:

  1. I think everyone is naturally creative, however how that creativity is expressed varies. Advertising/Marketing people are creative with ideas. Musicians are creative with sound. Artists use light and color.

    I also do think that people can become more creative in their niche, and can learn how to be creative in others.

    ReplyDelete
  2. Shareholding by employees welfare trust is a method to keep the voting power with the management. This is prevalent in some listed companies also. Charity begins at home. So the management has followed this policy- albeit selectively.

    Advertising industry is a self indulgent and insular field. They are mostly unconnected to reality. That is why we find beautiful ads which do not bear the Company's name or address or telephone number.
    So it is not a suprise that twenty years back an "Employees Welfare Trust" was created by Lintas for holding majority control of the Company and not many employees were aware of its true import.

    Now I understand why I do not understand many of the ads played in TV during the serials I enjoy watching. At least the serials - unlike the ads- do not pretend to have any connection to reality.

    ReplyDelete
  3. i personally feel they should have a provision for the creative departmen as well. If they want to pay them they can easily tweak around the the rules and laws

    but as they say ....
    egalitarian possibilty is an uncertainity

    ReplyDelete
  4. First of all, the welfare trust was created by Alyque Padamsee only to mobilise funds for employees. Truly for welfare. It was taken forward by different people after he left.

    If people were not informed about how the trust works then i would agree it was wrong. If the consultants chose to be consultants because they did not know how the money pool in the trust works and that 51% stake is held by the trust, then its a protocol problem. Mistakes in the past cant be fixed. But yes, from now on they can explain to every new joinee how and why the trust functions and then ask them to choose.

    What they did was not wrong. they're legally correct.

    I would have expected the human resources team to speak up about the consequences of this and then work out a politically correct way of doing this... but thats where they slipped.

    This was 'hot cake' according to PR perspective... obviously they acted in haste. But kya publicity yaar!!!

    ReplyDelete
  5. Recently had 'Lakshmi ki Kripa'when the other day my father told me that he has around 80 shares of Reliance which he bought some 12-13 years back and had forgotten altogether until he bumped into them a few days back.

    And I am talking about cool 1+ lakhs profit here, and that too quite suddenly. 'Lakshmi ki Jai'.

    ReplyDelete
  6. I am quite sure people who are in creative department and are full-time employees are getting the money they deserve.

    As, for consultants, they wanted to work outside, they wanted to save taxes and they have been doing, I suppose, for long time. It was the choice they made. Did they ever think about paying all the taxes they have cheated from the govt, Why then are these guys crying hoarse.

    What goes around, comes around.

    ReplyDelete
  7. And we thought Ad agencies paid peanuts!!

    ReplyDelete
  8. Not related to your compelete post, but particularly to this part.
    “The other point to ponder is the lack of defined pathways for a career in advertising, on the creative side. There are schools like MICA and even Northpoint by Lintas. But they focus on the management or media side of the business.”
    Me and a friend has often discussed this i.e. having a well defined career on the creative side in any creative field; be it advertising,theater or movies. So, an above average creative person would be afraid to to try his/her luck in a field like this. While the same person can earn a decent living in say software industry , it would take a lifetime to achive something in such an industry. Perhaps that’s the reason we see so many engineers floating around, but not may writers,artists and similar kind of people.

    ReplyDelete
  9. hi rashmi,

    guess this is what you're looking for:

    http://economictimes.indiatimes.com/articleshow/2237550.cms

    cheers,
    b

    ReplyDelete
  10. The creatives are pampered and will always get that treatment.... they were ignored this time... but not for long....im sure they will get their share in some way or the other....
    This is the inside news.... straight from lowe...

    ReplyDelete
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