Read My Lips is the new guide for how to say difficult things nicely. Elaine Eksvard is a best-selling author, TV personality, avid blogger, and CEO & Founder of rhetoric agency SnackaÂ Snyggt, which offers courses in modern rhetoric, presentation techniques, and sales rhetoric.
Read My Lips: Rhetoric and the Power of PersuasionÂ is out on 21 September.
Martin Luther King, with his ‘I Have a Dream’ speech, has been widely considered the best rhetorician of all time. People have tried to emulate his style and manner for half a century now, but with limited success. That’s because King was very much a man of his time. Today, we listen to things differently. There have been many books published in which rhetoric is situated firmly behind the speaker’s podium, but here we want to make it useful in your everyday life.
The purpose here is not to try and magically transform you into a Martin Luther King or a Barak Obama, but to help you become the best version of yourself in terms of communicating, motivating and persuading. Is this possible, you might wonder? Of course it is! If you haven’t figured out how to do that, I guarantee that this book will help take you there.
First and foremost, rhetoric is not something that’s just for politicians or actors. When I comment on rhetoric in the media, it is often about the rhetoric that I like the least – the sort that stays firmly planted behind the speaker’s podium. I am often asked, ‘Who is the best rhetorician among the politicians?’ That is roughly asking, ‘Which sumo-wrestler runs fastest?’ Politicians today are not so fantastically skillful. They do things that completelyÂ deaden one’s motivation for listening. They have a speaker’s podium and a printed script or teleprompters that they mechanically read from. But surely, you might think, they must have to do it that way. My responseÂ to that is, ‘Who says so?’ Not us rhetoricians at any rate.
Let us go back to King’s 1963 “I Have a Dream” speech. Contrary to popular opinion, it was actually a deadly boring speech. At least that was the assessment of gospel music legend Mahalia Jackson, who was sitting in the front row. While King went on and on with his written remarks, more than a few listeners could be seen yawning. Halfway through the speech, Mahalia shouted out, ‘Tell us about the dream, Martin!’ King stopped short, looking out at Jackson and at the sea of people standing there listening to him. He took a deep breath and did something that many politicians, and communicators in general, could make great use of. He literally improvised what would become one of the most iconic proclamations in history – ‘I Have a Dream!’ he spoke from the heart and shared what he had envisioned in his inner-most dreams.
The Chinese Entrepreneurs Series offers a unique insightÂ into some of the world’s most important businesses and individuals: Dong Mingzhu & Gree, Jack Ma & Alibaba, Ma Huateng & Tencent, Ren Zhengfei & Huawei, and Wang Jianlin & Dalian Wanda. The full series is available now.
Dong Mingzhu, chairwoman of Gree Electric Appliances Inc. (Gree’s) and a leader of China’s industrial reinvigoration, embodies many assets of a successful businesswoman. At the age of 36, when most women settle down into the comfort of a family, centered around their husband and children, she started a career from scratch. Step by step, advancing year by year, she eventually rose from an entry-level sales associate to the president of Gree Electric Appliances Inc. She is wise, bold, strong and firm. Dong Mingzhu’s success and experience have given her a unique perspective, and her intellectual wealth surpasses that of her peers. Her journey serves as an inspiring note to young people and a textbook for entrepreneurs.
For some men, their career is everything and marriage is only half as important in their eyes. Jack Ma was lucky, for he had both a successful career and a happy marriage, each of which was mutually beneficial to the other. Not only did Jack Ma’s times at the universityÂ bring him knowledge and confidence, but he also gained a wise and reliable partner. When Jack Ma left Hangzhou Normal University, his high-spirited and resolute eyes were brimming with hope for the future. Of course, there was no way he could have predicted the success over the next years, but he believed that even though today and tomorrow might be full of cruelty, the day after that would be worth waiting for.
What is this thing called the internet? More importantly, what can it do for us, this modern invention that provides simple ease of access to a worldÂ of complex information. The internet represents a technological and cultural revolution, which has heralded a new era of industrial development – all at the click of a button. In terms of Tencent QQ – popularly known as QQ – its founder, Pony Ma, captured the internet’s most revolutionary aspect: communication. QQ has become an indispensable part of people’s lives as communication has moved from traditional mediums, such as the telephone and letters, to networked communication. With QQ’s little penguin logo and mascot, Pony Ma created a miracle inside the Chinese internet’s ‘experience economy’. He has allowed countless netizensÂ to discover the ease and magic of online exchange at the touch of their fingertips.
In 1987, Ren Zhengfei retired from a People’s Liberation Army (PLA) base in Sichuan, and came to work for the Shenzhen Nanyou Group as the deputy manager in its affiliated electronics company. Honesty helped Ren Zhengfei navigate through eleven military years. However, sabotage quickly taught him theÂ guileful nature of the business realm. Duped into a bad deal, the company found itself in debt of over two million yuan. In this situation, Ren Zhengfei had no choice but to bite the bullet and leave Nanyou, truly unemployed. When it rains, it pours, and his first wife left him soon after. At that time, Ren Zhengfei was under a great strain to take care of his retired parents and help his six younger brothers and sisters. With the resilience of a soldier and eleven years’ military education, Ren Zhengfei did not crumble in the face of these challenges. With no time to brood over the business failure or family break up, Ren Zhengfei decisively started a business in 1988. He started a small technology company, Huawei, with only 20 thousand yuan, getting off to a rocky start by selling a Hong Kong (HK) made telecom switchboard. After fifteen years of hard work, Huawei’s sales revenue reached 30 billion USD in 2003. Huawei was a dominant force amongst the most successful national companies of China.
China has Wanda and Wanda has Wang Jianlin. Wang Jianlin joined the army in 1970. In 1986 he transferred to a civilian job and became the office director of the local People’s Government in Xigang District, Dalian City. In 1989 he became the managing director of Dalian Wanda Group Co. Ltd. He has remained in that position to this day. The Hurun Report – a magazine which ranks China’s wealthiest individuals – stated in October 2015 that Wang Jianlin’s assets had reached the value of 220 billion yuan, making him once more the richest man in China. During the rapid development of China’s economy over the course of the past 30 years, there has been no shortage of tales of wealth of every kind. The protagonists have been just as manifold. Yet the tide ebbs and flows and it has been rare to see one linger at the top for long. How has Wang managed to climb, slowly but steadily, all the way to the very top to be crowned China’s richest man?
Rene Carayol is one of the world’s leading business gurus, specialising in leadership, culture and transformation.
His new book, SPIKE: What are you great at?Â is the product of 30 years of supporting the growth and development of thousands of individuals and organisations globally, and brings together a proven formula for personal and business development.
Everyone has at least one inherent strength, read the extract below to find out more about how you can find your SPIKE.
When I try to explain SPIKE to friends, colleagues, and indeed to the audiences to whom I speak regularly, I usually struggle to articulate a precise definition. I have come to realise thatâs because there isnât one. Like most things that we find difficult to define â love/hate, peace/war â we can easily tell you what it isnât and we can always tell you what it looks like when we see it.
What this book isnât is another unit in the ever growing âStrengths-based leadership/development/coachingâ industry, exemplified by the excellent Gallup publications (a market leader in strengths training), focusing on exponents such as Marcus Buckingham and Tom Rath, which has dominated this approach over the past 10 to 15 years.
In fact, there is much to agree with in an interview in the Harvard Business Review from 16 January 2016, entitled, Stop Focusing on Your Strengths, given by Tomas Chamorro- Premuzic, a professor at University College London and Columbia University.
He warned of the potential dangers of concentrating on your strengths alone. He argues that âmost tools and assessments that are designed to nd your strengths would simply pick up the thing that you are best at.â I agree and that is precisely the point. A âSpikeâ is not simply something you are good at â it is something that is your brand, the essence of what you are.
There are many people who are great at certain jobs but actually hate doing those jobs.
Many sports professionals fall into that category. They have not necessarily found their âSpikeâ but have fallen into their marketable skill. This book isnât about positioning yourself for the best paying job â itâs about understanding what the best job is for you.
Itâs not about ignoring your weaknesses â itâs about recognising them and making decisions about how best to accommodate them. When thinking of team environments this means identifying, recognising and developing individual Spikes and balancing them in the service of the team.
What separates this book from the strengths-based theorists and practitioners is that it does not try, or even want, to provide a guidebook to success or an online âstrengths finderâ or dictate the way each individual should be; it is not, in any way, a self-help book.
It does not provide a methodology; rather it attempts to develop a philosophy â not for self-help, but for self-discovery. It does this through its use of real and emotionally connecting stories and through its simplicity.
Through my work and life over the last 25 years, I believe that I have earned the right to tell the stories that have informed my Spike philosophy and, more importantly, that will allow readers simple, but not simplistic access to Spike, through that greatest of learning vehicles: the story.
This book also is not about data-driven deep, impenetrable lists, charts and amateur psychometrics. at is the IQ approach of management, and there are more than enough good books covering this already. Spike is all about engaging your EQ, your Leadership of yourself and your future.
Management is concerned with âdoing things rightâ, where Leadership, on the other hand, is about âdoing the right thingsâ. Management is all about tasks, plans, strategies and activities, leading to their ongoing measurement of how these factors affect the tangible and demonstrable results.
Spike, however, like all Leadership approaches, is much more about attitude and mind-set. Spike sets out to provoke a completely different mind-set about our real natural assets and how we best capitalise upon these.
When Iâm on stage, I always say, âIf you want to know what your Spikes are, just ask a loved oneâ.â Not a work colleague, but someone who has unconditional love for you â mother, father, sister, uncle, partner, niece, gran, husband, wife, daughter, brother or wife. They will want you to succeed, so will not play games or compete with you. They will not use management speak but will kick-start your journey of self-discovery by using terms like, âyouâre generousâ, âyour patience is your Spikeâ, âyouâre firm but fairâ, and so on.
Understanding the Spike approach also enables us to tackle the implicit biases to which we are all vulnerable. Far too often, our first impression of someone will negatively colour our ongoing judgement of them.
is implicit bias can be very damaging, especially for women and minorities, and is a constant barrier to greater social mobility. The Spike philosophy can help.
By looking for an individualâs Spike from the outset, we will care less about their â first impressionâ. Searching for someoneâs Spikes takes us beyond their gender, race, religion, disability or social status.
But what does a Spike look like when you see it? As will be the pattern for the bulk of the book, I will answer this question by telling a story.
Forgive the footballing analogy â while this is not a story about football, it provides the perfect example of an individual who, at rst impressions did not quite look the part. Itâs the story of an individual with obvious limitations, but most of all, itâs a story of Spike.
It is the story of Ferenc PuskaĚs, a Hungarian footballer of the immediate post-war period. Ferenc GyurcsaĚny, the Prime Minister of Hungary, speaking after Puskasâ death in 2006 said, â There is not one Hungarian who will be left untouched by the death of Ferenc PuskaĚs. The best-known Hungarian of the 20th century has left , but the legend will always stay with us.â
Puskas scored 83 goals in 84 games for Hungary between 1945 and 1956. He was nicknamed the âGalloping Majorâ because he was nominally a soldier in the Hungarian army, but it was only as a player with the Hungarian army team, Budapest HonveĚd SE, that he really found his calling. He was to become an integral part of the Mighty Magyars, who bestrode the foot- balling world in the early-to mid-1950s.
They became the first overseas team to beat England on home soil in 1953. As they were warming up for the game, an unnamed English player looked across at Puskas and said, âLook at that little fat chap. Weâll murder this lot!â Hungary beat England that day 6-3 (Puskas scored two goals) and then took them back to Budapest for a 7-1 thrashing.
After the collapse of the Hungarian uprising against the Soviet Union in 1956, Puskas escaped to the West, surfacing in Spain to sign for mighty Real Madrid. In the ensuing years, he became central to the Madrid team, winning the first five European Cups, culminating in the almost mythical 1960 final against Eintracht Frankfurt at Hampden Park, Glasgow, watched by a crowd estimated at 127,000.
Madrid won 7-3 and Puskas scored four goals.
But what has any of this to do with Spike? Well, another tribute to Puskas by Sir Tom Finney, the England and Preston North End legend, holds a tiny clue. Puskas, he said, âhad a roly-poly physique, but a wonderful left foot and he was a brilliant finisher. I would put Puskas in any list of all-time greats.â
He didnât look like a footballer but, unlike the other England player, Finney looked past the obvious and marvelled at Puskasâ âSpikeâ: that âwonderful left footâ.
Most respected football coaches work on the premise that all footballers will have a favoured foot, which they will naturally try to play every ball with, and they work hard to push all players to work on their weaker and less used foot.
When Puskas was asked why he didnât practise more to make his right foot better, he explained that he practised all day, every day on his left foot to make it near perfect, and to worry too much about his other foot would have taken time away from perfecting his left . He understood what his Spike was, and appreciated that concentrating on a weakness would have been counterproductive.
In so doing, that âlittle fat chapâ became the best-known Hungarian of the 20th century. Not bad for a guy with âonly one foot.â Puskas did not ignore the deficiencies of his weak foot and worked to make it adequate, but he decided that a âperfectâ left would be more valuable and a competent right foot would be sufficient.
“Pleasure in the job puts perfection in the work” – Aristotle
Andrew Wallas, the author of Business Alchemy, specializes in business transformations. He is the CEO and founder of The School of Business Alchemy.
Business Alchemy focuses on the inner dynamic and energy flow within the organization itself, seeing where there is visible and hidden contradiction working against the aims of the company. This is a unique perspective on how companies can evolve and grow naturally and successfully.
We are driven by analytical, logical thinking and a rational approach in most aspects of daily life, particularly within most structures and organizations. Every business is a living organism with an identity. Larger companies spend millions of pounds seeking expert advice to help them create and reinforce their corporate identity. Part of the perceived wisdom within the corporate world is that a strong brand identity is essential for a successful business. One of the realities of corporate life, certainly in the Western world and probably the world over, is that it is very mind-dominated. Of course, it is also true that the wider culture we have created is also mind-dominated. The identity of the business is closely aligned with the mind of the business. There is less and less room for the heart or heartfelt decisions, for trusting gut instincts, and for the soul and soulful reflection.
There is, of course, nothing wrong with rational thinking, logical analysis, and factual argument. There is great value in this approach. However, we have become totally out of balance and out of sync with the natural rhythms of life and a huge amount of our potential. As individuals, organizations, and cultures, we are operating a long way short of our capabilities and hence, we are not reaching fulfillment.
As individual men and women, we need to learn to listen more to our hearts. Most people I meet are very disconnected from their hearts. It takes practice and commitment to learn to live more from the heart. Imagine a heart-led organization: what would this look like? A rational, logical, mind-dominated business is focused on doing, is didactic, driven and competitive. There is no question that all organizations need these qualities. A heart-led business creates space to pause and listen. It is not didactic and competitive, but rather reflective and collaborative. It is interested in listening to the rhythm and mood of the situation and then acting decisively. A heart-led organization values intuition, contrary views, and instincts that might not initially make sense.
When I go into a business, I often create a space and stillness within me so that I can listen to the heartbeat of that business. Depending upon the contractual engagement with the client, at an early stage in my work I will often gather senior executives and ask the question repeatedly, âWhat is the heartbeat of this business?â or alternatively, âWhat is the heart of this business?â
It is fascinating to me that the executives who are gathered have rarely asked this question before, nor reflected upon it. This process of enquiry always reveals an insightful, varied discussion, which energizes and animates those present. There is a lively debate with many contrary views, but it is interesting that there is usually a moment in time when views converge, and there is a landing and agreement between colleagues as to the real heartbeat of the business. For example, when working with a large, successful public relations company, a after half a day of exploring answers to these questions, the executives understood that the heartbeat of their business was creating connection. In the same way, when working with a corporate law firm, a similar process revealed that the heartbeat of the business was protecting and defending the rights of others.
I often read about and observe large organizations that go through a substantial downturn. It is well documented that Tesco, having had an uninterrupted period of growth over ten years, then suffered a serious contraction in revenue and profit. I remember thinking at the time that this was an example of a business that had become preoccupied with, and driven by, quarterly returns and voracious shareholders. I have not worked with this company, but it seems to me that the heartbeat of Tesco should resonate with supplying quality food to ordinary households. Many will argue that the situation with this company is more complicated and multi-layered, but I maintain that by disconnecting from the heartbeat of a business, the rot begins to set in. The great paradox of this situation, which is a well-trodden pathway in large businesses, is that of course every business wants to increase revenue and profit. However, becoming fixated upon this achieves the very thing you are trying to avoid. If, instead, the business listened to the heartbeat and was influenced by this inner pulse, then the revenue and the profits grow as a consequence and by-product of being attuned to the heart of the organization.
As individuals and as organizations, we need to learn to value the heart and to rebalance the mind-heart relationship within our businesses. This can only be done by learning to listen to our hearts. With a rational approach, a mind-dominated enterprise, it is possible to create handbooks, procedures and formulae that, once understood by others, allow them to execute and implement these principles within the organization. It is different with the heart. You cannot create a handbook or formula for listening to the wisdom of the heart.
Business Alchemy:Â Exploring the inner, unseen dynamics of the business publishes on 8 June
The following is an extract fromÂ The Crisis Book: Overcoming & surviving work-life challengesÂ by Rick Hughes, Andrew Kinder & Cary Cooper.
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- Self-awareness. Do you understand the nuances of when youâre sad, depressed, happy, distraught, elated, lonely, enthused, apathetic and so on? Each conveys a defined emotion in response to a specific set of circumstances or variables. Identify the cause and effect.
- Self-management. Do you know how and why you manage your emotional feelings and responses at any given time? What is necessary, sufficient, reasonable and appropriate? You decide.
- Social awareness. Have you grasped how and why others feel and express emotion? What are their triggers or cues? Do you understand and appreciate where theyâre coming from?
- Active Listening.Â Are you really listening to what others are saying, not just the words, but the unspoken messages behind the words? Use all your senses to listen (visual, tonal, body language) and reflect back your understanding of what the other person is saying to clarify and demonstrate that you have heard them.
- Motivation. Are you self-motivated and know what drives or inspires you to get on and succeed? What do you need to allow this motivation to lead you? What excites you and why? This creates passion and self-belief in yourself and others.
- Sorry. If you make a mistake or say something inappropriate, apologizing is an important conciliatory response that can help to build appreciation, openness, trust and honesty.
- Non-judgmental. If you stereotype or rush to form your own personal opinion about others, youâre making a judgment that can give you a misinformed reality of the person. Be open, transparent and accepting of other peopleâs needs and wants.
- Individuality. Get to know the real people you interact with â their loves, their hates, what inspires them, what demotivates them.
- Friendships. Who are your real friends and why? They are often people who energize you, give you new perspectives and stimulate your thinking. How can you spend more time with them?
- Stress management. How you deal with stress affects people around you, at home and work. Know your stress triggers and learn to adapt or manage them better.
- Trust. Trust is a two-way street â trusting yourself and trusting others. You canât learn to trust others if you havenât learned to trust yourself.
- Consequences. Understand the emotional consequences of your actions. How will people feel about, or emotionally react to, the decisions you make? What are the alternatives?
The following is an extract fromÂ The Crisis Book: Overcoming & surviving work-life challengesÂ by Rick Hughes, Andrew Kinder & Cary Cooper.
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It is widely recommended by health practitioners that adults engage in moderate intensity exercise for 20-30 minutes a day at least five days a week (that gives us two days off each week!). Children and young people need to aim for about 60 minutes a day.
Exercise can be fun, engaging, stimulating, help you sleep better, reduce how you respond to stress and generally make you feel better about yourself. Â It’s a no-brainer.
If you spend a proportion of your time exercising now, you’ll build up a reserve of fitness, which will reduce the potential for the aches and pains you might otherwise suffer from later in life.
- Doctor. If you haven’t exercised for some time or you have a medical condition, make an appointment with your medical doctor. They will determine what exercises might be safe and appropriate. Suddenly leaping into high-energy exercise could do more harm than good.
- Walk the talk. Walking is probably the most accessible form of exercise around and cheap! Walk at a brisk pace to increase your heart rate, blood flow and circulation.
- Sociable. Whether it’s a team-related sport or just something you do with someone else, exercise can be a great way of socialising and making friends, which in turn can improve your sense of well-being. A commitment to others makes it more likely to happen!
- Chores. It’s amazing how much energy you can expend when vacuuming, dusting, cleaning, polishing or washing windows. You get to exercise and have a nice, clean and tidy home!
- Gardening. If you have a garden, mowing the grass or weeding will help you get some exercise and it gets you our in the fresh air too.
- Stairway. Modern buildings are full of elevators. If you take the stairs, you get some important exercise. Even if it’s going down the stairs only, it’s still exercise. Make a habit of it and you’ll start to make this normal behaviour.
- Cycling. How about peddling to work? Or try getting our into the hills for some mountain-biking. There are lots of road cycling clubs these days for people of all capabilities and ages.
- Swimming. Whether your excuse is you don’t like to get your hair wet, or you feel self-conscious about your body, once you’re in, you’re just like everyone else. Swimming pools often have slots dedicated to learning or training, so if you’re not very good at it, you can learn. Even a gentle paddle up and down the pool helps to flex the limbs.
- Make it happen. Schedule exercise in your calendar as though it is an important meeting.
The following is an extract fromÂ The Crisis Book: Overcoming & surviving work-life challengesÂ by Rick Hughes, Andrew Kinder & Cary Cooper.
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We will experience, endure and grow through one crisis after another. And there’s no exception in the wider political and economic environment. In democratic societies, the public has the power to vote a government in or out. Organizations expand or retrench and industries blossom or decline.
We’re all part of a global political and economics system and so we experience the highs and lows accordingly. It can generate huge anxiety and uncertainty, especially when we live our lives reliant on the order and structure of a stable government and a flourishing economy.
- Keep calm. It might not seem so at the time, but things usually get better.
- Openness. Don’t be afraid to vocalize how this impacts you. Openness attracts support from others and gives permission to voice the struggle with uncertainty.
- Dialogue. Talk about what’s going on with those affected. They may have a different perspective and could offer a solution or a positive way forward.
- Reality Check. Check you have the correct facts and clarify the exact reality of the situation.
- Focus. Concentrate on what you can do, not what you can’t.
- Time. Things might not resolve overnight. Accept that you may have to allow time for a resolution.
- Preparation. As part of learning, assess how best to plan for the future in a changed environment.
- What matters. Consider what’s really important here. Are you still alive, do you still have a roof above your head?
- Control. You can’t control everything, but you may be able to control the immediate impact on you or how you feel or respond to your situation.
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Work gives us a sense of purpose and achievement. It provides us structure and routine. But we can also lose ourselves in our jobs and become work slaves, especially in a long-hours culture.
We form a âpsychological contractâ at work; a mutual relationship between us, the worker, and the organization. In exchange for the work we do, or outputs, we are rewarded with remuneration and benefits, or inputs. In theory, thatâs all it takesâŚ but in reality the demands placed on us can be wholly disproportionate to our capacity to manage them.
- Prioritize the difficult tasks first; these can be better managed when you have your peak energy.
- Delegate. Donât hang on to every task; know what to delegate and when.
- Perfection. No one is expected to be perfect. Appreciate when itâs better to complete all tasks well, against completing only some tasks brilliantly.
- Communication. Explain to your boss the pressures you face. Sometimes talking about it to colleagues can help you identify solutions.
- Duty of care. All organizations have a Duty of Care toward their staff to reduce the potential for unhealthy stress. You have a right to raise issues about any unhealthy stress that work demands on you.
- Obligation. If you feel obligated to take on more and more work, ask yourself why you have this obligation and what benefit this serves you.
- Choice. Youâll feel overloaded if you sense you have no choice. Act decisively where you can and if you genuinely have no choice about the workload, choose how to respond to it.
- Control. Strive to bring some control over what you do and the demands on you. Even bite-size feelings of control help illustrate that you have a choice.
- Stress. Know how, why and when you feel stressed, then act.
- Exit. If the job doesn’t give you what you need, maybe it’s not the right place for you. Â Start searching for a new job.
- Health. Give yourself the best tools to cope by attending to diet, exercise, sleep and rest.
- Help. Ask for support. Don’t suffer in silence. It’s unlikely you’re the only one feeling the way you do.
The following is an extract from Michael Farmerâs Madison Avenue Manslaughter: An inside view of fee-cutting clients, profit-hungry owners and declining ad agencies,Â winner of the 2016 Axiom Business Book Awards.
This extract, exclusive to the new edition, examines the still-unfolding crisis in the media agency-client relationship, sparked by Jon Mandel’s 2015Â exposĂŠ of the rebates and kickbacks enjoyed by agencies, unbeknown to theÂ big-buck-paying clients.
Farmer explores how this crisis, further exacerbated by the Dentsu overcharging and Facebook metrics scandals of 2016, has effectively axed any trust there was in this already fragile relationship, leaving the industry more tattered than ever before.
For the next week, you can use code ‘MAM40‘ here to get 40% off the brand new edition of Madison Avenue Manslaughter.
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MEDIA AGENCY MANSLAUGHTER: The Media Rebate Backlash
The years 2015 and 2016 will surely be characterized by historians as years of conflict and polarization, not only in politics, but in other fields, as well. The media industry has not escaped, as we shall see.
Polarization in politics intensified in 2015 with the announcement by Donald Trump that he would run as a presidential candidate under the Republican banner. What followed, as we know, was a political campaign characterized by an unprecedented outpouring of invective, accusations, character assassinations and insults which was vividly followed by the press. The New York Times, normally known as the staid newspaper-of-record with more than 110 Pulitzer Prizes to its credit, published âTrumpism after Trumpâ by long-standing columnist Roger Cohen, less than one month before the 2016 election, which Trump won in a surprising victory:
“If the United States escapes a disaster November 8, it will have done so narrowly. Donald Trump, a dictator-in-waiting with a bratâs temper and a prigâs scowl, has won the support of tens of millions of Americans. Itâs fortunate that we are less than a month from the election because we are running out of words to describe him: this phony, this liar, this blowhard, this cheat, this bully, this misogynist, this demagogue, this predator, this bigot, this bore, this egomaniac, this racist, this sexist, this sociopath. I will not go on. Itâs pointless. Everyone knows, not least his supporters.”
The media world experienced its own version of Trumpist invective when Jon Mandel, the former CEO of Mediacom, launched a blistering attack on media agencies, using the March 2015 Association of National Advertisers (ANA) Media Leadership Conference in Hollywood, FL, as his platform:
“Some agencies have arrangements in place with media sellers that reward them [agencies] for their spending. If those agencies choose to direct more of their clientsâ budgets to specific vendors, they might be given lower ad rates, free ad space or even cash in return. Clients may not be made aware that these relationships exist. There are cases where there are rebates that should be going to clients that are instead going to agencies.”
Rebates, âkickbacksâ, and other incentives for agencies that are at least potentially adverse to client interests, are happening virtually everywhere in the US media landscape, including TV. Have you ever wondered why fees to agencies have gone down and yet the declared profits of these agencies are up? Advertising spending broadly has long stayed within a narrow band of 1% to 1.25% of gross domestic product globally. So if agencies are growing at a higher-than-GDP basis, the money is coming from somewhere. Most of the rebates and other non-transparent dealings occur at the holding-company level, where itâs harder to track or audit.
There was nothing subtle about the attack. Mandel was accusing media agencies of dishonesty, if not outright theft.
The following month, in April 2015, the ANA held its Advertising Financial Management Conference in Phoenix, AZ, where the already-high tensions from âRebategateâ received an additional jolt from an ANA study of âClient/Agency Relationships 2015,â which could have been entitled âIâm OK; youâre not OK.â The findings related principally to relations between advertisers and their creative agencies.
The executive summary showed the following:
â˘ A majority (58%) of advertisers said that they provide âclear assignment briefsâ to their agencies, while less than half that number (27%) of agency executives agree.
â˘ A majority (54%) of advertisers believe that the ad approval process works well, while only 36% of agency executives agree.
â˘ Just under half of clients (47%) feel that procurement adds value, while only 10% of agencies agree.
â˘ Regarding compensation, 72% of advertisers believe that agency compensation is fair, while only 40% of agency executives agree.
Post-conference, the trade press was filled with charges, counter charges and self-justifying explanations about the rebate accusations and the sources of client/agency relationship problems. Joint action from the two trade associations would not be long in coming, but the initial focus would be on âmedia transparencyâ (the Orwellian renaming of the rebate/kickback issue), rather than on the myriad client/creative agency relationship problems outlined at the ANA Financial Management Conference.
JOINT TASK FORCE
In April 2015, the American Association of Advertising Agencies (4As) and the ANA announced that they were taking decisive action to address concerns about media transparency. Bringing together industry leaders from the marketer and agency communities, the two parties â the accuser and the accused â established a task force to: âidentify material issues and to address them with constructive dialogue and pragmatic courses of action.â
Although creative agencies were not directly involved in this effort, they were holding their breath, because in one way or another, they were going to be affected by it. They knew that media agencies were âcash cowsâ within their holding companies, and that any adverse developments that affected media agency profitability would have knock-on effects for them. If rebates or other forms of opaque sources of media agency profits were found to exist, client procurement departments would make short work of them, eliminating them with the stroke of a pen, which would lead to even greater profit pressures for the creative agencies.
Further, the rebate issue eroded trust between clients and all their agencies, and trust was already in short supply. A further erosion of trust would lead to more aggressive fee negotiations, further marginalization of agency stature in the eyes of their clients, and â who knows? â more agency reviews and relationship instability.
The 4As knew this as well, and as participants on the Joint Task Force, they were back on their heels, hoping to neutralize or minimize Mandelâs accusations about US rebates and kickbacks.
From afar, the Joint Task Force looked like it would have about as much success as a save-the-marriage therapy session involving an adulterous spouse who does not want to admit adultery.
TASK FORCE PRIORITIES
The Task Force began its deliberations in mid-2015, and one goal, among many, involved developing a set of guidelines and best practices to create transparency in media planning and buying.
The ANA hoped that guidelines and best practices would provide a basis for creating standardized contract language that could be used uniformly by advertisers and agencies alike. Uniform language would knock the rebate issue on its head and ensure that transparency was established on an industry-wide basis.
The 4As had no interest in handcuffing its member agencies in this way â seeking instead to protect agency freedom to negotiate client contracts in individual/ad hoc ways, using 4Asâ âguidelinesâ to inspire the drafting and negotiation of contracts. This voluntary guideline approach was consistent with the way 4As thought about its responsibilities on behalf of its members. 4As develop guidelines and surveys in many areas, but its members are free to use the guidelines as they wish. (Despite these well-meaning efforts, though, agency members have been losing the battle with clients over several decades, and 4Asâ
guidelines have done little to halt Madison Avenueâs manslaughter).
As much as the two parties claimed to be seeking common ground, they were really acting independently on behalf of their respective members. The working relationship was not helped by ANAâs separate decision, in October 2015, to hire two investigative companies â K2 Intelligence and Ebiquity/FirmDecision â to conduct an outside investigation into industry transparency issues, including rebate allegations. 4As would not be involved with this investigation.
Knowing where these investigations might eventually lead, and unhappy with ANAâs goal of developing uniform contract language, 4As took early unilateral action at the end of January 2016, publishing 4Asâ âmedia transparency guidelinesâ independently of the Joint Task Force. âThe most important thing here is that agencies have [already] been operating under a code of transparency with clients, and now weâre making it public,â said Nancy Hill, president and CEO of the 4As. âAgencies and clients now have a heightened awareness when looking at contracts.22 Weâll continue to have conversations with the ANA and their members.â
ANA, angry about the 4Asâ pre-emptive guidelines release, was quick to respond: â4As guidelines are premature and continued attention is needed to address lack of industry transparency that the ANA has highlighted for the last four years. Unfortunately, the guiding principles issued by the 4As fail to fully or adequately reflect the best interests of marketers.â
So much for the joint efforts to increase trust. The industry was back to square one, with K2 Intelligence and Ebiquity/FirmDecision yet to complete their investigations and publish their reports on rebates and kickbacks within the industry.
THE K2/EBIQUITY/FIRMDECISION REPORT
The 62-page investigative report was published on 7 June 2016. It was an absolute bomb, confirming Jon Mandelâs accusations.
The K2 report went beyond the identification of ânon-transparent practicesâ and attempted to identify the factors responsible for them. These factors included pricing pressure from advertisers, mandatory cost reductions as part of media pitches, the increased role of procurement, client-driven âextended payment termsâ (up to 150 days before agency invoices are paid), a new culture of expecting agencies âto do more with less, every yearâ and so forth.
The separate ANA/Ebquity/Firm Decisions portion of the report (published separately) acknowledged that advertisers were partly responsible for rebate/kickback practices, in that: âclient pricing pressure may be exacerbating media agency non-transparent business practices â a number of sources independently cited advertisersâ efforts to drive down agency fees as a reason why agencies are seeking additional sources of revenue beyond commissions.â The report encouraged advertisers to look at their own practices, particularly with respect to compensation and payment terms.
This admonishment did little to mollify 4As and its supporters. Critics of the K2 report found fault with the anonymous nature of the interviews, insisting that it was impossible to assess the credibility of the assertions. No specific agencies were identified with the taking of rebates, or if rebates were taken, whether they were kept by the agency or funneled back to the client. Defenders of the media rebates and kickbacks pointed out that most existing client/agency contracts do not prohibit the practices, and that agencies that obtain rebates are technically complying with the terms of their contracts.
To counter this, critics of rebates invoked a higher standard of agency behaviour, asserting that agencies are morally responsible to operate in the best interests of their clients, and non-transparent practices clearly fall outside of this standard.
Irwin Gotlieb, global chairman of GroupM, WPPâs giant media agency, dismissed the K2 report in its entirety, charging at a digital media industry conference in October 2016 that the entire [K2] effort was a âbusiness-development effortâ by K2 and Ebiquity to: âstoke their own prospects for forensic investigation and auditing. The ANA allowed themselves to be part of a third-partyâs business development,â charged Gotlieb.
EROSION OF TRUST: THE DENTSU OVERCHARGING SCANDAL
A further industry bomb exploded in mid-2016, when Toyota complained that Dentsu, its media and creative agency in Japan (and elsewhere), had been overcharging for media services. Dentsu, investigating its own practices, uncovered more than 633 cases of overcharging involving 111 of its clients. The overcharging, according to Dentsu, was due to âdeliberate, human-caused errorsâ where fees were charged when online ads had been placed for a shorter-than-expected period â or not placed at all. Dentsu refused to name any of the clients affected by the improper transactions, other than Toyota, which had already received a formal apology from the advertising agency.
FACEBOOKâS OVERSTATED VIDEO METRIC
In September 2016, Facebook disclosed in a post on its âAdvertiser Help Centerâ that its metric for the average time users spent watchingÂ videos was artificially inflated because it was only factoring in video views of more than three seconds. This vastly overestimated average viewing time for video ads on its platform for two years.
Publicis Media was told by Facebook, after further investigation, that the overestimate was between 60% and 80%.
The overall disclosure was a huge embarrassment for Facebook, which has been touting the rapid growth of video consumption across its platform in recent years.
Later, between September 2016 and December 2016, Facebook would own up to three additional admissions of inaccurate viewing metrics for its clients. On top of this, Facebook was embroiled in post-election claims that it acted as a distributor of (principally) anti-Hillary Clinton âfake newsâ during the election cycle, helping to tip the balance towards Donald Trump. Critics called on Mark Zuckerberg, Chairman & CEO of Facebook, to clean things up.
WHERE DOES THIS LEAVE THE INDUSTRY?
The rebate and kickback scandal, as charged by Jon Mandel and documented by K2, and the unresolved conflicts between ANA and 4As, as well as the evidence of overcharging and metric mis-measurement, leave the industry more tattered than before. ANA andÂ 4As are further apart than they were before the crisis erupted, and the Joint Task Force has amplified, rather than resolved, the issue of trust that has so long divided the industry. Two agencies, Empower and Mediasmith, resigned from 4As, citing the associationâs: âfailure to take a more progressive stance when it comes to working more closely with ANA to resolve media transparency issues.â On the other hand, a survey of ad industry executives in October 2016 showed that: âfar more side with the American Association of Advertising Agenciesâ (4Aâs) transparency âprinciplesâ than agree with the Association of National Advertisersâ (ANA) recommendations. Those views were held almost equally among advertisers as they were among agency executives polled by Advertiser Perceptions Inc.â
At the end of 2016, The Department of Justice announced that it was launching an investigation into whether ad agencies had been unfairly directing production business to their in-house production departments (or to their holding company owners) over independent shops. Shortly thereafter, subsidiaries of Publicis Groupe and Omnicom Group were subpoenaed. The suspected practices, if true, would have required collusion among various production bidders to engineer the desired pattern of winning and losing bidders.
With all the conflict and speculation, itâs Madison Avenue manslaughter on steroids, and the recent scandals have only accelerated the unfavorable trends that have been developing at a steady pace over the past several decades.
Looking ahead, it is not clear whose guidelines will be used in future contracts, although any realistic person should bet on the continued dominance of ANA and its members, who continue to hold the purse strings.