Q&A with ADK Global CEO Rob Sherlock: I want us to be recognised, but in the right way

Rob SherlockRob Sherlock was just recently appointed CEO of ADK Global, the international arm of Japanese ad agency network ADK. His task ahead is to ready the agency for global growth.

In this Q&A with Mumbrella Asia’s editor Robin Hicks, Sherlock talks about what he’s been hired to do, the obstacles standing in the way, the quirks of Japanese working culture, and building an agency network in the “right way”.

What is your brief? Grow the agency outside of Japan?

It’s to transform and reconfigure ADK outside of Japan for growth.

Explain ADK’s ownership structure, and how that will inform the expansion plan.

We are 24 per cent owned by WPP. That was an investment made in 1999. So obviously WPP are very much part of how we expand out globally. And they’re a real ally in helping us do that in the right places.

ADK Global was set up in November last year to broaden the agency’s aspirations beyond Japan. In Japan, ADK is the third largest agency. What is your global footprint? 

I’ll give you a brief history. We were the first Japanese multinational to open in China 30 or so years ago. We’ve got a number of big entities there. We arrived in Singapore 18 years ago, on the back of a big Japanese MNC client, and have 70 staff there [ADK Singapore won the NTUC Fairprice account last July]. We have offices in Indonesia, Myanmar, where we have 15-20 people, Cambodia, Malaysia, Taiwan and Vietnam and elsewhere. We’ve been in the global market place for quite a time, and have offices in the US, and Europe, but mainly Asia Pacific. We’re not inconsequential.

You’ll find most Japanese multinational clients, especially if they’re led in-country by a Japanese expat, will always – depending on the relationship – use one of the three big Japanese agencies – Dentsu, Hakuhodo and ADK. You’ll find a similar thing with Western clients too. If Virgin Atlantic or Dell are looking for an agency in Asia, they’ll look at WPP, Omnicom, IPG or Publicis Groupe. It’s the same, but different.

In Australia, WPP has made it clear that they’re not keen on STW Group expanding too far into Asia. Given the stake they have in ADK, does WPP offer advice on building a presence in the region?

There’s no doubt about it that WPP have more experience globally than we do. But they also respect and understand Japanese multinationals in other markets. So in terms of certain moves we make, we will always consult and listen to the advice of a very experienced partner.

Stuart Neish

Stuart Neish

We’ve worked closely with Scott Spirit [WPP’s chief digital officer and formerly chief strategy officer] and Stuart Neish, WPP’s CFO based in Japan – he’s a board member of ADK.

With any WPP relationship it’s not always smooth sailing, but we’re certainly getting back into a very health relationship with them and leveraging everything we can with their experience and global infrastructure.

In Japan, is ADK a comparable size to Dentsu, which has about 8,000 people housed in one skyscraper in Tokyo?

We’ve got 1,800 people in one building in Tokyo. We’ve also got a large production arm, ADKR, which has about 350 staff. And we’ve got other offices throughout Japan, which would mirror the footprint, in a smaller way, of Dentsu and Hakuhodo.

All your career you’ve been a creative, and later a creative director. What’s it like being a CEO?

Way back at the beginning, I was studying to be a chartered accountant at what later became KPMG. So I was going down that route. But my brother was a creative, and soon enough I said forget this, got out, and started out as a copywriter.

I’ve always had an understanding of the business side of what we do. I think every creative leader these days, has to have understanding of business and the commercial imperative, not just the creative reality.

When you talk to big clients, you can go in the room and actually talk about their business, and say, hey, I saw that your market share contracted in the first quarter, and obviously you’ve got extreme pressure on your bottom line. It makes a difference from saying here’s a great idea, etc. So it was always I suppose part of my brand footprint to understand the business of the business, not just the business of ideas.

Before I joined ADK 18 months ago, I’d been out of the industry for a while. And after America [Sherlock was chief creative officer of what was then Draftfcb, now FCB Chicago], I’d become incredibly cynical, and I thought I’d never want to get back into the business again.

But I did a few projects, spoke to a few people, and a friend said: ADK are looking to change creatively, would you mind coming to Tokyo to talk to them? I went in, liked the people, and saw that they had a great big hairy audacious need. We had to reconfigure our global footprint, how we worked, get some better thought leadership in, as well as talent, protocols and procedures, and also correct how we are perceived in the market.

What are your priorities? Which markets do you aim to enter next? 

We’re in most of the markets we want to be in. But it’s really building the bench strength, as you’ve seen with the recent hires, and building competences and making us stronger contender for both Japanese multinationals and for local accounts.

What does ADK stand for, what’s its positioning?

ADKFull disclosure, we’ve got a big global workshop in February to redetermine what we are and what we stand for.

At the moment, we’re the challenger agency for challenger brands. We are an activator of brands that have not reached their potential.

We are also what we call a consumer activations company [see ADK’s website]. Now, we’re not an activations company in the advertising sense of the word, that refers to a discipline. It’s about being consumer centric. I think we’ve got some work to do to sharpen the positioning, but by the second quarter we will probably have refined it to a more competitive and distinctive framework.

But I don’t want it to be a lip sell and a rally cry without a real business meaning. I want to be able to sit in front of clients and say this is what we do, this is what we bring to the party and this is what differentiates us from the rest.

Richard Yu

Richard Yu

There was the story last week about an agency in Malaysia that won awards in a dubious way. I never want to be like that. But I’m not saying we don’t want to be recognised. We’ve got a great agency in Taiwan, which won a grand prix at Spikes. Richard Yu is the chief creative officer there. He’s one of the top creatives in Greater China [and has just been appointed to head the direct category at AdFest]. I think he does some amazing work – and it’s genuine work.

ADK Taiwan’s campaign for Uni President that won the branded content grand prix at Spikes:

In Singapore, we won pretty big at the Effies last year. We beat every other WPP agency in Singapore, and I don’t say that all the time. We’re pretty proud of that, but we’re a bit under the radar. If there’s the perfect mix, it’s to be recognised for the commercial success of our ideas both in terms of their creativity and effectiveness. I do think every agency says that, but I’m totally against anything that’s dubious.

Why has ADK been so under the radar? Is it a Japanese trait of being modest?

Yes, I think it’s a cultural thing. In a western sense, we brag, naturally. But the Japanese are very… it’s just not part of the culture.

toranomon hills tokyo

Toranomon Hills, Tokyo, pic: BusinessEventsToyko.org

Let me give you an example. Last year we moved into possibly one of the most amazing offices in all of Tokyo, in Toranomon Hills . We are the key tenant, where we have five floors of the building. I love the building. There’s a lot about it. The guys from the International Advertising Association, Michael [Lee, managing director] and Faris [Abouhamad chairman and world president] visited us. The Japanese were very much more understated in how they showed our guests around than I was. I was going crazy bursting with pride. There’s a natural tendency to brag in Western culture that in Japan can be seen as crass and disrespectful. But I still did it, because I was so proud. But in Japan, I think pride is more internal, and is based on results.

Also, we were the first multinational agency to have a formal alliance with a co-creation (crowdsourcing) company – in this case it was Eyeka, and that was four years ago. Since then we have created a content hub – Sticki – this now includes partners such as Unruly. So it’s not just about being the curators of content, but actively getting into seeding and feeding that content to ensure it has optimum effect.

Back to your question, if I look at a big competitor of ours, beginning with a ‘D’, I would say that outside of Japan that they are in effect a Western agency – and I don’t say that with disrespect. Whereas we are intent on being a true Japanese multinational with our feet firmly on the ground in Tokyo, but with a global outlook.

I think we’re late to the party about getting our story out there because of our Japanese culture. But now I’m board we can start shouting about who we are.

It’s early days. As I say to our guys, let’s try it. If it doesn’t work let’s change it, let’s course correct.

We want to get it right as we can. But I think the key – again a Japanese trait that I admire – is that Japan is all about perfection. Perfection in food. Perfection in service. Perfection in delivery. But often to get to perfection takes a lot longer than to get to good enough. So we’re trying to balance this out… to get to a stage where it’s perfect enough and then start talking.

Have you worried at all that ADK might have left it too late with its plans to grow outside of Japan? 

Should have? Would have? Hindsight is as we know a brilliant science. Like with any agency, there are things we could have done in the past and could have done better.

The big thing about a consensus society by definition is that things tend take a lot more time than the spontaneity of a more Western corporate. But I think a great thing about Japan is that it often takes a longer time to get to consensus, but once consensus has been reached execution can be very fast, because everyone is on the same page.

In Japan, it’s often the case that at a wedding, the boss will attend as the guest of honour. This stems from the fact that traditionally – and this is slowly moving out – people have jobs for life. So therefore the husband, his life, and the financial success of the company are intertwined. The families are aligned. It’s not unheard of for the boss to do a powerpoint presentation on how the company is doing at the wedding.

What about awards? What’s the plan there? Are they a big part of what you’re looking to do?

It’s about creative recognition. I tell everyone let’s create ideas so big, so fantastic that as a consequence they’ll win awards – as a consequence.

The Taiwan office are by far our shining light outside of Japan. It’s more of a culture of doing good work, but also finding ways with working with other people and building alliances.

Single source creative solutions are redundant. In other words, a traditional agency has to be able to have in their repertoire of solutions other ways to come up with ideas. And I mentioned we are big on co-creation. It’s about having the right alliances and allegiances with other sources of ideation. It’s been said before, but the role of the agency is becoming more of a curator than an originator.

Being of a creative background, presumably you want the growth story of ADK to be about creativity as well as commercial success?

Yes, it is. And I’m not going to be one of those CEOs who says I don’t really understand creativity, I’ll leave it to you. I’ll always going to be a loud voice at the table, but not the loudest, part of a team.

We’re setting up a creative council – we’ve got to. We’ve got good creatives, we’ve just got to connect them a lot better. We need to form a closer community that leads to better innovation, and starts to move us forward in an integrated way.

It has been the case that ADK’s offices are run by Japanese. But that looks like changing in that you’ve hired a number of non-Japanese creatives recently in Chris Gurney as regional executive creative director, Kelvin Leong as China ECD and Nick Morgan as Indonesia ECD

New recruitsChris [Gurney] has worked in Japan, his wife is Japanese, and he speaks pretty good Japanese. He gets the culture, which can frustrate. He comes from the right background, and has roots in Japan. This sort of person is ideal for us.

We want to hire a head of HR. In my mind the perfect person would be Japanese speaking, with western experience. We have to be connected with the mothership. We need someone who understand the layers and can extract the best, but still apply a more multinational viewpoint.

What about you? How’s your Japanese?

I can’t speak Japanese. And I’m not going to learn it because I don’t want to insult the Japanese with bad Japanese. Luckily, through translators it works out.

What about the sort of people you’re looking to hire?

The key thing is, I want to make sure we get a low shithead quotient. Because really, I don’t like working with assholes.

But ego plays a big role in advertising? Isn’t the occasional shithead inevitable?

Ego is fine, as long as people are not divisive and are self-serving to the extent that that overtakes the common goal of the work. We need people who are selfish about having fame and fortune – that’s fine. But it’s when it becomes counter productive to the spirt of the greater good that it’s a problem.

It’s like having a family. Occasionally your children will have a tantrum, but you don’t want them to be straight-laced robots. But there are certain things are just not acceptable.

Isn’t it an issue that, certainly with holding companies and ad agency networks are run by accountants and suits, not creatives? There aren’t too many of you around…

David Mayo

David Mayo

True, but many are hybrids. Look at someone like David Mayo [CEO of Bates CHI & Partners]. He’s always full of ideas. For me the great suits are those who have ideas, just as the great planners are also great creatives, and great creatives are also great planners. Because they get it. Everyone who’s good in this industry – which is all about innovative break-through ideas – has that about them.

R/GA is one agency that seems to be doing impressive things in innovating the agency model. What do you make of what they’re doing?

Bob [Greenberg, R/GA’s founder, chairman and CEO] interesting in that he doesn’t come from an advertising background. He’s experimenting, which is good.

The four biggest holding companies, WPP, Omnicom, Publicis Groupe and IPG, they’re market capitalisation is about $68 billion. Google’s is about $440 billion. So the top four are about a sixth of the size of Google, which is as far as I’m concerned is a competitor. The revenue per employee for, on average globally among the multinational communications companies, is $90,000. Google’s revenue per employee is 1.2 million.

What does that allow? That allows enough money to fail enough times. That’s why you see this rampant experimentation. Google Glass. Is that going to work? Of course it’s not going to work, it’s stupid! But it’s essential. For people like Bob Greenberg, it’s not on the same scale, but at least he’s mixing things up to see what happens. That’s true creativity – to experiment.

But in a service industry ad agencies don’t often have the time to experiment. What do you make of the influence of the startup world on marketing?

I could say stuff like ‘failure is success’ biggest launch pad’ or whatever, but in Japan that’s like saying take your own life. Failure is not an option. That comes back to the thing about attaining perfection. It’s got to be perfect before you release it. It can take three times longer trying to get to 99 per cent perfect, but then it’s virtually fail safe. That’s a gross generalisation, but historically that’s been part of the culture.

It was often known as corporate constipation. And it’s true in so many things, a spasm of inaction because of the worry that it could be a wrong or a failure.

What we’ve got to do – but not in a reckless way – is to take some qualified chances and do things in a different way.

What does the brass at ADK think about this view, and how essential it is to experiment?

Well, they know i’m bit of a mad c*nt, which is good! My respect for the company is gigantic, and I’ve made a lot of good friends. They bought me on knowing what I am. And I think it’s going to be a marathon not a sprint.

In Western companies, they think quarter by quarter. Japanese companies take a longer term view. Often – and I hear it a lot of the time from Japanese agencies – a milestone is the 2020 Olympics. That’s a big thing for Japan. Everyone is looking towards that as a very exciting juncture.

When I first got to ADK I spoke to our head of client service. I asked him, what is your biggest worry? He said well, Rob-san, going global is essential because by 2050, the Japanese population will have reduced from what it is at the moment, 128 million, to 87 million, so therefore our growth has to come from outside of the country. 2050! He said it genuinely. You probably wouldn’t hear Sir Martin [Sorrell, the head of WPP] say well, we’ve got to have achieved this by 2050. He’s more likely to ask what’s happening in the next quarter.


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella Asia newsletter now.



Sign up to our free daily update to get the latest in media and marketing