Global CEOs and ECDs should all be based in Asia, not the West
Asia is the land of opportunity at a time when things are stagnating in the West, yet brands and agencies are just not seeing it, argues MullenLowe Profero’s Wayne Arnold
When I arrived in Singapore to lead MullenLowe Profero from Asia Pacific four years ago, there was with a huge sense of opportunity permeating the region.
The markets in Asia were being talked about as the new business frontiers of the world, and with the unstoppable rise of China, having a global chief executive on the ground seemed to be a natural and logical step.
However, as I sit here today, there are only two global agency CEOs in the region: myself and Ruth Stubbs of iProspect. What happened? When did all this optimism just fizzle out?
It seems strange because the growth and opportunity in the region is extraordinary and APAC has continued to outgrow other regions.
In the first quarter of 2017, India experienced a 7 per cent growth in gross domestic product, China 6.9 per cent and Singapore 2.5 per cent. Meanwhile, the United States only experienced a 0.7 per cent growth in GDP and the United Kingdom a meagre 0.3 per cent.
New Asia-centric brands such as Alibaba, Huawei, Haier and Bayan Tree Leisure Company have emerged on the world stage outside of the well-known brands from Japan and Korea. Even Hollywood films are jockeying for a world premiere in the world’s second largest box-office territory. Pirates of the Caribbean: Dead Men Tell No Tales was just released in the China on the same day as the US, marking the first premiere of its kind.
With these kinds of trends, you would think the marketing services communities and brands would be investing here as a growth priority. This begs the question: why on earth aren’t they? Given APAC’s strong economic position compared to the rest of the world, surely now is the time to double down on investment here and bring more talent into a thriving market – not pull back.
Sadly, brands pulling back is exactly what we are witnessing. Not only is there a limited number of global CEOs, but there has also been a cutback in regional talent. There are a few notable exceptions such as Caspar Schlickum, CEO for APAC at Wunderman, and Joakim ‘Jab’ Borgström, group creative director for BBH. But generally speaking, regional talent isn’t as well established in the market as some may think. International agencies that have opened their doors have done so half-heartedly to provide the minimum requirement for their international client list.
The picture is confusing as the data says one thing but actions say another. Current investment in this emerging global hub does not match the growth opportunity.
We’re seeing the seeds of promising signs of growth and economic recovery from the US and Europe, the Middle East and Africa. This, alongside events such as Brexit and the Trump presidency have apparently rattled marketers back into old patterns of behaviour and comfort zones, suggesting that established, slower markets take priority. What we are witnessing is a home-market-first mentality. But ‘America first’ shouldn’t mean APAC last.
There also appears to be a case of ‘Soho House Syndrome’ – a private members club of Westerners ruling from afar. Too many decisions about this region are being made in fine dining establishments of Europe and the US. As a result, our part of the world suffers from short-term decision-making so companies are taking one step forward and one step backwards.
A three-day whirlwind trip to Asia from a visiting CEO will not give their boards the in-depth knowledge needed to make the smartest decision on the region’s potential. Any CEO based in APAC would see the wealth of opportunity here and question why marketing dollars are being prioritised elsewhere.
All is not lost. Those businesses who do take the time to understand the region can fill the void and make huge gains.
This may sound a little counter-intuitive to my own business, but I want to see other companies pay a little more attention to what’s happening beyond Western soil. The more talent and strategic investment in this region, the faster it will grow and the better we will all do. We will prosper together.
Now is the time to relocate those global CEOs, executive creative directors and business leaders into APAC, to live and breathe the opportunity this region presents. Otherwise, a great chance in a flourishing market stands to be sadly wasted.
Wayne Arnold is the global chief executive officer of MullenLowe Profero
What a fantastic perspective. Each time there is a crisis in the US, marketers pull out budgets from other markets. Happened after ’08 financial crisis when Asia was unscathed, yet corporates, in order to show a healthy performance, pulled out budgets when in fact, if they would have allocated budgets to Asia, it would be a completely different story. It is the same now. Brexit and Trump are causing uncertainty and once again Asia stands to lose. Yet, if only someone would actually bet on Asia, they would most certainly rewarded generously. Spot on Arnold.
ReplyThanks, we forget history, those who invest wisely when others are not almost always win. In order to invest wisely you need to be well educated and to do so you need to understand the market by spending time there. Maybe not 100% or your time 100% of the time but at least in proportion of the opportunity.
ReplyCouldn’t agree more!
ReplyI’ve been based in Singapore and working with leaders across Asia for 13 years. Great ideas are generated here, but these can fail to gain traction because they weren’t though of in a US or European ‘head office’.
Finally, someone said it and said it well!.
Thank you.
Having worked in India building brands for over 10 years can tell you one thing – the opportunity in Asia is massive. Double-digit growth is a minimum criterion and the audience size is just humongous, hungry and open to new products and experiences. Companies have started going full throttle behind the Asian consumers but yes the Soho House Syndrome exists.
Also, unlike the West, in Asia, each country is atleast 10 smaller countries in terms of language and psychographics and needs drastically different insights to be worked on. It’s not a homogenous English speaking audience.
It will benefit the companies more and also the consumers (who will get better-suited products) if the global CEOs made Asia their base atleast for half a year.
thanks!
ReplyNice article! I’ve been thinking along similar lines, and had these questions that I wasn’t able to answer. Perhaps someone can shed some light?
The markets growth are huge in percentages, but what about actual sizes? With Asian markets are being even more fragmented than European markets, has it reached the tipping point where it is worth more to be based in Asia than in US or Europe?
Are the Asian markets big enough to make it worthwhile for global CEOs to be based here instead of US? I have seen global CEOs of alcohol companies moving to China though. Perhaps it is not the whole of Asia, but just from one giant monolithic market (USA) to another giant monolithic market (China)?
ReplyHi, thanks for the positive comments. See this series we did some time ago http://www.thedrum.com/video/man-about-asia. It is a series of short videos that I hope answers your questions about market size. Bottom line the answer has to be yes with 4+ billion people living in the region. Although obviously depends on the product you are offering.
ReplySince you were so ‘Singapore’ focused, let’s not forget Jean Lin global ceo of Isobar based in Shanghai.
ReplyGreat and fair build. Yes been renting an apartment in Singapore yet would not say so Singapore focused. One learning is to do the global role from here you need to be very connected with the entire region as well as spend a lot of time engaging, talking and physically being EMEA, NA and LATAM as well. Good for air miles not so great for the phone bill. Thanks for the comment.
ReplyIn general I agree with your perspective. I’m a CEO living in Singapore and leading a company I founded in 2000 & that now operates on 6 continents. Over the years I’ve seen many companies try to place their top execs in Asia but many go back to the old structures because it’s hard work! Unless you move the entire top leadership team to Asia, having the CEO sit here isn’t enough. Western MNCs certainly need more CEOs who have lived in Asia long enough to understand the complexities; also the real opportunities and what it will take to succeed. Thanks! Alison
ReplyFirstly congrats sounds like a great business. Agree with your comments, especially the hard work one, and would build more than moving the entire team we need to change the entire mind set. The days of a “head quarters” or “mothership” is a very old fashioned way of thinking for truly global companies. Sadly most companies still have this legacy way of thinking. In my view a far more effective way of thinking is by driving global values e.g. our core value is to be “Globally Curious” this drives the way we think, recruit and reward talent. Helps us solve the need to have all the talent in one place problem as well.
ReplyThe most interesting REAL work still comes from USA, UK, Europe and Australia. Innovative work doesn’t come cheap and these countries usually have the big budgets.
Work from Asia that gets noticed is usually a scam or done for free or falls very ambiguously somewhere between those two posts. About 1% of work from thailand is good and real but mostly its still scam shit. What would a global ceo do in thailand apart from trying to remove the daggers from his back?
So Im not surprised that most global CEOs still want to be based at the hubs of real creativity…..which Asia still isn’t.
Growth yes, creativity no.
ReplyAgree with Axe Cap although there is an argument that growth is not necessarily a factor. A quick look at the 2016 financials of the big holding companies suggests growth in APAC is flat, or slow at best.
But even if growth is a factor, revenues are not. US and Europe account for 70% of WPP revenue. For other holding companies that % is even higher.
So the economic argument is not sound.
In addition, global CEOs will sit where their clients sit, and until we see global companies move their HQs to APAC, there will be no change in the physical location of the agency and creative heads.
ReplyUnderstand what you are saying and to be clear I think it would be equally important for a Global CEO based out of Asia to have spent large amounts of time in NA and EMEA. My argument is quite simple, most business’s are talent driven. To plan ahead you should put your best people where the biggest opportunity for growth is, and over the next 5 – 10 years that will in my view be Asia. There are plenty of people who understand the opportunities in NA and EMEA very few in APAC so those who invest will get their unfair share of reward over the years to come. Re the best work argument, typically the best work is done by the best talent so again invest in talent in the region and the work will also only get better and better.
ReplyInvesting in talent is not the issue. That may work in Singapore but not in other countries in the region. Educating clients about what good creative is has priority over anything else. Then comes educating account teams. Account teams tend to work for the client rather than the agency that has them on the payroll. As long as clients dictate what kind of creative output they want to see then every effort to draw in better talent will fail.
ReplyFor those few companies and individuals willing and able to distance themselves from their ‘home market’ power centers (as though global concerns should have a home market) long enough to learn, this is a great idea. Another option might be to have global CEO’s come from Asia!
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