MullenLowe Group pushing for a ‘hub and spoke’ business model in Asia, amid senior level exits
Mumbrella has learnt that Richard Tan the CEO of MullenLowe Shanghai is set to leave the company. Confirming his exit, MullenLowe Group Asia-Pacific CEO Vincent Digonnet told Mumbrella: “Richard is to leave the company shortly to pursue personal projects. This is an amicable move and a leaving date is not yet finalised.”
Tan’s exit comes shortly after the announcement of the departure of the senior leadership team from MullenLowe Indonesia late last month with the departure of CEO Joseph Tan, chief creative officer Roy Wisnu and chief operating officer Daniel Siswandi.
Mumbrella heard that MullenLowe Singapore CEO Paul Soon had also left but this was denied by Digonnet who said: “Paul is still very much with MullenLowe and indeed is playing a key role in making sure we fully utilise Singapore skills and talent while building up the team in Indonesia to full strength.”
It was also rumoured that MullenLowe intended divesting its Thailand operation, in a move similar to those it had made in Malaysia and Vietnam earlier this year. The agency’s Malaysia operations had been bought by former CEO Adrian S’ng earlier this year and the Vietnam operations had been acquired by former JWT Vietnam CEO Saby Mishra who rebranded the agency MullenLowe Mishra.
Addressing the query about the Thailand operations, Digonnet said: “Nothing is decided yet concerning Thailand.”
However, he added: “The cost of being a listed business and the associated requirements in terms of compliance and reporting is a disproportionate burden for smaller, but faster growing, Asia-Pacific markets.
“Clients ask for services across the region which often requires a physical presence to provide an insightful local offer. However, in some of these smaller markets, unless you are the number one player, there is not enough client budget to make it sustainable when group and regional costs are considered.
“We are prioritising client needs, and took the decision to transform our Vietnam and Malaysia businesses to affiliation, which has been successful as it provides local leadership with agility and reduced central management costs.
“The remaining relationship enables us as a group to service global clients in local markets. But in a manner that allows the agency in that market to sustainably compete and focus on delivering quality work. This is a strategy we will look to adopt in other smaller markets where it makes business sense.”
Asked if these changes had a bearing on the direction of MullenLowe Group in the region, Digonnet said: “The way that regional interacts with local in Asia-Pacific is evolving and we must respond to such changes quickly.
“When we look at the development of our main clients in Asia today, and the way they structure themselves, it is obvious that we need to move faster into a hub and spoke business model, far away from the model of the seventies and eighties which was to open fully fleshed agencies everywhere in the world.”
Ravi is the editor at Mumbrella Asia. He has covered the marketing, advertising and media business for over two decades.
Asia used to be the superpower for Lowe. Now with [Edited under Mumbrella’s community guidelines] – what a sad, sad, day for Lowe Asia of the past! Maybe that’s what you get for allowing a Boston agency to [Edited under Mumbrella’s community guidelines] to know what it takes to lead Asia.
Reply1. Everyone knows that Paul Soon is leaving. Stop denying. Everyone in the Singapore office already knows.
Reply2. More news about senior leadership people leaving will be announced soon.
3. Not only senior leadership is leaving. Ask Vincent/Paul how many people have left the Singapore office this year. I should know. I was one of the many that left.
4. Maybe Vincent is the one that should [Edited under Mumbrella’s community guidelines].
Agencies don’t need to “reinvent” themselves.. well, look what happened when you got supposedly “digital folks” in to do digital transformation in a traditional agency? Let alone [Edited under Mumbrella’s community guidelines].
ReplyA-ducking and a-diving, the fighting octopus goes from strength to strength…perhaps a little less time CEO grandstanding and focusing on the leaders and clients you have left might help.
ReplyThere is only so much you can [Edited under Mumbrella’s community guidelines] around transformation, hub and spoke, hyper bundling, digital, cliche after another cliche…..
ReplyReality is there is only one global client that can sustain offices, Unilever and on this too, they are [Edited under Mumbrella’s community guidelines].
“Regional CEO becomes acting MD of every local office across the regional in pursuit of agility.”
ReplyRegional CEO comes out of retirement, [Edited under Mumbrella’s community guidelines] the network and spouts cliches about building new models of operation….
ReplyIf one looks at the implosions of any network agencies in the region, one has to look at the unvarnished value the regional structure adds to the bottom line.
ReplyRather than help the weak offices get better, they are just a cost (higher at that) centre, leeching off the revenue line while interfering with how they think successfully run offices ought to operate.
Good living, expense accounts and business class travel with no client facing responsibilities give them an entitled view of what life is on the quarry.
Is it so difficult to just take the paycheck and say ‘thank you’ to those who actually earn the money?
Regional is just a post box to drop the money back to HQ.
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