Business

Saturday July 4, 2009

Towards greater harmony

By M. HAFIDZ MAHPAR


FOETUS International, one of Malaysia’s largest marketing communications groups, has put in place several pillars to strengthen its infrastructure and ensure greater synergy and efficiency among its group of agencies.

Rosie Hong, who became group executive director on Jan 1, says Foetus has rolled out a “long list” of key performance indicators (KPIs) for its agency CEOs in relation to 3Ps – people, product and profit.

“We’re now implementing it to show our commitment to grow and ensure that each of our agencies is the best in class (in their respective marketing disciplines),” she tells StarBizWeek.

Foetus’ 13 members are mainstream ad agencies Naga DDB and Milk+Co, digital agency Tribal DDB, customer relationship marketing firm Rapp, media specialist Vizeum Media Services, DDB PR, Faces Publication, Beyond Activation, Interbrand Brand Consulting, corporate responsibility operation StART Foundation, MNC Wireless, mobile-led digital firm Digital Kungfu and talent agency Model.com.

Besides profit targets, the KPIs look into aspects like culture, people retention, talent recruitment, product offering, awards achievement, agency reputation, market competitiveness and new business development. These are measured twice annually – in the middle and at the end of the year.

“Now we have a very formal management meeting to be held at least once a year. That’s where all the agency heads, creative directors and heads of department will congregate and share business plans and targets,” she says.

Rosie Hong in the guitar room of the StART House. She says it’s important for someone in her position to try find integration as much as possible.

In the quest to become best in class, the CEOs and MDs not only have to drive their own agencies but also take the opportunity to cross-sell one another. “This is why it is important that someone in my position try to find integration as much as possible,” Hong says.

For example, Foetus is putting in place group-wide procurement processes.

“In the past, all the different agencies looked into suppliers and production procurement on their own and there was a lot of wastage.

“To be more efficient, Foetus has appointed a group procurement manager early this year. She has introduced a lot of processes, savings, standards and benchmarks, so we have a very vigilant process for shortlisting suppliers,” Hong says, adding that the said manager goes to different suppliers to do audits and look at their processes.

While the individual agencies under Foetus have their own planners, there are now also two “very senior” group planning directors who report to Foetus.

According to Hong, these Foetus planners handle project planning and business development related to high-level projects that require an integrated approach.

“The group is putting a lot of solid pillars to ensure we have the infrastructure not only for the individual agencies to grow at their own pace but we (at Foetus level) also help them with all these processes.

“This is so that, as a group, we’re very synergistic and efficient, with cost-savings and the economies of scale to buy in bulk.”

Foetus has been planning all this since the middle of last year although the implementation only kicked off at the beginning of this year.

“Last year, we saw that the United States was affected by the subprime issue, but we didn’t think Asia would be so much impacted until this year. It’s timely that the plans came into fruition this year,” she notes.

These are hard times for the entire advertising industry and, therefore, the results of these efforts in financial terms may not be apparent immediately. But Hong believes that when the good times return, what is being implemented will bring a lot of “value” to the group.

Asked how she expects the group as a whole to grow, Hong repeats the word “grow” as if it’s a foreign word, and then lets out a chuckle.

She explains: “I think, to be realistic, we’re looking at maintaining last year’s results at best because it is a very, very challenging environment, especially for mainstream agencies.”

This is in contrast to 2008 when the group performed well, growing by about 30% to reach RM58mil in revenue.

While some Foetus agencies may be stagnant at best this year, Hong points out that the group’s non-mainstream services are still growing. DDB PR’s bottom line is projected to grow four-fold this year. The activation and digital businesses have also continued to expand.

“For the rest, hopefully we will maintain last year’s results. So on an average score, we will be, in a way, even at the end of the year in terms of our profit and revenue targets,” Hong says.

Amid this hostile business environment, Foetus is not neglecting training and recruitment efforts.

This is the ninth-year running for Foetus DDB University (DDBU), an intensive three-month internal training programme that ends in September.

She estimates that about 40% of Foetus group’s staff, currently numbering just below 400, have gone through DDBU.

For this year’s training programme, 35% of the syllabus will be on digital media and digital excellence. “Digital is the major media channel right now and consumers are growing more and more digital savvy,” she explains.

Foetus is also actively going into colleges and universities in search of talent and to promote the advertising profession.

“We’re no longer looking at just communication colleges. We want to attract a more diversified range of students and this becomes our talent recruitment programme,” says Hong.

Foetus is also pushing ahead with its corporate responsibility (CR) initiative. In fact, the StarBizWeek interview with Hong takes place in a large double-storey house in Petaling Jaya that serves as an arts academy under the group’s CR arm StART Foundation.

It is here that underprivileged children aged seven to 17 from five Klang Valley orphanages are taught music, art, drama and dance free of charge. The cost of maintaining the place, which is leased, is about RM400,000 a year.

Classes started in April under the supervision of full-time programme directors Joshua Lee (formerly account director of Naga DDB and music director of the then-Sedaya College) and Rachel Yeow.

“(Foetus executive chairman) Datuk Vincent Lee observed that many people in the advertising profession, when they retire, would volunteer in some kind of organisation or others to give back (to society).

“And he was thinking, ‘Why wait till you retire and are old? Why not do it while you’re still active.’ And being in this industry, he feels the best way of giving back is to give back in the form of the arts,” Hong says.

“We thought about the commitment to StART Foundation, reviewed it and asked ourselves whether we should wait for another year because it is a challenging year, but Datuk was adamant that there’s never a ‘right’ time to do good, so we should just do it.”

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