The team players

m&k: Frank-Peter Lortz, Christoph Pietsch: Shortly before our interview, the global CEO of Publicis Groupe, Arthur Sadoun, published his review of the year 2023. He praises how well your company has dealt with economic challenges and mentions various areas in which Publicis can claim international market leadership. With such a "conclusion", are you relaxed about the future?

Frank-Peter Lortz: You ask us this question in January, so it is of course difficult to make a serious forecast by the end of the year. But I agree with Arthur when it comes to looking back on 2023: it was an excellent year for Publicis, both globally and here in DACH. We were financially successful, the share price went and continues to go - to put it casually - through the roof. We also continued to develop in terms of content and showed that our "Power of One" model makes us resilient and successful. So much so that it is now being copied by some of our competitors. That's a nice compliment, isn't it? (laughs) So, yes, I am optimistic about what is to come. But it is also possible that the economic conditions will continue to deteriorate, at least in Germany and Austria, and we need to keep that in mind.

It's no secret that marketing, communication and advertising measures are often the first to be cut when the economy darkens. How do you motivate the companies that use your services not to give in to this temptation? Because whatever you do, it seems to work quite well.

Christoph Pietsch: I need to expand a little on that. Let's take a look at the journey we have taken as a company over the past few years: What our colleagues have achieved in terms of transformation - whether in terms of our portfolio, structures, initiatives, the entire approach, so to speak - is impressive. It's incredibly motivating and radiates in all directions. For us, this has become a kind of credo, which in a nutshell is simply "to do good things with good people". There is a great deal of passion in all of this ... and that is simply incredibly attractive, almost like a kind of superpower. There are certainly always business factors that our clients have to take into account when working with agencies, but if they find a well-positioned, inspiring, cleverly structured sparring partner in us, then that helps to maintain connections even in challenging times. And even deepen them. Challenging times require ideas and concepts.

Lortz: I was very positive in my review of 2023, but you have to be honest - the wind was blowing in the face of the entire industry last year, and of course we noticed that. A tailwind would have been more pleasant. On the other hand, it was a litmus test, so to speak, for our business model ... and I'd say we passed it.

"The wind was blowing in the face of the entire industry last year, and of course we noticed that too."

You mentioned earlier that the "Power of One" makes Publicis resilient. Apart from the fact that this is a good claim, how does this "power" really become a differentiating factor in the market?

We are affiliated with many agency brands - including some that have historically enjoyed enormous popularity - but internally we are de facto one agency. We have a joint, cross-brand management board and have totally exciting, very different people who - when it comes down to it - all pull together. If someone has problems, they get help. And that's what sets us apart as a group.

Pietsch: (laughs) In previous roles, I've always told this story in exactly the same way as Frank-Peter just did, but the difference is that we really activated the collective potential of the "Power of One". In the end, the group is an agency. After three years in the group, for example, I'm still delighted by the fact that the entire board meets several times a week via video call and has intensive discussions: what are the current overarching issues, who is working on what potential, where do we need support? And even if there is a challenge or "dip", for example because a pitch or client is lost - which happens in our line of work - the agency in question can count on support. As a team, we think about how we can support each other. A team with a joint profit and loss account.

Lortz: "The Power of One" also makes us more agile and flexible. We can react much faster because there are no artificial barriers between agencies and employees and everything can be adapted immediately to changing market conditions or customer requirements. Clients often grow when the contacts realize: "We not only have a problem in area X, but now also in area Y - but Publicis can solve both problems."

As a top manager, how do you create a culture for around 3,000 employees at all hierarchical levels in the DACH region? That seems to me to be a complex, ongoing task - and important to ensure that good people don't leave.

At the moment, we are in the fortunate position that top talent is coming to us rather than leaving us - be it top creatives, digital experts or media professionals: people want to work for Publicis, that's a fact, and that in itself is proof that the Group is successfully optimizing its potential in the DACH region. When we receive dossiers from applicants who would really have no problem finding a job anywhere else ... it shows that we are already doing a lot of things right. An agency basically consists of two components: Employees and customers. If one of the two areas isn't right, the entire construct immediately begins to falter. Furthermore, as I said before, the "Power of One" must be more than just an empty phrase. For example, I firmly believe that a sense of togetherness can only develop if we not only allow interdisciplinary and inter-agency work within the Group, but if we actively promote it. We have internal training and development programs in which colleagues are deliberately motivated to think "outside the box". We organize events to strengthen the internal culture. We enable all colleagues to work abroad for several weeks a year - we support them with residence permits and insurance and help them find accommodation. This goes far beyond the DACH region. If you actually have your office here in Düsseldorf, but want to get to know Paris, New York or São Paulo better as a location and city, we make that possible. This also promotes cross-group cohesion enormously.

Pietsch: Perhaps at this point we can bring together two things that we have already discussed: Namely, the question of how we build successful relationships as an agency and how we develop an attractive employer brand. We want to be the best agency in the market for our customers and employees. And I think the formula for this is quite simple: ultimately, success always attracts success. Clients want to work with agencies that take on a leadership position, see themselves as a platform and are not somewhere "below the rest" in terms of performance. And the best employees want the best employers. We need to hear and understand this and take the needs of both interest groups seriously if we want to continue to grow.

As Chief Growth Officer, you would therefore also be at the interface between culture and communication. Am I reading too much into your role here - or would you agree?

Pietsch: So, promoting culture and communication is the task of all of us - the task of a large number of very capable, highly valued people who work here in the company. But, yes: I don't see my job as a pure sales or acquisition function. For sustainable growth, we have to look at the structures and tools as well as cultural issues. We have to think about the areas in which we excel, where this excellence comes from and how it can be transferred to other areas. Even in areas that perhaps need to catch up. There are then different strategies in marketing and sales, including which offers to put in the shop window depending on the situation. Creative communications is always popular because client turnover rates are higher there, digital business transformation because demand is higher than ever before, and media because it is often international in nature. Who helps whom to grow? Who stabilizes whom when things get difficult? Which service has which function in the value chain and in cross-selling? These are questions that we can answer from our model. In the end, the overall concept has to be convincing. Customers have to experience that it works and helps the business - and if our colleagues also attest that our form of interdisciplinarity is something special, then we've done a good job.

"Who stabilizes whom when things get difficult? Who is located where in the value chain?"

With the "Working with Cancer" initiative - which Arthur Sadoun launched as a result of his own cancer diagnosis - Publicis has motivated hundreds of global companies to voluntarily increase the protection of their employees in the event of illness. Isn't that actually the greatest success of recent years for you?

Pietsch: "Working with Cancer" is an extremely impressive program that has sent out a very important signal from the very first moment based on the clinical picture of the global CEO - and how he deals with it. And when you can set up a global NGO with more than 1,300 member companies virtually from scratch ... with SAP, Beiersdorf, Bank of America, Pfizer et cetera ... then you realize that the organization is not "just" advertising. It leaves a footprint and initiates real change.

Lortz: Something like "Working with Cancer" is fortunately being noticed and is a great success. Global advertising networks are often criticized for their size. But without this size, there wouldn't be the leverage needed to get something like this off the ground and create space for it, for example at the World Economic Forum in Davos.

Do you feel attacked when smaller "hot stores" accuse you - for example - of institutional inertia?

Most of the time, that doesn't bother me at all - but there are exceptions, as I just mentioned. I generally have great respect for smaller and medium-sized agencies; there are good reasons for them to exist. And there are also good reasons that they win great accounts and do a good job on these accounts. Our industry thrives on diversity - and I love diversity.

Pietsch: I would like to disagree.

Lortz: (laughs) Okay.

Pietsch: No, that wasn't adequately formulated, I'm not contradicting you, but adding to it. I wish I could answer as calmly as Frank-Peter. But we get annoyed every time we lose. We really do. (laughs) Of course, we are always fair sportsmen and women and can acknowledge when other offers were simply better - but we also want to impress in every competition and be the best. Compared to other agency brands, we simply have a different approach in terms of our model, portfolio, internationality and self-image; certain parameters are difficult or impossible to compare. And yet it's annoying when you lose a pitch against competitors - who you generally hold in high regard as people. We are simply ambitious. In the end, that's also part of the eternal story: the seemingly century-old story of the differences between owner-managed and capital market-oriented network agencies. Sometimes you're Goliath, sometimes David. Sometimes Roman, sometimes Gaul. This togetherness is often associated with challenger characteristics. From "unconventional", "unseen" to "totally courageous". What is often forgotten in the discussion: Offers must be designed around needs. The needs of customers, organizations, brands and talents ... So there is enough work for everyone.

But wouldn't you like to be a "Gaul" again?

Radicalism cannot be consistently maintained forever, neither with people nor with agency brands. Do you really want - no - can you really be credible and always be an "enfant terrible"? At some point, you have to grow up. "Nothing to lose" and healthy aggressiveness are acceptable stylistic devices in a certain phase of the agency brand - positioning and building awareness, so to speak. And if you deliver great work, you will grow. The portfolio also grows over time. Once the company has established itself and developed into a medium-sized organization through impressive performance, this also comes with greater responsibility. For employees and customers. All of this often means that you gradually lose the top position you held in the early days. Incidentally, this does not mean that you can no longer have an excellent creative product at your core.

Lortz: Expansion costs money. If I want to meet the increasing demand from existing and potential customers, I have to hire new people, rent larger offices and invest. I then automatically leave the area in which I was radical and different and become a little more like the norm. And - as already mentioned - "young and wild" people follow suit, doing for a few years what you did in the beginning ... Our industry is in constant flux, there's an incredible dynamism in it that spurs us networks on to develop dynamically as well. Maybe that's how everyone stays fresh together; maybe the big and the small benefit from each other.

"The market has room for a wide variety of players, who should all be given their time and their chance."

Chief Executive Officer and Chief Growth Officer: How do you actually work together on a day-to-day basis?

Pietsch: Well, first of all, it's Frank-Peter's fault that I'm here. (laughs) In the room where we are sitting today, Frank-Peter made us the offer to come to Publicis. In many conversations with Frank-Peter, the management board and the teams, it became clear that we could learn a lot here and perhaps even make a difference. From the very first day, I have (turns to Lortz) I appreciated your unpretentious, open and down-to-earth manner, it was a good fit on a personal level. And: you give space to spinning. (laughs)

You have to explain that ...

We have very different characters on the entire management board and in the agency leadership teams, as we have already mentioned. For some - and I would count myself among them - things are sometimes much easier in their heads than they really are in the end. Nevertheless, wild ideas and concepts are heard, seen and equally valued - by everyone in the agency group, by the way. If things get too wild, someone comes forward and says "it's probably not that simple", giving the thinking a new, important twist. Frank-Peter is also happy to take on this navigation.

Lortz: What I would like to emphasize again at the end of this interview is that it is nice that you invited us both for an interview, but we are not solely responsible for everything we have said. We play as a team, the management colleagues as well as each and every colleague in other positions. That's exactly how it has to be - it's one of my most important tasks to strengthen the team. I don't believe in hierarchies just for the sake of it; I don't need them to "lead" either. I don't need status symbols. I just want to be part of the team. If we want to continue the transformation that has made us so successful, we need feedback and dialog - we need people who aren't afraid to "go crazy" or think really, really big (points to Pietsch) - and this is only possible if we create an environment in which this is possible. You know the saying - "The head is round so that thinking can change direction?" That's what we want to be: a place where heads stay round. (laughs)

"That's what we want to be: a place where heads stay round."