reveries - jim speros - ernst & young

OCTOBER 2002

"Marketing needs to get back to creativity and ideas," says Jim Speros, chief marketing officer of Ernst & Young and new chairman of the Association of National Advertisers. "Too many marketers have taken their eyes off the ball."

"I mean," Jim says, "a lot of marketers have become too distracted by compensation issues, organizational issues, financial issues, and so on. I don't want to minimize those issues -- they're important -- but it's creativity and ideas that have the most meaningful impact in the marketplace."

Jim Speros also thinks marketers need to pay more attention to the changing face of the America's multicultural marketplace.

"There's a core group of enlightened marketers who have been investing in the multicultural market for a long time," he says.

"But there's another layer of marketers who really need to learn more about it and understand the value that these segments can provide and how they drive growth."

So, multiculturalism -- in addition to creativity -- is a key issue Jim plans to pursue in his year ahead as chairman of the Association of National Advertisers.

Meanwhile, where Ernst & Young is concerned, the issue of the post-Andersen hour is the matter of trust. "Given all the problems that have ensued in the financial markets," he says, "trust has been shaken. So, one of our core objectives is to restore trust in the profession, as well as to ensure that people link Ernst & Young with quality."

It's the pinnacle of an advertiser's career to chair the ANA. It is just a real honor.

Ideas, multiculturalism, trust. Those are the key words running through Jim's mind these days -- not that there's anything new about that for him.

His 20 years at AT&T wrapped up as VP of Business Services Advertising and Multicultural Advertising. Previously, he was in the ideas business at ad agencies Benton & Bowles, Lintas and NW Ayer. And when he was recruited in to the top marketing spot at Ernst & Young in September of '98, he brought with him a management style based on bringing out the best in people through open doors and ideas.

"Over the years," says Jim, "I've learned that if you treat people with respect, if you listen, if you give them room to express ideas and trust and empower them, you get superb and superior work."

How, specifically, do you promote creativity and ideas at Ernst & Young?

For one, we've created a "marketing university," where we bring in outside speakers to talk to our group. We also have a brown bag lunch series, where we bring people in on a monthly basis. And we have a series of seminars during the year, just to get some fresh thinking from outside of our own industry.

I am also a big believer in promoting risk-taking and creating a culture that's not risk-averse. I always say, "don't let the perfect be the enemy of the good." You'll never do anything great if you don't try anything new; you'll just be stuck in the status quo. So, if someone is passionate and makes a fairly compelling case, we allocate resources to the idea and we let it fly.

Any examples of how risk-taking has played out to Ernst & Young's advantage?

One of the things that we did was create a Web site for children, called Moneyopolis.com, to improve their financial literacy skills. On a day-to-day basis, our core job is not to market to children. But it is a wonderful Web site for kids, that works in classrooms, and that's gotten very, very fine reviews.

We also have a U.S. Ski Team sponsorship, which is probably something that you would not have associated with Ernst & Young. We sponsor the Ski Team because we think that it adds some new attributes to how our firm is viewed.

What steps are you taking to restore trust in a post-Enron, post-Andersen marketplace?

Among other things, we've appointed a "quality czar" within the firm. We're redoubling our efforts to educate our people that far exceed the industry standards for professional training. We have global methodologies that we're deploying throughout the firm to ensure the consistency of our approaches in 130 countries worldwide. We have a very strong knowledge management capability, which allows us to deploy a lot of our information globally, almost instantaneously.

Ernst & Young recruited a number of former Andersen consulting employees. Did that create any PR issues for you?

No, interestingly, there really was not a lot written about that. Actually, our hope is that the Andersen recruits bring some of the good things from their firm to Ernst & Young. In fact, there has been some good learning that we've gotten from many of their people.

But, clearly, it was also important that we trained them extensively on our methodologies and processes, so that what happened at Enron doesn't happen here at Ernst & Young. We have much tighter processes and controls and methodologies that prevent the problems that happened at Andersen from happening here.

Do you think this recession will trigger lasting changes in the way brands go to market?

The economic situation is temporary, but there are a lot of other, new dynamics going on in the marketplace that are triggering lasting changes.

My mom and dad provided a creative environment when I was growing up. We always took time to draw, paint, play music and things like that.

Look at the multicultural explosion. There are some 85 million people in the U.S. alone whom you would classify as multicultural consumers. If you put that in context, the population of Germany is 82 million people, the population of France is somewhere around 60 million people, and so on. So, America's multicultural explosion is fundamentally changing the way we talk to our consumers.

Another area is the whole shift in power to consumers, as technology gives our consumers more power. We're all looking closely at the impact of the shift in power from the media to the consumer. If TiVo takes hold, for example, and the consumer has the ability literally to bypass commercials, that will have a significant impact on our industry. As a result, I predict that marketers will probably go back to sponsorships of TV programs in the future.

How about the other power shift that gets a lot of attention -- from manufacturers to retailers, especially Wal-Mart?

The Wal-Marts of the world, the Home Depots, and others, certainly are becoming very, very powerful forces and brands in their own right. That does not mean that individual brands will lose power, though. Consumers will continue to buy branded goods, but those channels will be magnets for consumers to an even greater extent in the future.

Marketers will have to forge stronger relationships with those major outlets. They're going to have to have shelf space -- there's just no question about that. But they have to continue to work on enhancing their individual brands just as they do today, because when a shopper is confronted with five to ten choices on the shelf, it's still the brand that differentiates one product from the other.

I like the analytical side of marketing because it's substantive. But the creative side lets you express yourself in new and boundless ways.

Do you see major changes ahead in terms of how advertisers and their agencies staff, train, and organize themselves to address these changes in the marketplace?

More agencies are coming to me these days talking about a much more integrated approach to marketing, as opposed to just advertising. That's a good and positive change. Whether advertisers themselves will be receptive or not is another matter. What often happens is the marketer or advertiser wants to "cherry pick" the best-of-the-best in the field, which then places the onus on the marketer to coordinate all that activity.

The issue is that the agencies really need to train people who can think cross-functionally, because right now they're very, very siloed in many cases. They have PR operations, event operations, multicultural operations -- and their general advertising -- but these different groups often don't talk to one another.

Why does it seem like agencies don't get quite as much respect from their clients as they used to?

Well, many years ago marketers gave up more of the marketing control to their agency partners. But now, with agency economics being what they are, they have not been able to keep pace with attracting necessarily the best and brightest. Many of those younger people are going to the client side. That's a generalization, but if you look at starting pay scales for people entering the advertising field versus entering a major marketer, there's a significant disparity.

So marketers have assumed the role of hiring more and more highly- seasoned and trained marketing people, and that has put the agencies further in the background on some of the marketing issues. That's not to say the agency doesn't perform a valuable role, because you do get that objective third-party view they provide, that sometimes you don't get from inside the organization.

When you look back a year from now at your tenure as Chairman of the ANA, what do you hope you'll be able to say about it?

I would hope to say that I've reinvigorated the organization and brought a strong focus on creativity and innovation. And, also as the past chairman of the ANA Multicultural Committee, I'd like to make multiculturalism a more prominent aspect of the ANA's ongoing operations, as well -- just make multicultural issues more salient among a broader base of advertisers.

A lot of businesses are still in the learning mode, so we're hoping that, as an organization, the ANA can improve its understanding of the multicultural segments as well.

In addition to a major conference on multicultural marketing in San Francisco this year, we also started an industry awards program. We now have more than 125 applicants in awards categories across African American, Hispanic, Asian, and general market work. So the importance of multicultural marketing really is beginning to get noticed.

And in terms of Ernst & Young -- when you look back, say ten years from now at your tenure -- what do you hope others will say about what you accomplished?

I would hope that they would say that we built one of the finest marketing organizations in the industry. I would hope that they would say that we really made a difference in giving this firm a competitive advantage, and that we were a highly creative and energized group.

It's all about ideas. That's really what business is all about.

Again, this is a business of ideas and we should continually focus on trying to generate new and innovative approaches to marketing. By that I mean not just creative innovation, but innovation in media -- what's new and exciting in magazines, out-of-home, newspapers, and television, as well as production techniques, public relations, and direct marketing.

We have to take a much more holistic view of communications because the world isn't just about advertising anymore -- it's about the total brand experience and how that's created. That is the life-blood of any great marketing organization and that's really what the business is about.

And if you can mix that with just being a decent person and your relationships with others, it's a winning combination. My father liked to quote a Greek proverb: "Success is getting what you want and happiness is wanting what you get."

I can honestly say I feel like I have achieved balance on both sides. I feel as though in life I've been very fortunate to get what I've ultimately wanted, which is a great job and one that fulfills me in many ways. And also a great family to boot, and at the same time I'm happy at what I'm doing. Ernst & Young is a great firm to work with, and I'm having fun.