Consulting Convergence: TBWA goes upstream with consulting business

• TBWA Melbourne has launched a new agency / consultancy hybrid called Disruption Labs
• They have dropped the head hours business model and instead calculate the value they deliver to clients
• The belief is that by combining the executional excellence of agencies with the strategic influence of consulting, true customer centric transformation can be delivered

Original post: http://www.adnews.com.au/news/tbwa-goes-upstream-with-consulting-business

TBWA is making a move into the consultancy space with the launch of a division dedicated to projects that go beyond advertising and become about solving business problems.

Disruption Labs has been operating for a few months in Australia, and while it’s early days, the new division is already working on projects for clients including Schweppes and David Jones.

The services are open to existing clients, as well as a new business proposition.

It dovetails into the way TBWA Melbourne has restructured its account service teams so that senior account leads are becoming more strategically embedded with the client businesses they serve.

Find out more about how TBWA is disrupting its own business and evolving how it operates in the February issue of AdNews.

The consultancy space was a hot topic in 2017 but according to TBWA CEO Paul Bradbury, all the innovations TBWA is making in the way it operates are based around the customer, rather than increased pressure coming from consultancies moving into advertising territory.

“I find consultancies very unproven,” Bradbury said. "Clients are paying more than double for the pleasure of an unproven ability to deliver.”

“We’re going upstream and changing our agency structure so we have senior people who have become proper business partners to our clients. While consultancies are very good at making recommendations on processes and systems, the big criticism is that it leaves clients not knowing how to execute it.”

It's here that Bradbury believes TBWA can leverage disruption, creativity and its ability to execute ideas.

“The beauty is, disruption can be used to solve almost any problem,” he said.

Changing the structure of what the agency does and how it operates has a natural flow−on effect for how it charges and gets paid. There has been a deliberate move away from head hours compensation and it rarely shares head rates and salaries with clients. Instead, the agency works together with the client to figure out the scope of work and its value.

“How we deliver that is our problem," Bradbury said. “But there is a fixed price and we are very detailed about how we record the work we do. If clients want to upscale or vary it then that has to be paid for. We’re very upfront, but that’s the way we work.

“I think the whole industry has to move away from it [head hours] and someone has to take a stand. The sub−text is that we also want to be the agency that moves the industry forward, so we will step out in front and challenge things.

"It might cost us business along the way, but we’ll have a healthier business and work with like−minded clients.”