Dentsu Aegis’ next chapter involves much more Dentsu

“I have two titles,” Takaki Hibino says, sliding his business card across the coffee table. The simple white card clearly denotes Hibino as not just the new executive chairman of Dentsu Aegis Network Asia-Pacific, but also senior vice-president at Dentsu Inc.

“That’s one of the reasons I came here after Nick,” he says, referring to former DAN APAC CEO Nick Waters. “To create a new chapter. To realise One Dentsu.”

Hibino is well placed to attempt this: He's the son of a Dentsu employee who started his own career at the agency 36 years ago as an ‘eigyo’ or client lead, first for domestic brands like Nippon Telegraph & Telecom, Fujifilm, and Shiseido, and later for global names like Coca-Cola and McDonald’s.

Rising through the ranks, Hibino eventually became Dentsu’s first executive officer stationed abroad in Singapore in 2016. For two years, he was in charge of global business as the CEO of Dentsu Brand Agencies and the global president of newly rebranded media agency Dentsu X. He returned to Japan by 2018.

It’s only natural then, that Hibino considers himself a bridge between domestic and global, between Tokyo and Singapore, between Japan and APAC, and now consequently, between Dentsu and Dentsu Aegis Network.

Takaki Hibino, executive chairman, DAN APAC & SVP Dentsu Inc.

New structure. One culture?

The timing of his recent return to Singapore is no coincidence. Dentsu’s newly approved corporate structure means that starting January 1, 2020, both Dentsu Inc. and DAN will sit side-by-side, no longer one the subsidiary of the other, under an overarching Dentsu Group holding company.

What prompted the change, Hibino says, is that global business now forms about 60% of Dentsu’s total, exceeding the size of its domestic business. As rcently as six years ago, prior to the Aegis deal, international operations only accounted for roughly 10%. 

In last week’s Q1 earnings release, Dentsu Inc. CEO Toshihiro Yamamoto explained that the new structure will allow for “improved integration between Dentsu in Japan and Dentsu Aegis Network.”

So if integration is a new priority, Hibino feels APAC is a perfect region to do it. “We’re physically close to Japan and also mentally and emotionally. I think there is a huge opportunity,” he says.

But whether Dentsu Aegis employees abroad share his enthusiasm is far less clear. DAN APAC has just endured a harsh business year followed by a major restructuring that saw the removal of much of the senior regional leadership, especially on the media side. 

Even by late last year, Campaign had heard rumblings of employee dissatisfaction at DAN and resentment over encroaching ‘interference’ from Tokyo. Cynics might posit that the purge of APAC leaders cleared the decks for a smoother takeover by the 'mothership' in order to implement a Japan-centric vision.

Naturally Hibino refutes this. “That’s not true,” he says. “We never thought about a Japan-centric [vision].”

“We need to be a more effective and efficient headquarters to support market growth,” he later explains. “So that was the reason we made some changes in the headquarter roles.”

“I think most people understand and there’s no negative feeling,” Hibino adds, noting how change inevitably brings some concerns, which he is trying to allay through town halls and team meetings.

Dentsu DNA for DAN

More to point, Hibino is trying to get DAN employees excited about being part of ‘One Dentsu’. His argument is there’s no Tokyo-centricity, but a very strong sense of Dentsu-centricity in a “meta-national” culture with “no top, no center” but 62,000 employees globally working as Dentsu ‘jin’, or ‘people of Dentsu’. That includes 33,500 employees in APAC in 19 markets including Japan.

While many outside Japan perceive its corporations as unduly hierarchical and bureaucratic, Hibino describes Dentsu's leadership as a flat structure. A meta-national business, Hibino says, means innovation and ideas should come from anywhere and anybody. 

This, of course only works if  employees feel comfortable and part of a shared culture. Many outside Japan have been fixated on the serious workforce issues and transparency problems of past years that Dentsu has been working to address in Japan. 

To Hibino and others in Japan, this risks overlooking a truly impressive organisation and culture in Japan, borne out of Dentsu’s 120-year history as an innovation pioneer. It was Dentsu that first brought the television market to life and grew it in Japan, that built countless new robotics and technology applications and that first experimented with sports, entertainment and film projects in that market.

“We are very fearless to challenges. We face them without fear and overcome them,” Hibino says, explaining how he wants to see more of this rub off on DAN in APAC.

“I really want to utilise Dentsu DNA,” Hibino says, expounding on what that means. “We have a ‘never done before’ mindset. We really want to do the execution or proposals that have never been explored or never done before.” This ‘can-do’ mindset coupled with beautiful execution is what earns clients their trust, he says.

DAN APAC’s next chapter

“My intention is to pick up only good points from Dentsu and DAN and make a hybrid model," Hibino says. "That will be our differentiator."  

So what are the good points to be retained and expanded in the One Dentsu model in APAC? A couple of them seem fairly obvious and self-evident.

One is integration. While not ready to detail specifics, Hibino says there should be more seamless integration between the two, as clients demand it. He points out that DAN has successfully operated a one P&L model per market, while Dentsu Inc has “never operated unbundled.” This shared integrated experience thus bodes well for more resource sharing, Hibino argues.

“We can utilise knowledge and experience at Dentsu Inc. about creative and technology [for] this region to make more attractive output.“

Dentsu Aegis Network APAC headquarters in Singapore

 

Another is client-centricity. DAN’s client solution teams have a very important role in the new business model to ensure client needs are fully met, Hibino says.  Here, he sees parallels with Dentsu Inc.’s concept of ‘eigyo’  client business workers who put client needs first. 

But the types of client relationships DAN has may change too. In this new growth chapter, “the goal is to make DAN APAC the trusted long-term solutions partner for all stakeholders,” Hibino explains.

The key phrase there is long-term. While there will inevitably be smaller pitches and project work, Hibino says he wants to get away from short-term deals to focus on building longer-term relationships in APAC. An example to follow might be that of BC&F Dentsu's 22-year relationship with an automaker in New Zealand, which won them gold at the Campaign Agency-Partnership marketing partnership award last year.

New growth areas

Hibino also wants to expand new kinds of relationships beyond advertising, where DAN can work with clients as business partners. 

This, he explains, could mean developing a product or brand together with a client and getting some revenue share. Or it could mean developing a business platform with client and then being able to use the data from it in DAN’s core business. 

Hibino also sees room for much more expansion and collaboration in the sports and content categories. “In a more data-driven and AI-driven society, the live experience, live excitement will be more and more important,” he enthuses. With big opportunities in this arena over the next three to five years, Hibino sees a bigger role and more investment for units with sports and live event capabilities like DAN’s MKTG and Dentsu Sports Asia in Singapore.

“Of course we need to grow our core business,” Hibino says.  “But at the same time we need to develop other second or third profit sources as a group for sustainable growth for another 10 years, 20 years, 30 years.”

A tighter ship

New business models, however, also require more investment. And while DAN, like other agency networks, has spent when it needed to, several of its more recent priorities have revolved around creating efficiencies and cost savings. 

Dentsu’s latest quarterly earnings pointed out than at DAN, operational initiatives remained a key priority, and Hibino agrees that making operations more effective and efficient is one top-priority project, stretching across media and planning to finance and HR.

After joining in February, one of Hibino’s first major moves was to restructure DAN APAC leadership from five to three geographic clusters (Greater North, Greater South and ANZ), with the aim of allowing leaders to run their markets with more autonomy and speed in a simplified structure, he said at the time. 

And on Hibino’s first day on the job, he appointed Dentsu Inc. executive officer Masaya Nakamura as DAN APAC deputy chairman and chief growth officer in charge of the network’s newly restructured Singapore-based regional business in a bid “to become more client-centric and more efficient.”

Dentsu Aegis Network APAC headquarters in Singapore

Yet while DAN’s media agencies have been pulled into a single regional leadership structure known as the One Singapore Media Group, Hibino tells Campaign he has no plans for a similar regional restructuring on DAN’s creative side, where Dick van Motman, global president of Dentsu Brand Agencies based in Singapore was made DAN’s global CEO for creative in March, also overseeing Mcgarrybowen.

There’s been no shortage of changes already at DAN APAC over the past six months, so it’s very likely Hibino could take a more cautious approach before launching into the trials and risks involved in starting the new ventures he speaks of.

But Hibino says he’s aware of the challenges and appears to be summoning some of that ‘can-do’ Dentsu spirit to take them on. “I really appreciate failure because it means a first attempt in learning, so I’m not afraid of failing,” he says.

“[Nick Waters] did a really, really good job during his nine-year period here." Hibino says. "He grew the business rapidly. My role here is to create a new chapter of growth in Asia-Pacific.”