Disruptive power moves: Azwan Baharuddin (left), Country Managing Director for Accenture Malaysia seals the deal with Prashant Kumar, Founder and Senior Partner at Entropia.
Accenture acquires Malaysian full-service agency Entropia in dramatic market-changing move.
Less than 48 hours ago, the penny finally dropped for everyone connected to the marketing communications industry in Malaysia.
Unlike other agency acquisitions of Accenture, which were relatively small for their markets vs. the big holding groups, here in Malaysia Entropia is already big.
This acquisition marks the way forward for many agencies in all facets of marketing communications from creative, brand, media, digital, customer experience, e-commerce, data and more…
Hyperactive hybrid agency Entropia will complement Accenture Interactive’s capabilities in customer experience, design and creative communications bringing technology and creativity together across business experiences.
We sit down with Entropia’s Prashant Kumar and Accenture’s Azwan Baharuddin for this story….minus the $$$$ talk…..
How do you feel?
PRASHANT: Relieved – after having completed a complex mission that involved delivering on a bold vision while balancing multiple interests, in a rather short period of 4-5 years.
There is also pride in the journey we made, not just in terms of what we achieved together, but also how we did it – with unmistakable integrity and a high degree of fairness. It was a passage of gut, grit and gall.
There is joy but there is also a bit of sadness. Letting go of something you cared for so much. I guess the company grew up and had to grow out some day.
Did the plan work out the way it had been imagined?
PRASHANT: Well, it’s a mixed story, as all authentic stories tend to be. Macro forces didn’t work as we expected, since the economy, politics and the ad spend trend all were against us.
I also realized that I am a lousy fundraiser – the idea of asking people to part with their funds doesn’t come naturally to me. So by and large, bulk of the monies eventually came from friends and family (which is rarely good for stress levels). I couldn’t help feeling persistently that I personally owed money to everyone, which wasn’t the case as we were a private limited company, but guess I was just not used to the idea.
What worked wonders is our team and culture, the passion and commitment of our leaders and our people; the faith of our clients, who tend to be the most progressive in the business.
What about the competition?
PRASHANT: We have always loved and respected good competition. It inspires us to get better. It’s heartening how many competitor CEOs wanted us to succeed (though not against them, naturally) and it showed often in little gestures. So, the general feeling is that of gratitude and a certain sporting kinship.
What about clients?
PRASHANT: Malaysian clients are some of the most progressive and open-minded clients you can imagine. With rare exceptions, they also tend to be very nice people. For me the human experience around our clients has always been delightful.
The faith that our clients put in our people and our vision is a truly precious asset that we have. In our internal surveys we always score as too client-centric. And though we do try to balance that, I believe for any business, customer value ought to be the true North.
We will keep our commitments to all clients with this new move.
PRASHANT: Accenture shared our vision of what the future of marketing services was, and they seem to have a unique commitment to that vision among all the consultancies. We know that to bring that vision alive at scale requires deep capabilities in tech, data, operations and upstream business thinking.
Accenture is a behemoth with 537,000 employees and $42 billion in revenues. Accenture Interactive is already the world’s largest digital agency today with brands such as Droga5 and Fjord as part of their portfolio. When we looked at all the companies that had approached us in last two years, we felt that there couldn‘t have been a better player to give wings to our future.
PRASHANT: We have been quite open about our five year plan, when we started. We are going to complete five years soon. So, the timing was absolutely on plan.
Also, I have always believed that change should come from a position of strength, not when you feel the heat, but when you see the light. We are in great health as a company.
In the second half of 2020, we won 32 new pieces of businesses including the likes of TNB, Telekom Malaysia and Grab. Our awards tally continues to be impeccable.
Demand for our IR 4.0 capabilities and demand transformation services continue to grow rapidly in light of the changes the pandemic has brought.
We felt it was just the right time to belong to a much bigger platform that can provide us exponentially bigger depth and breadth. And Accenture was the perfect match.
How enriching has the deal been?
PRASHANT: Studies have proved that happiness per extra dollar doesn’t necessarily rise after a certain level. Having said that money is always good. It’s better to have some than not have. But enrichment and fulfillment must go together.
My special fulfillment comes from the fact that so many in our founding team are going to benefit extraordinarily from this deal. 13 out of 19 shareholders are employees of the company. 10 of our shareholders were Malaysians. Making money is one thing, helping so many more make it, feels like heaven.
What’s next for you and your team?
PRASHANT: Well, we see the next decade as belonging to what we call ‘consulgencies’ – offerings at the cusp of what consultancies do and what the agencies do – bringing the best of both worlds together. And we are really excited about being at the frontlines of that future, with the tremendous depth and diversity of capabilities that Accenture has.
As businesses organize more and more around customers, they realize that customers are human – and that logic is not enough to understand and appeal to them. You need insight, imagination and ingenuity to come together with cutting edge engineering, data, process and technology to create the future of business experiences – relevant, meaningful and profitable.
Our team’s ambition is to discover and shape this Business of Experience working as one team along with the rest of Accenture.
Consulgency is a term I coined in 2016 while introducing Entropia. Now with this acquisition, a true blue consulgency sits right at the centre of the advertising industry in this region.
What is the one insight from the whole journey you would want to share with the people?
PRASHANT: I see life as a series of S curves. You learn new things; you grow rapidly and then you start stagnating. But then if you are curious about new things and excited about learning you manage to pivot to begin a new S curve, albeit from a higher plane. An average 22-year-old starting out today will in the course of 40 or so years of professional life, experience at least 3 of these S curves.
Everyone of our leaders in the last five years has pivoted at least once, in some cases thrice, expanding into new skills sets, and becoming highly competitive in those.
For instance, someone from a media planning background learning hands on to lead creative services and two years later becoming an extended reality expert.
I believe that this fundamental curiosity is crucial to tame an increasingly uncertain future. People tend to narrowtype themselves too early too soon. That’s lazy, that’s boring and that’s the sureshot path to a perennial mid-life crisis. You have no idea what you could become. If only you try with an open mind.
You built IPG Mediabrands in Malaysia into a giant in your last stint and now built Entropia from zero. How were the two journeys different?
PRASHANT: Well, back then I was in my 30s and we were discovering ourselves as much as making the journey. It was curiosity, excitement and validation.
This time I was in my 40s. It was more deliberate, more mature, more complete. It was the same, with the leadership team, many of whom came from IPG Mediabrands. In certain ways, the culture, attitude, the momentum was quite similar.
I still miss many in the team we left behind.
PRASHANT: Like in any real journey, there will always be, right? There was a particularly tough phase when for reasons beyond in our control, we had to let go of some people in a unit. I feel responsible at some level. Such decisions do not come easy to us – it was the first time – and they tend to bear heavily on us for long periods.
Also, the first two years were extremely difficult for the team, and we had few degrees of freedom. We lost a couple of good people, and we have missed them often. Again, I consider it my inability to find a better way for them to stay.
It was my failure.
“Multidisciplinary consultancies, have over the past five years, embarked on strategic acquisitions of key assets, within the media domain. The overriding narrative, has been for consulting companies like KPMG, McKinsey, Deloitte KPMG and Accenture, to acquire key media assets, as businesses pivot towards digital, data-driven competencies and IOT agendas. Accenture invested over USD1 Billion into Accenture Interactive. Accenture Ventures, earlier this year also acquired TOUCHCAST, a leading virtual experience consultancy. Accenture Interactive’s acquisition of Malaysia’s premier full-service agency is perfectly timed, considering current realities and primarily where the business is agitating towards.”
Industry Veteran Dato’ Rishya Joseph
What are your forward acquisition plans after Entropia?
AZWAN: While Entropia is the first acquisition in South East Asia, I’m sure it won’t be the last, as we are always looking for potential partners within the region that will strengthen our unique position as an experience agency.
We found that the digital commerce market in APAC is set to increase two-fold to reach more than USD 1.1 trillion by 2022, and will account for almost two-thirds of the global digital commerce market. During the same period, at least 40% of marketing spend will be expected on digital channels.
Also, the rise in population, digital penetration and economic development in SEA sees ad spending forecasted to increase over the next 3-5 years. That’s why we see a need to capitalise on this appetite by expanding our capabilities and capacity to meet demand.
Our acquisition strategy is one that supports our growth model, which is focused primarily on organic growth, targeting acquisitions in very specific, high-growth areas of business.
A big motivation is to accelerate Accenture’s access to unique capabilities, and for us to build organically on top of them. This announcement is a great example of this “strategic tuck-in” approach.
I assume you are looking at Malaysia as your regional hub…
AZWAN: In today’s culture of collaborative working, Entropia will have the opportunity to work with our clients locally and in the region, providing their creative expertise and combining it with our technology insights.
Many of our clients are across many borders and Malaysia is strategically located in this region. Their addition will better serve our customers across Indonesia, Malaysia, Singapore and Thailand through enhanced scale and services in customer experience, design and creative communications supported by immersive media and digital marketing activations which we believe will pave the way forward for customers.
Can you explain how the work cultures of Entropia and Accenture will fit?
AZWAN: After meeting Prashant, and his leadership team, I found that both Accenture and Entropia share common cultures and are especially passionate about driving innovative solutions to value-add clients’ business and create an inclusive culture.
While there are differences in the way both Accenture and Entropia operate parts of their business, there exists very important similarities in what both organisations value as a team – the ability to embrace change to drive innovative solutions for their clients and communities.
As we evaluated the acquisition, we realise that this is something that we needed to do to disrupt the creative space. We are also proud to bring to the fold Malaysian talents, which is a testament to Entropia’s award-winning reputation.
From the very start, the deal for this acquisition of Entropia was structured with the people at the centre of it. Not just shareholders but for employees as well.
This provides a solid base, as we move forward with more than 240 of Entropia’s talents working closely together with us here at Accenture. This is an exciting time for both companies as we look to effectively marry creative and technology best-in-class expertise to disrupt the creative landscape, providing a new approach of engaging customers for our clients.