Fingerpaint’s Ed Mitzen has written a book about factoring empathy into ad agency culture. The new publication, which officially launched this week, is titled More Than a Number: The Power of Empathy and Philanthropy in Driving Ad Agency Performance.
Med Ad News chatted with him about the reasons for writing the book and what he hopes clients, as well as managers in other industries, can learn from how things are done at the agency. You can learn more about the book at https://edmitzen.com.
Med Ad News: Why did you write this book?
Ed Mitzen: Forbes reached out to me little over a year and a half ago. I think they flagged us because we were on the INC 5000 list for six or seven years in a row. They have a sales department and they reached out to see if I would be interested in writing a book. They sort of give you free rein in terms of writing the topic, and what you want to write about. And culture and empathy and how we treat our people, I could be the most authentic there and I had the greatest amount of comfort writing about those topics then anything else.
Med Ad News: What are the lessons you are hoping to teach with this book? Are the lessons only for agencies or can they be applied to anybody?
Ed Mitzen: It can be agencies and clients. I focused it on agencies because that’s my experience, but I think it can transcend into other industries as well. The basic premise is, we all know the ad world can be brutal, from the standpoint of hours, pressures, stress. It’s a very high-paced, challenging industry. I had worked in pharma before starting an agency, so I had what I felt was a unique perspective in that I knew what it was like to be a client and not really know how agencies worked. And then I started an agency, having never really worked for one. I didn’t come with these preconceived notions of how agencies worked. And I could build it from the way that I wanted to rather than conforming to some standard.
As I say in the book, I’m not a strategic genius, I’m not a creative maestro. And most agencies are really led by people who’ve risen up in the ranks. They’re either former creative directors or former heads of account service, or presidents of divisions. And they’ve sort of grown up in the ad world. And I didn’t, really.
Med Ad News: What are some of the lessons you learned that you want to pass on about how to have a better agency culture, or improving existing agency cultures?
Ed Mitzen: First, a couple of key pillars. If you look at the cost structure of agencies, at least 80 percent of our costs are people-related – salaries, benefits, payroll taxes, 401K plans. We don’t have factories or trucks, we’re a service business. So if 82 percent of my costs are people-related, that’s the asset I need to take the most care of. But in our business, especially with the large holding companies, but I assume with a lot of the large holding companies, profit really rules the day. If you’re not making your number for a month or a couple of months, or you lose an account, the first reaction is to let staff go, or to trim or cut back benefits. Or fire certain people, lay them off and hire them back in three months if you get more business. And I always felt that not only was cruel, but counterintuitive to what you should actually be doing to grow your business.
I always felt like if I focused on the people, and I focused on giving them the best environment that I could, and took care of them almost like a father figure, that would translate into better work, and ultimately better profitability and better dollars. One of the things I am most proud of, between Palio and Fingerpaint, I’ve never laid anybody off. I’ve been doing this almost 20 years and I’m very proud of that. And I think you will find, just human nature, that people will want to work with people and for people, who give a shit and care about them. I don’t want people to miss dance recitals and Little League games and parent anniversary parties. So that when we respect their lives and treat them as human beings, when I do ask them to come in on a weekend because we have some time pressure thing or some client demand, they know that I’m not doing that to build another wing on my house, that we’re doing it because we want to try and create the best work that we can. I’m not doing it to whip people into submission and squeeze every profit dollar out of them.
The basic concept is you treat your people great, they’re going to produce great work, that’s going to grow your business. If you have a culture where it’s driven off of the dollar is king, and people are an expendable resource that you basically treat like crap, ultimately your retention is going to be low, people aren’t going to be motivated to do their best work. They’re punching a clock rather than being motivated into helping their teammates, and build a much more healthier, inclusive atmosphere.
I’m constantly looking for ways in that I can help make my staff’s life a little bit easier. Whether that’s putting into place a student loan repayment program, or taking the healthcare burden off people by paying 100 percent of their healthcare, or giving them sabbaticals after they’ve been here for so many years. I’m sure Jack Welch, I don’t want to speak ill of those recently passed on, he would have probably thought I was a giant candyass. The whole way of doing it was every year you’d fire the bottom 10 percent and you rule by intimidation and everything is driven around share price. And I would argue that at least in today’s age, that’s backward. You’ll make more money, you’ll have more profitability if you don’t worry about that so much and instead worry about the people as human beings that are part of your company.
I will admit to that I have the luxury of not answering to shareholders and can put that flag in the sand, as opposed to someone who’s managing at WPP but the lessons still apply. Every time they lay people off or lose clients or cut bonuses because another division had a poor year, or don’t promote people as fast as they should because they’re worried about earnings, all of that stuff is basically creating this toxic environment that’s not going to enable them to produce the best work for the clients. And I want the staff here to treat the clients the same way we’re treating them. There’s an inherent human aspect to our business, and caring and worrying about our customers as people, because that’s how we treat each other.
There’s also a section in the book where I talk about the ways that clients need to do a better job in evaluating agencies. The whole pitch process is just completely screwed up. The fact that you’re going to spend $5 million a year with a potential agency and you evaluate them based on a two-hour presentation that’s usually death by PowerPoint and you’re not getting a chance to meet all of the team members and really get a sense of what the agency is all about in terms of their work ethic and in their ways of working together. What you’re really going to get, in terms of a personality contest in a two-hour presentation, isn’t a good indicator of how successful or not successful in terms of how your agency is going to be for you.
Have your pitches at the agencies. It’s a lot like when you buy a house. You can walk into a house and in three minutes know that this doesn’t feel right. Or you get a sense of, “Gosh, these people really work well together, they like each other, they’re energetic, passionate about what they do.” And you can’t tell that in a two-hour presentation. I always felt like that it was a bizarre way of picking that important of a strategic partner.
And half the time they [the client] are not present, they’re checking their phones, they’re getting called out for a meeting. And it’s just such an important decision in terms of your career as a marketer, a lot of times the success of which will rise and fall on the success of your product. Between the agency and the sales force, that’s a huge part of whether you’ll be successful. There are other things such as commercial aspect and price, but the agency is still such a huge component of your rising or falling that I think it deserves more intense evaluation.
Med Ad News: What are the programs you are most proud of putting into place at Fingerpaint?
Ed Mitzen: I would say one thing we’ve done from the beginning is that we don’t have titles or offices, so we’ve created this culture of inclusion that’s nonhierarchical. The ad business, I found – and I didn’t know this until I started one – everybody I knew was a vice president. You’d meet a 24-year-old and they were a vice president, sort of like the banking industry, and I’ve always felt like these artificial titles were designed to pacify people with lofty titles without necessarily helping them on a day-to-day basis with things. So we got rid of the title structure. I will fully admit at times it’s challenging, as we’ve had to do some creative things around promotions and career development as people want to be able to see what’s next for them. But for the most part everybody seems to really like the fact that everybody’s voice counts and you don’t have to be a senior vice president to feel like you can speak up at a meeting.
That’s one thing that helped to create and certainly embodies what we are about. Then there’s the sabbatical program, after you’ve been here five years you get a month off. We basically take your e-mail off your phone and you’re off the grid for a month. We don’t want you checking in, you’re literally gone. And it’s life-changing for people. Some people will take trips across the company in an RV, we’ve had a single woman who did Airbnb through New Zealand for a month. We’ve had some people finish their pilot’s license. We’ve had some people who stay home and read books and have a staycation. Our industry is so stressful, but the nature of what we do, that for us to give people a month off, paid, in addition to their vacation time… every five years, they have to take it all at once. I always thought it was bizarre, you get married and you take two weeks off, and you feel guilty and then the reality of it is that most people don’t notice that you’re gone, and then you’re back.
Paying 100 percent of people’s healthcare costs, it costs me personally probably $3 million a year. It’s not going to impact everybody equally, obviously it would save a lot more money for a family with children than for a single person. But with the student loan repayment program, that’s going to impact the younger people more than people in their 40s. We’ve had people cry when we told them that we were going to pay 100 percent of the healthcare costs. We have a woman here who’s married and who has a daughter with a heart condition, and it’s saving her $10,000 a year. I could give her a $10,000 a year bonus but it’s not going to have the same impact as her feeling like, “I don’t have to worry about healthcare premiums.” I’ve told the staff that we’ll do it as long as we can, I can’t promise you that we’ll be able to do it forever, but as long as we can. And the funny thing is that if you look at our margins, and you compare them to other companies in the industry, I can see what other companies are doing and it’s very similar to what we’re doing. I would argue that we have a little bit of a higher margin, yet we’re still doing all of these things that are costing us a lot of money – which shows you that it’s coming back around. You can treat the staff in a very kind, empathetic way, and it costs you more money, but it positively impacts your business.
Med Ad News: Are you thinking of writing another book?
Ed Mitzen: No, I don’t think so! It was much for me forcing myself to sit down and think these things out. We talk a lot to clients about all the great things we do for our staff, and they say, “That’s great, but how does it impact me?” What the book tries to show is that the work is better, the turnover is lower. It sort of forced me to prove out what I thought intuitively what was happening was true.
I’m not a fantastic writer. I proudly tell the staff I got a 430 on my SAT verbal score, which I think means I was borderline illiterate. But I enjoyed writing it, though it was not an easy thing to do. I was surprised at how long it took and the rewrites and just trying to put it in a way that I thought made sense.