When you have been working at an award-winning, world-renowned and highly respected advertising agency for 10 years, taking the decision to resign and start your own agency surely must be career suicide. After all, the prospect of starting any venture is fraught with difficulty, but going up against your former masters with little to no capital investment? That is practically the definition of foolhardy. But as the old Latin proverb goes: “Fortes fortuna adiuvat” – commonly translated to “fortune favours the bold”.
It is difficult to imagine what Peter Vundla was thinking when he did just that – in the early 1990s walking away from a promising 10-year career with Ogilvy & Mather to form Herdbuoys, South Africa’s first wholly black-owned agency.
Considering that black economic empowerment (BEE) was not even a concept yet, Vundla and his partners (Happy Ntshingila, Dimape Serenyane) showed amazing fortitude in the face of an uncertain future.
Now, some 20 years later, Vundla and his compatriots from Herdbuoys are considered pioneers – not only within advertising agency circles but in the greater business environment.
His success as chairperson in the cut-throat world of advertising garnered him a sterling reputation not only as a quality ad man, but as a man with prodigious business acumen. And it was not long before offers came around to sit on the boards of some of South Africa’s largest companies.
Currently the deputy executive chairperson with African Merchant Bank (AMB), a brief look at his curriculum vitae shows positions with Digicore Holdings, Midrunners, Pamodzi Investment Holdings, African Renaissance Board, Allianz Insurance, Universal McCann, and Foodcorp.
He further served as a director with the Advertising Standards Authority Board, and was president and national chairperson of the Institute of Marketing Management.
Leadership spoke with him about starting Herdbuoys, his love for the industry and his take on the success or failure of BEE.
Prior to the establishment of Herdbuoys, what were you doing?
I came from Ogilvy & Mather. I’d been with them for exactly 10 years and it was the only ad agency I’d ever worked for, up to that point. So I came directly from there to start Herdbuoys.
What was the thinking behind that? Was it merely a case of your seeing a gap in the market, or did you perceive the powerful statement it would make for black business in general?
There are a number of things. Firstly, we started looking at the way black consumers were reflected in advertising, and this always turned out to be in subservient roles. It was the black guy at the forecourt, filling up the white man’s petrol tank.
I felt that the time had come for black people, particularly Africans, to define themselves rather than have white creatives saying who we were.
And thanks to apartheid, all these white creatives had little understanding of the black consumer.
At the same time, there was a dearth of black professionals in the industry and the idea for us was to establish an agency of what little black talent there was, and house all of them in this entity called Herdbuoys.
All of us had a deep love for the industry and we didn’t think of Herdbuoys as a business; that was really far from our minds, we did not even have a business plan.
We tried to raise capital from commercial banks. We even went to our future competitors to start us up, but to no avail.
We started this agency out of my house – with no clients, no cash, nothing. We went without salaries for some six months.
The stress must have been intolerable. Essentially, you were working off prayers and airs?
Exactly. We had a very strong belief in ourselves as people and as black professionals.
We started with a client called National Sorghum Breweries, and the way in which we operated was that whatever income we would have, would go to whoever had the greatest financial needs. We would say, “You have to go and pay your school fees”, or “You have a bank instalment, so you will have so much”.
Even socially, too, we visited among ourselves; I would go to Happy [Ntshingila]’s house and I wouldn’t expect an Amstel Lager. I knew was going to get something else.
Clearly, you broke new ground. Did you think of yourselves as pioneers – not only in the ad industry but in black business overall?
Ours was the first, but we didn’t go into this saying, “We’re going to pioneer this”. We simply started something that needed to be done. The opportunity had come for a black-owned agency and so we did it.
The pioneering thing, I think, really was brought on by the broader black community and black professionals taking ownership of us. They were saying things such as, “You guys are pioneers. We’re proud of you and you shall remain the way you are. We will support you”; even if that support wasn’t by way of giving us any new business, it was more like moral support. Which we appreciated very much, but it wasn’t going to put food on the table (laughs).
Did you find that there were quite a few obstacles that you had to overcome, in terms of courting clients and gaining recognition within the industry?
There was a great deal of resistance. Firstly, from our previous employers, who viewed us as an “apartheid agency”, so to speak – asking why we couldn’t do what we wanted to do within their established agency?
And then there was much opposition from our competitors, obviously.
Clients cannot say, “Those guys are good, so long as they operate within established agencies. We cannot charge them with our brands.”
So we really had to prove ourselves and we worked twice as hard, perhaps even thrice as hard, as established agencies.
So what was the breakthrough?
I think when we won a five-way pitch for the launching of Future Bank [an empowerment initiative that was part of First National Bank].
That really got us started and got our foot in the door with Coca-Cola. It [Coca-Cola] started us with a brand, Krest Ginger Ale, which has a small budget, but we did great work. We took the attitude that we would do whatever we could.
Subsequent to that, we got Sprite, which is a helluva big brand.
And then a few years down the line, we handled the Coca-Cola brand. That’s how we started building our reputation and track record.
So you were doing quite well by the time the merger with McCann Erickson occurred. How did that come about?
We realised there were international clients who wanted to work with us. We required an international network and we looked at a few agencies, and settled for McCann, which at the same time was approaching us. It had fantastic proprietary tools that we could use as well as amazing training modules, and we could send some of our staff to offices throughout the world.
Very importantly, we could begin to handle brands such as General Motors, UPS and so on.
So we became Herdbuoys McCann, but at the same time, there was a parallel investment by McCann worldwide, which was McCann Erickson.
On a visit to Unilever, a client expressed an interest to go with Herdbuoys McCann, but most of its brands were already within McCann Erickson.
So I remember making a call to New York and saying, “Listen, this parallel investment is causing confusion. Why don’t we do a takeover of McCann Erickson?” and this is what happened.
So we collapsed Herdbuoys McCann and we moved into the larger offices at McCann Erickson – and we became Herdbuoys McCann Erickson. That’s how it came about.
Would you say that things have changed considerably since you opened the door for black agencies? Or do you see the industry as still very white?
It’s still quite (nearly) white. But I think what we did at Herdbuoys was to create much interest among young black kids.
But in terms of the leadership, it’s still in white hands and I think we still have no more than two black creative directors in this country. This is actually what led partly to my disillusionment with the business when I came out of it.
That explains the departure from the ad world, but why the move to banking and more ‘traditional’ business?
I ran Herdbuoys for 10 years, but as time went by, I found myself being perceived more as a business person than an ‘ad man’. And I began getting invitations to sit on various boards.
So I became more of a business person. I started becoming involved in black business organisations. That is the route I took.
At the time, I began making other investments outside Herdbuoys through an investment vehicle called Pamodzi. I was in an unfamiliar neighbourhood. That is how I would like to put it (laughs).
You have been very vocal about BEE in the past. Has your belief that BEE is a failure changed at all?
No, I still think BEE has been a failure. I think the failure has come from different sources.
There has been a failure on the part of the government to legislate on BEE, there has been a failure on the part of white corporates in terms of determining who actually should be empowered [by it] and who shouldn’t be. They basically have controlled the BEE agenda to their favour.
And the fault also lies with the practitioners of BEE through non-operational investments, through tokenism, through fronting, through opportunistic investments that are very much short term. There has not been a commitment to build, to contribute to economic growth.
We collected some research which shows that across all seven pillars [of BEE], there actually was very little compliance. So we find that economic power, still by far, rests with a certain segment of our population.
We see the continued impoverishment of black people – the poor are getting poorer – it’s ever increasing and I think we are sitting on social dynamite here if we do not correct this.
I’m saying that there actually is no BEE happening.
You are in your 60s now; have you given any thought to retirement?
I’m 62 now. I made myself a promise that I would not have to work once I hit 62. I have been with AMB Capital now for some seven years and late last year, I told my guys about this promise I’d made to myself and I told them I wanted to step down from AMB Capital as an executive. That will be the last time I’m going to be salaried ever.
And so, this is what will happen: This is my last working month, so to speak, and I’m not going into retirement. I will retain an office here at AMB – they’ve asked me to stay on as a non-executive chairperson.
So you will stay on the various boards to which you belong?
Yes, I will continue. I can handle perhaps two or three board positions. I will be concentrating on various trusts and non-government organisations with which I’m affiliated.
And play more golf!
I’m also in the process of writing a book on my life.
Given your many years of experience and your unique track record, how can younger, black creatives make a success in this industry?
I don’t really have the answers to success. I would say to them that they need to stay the course. They need to establish a reputation, they need to work and make money the old-fashioned way through hard work, and integrity must be uppermost in terms of their values.
Integrity, integrity, integrity – and that they must learn, learn, learn.
Labels: Peter Vundla Herdbouys, Peter Vundla South African Millionaire