The Creative Counsel: Ran Neu-Ner and Gil Oved
Walking around the extensive premises of The Creative Counsel (TCC), co-founder and joint-CEO Gil Oved makes the kind of statement one doesn’t typically hear from an entrepreneur: “People look at this company and are impressed by its growth, but in our minds there is always a degree of disappointment because we know how much bigger it could be and how much further down the line we would be had we not made many, many mistakes.
I’d also love to be able to say that all of this happened by design, according to some grand pre-thought-out master plan, but the fact is that it didn’t. In many ways we are where we are today by mistake instead of by design.”
Gil Oved and co-founder and joint-CEO Ran Neu-Ner are at the helm of South Africa’s biggest activations agency – a company with a R500 million turnover, employing 650 permanent people, running between 200 and 300 campaigns a year, and placing up to 15 000 temporary activations people in the field on any given day.
It’s a company with arguably 50% of the instore promotion market share servicing a portfolio of blue-chip clients across a broad spread of industries.
It’s taken this dynamic partnership just 11 years to get here, having started with a zero capital base, no knowledge of promotions and not a single client. Little wonder then that people are impressed.
It could be argued that, whatever their own impressions of the journey, this level of success simply doesn’t happen by accident. They might not have specifically planned to lead a company of this size and diverse structure, but certain fundamentals must have been in place for them to not only dominate, but develop what was a very small and immature industry.
With this Neu-Ner and Oved would probably agree. A number of critical ingredients have driven their success, but so too have the mistakes they’ve made. “We want to share both,” says Oved simply.
This is what they know about starting, growing and sustaining a top-tier entrepreneurial company.
Never ever EVER give up
The story of how TCC started is a lesson in sheer tenacity. When their online trading company was liquidated, Oved and Neu-Ner went to a coffee shop and wrote down how much money they had between them.
“It was a short list,” says Neu-Ner. The partners had lost everything in the venture and were casting around desperately for ideas when the money that Neu-Ner’s then-girlfriend was earning doing promotions caught their eye.
Teaming up with the former owner of a promotions company, the pair took premises in a 15m2 office, decorated it with garden furniture, opened the Yellow Pages and got cold calling.
“I hate cold calling. I don’t know if anyone enjoys it. It’s a terrible, awful thing to have to do,” says Oved. But, without any experience or credentials, it was their only option.
“I kept a spreadsheet to record each call and interaction with the person. Most of the time I got to speak to the PAs of marketing directors, who I’d targeted as a more promising prospect than brand managers.
I learnt very quickly how to be warm and likeable over the phone in 20 seconds, and I’d try to find out anything I could about the person I was talking to. Things like their birthday or their family, so when I next called them the call would be more personal.
In the end they’d feel sorry for me and schedule a meeting.”
Neu-Ner adds: “We learnt two things from that experience. Firstly, PAs are immensely powerful people, so build a relationship with them. And secondly, never, ever, ever give up. If someone tells you that they don’t meet with suppliers, call back. And call back again. And again after that. Break down the door if you have to. And if you can’t, break down their resistance until they’re dying for an opportunity to see you just so they can tell you to go away. Often, what separates people who succeed from those who fail is the willingness and ability to overcome whatever hurdle is placed in their way.”
Oved agrees, “‘No’ is not the end of a negotiation,” he says, “It’s the beginning of one.”
This is what got the partners through the first seemingly impossible months. “Our monthly expenses were R30 000 and we couldn’t raise this money, so Gil went out to work as an IT consultant and handed his cheque over to the business each month, while I tried to get it to work,” remembers Neu-Ner.
From August to February they broke even but never made any money and couldn’t draw a salary. “This meant we’d gone almost a year without having any money for ourselves. That really knocks your confidence, especially when all your friends around you are making money and carving out careers.”
Fed up, Neu-Ner suggested they throw in the towel, but Oved suggested they give it one more month, during which time he gave up his consulting work and came over to give the business everything he had.
“By the end of March, we still hadn’t made any money so we gave it one more month and in April we landed an account for Danone. We got an opportunity to pitch because we just kept calling back and eventually got through to the right person,” says Oved.
This tenacity is a value enshrined in the business today and it informs how TCC hires staff. “We put interviewees through hell. We keep throwing challenges at them to see how much more they are willing to come back for. We’re looking for people who can devise a solution no matter what the problem.
They have to keep their eye on the end goal and keep going after it no matter what. In this industry it’s critical. This is the worst industry to be in if you go home when you hit a hurdle.
Things can and often do go wrong, so you have to be able to think on your feet, come up with plan B and achieve your objective in spite of what goes wrong,” says Neu-Ner.
Pursue opportunities with a clear vision
Oved and Neu-Ner may not have initially planned the way the business grew, but early on they developed a vision of what they wanted to achieve and this was refined as the business matured. “We wanted to own the full activations value chain – to get into the hearts, minds, souls, homes and mouths of consumers so that we could influence their purchasing decisions,” says Neu-Ner.
Having this vision in place proved critical in directing which opportunities they followed. As Oved comments, “All too often entrepreneurs are sinking in a sea of opportunities, and the more successful you become the greater the opportunities that come your way.
You need to find the balance between being open to exciting new possibilities and having a clear idea of where you want the business to go.”
Over the years TCC has developed, invested in and partnered with a range of different businesses. At first glance the reasons for each may not be apparent, but each one of these businesses feeds into the over-arching vision of owning the activations value chain.
The Mr Delivery deal is a good example. Roughly two years ago TCC purchased a 50% stake in Mr D Media, a subsidiary of Mr Delivery. What possible connection could there be between a promotions company and a fast food delivery business?
“It gives us direct access into the homes of 1,5 million consumers, as well as information about where they live, what they buy, what they eat, how much they spend, where they bank and which credit cards they use,” says Oved.
Mr D Media delivers 1,5 million Mr Delivery guides to households around the country, so it provides us with a unique ability to offer clients a platform for their brands that goes directly into people’s homes.”
TCC also owns the South African franchise for the global Product of the Year competition, the largest consumer survey of its kind that rewards brands for innovation across a range of categories.
“We know that brands invest more in campaigns for new innovative products because these have higher margins. By rewarding innovation we are therefore directly encouraging growth of innovative products, which in turn grows the market that we service. It’s also a platform that positions us as leaders in the industry,” Oved explains.
The growth of the company into other areas – eventing, social media, field marketing, among many others – has always been driven by the vision of owning the activations value chain, says Neu-Ner. “From the time a consumer sees an above-the-line advert to the time they make a purchasing decision, there are a number of opportunities to create experiences that will prompt them to buy.
We look for these opportunities where we can implement a range of activations. And we’re aggressive about pursuing them. At the end of the day, our competitor is not the other company that does promotions or activations. Our competitors are rather television, billboard and other traditional media.”
Partners are not suppliers or employees
TCC starts new businesses that feed into its vision or invests in and partners with existing businesses. “These are usually innovative and exciting entrepreneurial companies,” says Oved.
Minanawe, for example, devises strategies to access the township market and is responsible for the Gauteng Beach Party held in Soweto and the Tour de Soweto.
Fusion is a small incubation business that creates partnerships between brands, allowing them to leverage each other’s platforms for greater differentiation, while Popimedia is a fast-growing social media specialist that enables TCC to offer holistic and integrated activation campaigns across a range of social media platforms.
Integrating a small business into an existing, larger one is notoriously difficult, and Oved and Neu-Ner have learnt a great deal about how to absorb these enterprises without stifling the creativity that made them attractive prospects in the first place.
As Neu-Ner says, “Buying into or partnering with another business is probably the toughest thing I have experienced to date. If you put aside the glamour and hype and actually look at the core of what it means, you are effectively taking two entities, each with their own vision, strategy, processes and most importantly culture and trying to merge them.
By definition this is no easy task.” Oved adds, “I think the thing to remember is that partners are neither your staff nor your suppliers. They do not work for you. They work with you – so treat them accordingly. Nurture and support them, but don’t try to manage them. We had to learn the difference between mentorship and management.”
Systems can make or break a growing business
The company’s extensive, diverse and rapid growth pushed the partners into unchartered waters.
“All our entrepreneurial experience was in start-ups. We’d never had a company that had really grown before, so it was new territory for us. We didn’t know what growth looked like and in a sense I don’t think either of us ever really believed that the company would get as big as it has,” says Neu-Ner.
The result was that, in many respects, they failed to put the right systems in place to facilitate and manage growth. As many entrepreneurs have learnt, growth can be destructive. “It certainly cost us,” says Neu-Ner.
He elaborates: “Combine a lack of systems with a fanatical devotion to delivering excellence and you put your people under enormous pressure. We lost a lot of good people because, without the necessary systems in place, they needed to work 24/7 to deliver on our high standards. It came at a significant human capital cost.”
Oved adds that financial systems were also lacking. “Cash flow was often a mess and collections were an issue. I think some customers even got freebies in the early days because we failed to invoice them! Technology can make or break you.”
Since then the company has invested heavily in implementing systems to manage and facilitate its growth. A state-of-the-art technology platform housed in a call centre manned by operations and logistics specialists helps the company to keep track of the 15 000 people doing different activations work on different brands across the country.
“We tried to buy something off the shelf but eventually realised we’d need to develop this system in-house. It addresses our needs precisely,” says Oved.
And as much as systems can be a hindrance to growth, they can equally be a differentiator. “Having this system in place raises the barrier to entry for competitors,” says Neu-Ner. Oved adds, “Anyone can start a promotions business – all you need is the proverbial man, van and fax machine – but not anyone can run a multiple activations business this size on a national scale.” It’s also helped the business to identify new efficiencies.
Think big — even if you’re small. That’s their advice to start-ups. “If you don’t build foundations for a big business, it will cost you later on. You’ll need to do it eventually so if you’re planning on being big, build for big even while you are small.”
Pass passion onto your staff
Systems have been equally important in ensuring ongoing human resource success. “Passion is everything. It’s the engine that drives this business, and we’ve learnt how important it is to pass this down the management line,” says Neu-Ner.
Doing so was what got them noticed in the first place. “The first pitch that we won, with Danone, was for a cottage cheese promotion in 12 stores over a weekend. They were giving us a chance to prove ourselves.
We ended up getting the account because, in the words of the brand manager at the time, we were able to pass our passion and energy on to our promoters.”
As a company grows, it becomes more difficult to achieve this.
“You need to continually communicate, be visible, and be involved. But you also need to have happy, motivated people. This industry requires more than the usual work ethic. Hours are long and there is a lot of weekend work. We’ve put systems in place for mentorship and coaching.”
Expect excellence – uncompromisingly
In as much as motivation and passion are key ingredients among TCC’s employees, so too is a strict adherence to uncompromising levels of excellence.
“I’m a perfectionist. I want 100%, 100% of the time. In reality I don’t deal well with failure and I adopt a hard stance,” says Neu-Ner, “You can deliver the most brilliant pitch but my whole passion for it will die when I see a spelling error.” The partners are relentless about pursuing the right idea and “bringing brilliance to life.”
“We have our own internal standards and we judge our people by those standards. We might win a pitch but if I feel we didn’t deserve to because our work was not perfect, then I’ll tell staff that. Equally, if we lose a pitch but I know the team gave it their all, then I’ll tell them so.
But it’s not about whether or not it’s good enough for the client or the industry. We need to keep pushing the boat out in terms of excellence.”
Neu-Ner, a self-confessed football fanatic, uses the following analogy: “If a footballer plays a brilliant game and makes one wrong kick, it can cost the team the match. It’s the same in business. You have to be at your best for the full 90 minutes of the game.”
What about human error and the fact that, no matter what your standards, people will fail at some point? “Failure is not acceptable as an end-point,” Neu-Ner answers, “I believe that you may fail initially, but it’s not a failure if you can find a way to fix it.
It’s only a failure if you can’t rectify it or use it as an opportunity to learn from it,” he adds.
Hire people who will grow your business
Excellence relies to a large degree on having the right team in place, and Neu-Ner and Oved have learnt a great deal about surrounding themselves with the best people.
“If I could go back and do one thing differently, I’d hire the best operations person and the best financial director I could find – from day one. We hired them later on and, to some extent, they had to come in and pick up pieces,” says Neu-Ner.
He and Oved say they’ve made the same mistake made by countless other cash-strapped entrepreneurs. “When you’re counting the pennies in the early days you hire the cheaper resource. For the first eight years I always believed in hiring talented people and growing them as we grew.
Today I sing a different tune. Hire the best people. Pay top dollar and get people who can grow your business. Don’t worry about the cost of good people – the return is worth it and the cost of replacing people is often way too high,” he says.
The right partnership is potent
Like most successful (and truthful) entrepreneurs, Oved and Neu-Ner have made their fair share of mistakes. But there’s a great deal they’ve done right too, and one of their key success factors has been their dynamic and potent partnership.
In a rare arrangement – and one that seldom works – they are joint CEOs. “On some things – like the bigger vision and where we want the business to go – we always agree, but on other issues like how to go about getting there, we disagree often and loudly. New staff members are surprised to see us frequently ‘fighting’,” says Oved.
“We work together on the broader strategic stuff, but we worked out early on that we can never meet operationally,” says Neu-Ner.
The fundamentals of the relationship must be in place. Trust, honesty, transparency, consistency, reliability, and above all, equality in everything.
“We share everything equally – risk, reward and responsibility. This is a partnership split down the middle in every respect and I think that’s a very important ingredient for partnership success,” Neu-Ner explains.
“A business partnership is like a marriage – you fight, you make up, you share good times, you endure bad times, one of you is strong while the other is weak and vice versa.
Once you accept that this is how things will be, the partnership becomes a lot easier to manage,” says Oved.
He and Neu-Ner have been friends since childhood, but neither of them believes friendship or a long-time relationship is necessary for partnership success.
“One thing we are and have always been is incredibly competitive – in everything we’ve ever done. So in a way my biggest competitor sits next to me and this pushes me to ever increasing heights on a daily basis,” says Neu-Ner. Oved agrees, “Choose someone who will challenge you to do your best,” he says.
Top tips for entrepreneurs
Challenge everything, question all. There are inefficiencies all around. Each one is an opportunity to make money and change the world.
If you analyse something long enough, you will find all the reasons why you shouldn’t do anything – sometimes you just need to go with your gut and have faith.
People will have more faith in you than you do in yourself – they are generally right.
Act with integrity, it will make you more profit.
Your personal brand is the most valuable or damaging thing you have. Never compromise your integrity and never let anything leave your desk that is below your standard of brilliance.
As an entrepreneur, accept that you are a ‘doctor-on-call’.
Spend time on the future – don’t let your current success blur your vision. Companies that get caught up in their success often lose sight of innovation and before they know it the wave ends and they land up with a huge infrastructure and a product that is out of favour.
The CEO should live at least a year ahead of what the business is doing today.
Put in proper foundations. Investing in the systems upfront will save in the long run and make you really competitive!
Cut. Don’t throw good money and time after bad investments. Often the cost of rectifying may be higher than the loss incurred in exiting.
Labels: Gil Oved, Ran Neu-Ner, The Creative Counsel