Episode 9
What's Next with Rishad Tobaccowala
Rishad Tobaccowala is the Chief Growth Officer at Publicis Groupe, an advertising and communications firm whose 80,000 employees worldwide are dedicated to delivering marketing and business transformation. He is responsible for supporting the leaders of Publicis Groupe's largest global clients, to help these organizations grow in a revolutionary time for all businesses. For his pioneering innovation, BusinessWeek named Tobaccowala one of the top business leaders, and he also was dubbed one of five marketing innovators by TIME magazine. He regularly presents keynotes at industry conferences and speaks at well-known global organizations, such as Kellogg's, IBM, Amazon, Google, and Facebook.
Transcript
Hello, I'm Rishad Tobacowala. I'm an author of a book called Restoring the Soul of Business: Staying Human in the Age of Data. I am today, also a speaker and advisor. One of the firms I advise is the fullness group, which is a 87,000 person marketing and business transformation firm, where I spent my entire 37 year full-time working career. Most recently as both its chief strategist and chief growth officer
(:Rishad, thank you so much for joining me today.
Rishad Tobacowala (:Thank you very much for inviting me.
(:First question I must ask you is what prompted you to write this book about staying human, as the title says. In an age where in advertising marketing data, it's all seen as the answer to everyone's brand problem.
Rishad Tobacowala (:The reason I wrote it is because I was beginning to realize that the focus on what I call the spreadsheet or the data or the math while important. I have a undergraduate degree in advanced mathematics. I am an MBA in finance. When I worked at the group, I worked very hard to buy data companies. I led some of the digital efforts, so I very pro data. But I began to believe that skewing too much towards the data to the math and the spreadsheet actually ended up with companies, individuals, and culture suffering. The reality was it wasn't just about the spreadsheet, but it was also about the story. It wasn't just about the math. It was about the meaning and the magic. And so the book basically said, we are living in an age of data and age of technology, but what will differentiate, separate us is the culture, the humanity, the provenance, and the storytelling, and that comes to be true.
Rishad Tobacowala (:And then the book explains why by proving again and again. By looking at the same company before and after. So a company that was skewed towards only data and then talked about data plus something else like, the soul. Think about Microsoft before and after Satya Nadella, or I will take the same category airlines in the United States, look at the top four airlines and ask what differentiates American and United from Southwest and Delta. And one of those sets, which is Southwest and Delta are much more driven by culture, much more driven by story. The other two are driven completely by math. Let me know if the two companies that have high turnover have gone bankrupt or three, four times. It's the ones that are all about data and math. So you see that again and again. And I truly believe that data is like electricity. You can't do without it. But tell me if you're competing with other people who use electricity and not with people who are using steam, how is that a differentiator?
(:Very interesting. And all of this seems to have started from a spark. You tell in your book about a story of an experience with one of your first mentors. I believe her name was Jane?
Rishad Tobacowala (:Yes.
(:I wonder if you tell me a little bit about this moment? What happened there?
Rishad Tobacowala (:So when I began my career at what was Leo Burnett. One of my bosses or my boss at that time was a person who ran all of the research departments. And we were building a case for a brand new media that was being born called cable television. And she and I ran the math and we could see that cable television was going to be [inaudible 00:03:49] formidable. But we had to convince our overall leader who was a big believer in network television that this cable television thing was for real. And we first tried to sell it to him by just showing the math on a spreadsheet. And we were thrown out of the room. Because in effect, we were telling him that cable television over time might become bigger than network television.
Rishad Tobacowala (:And he should focus on that versus telling him that in order to reduce the overall prices that our clients would pay and to extend their reach, he should add a little bit of this, to what he knew particularly well. So we should have sold it, that he was in the pizza business and we had a new Tabasco sauce versus telling him that Tabasco sauce was going to be more important than pizza. And so it was a combination of knowing how to tell a story, how to fit it in the overall architecture that got me to begin to realize that while we are living, and today we are living in a data driven, digital Silicon age, everything we do, and every person we deal with is a analog, carbon based feeling person.
Rishad Tobacowala (:And we actually choose with our hearts and we tell, we use data to justify what we just did. And so for all the people who say we are making data driven decisions. I said, that is not true. Number one, you were born because your parents made a non data driven decision. The ROI on childhood is not so good. So that's number one. Number two, if you wear a watch or drive a car, and if you wear a watch, why are you doing that? Your phone has a better watch. And if you drive a car that's more expensive than the Toyota Camry, why are you doing that? It makes no sense from an economic perspective and what justifies that the most valuable company in the world and the most valuable company in Europe are called Apple and LVMH which do not compete on price, but compete on design storytelling, provenance. So I said, everywhere around you know what you're saying is not true. So why are you saying this? That it's all about data
(:That's really fascinating. You recently wrote in your newsletter about the third connected age. AI, 5G, VR metaverse web three. Obviously with change comes opportunity. So using the lens of your book, right? Restoring the soul of business, what are the implications now? If we need to concern ourselves with focusing too much on data and not enough on human connection.
Rishad Tobacowala (:So here the basic belief. At heart, all technology that has worked has allowed human connection or enabled godlike power among humans. What I mean by that. When we have the worldwide web, we were beginning to connect to discover, and we were beginning to connect to transact, if that makes sense, right? And we call that search and we call that eCommerce, but it was basically human beings like to shop and human beings like to discover, right? Then some companies allowed us to connect all the time and connect to everybody. We call that social and mobile, but it was a human need. The third generation is also about human connections. So what are the connections that we're looking for that we don't have. We want to connect faster. And that's what 5G is. We want to find new ways to connect and voice augmented reality and virtual reality and new ways to communicate and connect, right?
Rishad Tobacowala (:We want our connections to make life even easier for us, which is machine learning, which is, tell me what I want before I know it to a certain extent. And as importantly, one of the things we are now questioning is who do we trust? So we want new types of trust connections, which is blockchain. So fundamentally I explain to people that the technologies, that best scale are ones that actually satisfy human needs. So don't focus that much on technology, but focus on human connections. Human connections to discover, to transact, to make it easy to connect all the time. And those are what makes a new age. And if you focus on that, you don't lose the plot. And similarly I am very involved in trying to understand and making sense of what I call the future of the internet.
Rishad Tobacowala (:I have recently put together stuff for boards, which I do. Where I explained to them that web three and metaverse and crypto and NFTs are all very different things. And they keep smushing them into one thing. They're connected, but they're different things. And once I explain it in that way, and then I explain it how underlying human things, I also remind them that at the very heart of it, and as someone who spends a lot of time with an oculus quest too. The metaverse while being particularly magical and we'll get more magical over the next X number of years is eventually about your innerverse, right? And it's really about new horizons. And one of these days when I have the right angle, my substack newsletter will have a oculus quest headset on top of a book of poetry. And I'll basically call it metaverse versus innerverse.
(:Very nice. I remember not too long ago in presentations about media in the future, people who would love to speak about blockbuster and Netflix.
Rishad Tobacowala (:Yeah.
(:It would be used as a case study of this is what's going to happen to you, your industry, your business. If you don't change with the times. Recently, we've seen Netflix, their value plummet. I believe almost 60% in the past 12 months. What's the learning from this? Or what can we learn from this and the advertising?
Rishad Tobacowala (:I think there are three lessons to learn. One is Netflix is a great company. They did a lot of pioneering stuff. But in its early years, nobody took it seriously because it seemed to come from what was known as the slime versus heavens. Heavens was television, broadcasting, and slime was internet, right? And this was a company that came from two slimy areas. One was the internet. And prior to that postage, it would mail CDs, right? And as someone who basically worked both in data based direct marketing in the early days of the internet, we were basically looked down. We weren't even the caboose on the train. We were the piece of gold that was thrown behind the train. The first thing is don't look down upon things that come from nowhere. As I explain to people. Every industry that's changed has changed from outside. The automotive industry wasn't changed by the automobile companies.
Rishad Tobacowala (:It was changed by Tesla and Uber. So to a great extent, that was the first lesson. So pay attention. The second lesson is at a particular stage, a successful company begins to get high on itself. And that is what basically happen to it'll continue to be very formidable. And I don't necessarily associate a company at any given time with its current stock price. But what basically began to happen is Netflix began to get high on itself. And there were three indications that it got high on itself. One is it turned from being an underdog to a bully. Among the things it did is it bought the company that owns all the billboards in LA. So they could only have their movies on billboards. That's interesting blockbuster move. Which is number one. Number two is they actually began to believe that they were a technology company versus a content company.
Rishad Tobacowala (:They had a very good streaming platform and they began to leverage data on certain things. But to my point, everybody caught up. I have the opportunity and probably the addiction of loving all kinds of media and because I can afford it, I subscribe to 20 different streaming services. I have 20 different streams and people don't even know they're 20 different. They're more than 20, but they're 20. And there're odd ones like [inaudible 00:12:50] and then British ones like ACON and BritBox. But I have 20 of them. Every single one of them. And what I began to realize is Netflix was just like all the rest. Especially when you sort of certain things. People had caught up on the data and technology or their data and technology edge was not an edge.
Rishad Tobacowala (:The only edge that they had left was they had a fantastic way of sourcing international movies or international content, right? Whether it's squid games or Peaky Blinders. And so somewhere along, they began to have terrible [inaudible 00:13:28]. So that's the second, right? You become a bully and the third is you then have a cult language. And that's when I knew they were in trouble. So they have this thing called a keeper. Are you a keeper? So everybody says, when you hire this person, if you could hire them again, right? At some particular stage, this keeper thing became pretty stupid. It's a way of getting rid of people you don't want, right? And the other is, if you have a keeper thing, it's become transactional.
Rishad Tobacowala (:I've spent 37 years in a company. Let me tell you, there were years. I wasn't that good. And there were years that I was pretty world class. But if every year people would look at me and say, is this person, world class today not were they world class yesterday? And can they be world class tomorrow, but are they world class at this moment? I would've been fired, right? But the inability for a storytelling company to understand that humans are stories and have ups and downs, and to basically have a way of leveraging people, which is completely transactional, meant that people only stayed there because of the high stock price. That's the damage of the stock price. Everybody now knows that the bully wears no clothes. They're just like any other company. They're not omnichannel when they need to be. And that they got high on themselves, but they're a good company. They will respond. So the net story is pay attention to people that come from the slime. When you become successful, don't get high on yourself. And please recognize that sooner or later everybody catches up.
(:We're recording this on April the 29th. And the reason I say that is I want to ask you this question to end this off. This week, Elon Musk and Twitter agreed to get married. Elon Musk is buying the company. What are your initial thoughts on this transaction and the future of Twitter?
Rishad Tobacowala (:So it's hard to tell because in effect, there are what I call the bull case and the bear case. And the bull case is everything that Elon Musk has done as a business person. I'm not talking about sometimes his personality quirks, but I'm talking about business. He has probably with the exception of Steve Jobs, right? And maybe Bezos, right? Changed the world for the better, for more people than most people think between SpaceX, Boring company, Tesla, Neuralink. The man is basically a genius at levels that we don't actually appreciate and understand. And he's become the richest man in the world. And twice as rich as Jeff Bezos, right? When his stock price was its highest, maybe a different today, but still the richest man. And when this particular person who is a great innovator, who truly understands how Twitter works, takes Twitter, he could take it into a completely different world.
Rishad Tobacowala (:So think about it. Sometimes when you want to revolutionize the company, you take it private, which is what he's done. Private equity buys a company, cleans it up and takes it out. So all of that's the bull case, right? That he will significantly take away the financial pressure. He will improve the product. He will change the people or keep the right people and do that. Here's the bear case. And I don't know which of these are going to wear out because it's too early. The bear case is this is a case of over reach that a world class person became bore. Let his ego get in the way and may have over leveraged himself, which will affect the Tesla stock price, which has already begun to be impacted. That in effect that the future of Twitter is not really about the future of Twitter. It's about the future of Tesla.
Rishad Tobacowala (:And that what happens on Twitter will indicate three things. It'll indicate, number one, how Tesla stock price works. Number two, how quickly SpaceX goes public because he needs to raise money, right? And number three whether he's overreached. So I'm hoping for the bull case, because I'm a fan of Twitter, I'm a fan of Elon Musk, again, as what he's done and a [inaudible 00:18:09]. But there is a case which is sort of a bear case, which is the underlying financial economics, because he's highly leveraged. If you think about it. He bought Twitter for 44 billion dollars of which between his guarantees and the debt that he's taking, he's paid 31 billion. In 2018, 3 years ago, his total value, his total net worth was 21 billion. It's got up to 200 plus billion because of Tesla, right? And so to a great extent, this is Tesla buying Twitter.
Rishad Tobacowala (:I mean Tesla stock price basically enabling Twitter. And therefore I would look at this is the real impact it's going to be on Tesla, stock price, SpaceX, going public, right? And a whole bunch of other stuff, but it should be very interesting. But I always remember, and I always try to get people to recognize that many of these people from Bezos to Jobs to Musk are so absolutely amazing that compared to what we are, their giants. So I just say, I hope he has it overreached, but it feels a little strange.
(:Rishad, this has been a fascinating conversation. Thank you so much for spending time with me today. If people want to subscribe to your fascinating newsletter, where's the best place for them to go?
Rishad Tobacowala (:So it's at R-I-S-H-A-D, which is my first name,.substack.com, S-U-B-S-T-A-C-K.com. It's completely free. And it's a different topic every Sunday, five or six minutes. And it also includes a new artist every Sunday. So hopefully that'll be fun.
(:Wonderful Rishad, thank you so much for your time.
Rishad Tobacowala (:Welcome. Thank you.
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