| Even if, while doing business, you repeat someone else’s experience or follow some "indisputable" laws of its development, every decision you make is unique: it leads to unique results.
When my partner, Dmitry Solopov, and I decided to divide our holding into several separate companies, we realized we were not inventing something new. Similar path had been chosen by internet agencies in Europe and America. Nevertheless, we were considering the pros and cons for about a year and a half, and the process was over in April 2005. The necessity of such a move was dictated by several problems which we tried to solve by this division.
This summer our “child” will turn 10. During this time we haven’t been idle. Not surprisingly, at the beginning of the restructuring the concept of Hidalgo Image was pretty vague. We surveyed our customers in order to understand what formula would provide the most efficient interaction. Thus, one of the reasons for dividing the holding was the desire to create a premium company.
Indeed, it is not appropriate when customers like Vneshtorgbank (International Trade Bank of Russia) are served at the same place as Pekinskaya Utka restaurant! Apart from that, we needed to position our direction clearly. As a result, five independent companies appeared, each of which has its own core competence. Altman&Solopov acts as the consolidating and managing unit for complex and large marketing projects. Hidalgo Media is a media buying agency, Hi=D is a design bureau, SoundBrand is an audio studio, and Hidalgo HoReCa is a niche company that specializes in advertising and marketing in the entertainment sector.
I would lie if I said that we did not pursue a financial interest when creating such a complex structure. When you present a simple agency, it is one sort of added value; when you present a whole syndicate – quite another. Big companies like to work with big companies. And, finally, the last reason. We were also thinking about the future. According to the classical principle “don’t put all the eggs into one basket”, we created several independent business units – probably, with the long-term purpose of selling them off separately. So what is so unique about the result? – you may ask. The answer: for a start, Hidalgo Image has no competitors. Well, of course, each of the five companies competes in its sector with similar firms. Thus, competitors of HoReCa are print mass media and radio stations; Hi=D rivals with the best design studios in Moscow; Altman & Solopov – with Artcom, Priorom, MagicBox, NFQ; and Hidalgo Media – with media buying companies and radio stations. But as a whole, our syndicate is unique.
If we talk about Russian advertising companies, some of them have been divided into media groups and creative teams. But there are no narrowly- focused agencies anymore.
Speaking of competition, the well-known adage that “competition drives progress” can be applied not only to the market in general, but to a single corporation in particular. The same laws work inside a company and outside of it, and the most important one has not changed since humans lived in the jungle. Only the strongest survive! Following this theory we encourage competition among our companies inside the holding, sometimes artificially creating conflicts. Of course, this is not just for fun, it helps us understand our prospects better.
Basically, we have achieved what we strived for. We have divided our syndicate so that a new economic sector emerged. It allows us to fulfill complex orders from our customers more efficiently. We want to start a few more companies in the future, in order to grow this cluster.
As I reread the above, I realized it sounded like a super genial idea by genius managers who have managed to implement everything that they desired perfectly. In fact it is far from that. Nothing went as smoothly as we had imagined. After a while we realized it would have been better to introduce one company at a time to the market, not all of them together. At one point we felt a lack of managerial resources. Independence creates both an incentive for development and a stupor. Mistakes are made all over the place. As a result, some of the units turned out successful, others got stuck. Not every employee managed met our expectations. We understood at once that one of the companies could fail, but we did not know which one that would be. Now what we need to correct is evident. Of course, ideally people should learn from others’ mistakes. But gaining one’s own and unique experience is what should be highly valued. |
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