The recent epochal acquisition of 25 percent equity in Troyka Holdings Limited, Nigeria’s foremost marketing communication group, by Publicis Groupe, the third largest communications organisation in the world, has been in the news lately. The man at the centre of the transaction, Chairman of Troyka Holdings Limited, Biodun Shobanjo, shares with Kunle Aderinokun, the overarching effect the partnership will have on the marketing communication industry and the economy.
What does the recent acquisition of 25 per cent by Publicis Groupe in Troyka mean to Troyka, the PR and advertising industry and the Nigerian economy?
For Troyka, it is a highpoint in our journey. We started 36 years ago, as an indigenous enterprise and by that singular action, we are today, part of a global organisation operating in 108 countries with 76,000 professionals. To the industry and the economy, I believe some of the gains of the partnership will include access to superior and better skills, access to knowledge, tools processes and system, these things, we believe will impact what we deliver to clients across the six companies involved in the partnership. Again, considering that it
cannot be a closed shop, people are going to interact with each other and this would expand knowledge. As regards the economy, if we can impact our clients’ businesses the way we envisage, it will bring growth and expansion. We see the possibility that goods may begin to cross-border; from the indigenous to the multinational brands we work
on. You find that when goods begin to cross a territory, it is more volume, hence, more sales and revenue will be generated for clients that we work with. So all these would impact the economy, again, we would bring in more people to share this knowledge with. The more people we bring on board, the more impact it will have on clients that want to impact themselves. We see very exciting time, a major impact on Nigeria economy and most importantly, we are expecting an explosion in the quality of service delivery and the quantum of what we are able to unleash on the marketing communication industry as we go along.
Publicis Groupe is a publicly quoted company and your company, Troyka is a privately owned business. Can you share how you were able to negotiate this deal?
Firstly, it took us over three years to get to this stage, as Publicis needed to carry out all the necessary due diligence. Being a publicly quoted company, it meant that they had to be very careful where they put shareholders’ fund, which is very important. On our side, we were also having discussions—because it was a two-way issue.
On what the determinants were: Publicis needed to put their money in a place where democracy is taking root, where there will be free enterprise, with a government fighting corruption and other vices.
They needed to be sure of the organisation they were investing in. All of those critical factors, corporate governance, integrity and a whole lot were available within our own system. These were the things they were looking for. It did not matter if we were privately or publicly owned, they felt they could invest in the company. This was how we did this deal.
What is this deal trying to achieve?
The primary goal for us, is to bring something uniquely different to the clients that we work for. The sole of our enterprise is centred on the ability to make our clients’ brands winners. In a fiercely competitive environment how can you ensure that every company that you work for will be number one or number two, using marketing communication to help your client achieve that. Therefore, it is assumed that the brand itself will be the right brand, but you need to put the support, all of those support mechanism needed to form a marketing communication perspective, need to be upgraded. This was the focus, to up our game, to ensure that wherever the client goes whether it is New York or Lagos, the same quality or service, and standards will be applicable and that is exactly the things we are aspiring to do. If you visit our offices in the next three months, you will notice that things have changed, even physically. Mentally and intellectually. We hope that in the next three months, people will begin to notice a change in the quality of our people.
I’m aware that Troyka is a household name in marketing communication in Nigeria. So I’m just wondering where you are expanding to because I know there are six companies in the marketing communication group. I also wonder why this deal and again, why did you accept the proposal, in the first instance?
The mistake we all make is to continue to benchmark what we do here.
We do not want to benchmark what we are doing with local environment; we want to bench it against the best. That is the motivation. We are looking at how our company can rank among the best in our area of business. So let’s take it beyond this country, if you are to take each of those six companies, and compare it to any company in those areas of business, how do we rank? So, from the first day we started our business, we have always said that we didn’t want to be the typical Nigerian company, we want to rank among the best, and so, that
was the motivation.
Secondly, we embarked on this deal because we wanted a company with which we can share the same ideology. Publicis Groupe was started by an individual 90 years ago, Marcel Blanchet that is the name of the individual. He ran the company successfully well, and he started it when he was 20 years old. By the time, he retired; he handed over the
company to the person running the business presently. The daughter of the founder is the chairman of the board presently, and his grandson is a member of the board. Therefore for us, we can identify with that.
A lot of Nigerian companies started by hardworking Nigerians died after their founders died. Publicis Groupe is a very good example to look at. The company is publicly owned and quoted, but it was started by an individual 90 years ago. For us, it was important to lay the foundation for the future of this enterprise while the founders are still live, so that if the present founders die, hundreds of Nigerians will continue to gain employment within these sectors.
Speaking about managing businesses and creating a legacy for others coming. How does Troyka manage businesses in these harsh economic conditions and weather the storms?
I think firstly, is the ability to try and weather every storm; we have had three storms in the course of our operation, but what we have always done was to adapt. As I said earlier, our client survival is very important to us. Once they survive, we survive; there is an umbilical cord that ties both of us. The second thing we have done is to adapt to the changing needs of the time. Today, whereas a lot of people see challenges, we see opportunities; indeed, a lot of clients are seeing opportunities. What the challenge of today requires is to begin to look inwards.
Where are those Nigerian products (goods and services) that we can convert to brands, which the consumer can then begin to invest in. We need to go back to the Nigerian taste; where are those clients that believe in rice that is grown here as opposed to rice that is imported, so that we can brand those rice and market them. This is where we want to anchor, our focus will shift to things manufactured locally. So that we can support those who play in that area and immediately build very strong brands that the Nigerian consumer can invest in. We have been through that before, and we are willing to go through it again. It shows absolute belief in Nigeria.
What are the secrets and strategies driving your company?
There is no secret about what we have done, 36 years ago we started with one company, 18 people. When you look at just our marketing communication arm only, we employ well over 300 people, when you add the other businesses, as a group we employ close to 19,000 people. You are aware that we own a security company that is a very large employer
of labour. It employs about 18,000 people. We still have two or three other companies. The important thing is to look at opportunities, where people see challenges, we see opportunities. The opportunity we see is to help our clients. When you look at it, the marketing Communication Company was initially one, but because of the
specialised needs of clients in specific areas, we had to go and invest in those areas, so we can continue to support our clients.
Every area we have invested in is to add value to our clients. This is what is behind the growth we have witnessed.
As an expert, can you please give your opinion why SMEs, that are private companies, are making a low impact on the economy?
If you start a small company, there are chances that very serious players will not partner with you. If you play in that small environment, it will be very difficult to impact society and the community. Your desire must be to fast track your growth rate, if you don’t do it quickly, there is a likelihood that you will remain small.
So you have to quickly build traction so that you can move from small, medium to big. It is the logical way to go. It is only the medium and large scale companies that impact society.
Sir, don’t you think if we have aggregates of small companies and the policies are right, they can make much impact. For instance, we have small companies that are in thousands, while the big companies are in hundreds. Don’t you feel that they can make many impacts by controlling 90 percent of the economy?
When you look at the place where the small-medium scale industries play, they tend to operate like cottage industries. When you aggregate their strengths, they can control 90 percent of the economy, but you when you look at the mega of the companies, those are the ones that act as a catalyst for a lot of things. So, each has its own responsibility and contribution to the economy. But there has to be the enabling environment for the SMEs to strive, even the bigger organisations need to the right environment to optimise their own potentials.
Looking at the issue of government and its policies, you are in the business of communication and you have been able to attract direct investment into the economy, which we have not seen happen in your area. So what do you think is making it difficult for Nigeria attract investments into the country?
Before now, corruption was a very major factor, they were concerned about the ability to deepen democracy, they looked at leadership, but then they looked at other issues such as infrastructure. We have the advantage of the population, but it takes much more than population; you need to create the infrastructure. You need to make the ability to run businesses conducive so that those investors can take their money out, in the event that they have made a profit. All those infrastructural deficiencies need to be addressed. These are things militating against people coming to invest in the country. Everybody is discussing devaluation, I don’t want to engage in any issue of devaluation because I’m not an economist, though there are two schools of thoughts on the issue.
There are those that are canvassing for currency devaluation. While the other school of thought is saying that you don’t have to devalue, if you increase your productivity, and you begin to look at things you can produce on your own, your currency will become strong.
But at the end of the day, they all play, the investor needs to be sure that what is been invested will be equivalent to what is received at the end of the day. Those are issues and problems that have worked against us in getting FDIs. One must give credit to Publicis Groupe that they did this deal at the time they did. Like I said earlier, it is a total belief in Nigeria and the leadership, there is absolute confidence in those who have built this company called Troyka; so it basically ratifies what we have to do and encourages everyone to come, particularly those in our own industry.
Having sealed this deal with Publicis Groupe, are we going to see a rebranding of the Troyka Group? And, looking forward, in the next five years, where do you see Troyka?
Rebranding? What’s in a name? I think people should understand that what Publicis invested in is the brands that are here before they came—people know Insight, people know Quadrant, people know Mediacom, they know all our companies. So we don’t necessarily have to change our name and if we feel that we want to either choose a new name or change the name when we get to that bridge, we will cross it but there is no hurry at all. And like I said, what’s in a name? The garb does not make the monk; it is what we are able to deliver that is important
to the world. So far as they know that this company is partly owned by Publicis Groupe, we are disseminating that information, it really doesn’t take anything from us. That is number one.
Number two, I wish I could tell you where Troyka will be in the next five years, but we hope that we will have been able to consolidate our position. Having said that, I am one of those who always say being number one is not a birth right, you have to fight for it, people have to fight for it. If you look at your industry, for instance, at one stage in this country, the newspaper was Daily Times but that’s not the situation now. Except you are able to defend your turf and you stand for what you rightly have to be, others are going to take it from you. This kind of partnership that we have will help consolidate our position in the market and we will still continue to remain the number one marketing communications group but we have to earn it, it’s not going to be a tea party, we have to really work for it.