Lookinglass designed an in-house post production business for a leading agency to successfully compete head-to-head with the industry’s best vendors.

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Issue

A leading mid-size agency was frustrated by its inability to establish a profitable and creatively competitive in-house post production business.

The company had made a significant investment in post production technology. But the agency’s producers and creative teams did not trust the group with broadcast quality projects, and the agency recognized it was leaving potentially millions of dollars of profit on the table.

The Lookinglass Consultancy was hired to design a business model that would allow the agency to confidently retain a significant percentage of post production revenue across each of its offices, and support its creative department’s growing production needs.

Challenge

The Lookinglass team’s challenge was to create a business-within-a-business, one capable of competing immediately with third party vendors that already had existing relationships with the agency’s producers and creative teams.

Structurally, the new business would need to immediately service multiple offices, and be capable of easily supporting the agency’s expansion to new cities.

Approach

Lookinglass conducted a thorough discovery process which evaluated the agency’s in-house capabilities and practices against the post production industry’s own standards.

We then developed a comprehensive operational and financial model that would support the existing needs within each office, while also attracting broadcast quality talent and projects. 

The model incorporated a specific set of recommendations including:

• A projection of the business’s capital requirements and P&L over the next 3 years
• Position by position staffing plans and reporting hierarchy
• Talent recruitment, compensation and retention strategies
• Multi-office information systems and management practices
• Office by office sales and marketing strategy
• Technology and room layout requirements
• An implementation roadmap to maximize the effectiveness of each step

Current Situation

The plan was approved and funded. The Lookinglass Consultancy was then hired to support the initial implementation of the plan which to date has achieved the following:

• Buy-in from key agency creative and production department stakeholders 
• Implementation of a customized multi-office job management system, including agency staff training in each office
• Integration of the job management system with the agency’s finance and accounting departments
• Design and construction of eight new spaces across three offices integrated within the agency’s creative department
• Purchase and installation of post-production technology, networked across all offices
• Restructuring of the post-production group’s management hierarchy with clear definition of responsibilities and accountability, including job descriptions
• Development of multi-office job management practices including media management protocols
• Creation of a clear talent hierarchy and appropriate changes to the existing staff
• Hiring of outside talent based on a multi-office compensation philosophy
• Identification of, introduction to, and negotiation with an independent name-brand supplier to provide high-level creative talent for year 1, in order to dramatically accelerate creative and technical expertise, and to lift the agency’s post-production capabilities above agency and industry expectations
• An increase in the performance, measurability and creative capability for the agency’s existing needs
• Increased revenue and profitability ahead of projection

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Lookinglass developed a Digital Asset Management solution to support the day-to-day needs of a rapidly growing company and save the business $5 million a year in reduced operational and capital costs.

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Issue

A rapidly expanding creative business had outgrown its method for managing digital media and information. Employees spoke openly of their frustration and the time wasted using the current systems and many had resorted to Google and YouTube as more effective alternatives.

The IT department had invested in an expensive Digital Asset Management (DAM) system that had been rejected by the staff, and IT was also struggling to satisfy the company’s back-up needs, despite spending heavily every year on additional storage.

The Lookinglass Consultancy was hired to analyze the impact on the company’s workflow and financial performance, to assess the business risk of the current shared server strategy and to provide specific recommendations for a long-term solution.

Challenge

The Lookinglass team’s challenge was to determine the real impact on the company’s performance and to understand why previous initiatives had failed.

Any solution would have to integrate the specific, and sometimes unique, needs of a wide range of departments and disciplines on a single platform.

And given the independent nature of the company’s staff, it was clear that any system that required formal training or a sudden change in individuals’ work habits would fail.

Approach

Lookinglass interviewed senior managers to establish a hierarchy of company-wide business priorities that were not being met.

We then conducted a sensitive discovery process which analyzed the impact of the current situation on key individuals in each department through participation in their day-to-day processes, and included a detailed analysis of IT’s shared server structure and data back-up issues.

Lookinglass then developed a company-wide DAM strategy that incorporated the steps necessary to re-deploy the company’s existing DAM system and overcome staff resistance.

The strategy was supported by specific recommendations and analysis including:

• A centralized, ‘one-to-many’ data storage strategy that collects all metadata through the company’s existing workflows
• A summary of the unmet needs of each of the major departments and the cost of lost time
• A company-wide storage and back-up IT strategy
• A risk analysis that demonstrated the potential liability of the current strategy at $11,000,000
• A three year projection of the savings in capital and operational costs versus the current strategy

Current Situation

The plan was approved and funded. The Lookinglass Consultancy was then hired to support the initial implementation of the plan which has already achieved the following:

• Establishment of a company-wide strategy for digital media and information management based on specific and prioritized business goals
• Completion of a comprehensive RFP resulting in a final decision to re-invest and re-deploy a re-engineered version of the company’s existing DAM system
• Capital Cost Savings:
  • More than $1.5 million saved by re-deploying existing system versus the best alternative DAM system, with no compromise in functionality or performance
  • Reduced IT capital spending on storage needs projected at more than $4 Million over the first three years
• Operational Cost Savings:
  • Projected against staff time spent searching for correct versions of media and up to date information:
    • Year 1: $1 Million
    • By Year 3: $5 Million p.a.
• Collection and cataloging of all historic company media created during the last five years
• Greater collaboration between departments
• Increased utilization of the company’s historic portfolio in new business pitches
• Increasingly pro-active management of the company’s clients
• Foundations for a company-wide capability accessible from any existing or future office

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Lookinglass designed an information management system that dramatically improved opportunity conversion and profitability.                                                                              

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Issue                                                 

An international company was struggling to consistently manage its talent and clients across all of its offices. Resource allocation and pricing decisions were being made locally and reactively. 

The company’s management was concerned the business was missing opportunities and that their pricing practices were ignoring potentially valuable revenue streams.

Lookinglass was hired to design an information management system that would aggregate the company’s sales, bidding and job status information in real-time across all of its offices, and would allow the company’s management to immediately analyze the impact of local decision making.

Challenge

The Lookinglass team was engaged to design a system that would support the local needs of each office, satisfy the requirements of the company’s finance and accounting teams, and encourage ongoing customization. 

The system would strictly control the amount of information available to each user group, allow for customized reporting and be accessible over the internet.

Finally, it required an intuitive user interface that eliminated the need for extensive training or user manuals.

Approach

Lookinglass mapped the company’s workflow into seven specific areas, and developed an architectural map of the flow of information through the company, including variances for each of the local offices.

We then broke the company into six primary user types and interviewed key members to define the specific access needs of each group. 

Finally, we conducted an RFP with a list of developers who satisfied the criteria we had established in collaboration with the client’s management team, and conducted a series of demos with each system.

Current Situation

A developer was hired, and Lookinglass supported the development and deployment of the system through beta. After the first year, the system had created the following results:

• Increased conversion of Lead-to-Job Award ratio by thirty percent over the first year
• Increased profitability margin across all jobs by 7 percent
• Reduced average accounts payable by 15 days
• Better strategic use of discounts reduced total discounts to clients by 15 percent
• Reduced bad debts by 70 percent
• Increased percentage of return business from most valuable clients based on profitability analysis
• Expanded opportunities for company’s younger talent with higher profile projects

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Lookinglass mediated a fractured partnership and constructed a new agreement                     that created a re-aligned set of priorities and individual responsibilities.

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Issue

After fifteen years of consistent success, four partners had reached an impasse about the future of their business and their respective roles and responsibilities.

After several months of discussions and negotiations arbitrated by the company’s accountants and lawyers, the partners had decided an objective third party was required to resolve their differences.

Challenge

The Lookinglass team was engaged to mediate the differences between the company’s owners and to design a new agreement that would more accurately reflect the current contributions of each partner.

The solution had to take into account the historic contribution of each individual, and provide a flexible ownership platform that could continue to adapt as the business evolved.

Approach

Lookinglass structured our approach to understand the dynamics of the group and the perspective of each partner. We compared those insights with interviews of the company’s key staff and an analysis of the historic performance of the business.

We designed an ownership model and an expanded legal structure that satisfied the importance of rewarding the partners’ historic contribution while emphasizing the need for the business to grow if any partner was to extract capital value.

We presented this in conjunction with an assessment of the operational state of the business and the obstacles felt by the staff as a result of the partnership’s disagreements. 

Current Situation

The partners accepted our recommendations and retained Lookinglass to implement the new legal structure and to finalize the new partnership agreement.

Two years later, the partnership has added additional members and the company has built two new divisions headed up by two of the original owners.

The company’s revenue and operating margins were at historical highs at the end of the latest fiscal year.

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Lookinglass produced a cost benefit analysis for a company’s geographic expansion, and developed an organizational model that leveraged the company’s capabilities in both locations

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Issue

A five year old design company was losing ground to its leading competitors who had both added additional offices within the past two years.

The company’s owners wanted to be sure the potential return justified the investment and the disruption to their original business. They were also reluctant to expand unless they were certain the company could maintain its cultural uniqueness.

Challenge

The Lookinglass team was engaged to perform a cost benefit analysis of the possible expansion. This included evaluating the business potential of the second market and producing a comprehensive estimate of the capital and overhead costs.

We also had to integrate the two offices operationally and culturally.

Approach

Lookinglass spent time in the proposed market, interviewing potential clients and prospective employees, and researching local cost factors. We carried out a qualitative and quantitative evaluation of the competitive environment and defined a number of unmet needs.

The team then conducted a thorough evaluation of the company’s current day-today operations and cultural uniqueness, and determined the skills the company would need to add in a new management structure and developed the specs for an expanded information system.

Finally, we identified three initiatives based on suggestions drawn from our staff interviews that could be built in to a new office to extend the company’s cultural identity. 

Based on the analysis, Lookinglass recommended that the company should proceed with the expansion.

Current Situation

The company accepted our recommendation and we were engaged to help implement the expansion.

The office was opened eight months later and after the first year, the company had established itself as one of the top three design businesses in its second market.

The company was operating on a system that shared CRM and job management data in real time between the two offices, and which kept staff in both locations fully informed about the company’s work.

Forty percent of all projects shared talent and resources from both offices, and the company had developed new revenue streams from opportunities created in the second market.

The company had been approached about a potential  joint venture by a client attracted by the company’s multi-office capabilities.

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It was the culmination of a plan we had laid out eleven years before when the idea of starting an international film editing business had first entered our consciousness.

Our goal had been to build the best film editing company in the world. We reasoned that if we were going to work every day at something, there was no reason to aspire to be less than the best the world had ever seen. We might not get there. But we should try.

We defined best on a variety of levels. Quality of work; financial performance; career opportunity for staff; honesty; transparency, level of service. We wrote them down and worked to hold onto those standards every day for eleven years. We measured our progress against them relentlessly. That gave us the framework we needed to stay on track through all the good times and bad.

We were also guided by a Terence Conran quote that Chris wrote on a sticky and stuck on her office phone. “Stay humble and nervous.”

In October 1994 we left our jobs at DDB Chicago and formed The Lookinglass Company - a small Chicago film editing boutique - with a lot of financial backing from an angel investor. There were many, many things that were incredible about that relationship. And a few that, over time, got in the way.

That's true of every relationship based on money, and the more you can think the issues through up front, the longer the relationship will work for both sides. The challenge in all aspects of running a business is to know what you don't know. And that can be expensive knowledge to acquire through experience.

One thing we never forgot was that we were in a service business, and we spent a lot of time talking to our clients about their problems. We also never lost sight of the fact that our success would be determined by our ability to solve their problems. Not our ability to solve ours.

To claim that we foresaw every issue and every obstacle would not be true. But whenever we were confronted by something unexpected we had a philosophy and a frame of reference by which to approach it. That gave us the confidence to make decisions and the confidence to make mistakes. In either case we knew we could learn something because we had a plan against which to measure the results. When it comes to analyzing information, context is everything.

"You have to see where you’re going before you can see where you’re not."

We went through a lot of the typical start-up pains, and a lot that were less typical. We learned the difference between cash flow and profitability, that not all employees were equally capable of the same level of growth no matter how much we believed in them. We discovered the benefits and downside of bank loans versus investor loans, of having beautiful - and expensive - office space, of working with friends.

We came to understand value engineering. We were given a hard lesson in the importance of recognizing and maintaining leverage in any negotiation. We saw that the work of a logo designer can impact the work of up to a dozen other suppliers, and we learned the cost and benefit of thinking through each and every one of those steps.

We thought through every detail. We thought.

Until we got a call that a client was actually going to hire us for the first time and were on their way over. Suddenly, we took stock. We had the windows, the wiring, the rugs, the computers, the cables, the labels, the phones, the pencils, the paper, the heating, the cooling and the invoicing numbering sequence.

What we did not have were any coffee cups.

As we ran out to Crate and Barrel, we had no idea what lay ahead. What if this turned out to be our one and only client? What if we had just opened a very beautiful mausoleum.

Either way, we were in business. With a paying customer.

At least we could say that much.

Chris and I were never comfortable in big crowds. But we knew we were powerful in small intimate social settings. So we started inviting potential clients to our home for dinner. I can honestly say we never invited any one we didn’t already like. But we made the effort consciously. As Woody Allen says, though not as often as I repeat it, “ninety percent of life is just about showing up.” We found a way we could show up that was comfortable to us.

The business grew. We advertised nationally and acted as though we were who we wanted to be. “They became what they beheld” is another quote we lived by. Quotes are micro philosophies. I’m a fan of both.

Things were good and getting better. But, we knew we were never going to be ‘the best editing company in the world’ (“tbecitw”) sitting in Chicago. So we asked David and Jemma if they would consider moving to Los Angeles.

A quick contract renegotiation later - LA is very much more expensive than Chicago - we opened a small office in Santa Monica, and threw the resources of our small but growing company behind them. (Ultimately we came to establish formal cost of living factors in all four of our offices so we had a transparent and fair foundation for all employee moves).

We didn’t discriminate based on where an opportunity came from. We simply allocated resources to support it. We developed proprietary information systems that supported both offices seamlessly, established a philosophy for travel policies so we could manage costs and expectations pro-actively, and then added technology to support our commitment to ‘fluidity’ - a catch phrase I adopted to define our method and our expectation both internally and publicly.

We made many, many decisions based on whether they made us more or less ‘fluid’ as a company. And if you look at the Whitehouse to this day, you’ll see fluidity coursing through its veins.

We gained local traction in LA thanks to having smart and committed people on the ground who embodied our original philosophy, and then added their own personality and experience to bring it to life. We got better work, attracted more attention and then reached the tipping point with the addition of two significant local talent, film editor Livio Sanchez and Executive Producer Sue Dawson. They both agreed to join us on the same day. It was the day I knew we had reached a new level.

Two years later Livio edited the original “Whassup” campaign for Budweiser on the back of his passion for the short film on which the work was based and on my personal relationship with the agency producer in Chicago. “Whassup” infiltrated every home in the Western hemisphere and won the Grand Prix at the Cannes Advertising Festival as the best commercial in the world that year.

We had arrived.

As a very junior account executive at Ogilvy & Mather, I heard Kelly O’Dea - who went on to become President of three different worldwide ad agencies - describe trying to get to a new business presentation in Miami from a snowbound New York. With every airport in the Tri-state area closed, it was apparent that the Ogilvy team wasn’t going to make it in time. “We’ve tried everything,” Kelly was told. “You can’t get there from here.”

Kelly paused and then said, “where can you get there from?”

The answer, it turned out, was Washington DC. I can’t remember whether they won the business. It doesn’t matter. What matters is they knew where they were going. And they knew where they were.

The rest is a matter of geometry.

By early 2000, The Lookinglass Company was, by any measurement, successful. We had fifty employees, two offices, serious profitability, award winning work (including editing the best commercial in the world that year) and great office parties.

We were not, by any measurement, ‘the best film editing company in the world', however. And the truth, as I was becoming increasingly aware, was that we couldn’t get there from here.

Film editing companies are fueled by the creative quality of the projects they work on. In the advertising industry, those commercials rarely make you any money. They do, however, make you aspirational to potential customers. And aspiration is a powerful metric in building customer loyalty.

Which brings us to the Whitehouse.

The Whitehouse in 2000 was a London based film editing company owned by three of the best film editors in the world. Rick Lawley, John Smith and Andrea MacArthur. In my view, John is the best pure editor I’ve ever come across. And they had working for them an editor named Russell Icke, who was potentially the best of them all. Their work was, by every definition, aspirational.

In February 2000, we had a cup of coffee with Rick in the chilly basement of their Soho offices, a stone’s throw from Carnaby Street. He’d been describing the latest approach from a US editing company interested in buying the Whitehouse and ended the story saying casually, “I don't see a reason to sell my company to them.”

We got on the plane home that afternoon. As we took off I turned to Chris and said, “do you think he’d sell it to us?”

We were back two months later to ask him the question formally over lunch. It was April 27th. My Father’s birthday. And as we explained our vision, Rick fell silent for about twenty minutes. It was the only time, before or since, that I saw him lost for words.

The vision, simply, was that we put the two companies together. Integrate them. Utterly and completely. No marketing alliance. No affiliation. A pure and absolute merger. Their creative profile on our business model. A true network, without regard for geography or time zones. Talent + opportunity. 2+2 = 1000.

The deal took eighteen months to negotiate and paper. Technically, it was probably part merger, part acquisition, but in practice we worked very hard to make sure everyone had an equal voice and shared responsibility. The deal had to be re-negotiated entirely at one point when Andrea decided that she was chemically more interested in starting her own business. Differences are never the problem. Unwillingness to confront differences openly are the problem. Andrea started a company called PeepShow which she has since expanded into the US as well. She did it her way and their work speaks for itself.

The negotiation with the Whitehouse was as challenging as anything I’ve ever done. We learned about LLCs, and S-Corps and Ltd’s. We learned about investment basis, valuation methods, capital accounts, preferred and common stock. We learned the tax implications of phantom ownership, US state tax law (which can extract more than 100 percent of your state tax obligation if you get it wrong), the value of being a US citizen and the cost of equalizing those that aren’t. We learned about VAT returns, UK employment law, inheritance law and what due diligence can mean and should mean. We ran up several hundred thousand dollars in legal and accounting bills to acquire this knowledge, and several thousand more in travel costs in both directions.

There were any number of times it could have fallen apart. When it seemed easier to stop. When the issue of who paid for employees' coffee threatened to derail us. But we managed always to keep to the fore the vision that this would change the way the industry worked. That if we could take the best parts of both companies and truly integrate them, that we would establish so significant a competitive advantage that the rest of the industry might never catch up. (In my view, four years after we left, the Whitehouse still stands alone in its depth of talent and ability to support clients effortlessly around the world.)

By Labor Day that year the various agreements were in the last stages of being finalized and a signing ceremony had been scheduled in Chicago for September 15.

September 15, 2001.

Then the world changed.