ANALYSIS: Inside the restructured Dentsu Group, a new holding company

Chris Pash
By Chris Pash | 18 November 2019

Dentsu will from January shift to a pure holding company structure to be called simply, Dentsu Group Inc.

The name change was foreshadowed in February but few details were released.

Now, with the release of third quarter results showing a 1% fall in organic growth at Dentsu, further details are available of the evolution of Dentsu and a vision called One Dentsu.

Japan-based Dentsu says it will establish an in-house company, Dentsu Japan Network, to run overall operations in Japan, consisting of 116 companies.

In the third quarter, organic growth in Japan fell 0.9 % “due to an absence of large scale sporting events as well as a decrease in traditional media”.

However, Dentsu says the Japan business in the December quarter will benefit from a number of large-scale events including the Rugby World Cup and the Tokyo Motor Show.

Dentsu Aegis Network will be headquartered in London where it will run all international businesses -- about 880 of them -- outside of Japan.

Tim Andree, the executive chair of Dentsu Aegis Network, will be on the board of directors of Dentsu Group. He will become executive vice president of Dentsu Group.

According to the third quarter results, the international business was impacted by negative growth in APAC, driven by weakness in the Australian and Chinese markets.

Excluding the impact of Australia and China, September organic growth for Dentsu Aegis Network was 1.8%.

In Australia, local CEO Henry Tajer has been restructuring since he took over in February, 

The international business has been streamlined around three lines of business: creative, media and CRM.

“These lines of business have been designed around client needs and will ensure we are set up to help clients win, keep and grow their best customers—by being data-driven, tech-enabled and ideas-led,” says Toshihiro Yamamoto, president and CEO. He remains as president and CEO under the new structure.

“2020 is a year of transition and by 2021 we will be operating under these three lines of business and be truly integrated by design.”

The structure:

dentsu structure

The aim behind the structure is flexibility, the removal of walls internally and across agency groups.

“People within Dentsu are connected openly across countries and organisations on a global level, bringing together diverse perspectives, and making it a matter of course for innovation to be generated from anyone, anywhere,” says Dentsu.

“The aim is to become new Dentsu, that continues to create new value and new businesses by forming flexible teams not only within dentsu, but also with various external partners.“

As a pure holding company, Dentsu Group, aims to empower all group companies and their individuals to be “one team”:

1. Foster an environment in which flexible teams transcending organisational barriers can be created.
2. Provide opportunities to expand business domains and launch new businesses and services, as well as develop supporting systems.
3. Promote opportunities to cultivate the ideas that generate innovation, their execution, and the power of management.

“Rather than a conventional holding company, Dentsu Group Inc. aims to become a 'teaming company,' or a company of making all the companies one team,” the company says.

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