by Zibusiso Mkhwanazi (@ZibusisoSays) Every single day of our lives, marketers entrust us with their brands: to protect them and build them. But how many of us stop and think about our own brands — the agencies we have built from scratch?
Many of you know Avatar’s story and the hands-on approach Veli Ngubane and I have had building us up to a 100+ agency over the last six years. Many of you have also been following the development of our next quest, an agency network for Africans, by Africans: M&N Brands.
It has been a tough journey and every pitch has been hard-won. We have set even tougher goals this year for ourselves and our exco around creative awards, efficiencies and culture. We celebrate black talent daily and we defend black talent daily. Every account win, every growth story, every accolade comes with huge responsibility. Responsibility to deliver, to perform and to prove that client was right in risking their brand with a 100% black-owned and -managed agency. Yes, we are sadly still having these conversations in 2019.
But do we marketers ever pause and think about our own brands and how vulnerable they can be? I was reminded of this just the other day when the brand of my very own agency was put into disrepute and we were left very vulnerable.
We aren’t guilty of any wrong doing, but are still caught in a reputational quagmire that may break any good organisation. Without giving too much detail, Avatar is currently facing an onslaught of media enquiries about a former client of ours because we allegedly overcharged them, purportedly using underhanded ways.
Client and ourselves had agreed on a set contract fee and, as per business norms, upon billing client, we added value added tax, as a VAT-registered business.
Unbeknown to us, however, according to this client’s norms, its contract values are always inclusive of VAT. We assumed that we were on the same page with client and added our VAT, for three long years. I don’t need to tell you how much that can be for any-size account. Curiously though, the client paid us our invoiced bills without any query. But, as a state-owned entity, it was subjected to an audit by the auditor general and this discrepancy was discovered.
Responsibility of the client
I am obviously confident that we did nothing wrong, at least not deliberately, and say with certainty that I can stand in front of any court of law and testify that we wouldn’t commit any such ‘crime’ knowingly. In my mind, client should have picked this up very early and called for both sides to correct it. It was responsibility of the client, especially since it drafted the initial contract, and didn’t specify that the fee was VAT-inclusive.
Not only is my conscience clear that Avatar is on safe ground, I am also comforted by the fact, right at the beginning of the account, we committed more human resources than earlier pledged in the bid. This was our value-add to client. I can tell you now that, if it were clear upfront that the fee was VAT-inclusive, although we would have still committed more resources because that’s what good businesses do to go beyond the call of duty, we wouldn’t have committed as many as we did this time.
So, on the basis of facts, we know we did nothing wrong. But that is not the point. As those in public relations will tell you, perception is king. Currently, a perception has been created by some that we are in the wrong and took money that wasn’t due to us.
You can never be over-careful
Which is the point of this article. You can never be over-careful. It’s important that we read and understand our contracts properly, and are in sync with our clients. There mustn’t be any misunderstanding or misinterpretation, however big or small.
Not paying attention to detail may damage your reputation and brand. It’s less likely as a startup or even a small business but, as you grow to medium or big business and your client base grows, your billings get bigger and the contracts become wily and cumbersome, you will need to be extra careful. Because, ultimately, it doesn’t matter who is right or wrong in such cases. What matters are two important things: taking responsibility and morality. No business leader should be found wanting on either.
To bring closure on this matter, we opened our books to a forensic audit on this particular contract. The forensic auditors have exonerated us [see pdf]. But I know one thing: there will never be another contract on my desk that is not read over and over again by as many pairs of eyes as possible.
Advice to young agency owners
As a business, we trade solely on our credibility and integrity. We can’t put those on the line. But we also should do so to protect our clients from their own auditors so that they aren’t also found wanting. Strengthen this side of your business and you will thank me later.
My advice to young agency owners:
- Develop a thick skin very quickly
- Build your reputational currency everyday — your integrity and your personal values are wound into your own agency offering
- Keep everything in writing — email is your friend — every contract negotiation, every extension, every complaint, every compliment
- Contracts may be tricky things, no matter their size — get legal advice
- Deliver, deliver, deliver. We take great pride in winning competitive pitches and delivering on scope of work. We aren’t perfect — I own that — but no-one may question our commitment and our open, honest conversations that we have with clients where there are issues.
- If you are a black-agency owner, understand the extra responsibility you carry, and carry it with grace
- Surround yourself with a team who can share these burdens and help you navigate past them.
We’ve been caught in this crossfire for nearly nine months now. In those nine months, we’ve continued to win, to work, to grow, and to be humbled. For those who’ve experienced the same, my door is open — I now understand this journey. Keep on keeping on.
Zibusiso Mkhwanazi (@ZibusisoSays) is the co-founder of Avatar and the group CEO Of M&N Brands. He is a World Economic Forum Leader and was announced as a finalist in the EY World Entrepreneur Awards 2018.
“Motive” is a by-invitation-only column on MarkLives.com. Contributors are picked by the editors but generally don’t form part of our regular columnist lineup, unless the topic is off-column.