“A good deal will always be like that,” he says. Mitchell scribbled the deal down on a single piece of paper and flew to London to meet with Aegis CEO Jerry Buhlmann. “I never thought the price I was asking was too high (A$1.20 for each Mitchell share), or that the deal wouldn’t come off. I was supremely confident.”
Mitchell maintains a key element of a successful deal is trust. “You have to put yourself in the other party’s shoes and work out what’s good for them as well,” he says. “Everyone has to win. If a deal is all about you, it won’t work. If price becomes a major sticking point, it won’t be much of a deal.”
To do a successful deal, he suggests meeting face-to-face with the other party’s decision-makers as opposed to swapping emails and letters with advisory firms.
“I’m always on a plane,” he says. “As much as I can, I try to be in front of people. I’m old-fashioned. I try to be confident, not arrogant – there’s a very fine line. I don’t want to exploit people; I don’t want to bluff them, I don’t want to play games – I just want to get a fair deal done. To reach a compromise, just keep talking with the other party. It may take time, but if it’s fair, a deal will generally get done.”
Top qualities
Mitchell says top business leaders are invariably those who “own tomorrow because they know what’s coming next”.
“Leaders are visionaries – they recognise the future,” he says. “They are curious and ask a lot of questions. They inspire and motivate staff to achieve goals in line with the business strategy. The measure of a good leader is quite simple – people follow.”
Mitchell says businesses are about two things: the first is people, the second is money. “If you’ve got the best people, you’ll make the most money,” he says.
“I work hard at maintaining good relationships with my staff. I say ‘here’s where we’re going and I’ll give you great support to do it’. “We’ve done well in the past, but all I’m interested in is what’s going to happen next.”
Negotiating the digital world
Mitchell expects to be leading the Australian arm of Dentsu when the deal is concluded at the end of this year. He says the acquisition of Aegis provides Dentsu with global coverage. “It will now be a world group,” Mitchell says, forecasting Asia will account for about 50% of global gross domestic product by 2050 due to its rapidly-expanding middle class.
“Asia is going to have more middle class people than anywhere else in the world and it’s going to drive demand for products and services,” he says. “Australia’s tourism industry will be bigger than mining in 10 years because a growing number of middle class Asian people will travel here for their holidays.”
Reflecting on his media career, Mitchell, 70, says the internet is responsible for the biggest change in communications since the invention of the printing press.
Before the internet, mass media was directed all one way – consumers read, watched, listened, absorbed or visited a shop. The digital world is two-way – a shopper presses a button on a computer or mobile device and companies discover what products sell.
“The famous story had always been that 50% of our advertising isn’t working; the trouble is we don’t know which 50%,” Mitchell recalls. “Online, you know everything and that’s the real difference. Internet advertising is more efficient and also cheaper because it cuts out all the waste.”
Mitchell says by 2013, about 25% of all advertising dollars will be spent in the digital space. He says the internet will accomplish in 13 years what it took television more than 25 years to achieve – about a quarter of Australia’s annual ad market.
Online advertising spending in financial year 2011/12 was about $3.135 billion, an increase of 21% on the prior year, according to online industry body, Interactive Advertising Bureau (IAB) Australia. Total ad spending across all media platforms in the same year was about $13.5 billion – an increase of between 2% and 3%.
Depending on the product, service and audience, Mitchell places ads where he believes he can get fastest and biggest impact. “Consumers are simply living their lives, so you have to be in front of them wherever they are,” he says.
While he expects newspapers to survive, he says 80% of media will be digital by 2020. He says the printed advertising word has a bright future: it’s just more of it will be distributed electronically via computers, smartphones, iPads and other tablets.
Harold Mitchell: Media briefing
Q: What is your favourite source of leadership inspiration and ideas?
A: Mostly, it’s modern day life – travelling and talking to lots of people. Always have your antenna up. From my dealings with media owners over many years, the best ones are great listeners. If I’m doing 90% of the talking, I’m only doing 10% of the listening. And there doesn’t seem much value there.
Q: What is the one thing a leader should never do or say?
A: ‘I’. Because that means you’re the most important person in the world and you never are. Rather than say, ‘I must do this and I must do that’, always say ‘we’.
Q: What two elements are critical to achieving change?
A: Imagination and courage. I imagined we could be number one in our industry when we started in 1976. And we did get there. In the beginning, it might seem the business isn’t working, so you must have the courage to stay with it.
Q: What was the worst moment of your career and what did you learn?
A: Losing two big clients in 48 hours. At the time, these two clients represented a third of our business and we relied too heavily on them. Our competitors bought them and we were sacked. I immediately realised it’s much better to control your own destiny.
Q: What makes a workforce productive?
A: Working as a team in the same direction. If you’re all trying to do different things in different places, it will take four times as long to do the job.
Q: What important qualities do you look for in your direct reports?
A: I want a report to be clear and concise. But, at the same time, I’m also looking for individual understanding and comment.
