SI Partners’ Path to growth survey, based on interviews with 600 senior decision makers at creative agencies explored the growth challenges faced by creative businesses globally - here we put The Netherlands, an established hub for creative businesses, in the spotlight.
Due to the maturity of the creative Dutch industry when compared to relatively new markets such as Greater China, Dutch businesses are viewed as preferable targets for M&A from large organisations. This is in part as a result of access to ready-made talent and an optimum location which is an attractive prospect for organisations looking to expand.
Creative agencies in The Netherlands are ambitious in terms of plans for growth and interested in securing a growth partner. 13% of leaders in the Netherlands cited acquisition as their main motivation for growth, compared to the global average of 7%.
Dutch businesses are attractive to buyers looking to expand into new geographies
Creative agencies in the Netherlands possess numerous attributes which make them an attractive target for potential acquirers. One such attribute is convenience: Transport links are excellent and the majority of Dutch residents have a strong grasp of the English language, making it a viable alternative to London as a European hub. The Netherlands is also close in proximity to Germany, the largest European market. All of these factors, in combination with the strong creative Dutch heritage, make agencies in this region an attractive prospect to buyers looking to expand into new geographies.
75% of creative businesses in The Netherlands do not have a talent plan
Although agencies in the Netherlands are ambitious with growth planning and hold a higher level of acquisition appetite than their global peers, our research revealed that 75% of Dutch creative businesses are not currently in possession of a plan to manage talent, a significantly higher level than the global average of 56%.
The lack of a plan to manage, recruit, reward and retain talent is a potential obstacle to achieving growth ambitions, in particular when considering M&A as a route to growth.
In talent-based industries, the talent/creativity is the product - agency businesses must demonstrate that they are consistently investing in the very best and brightest talent and that they have the appropriate incentives mechanisms in place to retain key talent after acquisition.
It is important that the talent planning issue is addressed to ensure that talent acquisition does not become a major barrier to immediate growth, but also to ensure that attractiveness to buyers remains through appropriate succession planning.
Creative agencies in the Netherlands are attractive to buyers and, for the most part, well placed to achieve their growth ambitions. However it is important that agencies do not overlook the importance of talent in advance of any transaction event, as it could impact which growth partners are candidates and ultimately the valuation achieved. If leaders continue to neglect the issue of talent, they may sell themselves short in a future sale process.
The Netherlands Special Report is part of a series from our global creative sector growth trends research, The SI Partners Path To Growth Survey, which explores global agencies’ growth plans and challenges.