Zigging in a zag-like world

Chemistry is an innovative creative ad agency that’s constantly punching above its weight in a fiercely competitive industry. Founders Mike Larmer and Joseph Silk share their business highlights and some lessons.

It was a crisp, gloriously fine mid-Winter’s day when NZBusiness visited Chemistry’s office in Auckland’s Westhaven Marina. The generous open-plan space was quietly humming with activity. 

One of Chemistry’s clients, Jaguar Land Rover, was just days away from the launch of a new electric iPace campaign. The agency’s co-founders Mike Larmer and Joseph Silk (pictured R&L) describe to me their new TVC, a collaboration between artist Otis Frizzell and racing driver Greg Murphy, due to debut the following weekend. Their pride in the creative team’s work was obvious.

From day one Chemistry has been an agency that thinks outside the box, an attitude generated by the vast experience of the two directors. Mike has a multi-award-winning career spanning 30 years in both the UK and New Zealand, while Joseph is a well-known industry leader whose 28-year career takes in a number of New Zealand’s best agencies.

They both recall how the late David Walden, an icon of New Zealand’s agency scene, mentored them through their early years, and agree that their business partnership is a bit like a marriage.

“Mike and I both had a similar vision of what we wanted to do with Chemistry,” recalls Joseph.

“We recognised that we had complementary skills, and although this sounds like a cliché, advertising is a team game. My focus is on operations and running the agency, and Mike’s is new business and growth. While we’re capable of performing both roles, we’re more comfortable with our individual focus. It works out really, really well.”

Nine years after launching Chemistry Mike and Joseph can reflect on a highly successful track record. Today, major clients include IAG (NZI, AMI, State), PlaceMakers, Z Energy, Samsung, MTF Finance and STH Group (All Blacks Tours, Rugby Australia, NZ Cricket Tours, Melbourne Storm) to name just a few.

One of their standout successes was launching the helloworld travel brand, which quickly grew to number three in the market. Chemistry also created New Zealand’s first health loyalty programme under what was then the Sovereign brand – managing the whole concept from strategy to in-market. It was a campaign that helped propel Chemistry to its best year for international awards.

While the industry cops flak for constantly chasing awards, the two directors believe that awards are still a good measure of success. “Just like the gold medal is a measure of success at the Olympics,” says Mike. “And it is success that not only hires the best people, but can also attract the best clients.”

He points out that the organisers of some of the international awards are often blown away by the small size of the company, compared to the competition. Again it’s that classic Kiwi trait of ‘punching above our weight’.

Protecting a culture

“Over the past nine years we believe we’ve delivered on our original vision,” says Joseph. “We had both come from network agency experience with all its politics. For us, one of the cornerstones of growing Chemistry was always going to be culture. Our people are the most important asset we have, and culture is massively important when the only thing you’re selling is IP.” 

Both Mike and Joseph wanted to build a self-sustainable culture that fosters learning and longevity and bucks the industry trend of high staff turnover. They’ve clearly succeeded in that goal, and the fact that most staff have been with them for four-plus years is evidence.

“Our culture to grow people’s capability and confidence seems to have worked well,” says Joseph.

Another source of satisfaction is Chemistry’s approach to business – where it’s not about just waiting for the client’s brief and an immaculate execution of that brief. 

“We endeavour to understand more about the client,” explains Joseph. “Where they’re going, what’s keeping them awake at night, as well as being proactive about our strategic input. 

“In a sense we help generate the brief, and we focus on the business results, rather than just creativity.”

It’s also about looking at the work Chemistry does for clients through a business lens, he says. Not just a creative lens.

When Covid came calling

The destructive power of Covid essentially wiped out Chemistry’s travel category overnight, leaving a void. 

“We were collateral damage along with everyone else,” says Mike. “But fortunately we’ve been blessed with blue-chip brands across a number of categories, which kept on spending.” 

There was also the fact that they had built up a very wide customer base over the years, which helped spread any risk generated by unforeseen market forces – such as the pandemic.

It’s another cliché, but ‘zigging when others are zagging’ has been Chemistry’s market difference, and it helped them to not just ride the Covid storm but to grow the business as well. 

There were no thoughts of cutbacks or lay-offs. Quite the opposite. They kept all staff totally in the picture. They invested in new tech to give everyone greater work flexibility, expanded the office and signed a new lease – much to their landlord’s delight.

The outcome from all that positive investment and hard work in the face of the pandemic, was an unprecedented run of new business and growth which saw them exceed their pre-Covid annual forecast.

“Put simply, we just backed ourselves,” explains Mike. “It all came down to our team ethos. And the day after [the national] lockdown there was a queue of [our] people at the door ready to get back in!

“Over the years we’d created a lot of building blocks, which enabled us to ride out Covid better than some of our colleagues.” Having no international shareholders to keep happy also played in Chemistry’s favour, he confesses.

Building brands, lifting people

Chemistry is a brand response agency. Joseph explains that it doesn’t matter what business you’re in, success is all about building a brand. 

“Our focus is making sure that all the brand work we do is measurable – and driving a result. It’s not just ‘do people like the ad?’, but actual business outcomes.”

Looking ahead, the key to Chemistry’s ongoing success lies in its own people, says Joseph. “We’re actually pursuing succession planning in our business. That’s hard because you must take your people on a journey. He cites two members of their team who’ve moved from account manager level to managing partner in the space of just four years.

“For me that’s so much more rewarding than going out and hiring a managing partner.”

Mike agrees and adds his definition of business success: “That’s when a younger team member is in a bar and when quizzed on who he works for, is met with a ‘wow’ rather than a ‘who?’, or even worse, ‘I’m sorry!’”

Success it about reinventing yourself and learning, adds Mike. “One of our values is finding new ways to grow. Everybody knows our company values and purpose off by heart, and we’ve created an environment where everybody really lives to our ideology.

“If you don’t keep on learning, you’ll be dead in the water in about 18 months.”

Success is also about engaging outside resources to help your business grow, because as owner managers you’re too close to everything.

“We were the proverbial ‘builder’s house’ scenario,” explains Joseph. “It took us about four years and a number of failed attempts to build our business strategy before swallowing our pride and hiring an outside resource. That’s when we got our business strategy and core values sorted out. 

“It was the best thing we’ve ever done, and since then we’ve never dropped that third party support.”  

Mike and Joseph’s top tips for startups:

1. Set a BHAG (big hairy audacious goal) – an inspiring common goal in which your entire team must play a role in.

2. Understand your WHY. WHY is not about making money. WHY is your purpose, cause or belief that is the very reason your business exists.

3. Manage the things that make you money – rather than managing the money. Making short-term decisions based on what is right in front of you can often limit long-term success. Talk to your accountant and bank – they can be surprisingly helpful.

4. Get all the advice you can from different points of view. People outside your business provide a perspective that is hard to get from being in the trenches.

5. If starting a business with others, define your roles from the outset to ensure you minimise crossover, confusion, tension and wasted effort.

6. Always remain open to feedback from within the business and outside. It usually comes from a well-meaning place.