In an interview with Real Business, which runs a number of events including this week’s Marketing for Start Up Britain, backed by the MAA, Millner said of the loan – the result of winning Bank of Scotland Corporate Entrepreneur Challenge : “We didn’t need the money but we started to act like we did. We became lavish. We lost sight of everything we’d learned and went on a spending spree.”
Set up in 1999, the agency’s first client was Sony Ericsson. Other blue-chip clients also hired the agency, including Shell, Adidas, T-Mobile, Coca-Cola and Bacardi Brown Forman. Then the Department of Health hired it to promote safe sex among young people. “Once you have blue-chip organisations, it gives you enormous stability. You’re no longer eating hand to mouth,” said Millner. “You have a better reputation – and agencies are driven by reputation.”
By 2003, Iris had moved into the US, working with Adidas, among others. By 2008, it was achieving sales of £33.6m and had 256 employees on its payroll. That same year, it won a £5m interest free loan in the BoS Challenge, but BoS doubled it to £10m.
“Ironically, this was the beginning of our problems,” said Millner. “We’d think of somewhere exotic, then we’d send out a team with our logo. We had money and we were spending it in a hurry.”
Iris acquired a management consultancy firm, Concise. It also launched offices in Munich, Amsterdam, Madrid, Mexico City, Paris, Beijing, Shanghai, Melbourne, Dusseldorf and Atlanta. It also recruited about 30 accountants, 3 HR staff and a few lawyers. “We thought this top-heavy structure would smooth our pathway to growth,” said Millner. “But those people were expensive. And they just got in the way.”
And then HBOS was taken over by Lloyds TSB. “Suddenly we were working with a bank that didn’t know us. They changed our terms of agreement and we were hammered on debt repayments,” said Millner. “Most of our new offices were loss making and our second oldest and second biggest client, COI, stopped spending.”
Iris was forced to close down offices in areas of low strategic importance, axe the expensive management layers and reduce central costs.
“It took time but we’re moving forward,” he claimed. “We’re making money every month again and we’re nearly debt free. We’ve grown up and we’ve gone back to what we do best. Whatever you do, don’t make growth your one and only master. You’ll end up making stupid mistakes.”
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