Purpose-driven marketing that drives growth with Pedro Lerma of LERMA/

0:05Hello, everyone. Welcome to Question Everything, a podcast all about learning from the successes and the failures of those who dared to, well, question everything. This podcast is part interview, part therapy, and part Price is Right. We have our own game board stacked with questions that'll make even the most successful CMOs sweat. I'm your host, Ashley Walter, CMO and partner at curiosity. On today's episode, I sit down with Pedro Larima, CEO at Larima, a full-service cross-cultural agency known for its Super Bowl spots and award-winning work for Home Depot, Salvation Army, and many others. Between industry war stories and heartwarming tales, today you'll learn three ways to infuse cultural fluency into your creative.

0:49The real story behind the He Gets Super Bowl ad backlash and how Pedro turned his biggest mistake into a lifelong leadership philosophy. So plug in and get ready to rock out. This episode is going to light up the charts.

1:10Pedro Lerma is the CEO of Lerma, an agency acclaimed for its innovative and inclusive approach to the industry, earning back-to-back ad age small agency of the year titles and A-list standout in 2024. Additionally, Pedro has been recognized as Ad Age Executive of the Year and as an inductee to the Southwest Advertising Hall of Fame. Besides being known for producing Super Bowl spots for brands like Avocados from Mexico and He Gets Us, Pedro is also known for his unique approach to leadership. All right, Pedro, welcome to Question Everything. How are you?

1:46Pedro Lerma:I'm doing great. Thanks for having me. I'm excited to be on my first game show. Awesome. I'm excited to have you. This feels like, I don't know, for me, this is a very iconic moment. I have followed you. I have followed your agency. You guys have done some really remarkable work. And from what I can tell as an outside fan, you do it the right way. You lead with kindness and compassion. And inclusivity is just part of your DNA. And I cannot wait to unpack some of that today. Okay, so you know how this podcast works. We have a game board stacked with 12 super spicy questions, and the power is completely in your hands.

2:28So what's your favorite number?

2:32Pedro Lerma:Well, I don't want to go for seven because I watch your podcast and lots of people pick seven. So let's go with number five. Okay, okay, I like that. All right, I love this photo. So for the people listening who cannot see what we're looking at right now, I want you to explain this photo and then talk a little bit about how your experience as a musician has shaped your view of creativity and culture. Ooh, so explaining the picture, I think, is probably the easiest part of that question. It's a picture of me with a guitar standing on our stage. We have a stage here in the office. It is set up all the time.

3:11Pedro Lerma:So we have drums, guitars, amplifiers, we have PA system, lighting, everything. And we have an annual holiday party where we will hire a professional band. So we are all, I say we all, lots of people within the agency are musicians, but I would call us recreational musicians and we bring in professional musicians for those parties. And from time to time, I will get up there and do a song or two with the band. And it's a lot of fun. That's cool. Now, I guess to answer the second part of your question, how, I guess, my love of music has influenced our work. I feel like audio is such an incredible way to make connections with people.

4:01Yeah. I used to think that music was really about the beat patterns or the chord progressions or even the lyrical content.

4:09Pedro Lerma:And it is. But there's also a physiological part to enjoying music that is more about the vibrations and what your body feels. And there are certain notes or tones that make you relax, make you excited. And so there's this whole other part of audio being a way to make connections that to me is fascinating. And it's been something that we pay a lot of attention to. A lot of the work we've done, you know, his featured music is a big part of it. A couple of Super Bowl spots where we had a cover of In Excess' Never Tear Us Apart. And our most recent Super Bowl work for He Gets Us featured Johnny Cash doing a Depeche Mode cover, which was amazing.

5:02Pedro Lerma:And so music is a big part of who we are as an agency, but also a big part of our business, as you know. That's cool. And from a culture standpoint, like I can't even imagine what it's like to be an employee up there just like jamming out with the CEO. That says a lot about you as a leader and the kind of environment that you're creating in the office as well. Well, I just said I've always enjoyed music. It's a big part of my life. and I wanted us to have a way for us to express our creativity beyond just what we do for work. And so it's been a really neat part of our culture. I think that's really, really cool.

5:46Thanks for sharing that. Sure. All right. Let's go back to the board.

5:51Pedro Lerma:Okay. Now let's go with number seven. Okay. Okay. So Home Depot, one of your clients, was named one of the most culturally inclusive brands by ANA. And as you know, many agencies talk about inclusion as who has a seat at the table. And I know you do as well, but you guys go so much deeper than that. And I'd love for you just to talk a little bit about inclusion, especially as it relates to the creative product and your philosophies there. Okay. Well, inclusion has always been really important to us. We started as a Hispanic agency and evolved into what we call today a cross-cultural agency, but built on the foundation of multiculturalism.

6:38Pedro Lerma:And so that's always been a sensibility that we have, but we've really leaned into it. We have a practice here called cultural fluency. And that practice is here to do three things. And that is to elevate, mitigate, and grow. And I'll explain those. So elevating is making sure that we represent communities, often underrepresented communities. We need to make sure we represent them in authentic and respectful ways that we're lifting those communities up. The second part of that is to mitigate, and that is to mitigate reputational damage. And as you know, there's been a lot of that in our industry in the last year.

7:24Pedro Lerma:And so we work really hard to make sure that we don't make missteps when it comes to inclusion. And the last part is to grow. My guess is that you, as head of new business for Curiosity, have seen lots of new business briefs that ask you to connect with a growth audience, but to do it in a way that doesn't alienate the legacy customer. And so our practice helps us ensure that we do that. And so with a brand like the Home Depot, we've been working with them now for 15 years. They have always been big believers in the black and the Hispanic customer base. And so they have had a long-term relationship with that customer base, which I think is foundation.

8:17Pedro Lerma:I tell people, if you're going to go after a new growth segment, you need to make sure that you can stand behind the idea that we have had a real relationship and we have supported this community up until now, because if not, you know, it's often seen as performance. And so our cultural fluency practice is just an incredibly important part of what we do. And it makes sure that we, you know, deliver the kind of work that we've delivered for the Home Depot that has helped them, you know, be recognized by the ANA as Multicultural Brand of the Year. Hmm. That's fascinating. So true. Is this a true story?

9:01Did I read this correctly? So Home Depot, your your beginning relationship with them was you were serving as the multicultural arm as the agency responsible for that. And then you won full AOR duties. So is that true? I want to clarify that.

9:18Pedro Lerma:So we are their Hispanic agency of record. But there was a point in time when they had to part ways with the Richards Group, something you probably know about. And they continued with us. And so we were in a position to help them through a transition period. They knew that they wanted to hire another agency to replace the Richard Troop in their roster. But for several months while that process was happening, we took on all of the work. And so we weren't AOR, but we were doing both Hispanic and general market work for them. And so eventually they hired a new agency, BBDO. and so they've gone on and done a lot of great work for the Home Depot as well.

10:11But it put us in a different position with the client where they see us now

10:16Pedro Lerma:as not just a Hispanic agency but an agency on roster and we have done lots of general market work and continue to do so and we're thrilled with the expansion of that relationship. I think that's fascinating. Just that slight even just shift of your roster status, I think, probably is a big contributor to a recognition like this by the ANA. It's not just done in a silo or a side agency. You're actually part of the big brand briefs and opportunities. So kudos to everything that you're doing on that business. That's really incredible. All right, let's go back to the board. Where are we going next?

10:58Are you going to stay in a line?

11:00Pedro Lerma:Let's go with number one. OK, up to the top. All right. So you've produced multiple Super Bowl campaigns. I actually was eating some avocados last night in preparation for this. So I'm really curious because we have not done a Super Bowl spot yet. How, if it does at all, how does your Super Bowl creative process differ from your traditional, you know, everyday creative process? I would say it differs in that there are a whole lot more people involved in it. We have here three different creative groups, and they work on different sets of accounts. And when the Super Bowl comes around, it's really kind of an all-agency kind of a process.

11:49Pedro Lerma:As you know, great ideas can come from everywhere. And even, you know, there are teams that know a client and know a brand really well. And sometimes it's good to bring in somebody that just brings a new perspective to it. And so I would say that's really about the only thing that changes in doing a Super Bowl spot versus, you know, doing any other spot. All hands on deck. Yeah. How early do you get started? So we've got the Super Bowl coming up not too far from now. Are you already thinking about it or would you typically be thinking about it by now? Well, it depends. A lot of times that's driven by our clients.

12:28Pedro Lerma:Clients might be ready earlier in that period of time. Sometimes we're scrambling at the last minute. That's not unusual. We know other agencies that have worked in the Super Bowl and it can get pretty crazy leading up right up to the week before the Super Bowl. Wow. Cool. All right. Let's go back to the board. Where do you want to go next? Let's go with number 12. Number 12. Okay. So you've said that trust isn't built by being perfect. It's built by being accountable. How has this proven to be true in your career? So I think where that quote came from was an article I wrote about just kind of lessons I'd learned in the industry.

13:17Pedro Lerma:Early in my career, I had a furniture brand and we were a small agency. I grew up in Rustoff Falls, Texas and started a small agency there. And we had a media schedule that was supposed to run. And for whatever reason, one of his spots didn't run. And I knew it was going to be a big deal. I was really nervous about it. But I walked into his office, took complete responsibility. I don't remember if it was my fault or somebody on the team, but nonetheless, I felt responsible. I owned up to it. I told him what I was going to do to make sure that that never happened again. And I really expected an ass chewing.

14:06And instead,

14:07Pedro Lerma:said, you know, he said something to the effect of, you know, I appreciate your integrity in this, and I do trust now that it won't happen again. And this was a client that was, he was not an easy client. So for him to respond that way was really impactful. And as a result, you know, I've just kind of carried that idea with me throughout my career. If you make a mistake, own up to it. It's okay to be vulnerable. But along with that vulnerability, you know, talk about what you're going to do to make sure it doesn't happen again. Yeah, I think that's really great advice, especially as you're starting to enter your career, but then even in an elevated leadership role.

14:54One of the things that I say a lot is, you know, oops and ouch. You know, oops, it's just such an easy word. Like when you've made a mistake, it's oops, you know, and then you kind of explain yourself and say what happened. And then also on the reverse is ouch, like that hurt, what was said or done had an effect on me. So you can have an open and honest conversation about it in the moment, I think is really important.

15:19Pedro Lerma:I love that. I'm stealing it. You should, you should. I actually, I use it on my kids quite a bit as well. It works for them. It works for them, too. Yeah. And I've said it a fair amount of times in my career, too. So all right. Great story. I think there's a lot of lesson in that that we can learn. I imagine that shows up a bit in your values, too, in your organization today and how your employees kind of handle their client relationships as well, which is really cool. All right. Let's go back to the board. Let's go with 10. Number 10. Okay, so you recently joined forces with, how do I say it?

16:05Mizanu?

16:06Pedro Lerma:Mizanu. Mizanu in Edelman to form MEI, which is a minority-owned Hispanic-led full-service communications agency. I'm super curious to learn a lot more about this, but tell us, what does this collaboration represent to you personally? and what larger shift do you hope it signals for the industry at large? So the partners in that are Luis Miguel Messianu. He is a well-known creative talent, primarily in the Hispanic market, but he's well-known beyond that too. And the other partner is Richard Edelman from Edelman PR, the largest PR firm in the world. And we set out to build a Latino-focused earned media practice.

16:57Pedro Lerma:And so the thought was that within public relations, there is an opportunity to bring more creativity to those solutions. And then within the Hispanic market, that really hasn't been addressed. And so So that came at a time when Luis Miguel was leaving ALMA, the agency he founded in Miami, and within the DDB network. And I happened to run into him in Paris, France. We were on our way to Cannes, spent some time in Paris before that, and he was in the same hotel I was in. Didn't know that. But we ran into one another. And that happened the night before AdAge announced that he was leaving ALMA and launching his own agency of consultancy.

17:50Pedro Lerma:And so I ended up reaching out to him, congratulating him. And then when we got to Cannes, I talked with him about the vision I had, which was to better represent the Hispanic community and to do it in a way that was really lifting up the community and helping brands forge authentic connections through earned media. And a lot of what he had in mind for the practice that he was going to build was aligned with that. So we talked on one day. We had breakfast with Richard Edelman the next day in Cannes. And so that was in June. And by September, we had launched an agency. And it's been a great, great experience.

18:35Pedro Lerma:Luis Miguel is somebody that I had admired for a long time. Now working with him, I have an even greater appreciation for him. And Richard has been a huge champion for the Hispanic Latino community. His wife is very involved, Claudio Romo Edelman, in the Hispanic community. And so it's been a great, great partnership and really excited about that. Incredible. So are you splitting your time between both organizations? How is that working for you personally? So I am CEO over both companies. But Luis Miguel is a grown-up, I tell people. He built an amazing agency before this. And so he really runs the day-to-day chief creative officer and essentially CEO.

19:26Okay. And is the strategy, are you partnering with other agencies? What's the kind of growth plan there?

19:35Pedro Lerma:We have. Some of the brands that we've worked on are within the Edelman portfolio. Others are because of relationships that I have had or Luis Miguel has had. And in many of those cases, there are other agencies in the mix. As you know, that's more common than not. And so it's just been a lot of fun building something else. Awesome. Very cool. All right. Let's go back to the board. You're not busy at all, are you? dual CEO. That's great. Let's go with number six. Okay. Number six. So you've said that you see leadership as a service rather than an authority. What does that look like? And what do you consciously do to be a service minded leader?

20:32Pedro Lerma:Yeah, I tell people I exist here to support you, everybody that works here. And so I often ask, what can I do to support you? What can I do to help you? It really comes, I guess, from just my leadership philosophy. there are a couple of experiences that I've had. The first was early in my 20s. I went through the Dale Carnegie course, which was a public speaking course, but it's really so much more than that. It is really a course on human relations. And as part of that, I learned a lot about leading. I learned about, you know, dealing with difficult situations. And I came to realize it was a lot of empathy-led approaches.

21:22Pedro Lerma:I later read an article, and it was about emotional intelligence, and it referenced a book called Primal Leadership. And in that book, it talks about four characteristics of a great leader that has emotional intelligence. And the first was self-awareness. So I know what I'm good at, what I'm not good at. Second is self-management. So I'm going to put myself in situations where my strengths shine and my shortcomings are somehow compensated for. The third is social awareness. So I know the strengths and weaknesses of the people around me. And within the agency, I often talk about, you know, that includes our clients.

22:04Our clients have strengths and weaknesses and we have to consider those things.

22:09Pedro Lerma:And the last is relationship management. So self-awareness, self-management, social awareness, and relationship management. And that has really, when I read that, I thought, well, this is a lot of how I've been behaving. I didn't realize there was a structure to it. And so I really embraced that structure. I give the book away, Primal Leadership, all the time. In fact, I will send you one. I would love that. And the other book that I recommend a lot is How to Win Friends and Influence People, which is Dale Carnegie. But those two books and those ideas have really shaped who I am as a leader, and I consider myself a lifelong student of leadership.

22:50Pedro Lerma:You know, sometimes I think I happen to be in advertising, which I love. I have a thorough love of this industry and what we do. But I've been a lifelong student of leadership. And so if the world blew up and I had to do something else, I think I could probably do okay. I read, I was reading, you know, comments and articles preparing for this. And somebody said, you were the kindest leader they've ever witnessed. And I thought that was pretty remarkable of a statement to make, because I think sometimes people can conflate kindness and success and the fact that you're able to do both so well. I think there's a big lesson there.