Can a new CEO fix McCann Worldgroup?
That question is the very same one that observers, Wall Street , and even senior executives within Interpublic Group of Cos. were asking 20 months ago, when Nick Brien was brought in to succeed John Dooner as CEO. Yesterday we got an answer: nope.
By replacing Mr. Brien with a known quantity, longtime Interpublic guy Harris Diamond, the company signaled that its only shot at achieving the tall task of reviving the holding company's most important agency network was with a new -- and very different -- kind of leader.
Now, the pressure is on Mr. Diamond to prove that at the helm of McCann, which in many ways is set back further than it was a few years ago when Interpublic deemed it in need of an overhaul, can succeed in the ways that Mr. Brien could not.
While Mr. Brien's appointment to lead Worldgroup in January 2010 was seen by some as a risk, his previous efforts on the media side rightfully offered hope that he could be the person to complete a turnaround. After all, Mr. Brien was lauded for his work as global CEO of Worldgroup's media agency, Universal McCann. It had been on shaky ground but in his time there, he restocked the agency with talent and pulled off a coup, retaining Johnson & Johnson's estimated $3 billion account through the creation of a new agency model for the client. From there he went on to become CEO of Mediabrands in the summer of 2008. It'd be hard to deny that he contributed to giving Interpublic's media business a much-needed jolt back to health.
But that was just one piece of McCann Worldgroup, which, in its entirety, turned out to be a more difficult beast to tame.
Under Mr. Brien's watch, McCann lost key global pieces of business from ExxonMobile, Nestle and Lufthansa and had a significant hiccup with the building (and later folding) of a dedicated unit for Loreal. He cleaned house to bring in new blood, and while some of that was needed, in the process the shop also lost a raft of talent that had institutional knowledge from working there for years -- names like Joyce King Thomas, Brett Gosper and Eric Keshin. While he helped to defend important accounts such as the U.S. Army and General Motors' Chevrolet when they went into review, new-business activity was lackluster over the past couple of years. McCann has picked up a couple new pieces of business here and there, such as work from Ikea and AOL just last week, but it's not been able to land the big fish it needs to stay competitive, nor has it spurred impressive organic growth numbers on those accounts it does have.
Deutsche Bank analyst Matt Chesler, in a note to investors last night spurred by the news of Mr. Diamond's appointment, put it this way: "There hasn't been much success at McCann since Brien took over in early 2010; he didn't land notable key accounts, there were multiple large losses that far outpaced the wins, and even the good things seemed to come partially undone. Brien did amazing work fixing IPG's two media assets, but in the end, it seems he was the wrong guy for McCann."
The choice of Mr. Diamond is an interesting one in part because he was said to be in the mix for the McCann top job the first time around and was passed over for the position. Multiple industry executives also told Ad Age that in recent months outsiders weren't biting on offers for the role. One person familiar with the matter who did not wish to be named told Ad Age the pressure was mounting from shareholders and due to increasing speculation about Mr. Brien's tenure in press reports.
Ask around and you won't find many detractors of Mr. Diamond, though. Those who know him and have worked with him are bullish on his operational ability and global expertise. They say in pitch scenarios he's impressive and not one to shy away from a challenge -- even if it is one as big as taking a distressed company and turning it around. That's what he did with Weber Shandwick, guiding the now-premiere PR shop from a place where it was suffering from a Frankenstein syndrome of various corporate roll-ups and stitching it altogether into something that works.
"Nick was a media guy, but Harris has much broader communications experience," said one industry executive who knows both men. "[Mr. Diamond] may not be the most creatively-driven guy ... but he's very strategic and knows about corporate and brand positioning. He has a proven track record of running a diverse array of companies, capabilities and competencies because that CMG group did everything from sports marketing to brand identity. He made sure he delivered the quarterly numbers and knew how to create strategic plans for their health. He has a lot of experience working with multinational clients. And, he's a no-bullshit, straightforward, doesn't-mince-words kind of guy."
With a one-time job as a comptroller, a law degree and experience running political campaigns, it's easy to imagine him as more serious than most in adland, and a bit old-school too.
But, said the exec who knows him: "He has one foot in the present and one in the future. He's more progressive than people give him credit for and made PR Weber Shandwick into a world-class brand in part by building a massive social-media practice."
One area, and it's a significant one, that observers agree isn't Mr. Diamond's strongest suit is his understanding of how to speak the same language as creatives in order to improve the creative product.
Creative also happens to be an area that 's been a bit of a silver lining at McCann under Linus Karlsson, a big hire Mr. Brien made in the fall of 2010, when he convinced the award-winning Swede from Mother to run the New York and London offices of McCann. These days Mr. Karlsson is spending his time largely doing work for General Motors, Ikea and other clients.
Continuing to improve the quality of creative output requires a serious amount of attention domestically, and although Mr. Diamond has long worked in tandem with McCann creatives in the U.S., key to his success will be ensuring that they can relate to him and see eye to eye on the work. To the degree they don't, it will be important that the duo of executives McCann recently elevated to oversee advertising under Worldgroup, Luca Linder and Gustavo Martinez, can step in and take charge.
"We actually think that Diamond might be just the right person for the job, even if he's arguably the safe bet and internal," said Deutsche Bank's Mr. Chesler said in his note. "What's needed now at McCann, a mini holding company itself, is a stabilizer. And, Diamond's sweet spot is collaboration, which will be well put to use integrating resources at the Worldgroup. Presumably the Luca Lindner and Gustavo Martinez promotions are designed to specifically focus on fixing McCann Erickson Advertising ... This would make a lot of sense -- while there may be good stories at McCann outside of U.S. creative, it's hard to have a strong IPG without a strong McCann Erickson Advertising in the U.S."
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