Maurice Levy Mulls Question of Lifetime: His Successor

Jean-Yves Naouri Is the Front-Runner to Be the Third CEO of Publicis Groupe in Its History. But the Race Is Far From Over

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Jean-Yves Naouri is in the bar of a five-star hotel in Singapore, armed with six cellphones, an iPad and a laptop. It may seem like the corporate edition of "The Amazing Race," but Mr. Naouri says they're simply his tools for staying current in a world where digital communication is so ubiquitous that the very word "digital" will soon be obsolete.

"It will be so natural, it will be entrenched, embedded in everything that we do," said Mr. Naouri, who is on the road as many as 200 days a year as he juggles the multiple roles of chief operating officer of French advertising conglomerate Publicis Groupe , executive chairman of agency network Publicis Worldwide and, sometimes, heir apparent to Maurice Levy.

Maurice Levy Credit: Bloomberg
Maybe it's less "Amazing Race" and more epic marathon to the top of the $7.2 billion advertising holding company, whose assets include name-brand agencies such as Leo Burnett and Saatchi & Saatchi. Mr. Levy, chairman-CEO of Publicis, was originally scheduled to retire at the end of this year. Instead, the network bought time by upping the retirement age for management board members to 75 from 70 before Mr. Levy, whose birthday is in February, turns 70 next year. And the company, not yet ready to pick a winner or divide up Mr. Levy's duties among several people, has set up some challenges for insiders.

Mr. Naouri, 51, was recently given additional responsibility to spearhead China strategy and improve Publicis companies' laggard performance in Asia. He is committed to spending one week each month in China, where he immerses himself in doubling the group's size in the country within three years. The company also elbowed aside Richard Pinder, the Publicis agency network's chief operating officer, to give Mr. Naouri a chance to demonstrate his ability to run a global network; Mr. Naouri was named executive chairman in March.

While Mr. Naouri is being tested in new ways, another rising star and a new business hotshot is Arthur Sadoun, who at just 40 years old is still too unseasoned to run the whole group but is being given a shot at proving himself beyond France. In April, his role as president-CEO of Publicis France was expanded to managing director of the Publicis network, putting him in charge of Western Europe, and adding worldwide responsibility for strategic planning and creativity. The extremely tall, lanky Mr. Sadoun says he now splits his time equally among France, elsewhere in Western Europe and the rest of the world, but without losing his client focus.

Jean-Yves Naouri
Jean-Yves Naouri
"I spend 90% of my time on clients," he said. "I don't do a trip if I'm not meeting clients, and I keep internal meetings to an absolute minimum."

Others are moving up in the inner circle, too. Publicis Groupe 's hard-working chief financial officer, Jean-Michel Etienne, was named to the five-person management board in June 2010 to finish the term of David Kenny, who had just quit as VivaKi managing partner (the departure of the American Mr. Kenny, another rising star, makes it all but certain that Mr. Levy's successor is going to be French, although the company says that 's not required). Publicis is unlikely to give a top job to a CFO who lacks client ties and hasn't run a global network, but Mr. Etienne could be a big help to a less experienced player like Mr. Sadoun. One area to watch is whether any of the management board -- Mr. Levy, Mr. Naouri, Mr. Etienne, VivaKi CEO Jack Klues and Saatchi & Saatchi CEO Kevin Roberts -- changes when their four-year terms all expire at the end of 2011.

Generational change is clearly ahead at Publicis, but Mr. Levy may not retire anytime soon. Besides, it doesn't hurt Publicis, some insiders say, to have multiple workaholics competing harder than ever for advancement.

Arthur Sadoun
Arthur Sadoun Credit: Melanie Frey
"It's a perfect situation," said the head of a Publicis operating company. "[Maurice] is there. They've got other prospects. Some are given a nudge and a wink. They'll work with passion and commitment as long as they're in the race. Why not keep the race going as long as possible?"

"Jean-Yves' experience makes him a viable contender," said one person within the Publicis Groupe with knowledge of senior management moves. "But, truthfully, Naouri needs to be associated with a big success to make it an easier decision. It's the supervisory board that has to agree and they are the ones that have to be comfortable with a successor."

It's hard for anyone outside France to fully comprehend the magnitude of this changing of the guard for Publicis. Mr. Levy's eventual retirement is only the second time the leader at the top has changed since Publicis was founded in 1926 by very young legendary adman and later war hero Marcel Bleustein-Blanchet. The first handover was in 1987, when Mr. Bleustein-Blanchet retired at 80 and entrusted the company to Maurice Levy, then 45, who built it into the world's third-largest ad-holding company. (Mr. Bleustein-Blanchet was involved in the business until his death in 1996; years later his office remained untouched, as if awaiting his return, at the group's corporate headquarters in a former Paris hotel on the Champs-Elysees that served as Allied headquarters during World War II).

Mr. Levy is also tough to replace as a power player in the highest echelons of French politics and business, after hobnobbing with four decades of French presidents and presiding, as he currently does, over the powerful French employers' association, making him the public face of corporate France.

In one scenario sketched by some insiders, Publicis may name a CEO but ask Mr. Levy to stay on awhile as chairman, and keep the new CEO on track while continuing to be an indispensable adviser to global clients such as Nestle and L'Oreal. (Both marketers transitioned long-time powerful CEOs to chairman roles.)

"Maurice Levy has pointed out there are a number of talented people around who can succeed him," said a Publicis spokeswoman. "Jean-Yves Naouri is the first among many, but there are many. It's the supervisory board that makes the decision, not any particular individual, and the time hasn't come yet."

Mr. Levy, in a call from Jordan, said it's the supervisory board's duty to look at all options, but stressed "Clearly Jean-Yves is leading the pack."

Jean-Michel Etienne
Jean-Michel Etienne
Much depends on Elisabeth Badinter, daughter of Mr. Bleustein-Blanchet and chair since 1996 of the supervisory board that wields the ultimate power at Publicis. Ms. Badinter is a regal star in her own right, as France's leading feminist, as well as a historian and best-selling author, and one of the richest people in France.

Publicis' apparent pullback earlier this year from considering Mr. Naouri as Mr. Levy's successor in favor of testing multiple candidates is said to be because Ms. Badinter wasn't convinced that he's right, or at least ready, for the job. If, in the end, no one measures up, the heavyweight 16-person supervisory board -- which includes everyone from leading bankers to museum presidents -- could tap its own contacts and try to identify a charismatic and strong business leader from outside the group.

At some point, the Badinter family, which owns 10.5% of Publicis, will be ready for its own shift to the next generation. At 67, two years younger than Mr. Levy, Ms. Badinter has three children, and her niece Sophie Dulac, a former headhunter, is already vice chair of the supervisory board.

Simon Badinter
Simon Badinter
Ms. Badinter's oldest son, Simon, 43, has been on the supervisory board since 1999 and until this year headed a smallish Publicis ad-sales business called Medias & Regies Europe. He relinquished that role to his younger brother, Benjamin, in February and continues to run MRE's Cleveland-based U.S. arm. Simon Badinter settled a dozen years ago in the Midwest, where his French accent added an exotic touch to his part-time job as a talk-radio host. He became a U.S. citizen in January, and last month moved his radio show to a CBS station in New York, where "Simon Rendezvous" is billed as a French guy's advice on relationships and romance. Asked last week on air whether it's acceptable to end a relationship with a text message, Simon told his audience that 's too "cold." Send a nice email instead, he advised.

Neither Mr. Naouri nor Mr. Sadoun will discuss the succession, or their own prospects, but both were willing to speak with Ad Age and talk about their current challenges, Mr. Naouri in Singapore on one of his frequent Asia trips and Mr. Sadoun in Paris.

Given the company's commitment to making digital ubiquitous, Mr. Naouri is pleased that Publicis by June hit its year-end goal of growing digital to account for 30% of group revenue. The new goal he'll strive to meet: 35% by the end of 2012.

"This goes beyond the acquisition of agencies or the acquisition of talent," he said. "It's a transformation."

Publicis' new corporate mantra is "If you don't lead the change, the change will lead you."

That slogan underscores Mr. Naouri's view that it's not enough for brands to be different from their competitors -- they must be innovators. He uses a recent YouTube video to illustrate his point that marketers and agencies can't hesitate to adapt to new technology.

"A baby girl complains to her father that the television doesn't work because when she tries to do this on the TV set" -- he swipes his finger in the air -- "you can't change the image. A 3-year-old child is already used to the most recent technology. "Daddy, your TV is broken.' It says everything, in my opinion."

Communicating with his children -- ages 25, 24 and 21 -- highlights the differences between generations. With his hectic travel schedule, he finds Facebook the quickest way to let them know he's arrived somewhere safely.

"I've noticed that they don't answer their phone, they don't answer SMS. But every time I send a private message on Facebook, I get an immediate answer," he said, laughing. "So I feel honored that they have not decided to ignore me."

At Publicis since 1993, Mr. Naouri understands the company's deeply rooted culture, inspired by the founding family and carried on by Mr. Levy.

Elisabeth Badinter
Elisabeth Badinter Credit: Baltel Sipa
"What we try to do is show that this company has a soul," he said. "There are some holding companies that I consider [to] behave as financial holding companies; there are some holding companies that are trying to manage assets, others that put emphasis on the work, the work, the work. We are trying to build something that is a family and for the benefit of our clients."

As for the Publicis Worldwide network, his biggest challenge now is growing the stable of local clients to complement its European-based global clients, who spend less on marketing than U.S.-based marketers.

"This is a network that was mostly built through acquisitions and we have a lot of entrepreneurs at the helm of the agencies. Some of them have left and because of that we have -- "Mr. Naouri paused, choosing his words carefully -- "reduced the competitive advantage that we had in terms of the balance between local and global clients. . . . So we need to go back to the balance that we had."

Mr. Naouri's experience has been mostly at the holding-company level; Mr. Sadoun's is on the agency network side. "The advertising business has to be rooted in agencies," Mr. Sadoun said. "I don't believe in the corporate job. Look at Maurice Levy -- he's still an account exec."

Mr. Sadoun's route to becoming a client whisperer is an unconventional one, especially for a French adman. After business school, his father arranged a job in a luxury brand's marketing department in New York. Instead, Mr. Sadoun fled to Santiago, Chile, armed with business ideas ranging from selling ads on supermarket carts to importing French mass-market fashion, which he did successfully with the Kooka� brand.

He sold his next business -- importing promotional objects such as branded soccer balls from China for clients including Nestle -- to Omnicom Group's BBDO.

Back in France, Mr. Sadoun had accepted a job at McKinsey when he met, socially, TBWA head Jean-Marie Dru, who convinced him that ideas are what transform a company and offered him a job on the spot.

Focusing on planning, new business and talent, Mr. Sadoun ended up as managing director of Omnicom's TBWA, Paris, during the agency's unstoppable years. That promotion came about when he won back Tag Heuer, which the agency had lost to BBH then pitched and lost again, by visiting the client to explain why he wasn't going to pitch for the account yet again, but that the client really should return.

Mr. Sadoun had promised TBWA's best creative minds to Tag Heuer, so he flew to Chiat/Day in Los Angeles and briefed a team about the watchmaker and TBWA's Disruption philosophy. He said, "Lee Clow shouted that it was rubbish and I responded very toughly in front of his team. I had to challenge him, and he was furious. ... Jean-Marie Dru told me Lee [said] I was insolent and that he should fire me."

Five years ago the call came from Mr. Levy, inviting him to run the main Publicis agency in France, and Mr. Sadoun quickly replicated his TBWA success there, most recently hiring former TBWA colleague Erik Vervroegen last month as Publicis' international creative director. "I love to be a creativity magnet," he said.

Mr. Sadoun, a great storyteller, describes what it's like to work with Mr. Levy: "We were waiting for the results of two very big pitches. At 7:30 p.m., the phone rang and one of the CEOs told us we'd won. ... The CEO of the second company called and said we'd won that , too. In six minutes I'd won two major pieces of business that changed Publicis Conseil. I went to see Maurice and told him that we'd won both. He stood up, made a gesture of taking off his hat to me, then sat back down and said "OK, but where are we with Axa? Did you call them? No, I'll do it myself.' Maurice is never satisfied, but I respect him a lot."

Giving some insight into Mr. Levy's process of working with key execs as he contemplates the succession, Mr. Sadoun said, "From 6 a.m. to 11 p.m. we exchange emails, and I see Maurice every day that we're both in Paris. With Maurice, you are never, ever in a comfortable situation. When I came to Publicis Conseil five years ago, my priority was to win business, and in that time we've more than doubled the size of the agency."

Now, he said he focuses on taking care of France, the rest of Western Europe, and working with Mr. Naouri on the worldwide network. "If there's one thing I want Publicis to get recognition for, it's the ability to lead change for clients."

One often-mentioned key to Mr. Sadoun's success is his tight 15-year working relationship with Valerie Henaff, who is Publicis Conseil's managing director and in charge of strategy and new business.

"She's my brain," Mr. Sadoun said. "We work together on everything. I run around all day looking like a stupid dog while she's at her desk thinking about what I should say in my next meeting. She's my teammate. We are one."

So what's ahead? If the global economy dives back into recession, it'll be tough for Mr. Levy to step down. Another looming issue is Dentsu's roughly $1 billion, 11.2% shareholding, which the Japanese ad giant who is Publicis Groupe 's biggest shareholder can dispose of next year, although Dentsu is required to get Ms. Badinter's approval for any share sale to a third party until 2014. Mr. Levy is already smoothing the way, indicating last week that Dentsu is likely to sell, and that Publicis should be prepared to buy back Dentsu's shares.

"Maurice's imprimatur on Publicis is so strong, it'll be tough for whoever succeeds him," said the head of a Publicis group company who is one of the many execs who gets 6 a.m. calls from Mr. Levy. "You don't want to be the one after Maurice, you want to be the next one after that ."

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