Ad industry scrambles for next-gen leadership

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The industry is ready to anoint the next generation of leaders, but where to find them? (Other, of course, than the U.K.)

It is not an idle question. With numerous chief executive and chief creative seats empty and others slated to be vacant soon, the industry needs an answer-quickly.

"There is an incredible dearth of talent," said Donny Deutsch, chairman-CEO of Interpublic Group of Cos.' Deutsch. "The industry's fundamental problem is a lack of talent."

The chief executive seats at Grey Worldwide and Universal McCann are empty. Ann Fudge will give up the leadership of Y&R as soon as a replacement is found. Interpublic's long-running search for a chief to oversee all of its media operations continues after six months, and it's believed Interpublic is also looking for a senior manager at Initiative. Carat USA needs a No. 2 to chief David Verklin. Planning ahead, Publicis USA Chairman-CEO Susan Giannino last June said she'll leave in the next three to five years.

And it's not only business-side managers, either. Top creative posts at Leo Burnett USA and DDB Worldwide, Chicago, are also open.

The many openings and the length of time they're remaining unfilled leads many to conclude the business is in dire straits.

The causes for the talent shortage are simple, maintain some headhunters and managers. "Agencies have not significantly invested in training talent," said recruiter Sharon Spielman, managing director, Jerry Fields Associates, New York. "Every time a recession hits, training and development is the first cut."

Graduates of such long ago programs as one run by Ogilvy & Mather Worldwide describe them as rigorous-homework assignments included creating media plans and analyzing research studies-and useful. Stephen Gardner, co-founder, independent agency GardnerNelson Partners, New York, years ago graduated from Ogilvy's program and felt the experience put him "on par with my peers in my graduating class-many of whom, unlike me, were MBAs."

BRAIN DRAIN

Another problem: Advertising's pay scale lags behind that of competing industries, such as media and entertainment. The cable industry's expansion has been and continues to be a brain drain for advertising and media agency talent. Pat Mastandrea, CEO of search firm The Cheyenne Group, found three of her most successful hires in agencies years ago when she set up Fox's sales organization. "Agencies have always been a fertile recruiting ground," she said.

Some industry executives point out that changes in consumer behavior and media consumption are translating into significant shifts in how media agencies in particular must operate. "Our industry is changing dramatically," said Steve King, chief executive of ZenithOptimedia. That, in turn, alters the type of experience and abilities needed in rank-and-file employees as well as senior management. Leaders today must understand not only how negotiations and buys are executed in multiple media, but must also be well-versed in disciplines like strategy and planning, new business and client and employee management. "We've struggled to expose people to enough of the skill sets," Mr. King said.

But others, such as Gavin McElroy, a partner at law firm Frankfurt Kurnit Klein & Selz, New York, whose practice includes contract and compensation negotiations for senior executives, argues that agency management often fail to recognize and cultivate their next generation. "There's a tendency to think the grass is greener on the other side of the fence-that people outside can come in and solve internal problems." Difficulties encountered by non-agency executives like Ms. Fudge or, in the late 1990s, former McKinsey & Co. consultant Rick Hadala at Ammirati Puris Lintas, suggest that understanding agency culture and managing it well is a skill best learned over time, from within. "I'd advocate retaining key talent to the extent that it can be done," Mr. McElroy said.

Adds Ms. Spielman of Jerry Fields: "The raw talent is there. But it has to be invested in and cultivated."

Perhaps not surprisingly, one of the industry's best examples of a home-grown talent cultivated over years is Ed Meyer, chairman-CEO, Grey Global Group, who joined the firm in 1956 and became CEO in 1971. Disagreeing "completely" with the notion of a talent dearth, he maintained "there are plenty of candidates around." But as he's charged with finding a chief for Grey Worldwide by September, he declined to comment further, saying that he doesn't want to help his competitors.

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