Worldgroup shakeup: The man for McCann

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Ask John Dooner what makes the McCann machine tick and, like a politician hitting his marks, he cites fuzzy and familial attributes: "love," "honesty" and "a sense of humor."

But don't be fooled. The McCann chairman-CEO is more Tony Soprano than Mike Brady: His reunion with the McCann Worldgroup that he built has been about increased budgetary discipline, aggressive management and rabid focus, not hugs and handshakes. And his tough love is getting results.

Some observers said the results never went away, that the juggernaut never stopped rolling. But the early months of 2003 were a rough period for the agency. A breakdown in accounting systems, and mounting woes for McCann parent Interpublic Group of Cos., resulted in Mr. Dooner being demoted from the helm of the holding company and returned to the top slot at McCann. Then CEO James Heekin was ousted, ostensibly to make room for Mr. Dooner's restitution, prompting a little wailing and gnashing of teeth at 622 Third Avenue.

This upheaval came just weeks after McCann's flagship client, Coca-Cola Co., had moved its North American Coke Classic account to WPP Group`s Berlin Cameron/Red Cell. One executive within an Interpublic agency suggested margins at McCann had slipped too.

new-business tear

That same executive now says McCann's margins are back to 2001 levels, Interpublic claims the accounting problems have been ironed out, and McCann is on a new-business tear. Over the past 12 months it has prevailed in competitive pitches for Verizon Wireless, Pfizer's Viagra and Staples. In addition, relationship marketing unit MRM won creative duties on Microsoft's customer relationship management account, while in Asia Pacific, the agency won a review to launch General Motors Corp.'s Chevrolet brand in China and was also awarded pan-regional responsibilities on Siemens.

"John's reinvigorated the traditional financial disciplines at McCann while maintaining the focus on competitive new-business win rates," said David Bell, who succeeded Mr. Dooner last March as chairman-CEO of Interpublic. "Are they satisfied? No. Are we? No."

Tim Fidler, director of research-Ariel Capital Management, which owns 4.12% of Interpublic, added, "The real challenges at McCann were ones of cost." A growth-through-acquisition strategy pursued for nearly a decade had a disastrous effect in late 2001 when the global economy slowed and advertising spending screeched to a halt. Costs were out of line with revenues. Executives close to the company believe Mr. Dooner has dealt with that problem head on, paring back spending and eliminating roles that had become surplus to requirements. "Because he'd worked there before he knew where the fat was," said one Interpublic agency executive.

Upon his return, Mr. Dooner also refocused the agency. He rallied four top executives-Eric Einhorn, chief strategy officer; Jonathan Cranin, worldwide creative director; Marcio Moreira, vice chairman; and Ramesh Rajan, chief financial officer-who have worked with him to emphasize the importance of four areas: partners, people, creative product and company profits.

The group also crafted a long-term vision, dubbed "Category of One," that lays the mission for McCann Worldgroup to provide all of its 30-plus capabilities, in disciplines ranging from database management to recruitment advertising to field marketing, to clients invisibly. Mr. Dooner set goals for the next five years. The overall thrust: to have two multinational clients become Category of One clients each year as well as adding two multinationals within each discipline.

real changes

In some very real ways, Mr. Dooner is changing the company. He has eliminated some of the practices, such as the cross-office charging. A new cash-and-stock option incentive program that rewards cross-discipline collaboration is now in use in the hope of fostering greater intra-Worldgroup collaboration.

With the help of 36-year agency veteran Mr. Moreira, a creative director by training, Mr. Dooner upended the status quo. The pair has hired, promoted or redeployed 52 people of the roughly 100 in Worldgroup's executive ranks.

Specific changes include moving McCann veterans Max Gosling and David Warden as regional director of Asia Pacific and Europe, Middle East and Africa, respectively, following the departures of Peter Hamilton and Ben Langdon, respectively.

In Latin America, as well, changes are under way. That region came under particular scrutiny after former McCann employees alleged, in a class-action lawsuit filed in January 2003 that management pressured regional and area CEOs and chief financial officers to "meet budgeted operating profit numbers at all costs." Luca Lindner, a former Publicis Groupe executive, has just been hired as president-Mexico and deputy regional director-Latin America and may eventually succeed Latin American/Caribbean chief Jens Olesen. The lawsuit is expected to be settled this year.

fierce competition

Similarly, Rupert Howell, a founder of one-time London hotshop HHCL & Partners, who joined last August as chairman of the U.K. and Ireland and president of Europe, Middle East and Africa, is expected to eventually succeed David Warden. Currently, Mr. Howell is focused on re-energizing McCann London, an office that has flagged in recent years. The goal, said Mr. Howell, is a return to profitability and growth.

But competition for talent is fierce: Just weeks ago Omnicom Group's TBWA/Chiat/Day poached Brett Gosper from McCann to be president of its TBWA New York Group, a newly created post. Mr. Gosper joined McCann nearly one year ago. Some said it was hard for him to break into the tight-knit family at McCann.

None of it has been easy for Mr. Dooner, not least because he has had to confront personal tragedy; his daughter, Mimi, died of cancer earlier in the year. "It has been a tough year for John," said Michael Sennott, a former vice chairman of McCann and longtime friend of Mr. Dooner's. "But he has enormous resilience. And a great sense of responsibility. It's that kind of a character issue."

And his appetite for McCann's success is unsated. High-profile additions from Coca-Cola are not among the new-business wins, but, smiling devilishly, he mused: "Wouldn't it be great to have Coke as a Category of One client?"

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