IPG’s new CEO isn't your average holding company chief
Interpublic Group of Cos.’ incoming CEO might have kept a relatively low public profile, but internally it’s a vastly different story. During Philippe Krakowsky’s 20 years at the holding company, he’s been known as the go-to guy for its many agencies. Deutsch New York even slapped his photo on a bumper sticker once that read, “1-800-CALL-
KRAKOWSKY. Got a problem? Call Philippe.”
Krakowsky, 58, has worn a number of hats at IPG over the last two decades, but there’s one role he has held consistently in the last few years: right-hand man to CEO Michael Roth, who moves to executive chairman of the board in January. Krakowsky is “a very quiet presence,” says one exec close to the IPG business, and a rarity in an industry known for big egos and corporate politicking. “He’s been involved in every meeting [at the holding company level], every decision, but during meetings he’s never had a big participatory role. Michael was still the center of things.”
In fact, Krakowsky declined to be interviewed for this profile, preferring that the spotlight stay on Roth until the baton is officially passed.
“He is the kind of person who cares a lot about integrity and morality and doing the right thing,” Kristen Cavallo, CEO of IPG’s The Martin Agency, says of Krakowsky. “When I found out he was Michael’s successor, I felt a combination of relief and happiness.” “It’s an example of one of the times where the good guy wins.”
The competitive field
It wasn’t an easy win. As Cavallo says, Krakowsky prevailed over “candidates of stature; some that are quite larger than life.”
Several of the people interviewed for this story say it has been widely known within IPG that the hotly competitive contest for the CEO title came down to this trio: Krakowsky, McCann Worldgroup Chairman-CEO Harris Diamond and former Executive VP and Chief Financial Officer Frank Mergenthaler. Roth, 74, has been serving as IPG’s CEO and chairman since 2005 and has been expected to announce his retirement for several years.
The hard-charging and image-conscious Diamond was the closest runner-up for the role, the execs say. Perhaps not so coincidentally, Diamond announced he would be retiring at the end of the year—to be replaced by McCann Chief Operating Officer Bill Kolb—one week before Krakowsky’s appointment went public. The execs say the next likely candidate for a time was Mergenthaler, who announced last year he would also be retiring.
“It was always pretty much between Philippe, Harris and Frank, and none of them would want to work for each other, so my sense is Frank left at a certain point when he knew it wasn’t going to be him,” one exec speculates. “Although I’m not sure if Philippe would have left if Harris had become CEO.”
The tipping point for Krakowsky may well have come in 2018, when IPG laid out a massive $2.3 billion for Acxiom Corp.’s Marketing Solutions business. Krakowsky was the architect of the deal, which gave the holding company control over its 2,100-person data analytics and management group. It was an expensive if transformational gamble that benefited IPG’s Open Architecture model, also championed by Krakowsky, that offers clients integrated solutions across creative, data, design, digital, marketing, media, production, public relations and strategy and which is credited with helping IPG win and maintain business. “When it comes to data, we believe that there’s a significant advantage in having scale,” said Krakowsky during a July 2018 conference call with reporters discussing the acquisition. “As people have gotten more and more focused on privacy and on regulating the ways in which people are handling data, [IPG did not want] the disadvantage of not having a prominent place at that table.”
“I see [Krakowsky] as a technology brain in a world that isn’t always full of technology brains,” says Deutsch New York Chief Technology Officer Husani Oakley. “Philippe has an understanding of not just the high level of what data can do, but of a detailed level of how this stuff happens. In business, the fortunes are made on knowing those details.”
Krakowsky’s digital savvy traces back to the start of his career, when he built an artificial intelligence software company that he ultimately sold to Apple. Krakoswky, a native Spanish-speaker born in Mexico City, moved to San Francisco at the age of 9, according to moreaboutadvertising.com. He graduated from Harvard University in 1984 and joined rival WPP Group’s Young & Rubicam (now VMLY&R) in 1996, where he rose to senior VP. Today, he lives in Manhattan with his wife, Posey Krakowsky, an ordained minister for The Church of the Ascension in New York.
Krakowsky’s tenure at IPG began in January 2002 as senior VP and chief communications officer. Three years later, in 2005, he was appointed executive VP of strategy and corporate relations and in 2011 he assumed the role of chief strategy and talent officer. In 2016, the holding company shifted him to chairman and CEO of IPG Mediabrands before tapping him as chief operating officer of IPG last year.
Krakowsky’s background in public relations gives him experience in dealing with the press and analysts as well as the ability to navigate internal politics at IPG. Mediahub Global CEO John Moore says that Krakowsky’s IPG Mediabrands communications background gives him the ability to have “more informed” discussions with chief marketing officers as the media landscape becomes increasingly complex due to the pandemic. Moore says, more than ever, chief marketing officers “want to understand how their money is being spent,” and modern CEOs need to be able to break it down for them.
Not the life of the party
Michael Duda—managing partner of Bullish and former longtime executive of Deutsch, where he served most recently as partner and chief corporate strategy officer from 2005 to 2010—says it’s encouraging to see an executive who has worked directly on the business rise to CEO. He says often companies promote executives with financial backgrounds to the top role, though that hasn’t been the case in recent years. WPP CEO Mark Read, who succeeded Martin Sorrell in 2018, formerly led global digital agency Wunderman (now Wunderman Thompson), and Publicis Groupe CEO-Chairman Arthur Sadoun, who took over in 2017, previously headed up various creative agencies as well as the holding company’s entire communications practice that spans Leo Burnett, Saatchi & Saatchi and BBH, among other shops.
Still, Krakowsky isn’t your average holding company CEO. “He’s a straight-shooter,” says Duda. He isn’t the “life of the party,” but the “guy who makes sure everything goes smoothly at the party.”
That comes from years of fixing, adds Duda. “He had to deal with a lot of the hard problems at IPG and make them go away.”
One of them, according to a person close to the business, was helping IPG overcome The Martin Agency’s #MeToo scandal in 2017 that toppled longtime Chief Creative Officer Joe Alexander by ushering in Cavallo and forcing the resignations of former CEO Matt Williams and President Beth Rilee-Kelley.
Several executives from across IPG’s agencies—including Moore, Oakley and Deutsch New York CEO Val DiFebo—say they regularly lean on Krakowsky for support connecting with other internal teams, getting resources from the holding company’s budget, client mediation or just some advice over a cup of coffee.
Cavallo laughs when asked if she would vet Krakowsky first with some of her bigger requests before going directly to Roth. “All the time,” she says. “I probably always go to Philippe first.”
DiFebo, who was behind that bumper sticker, says Krakowsky has been available at all hours during the day and night to assist with any problem facing Deutsch. Krakowsky was also instrumental in the agency’s Acuvue business, helping facilitate communications between Deutsch New York and other international IPG agencies also working on the account. DiFebo recalls once when an IPG agency in Germany went dark on her during an urgent matter for the client, Krakowsky intervened. “He doesn’t panic,” DiFebo says. “He’s even-tempered. He multitasks. I go to him and say ‘I want to do this’ and he says, ‘OK, let’s work it out.’”
All that said, it seems impractical, if not impossible, for an exec to ascend to the top at a fiercely competitive company like IPG without a streak of wiliness. It was rumored that when he was head of communications for IPG, Krakowsky would use slightly different language in memos to various agency leaders, so that they would be leery of leaking them to the press. That account is roundly denied by the company.
What’s next for IPG
IPG likes to tell investors that it is performing better than holding company rivals, outpacing them in organic growth for the last seven years. That wasn’t always the case: Roth, along with Mergenthaler, managed a stunning financial turnaround at the company that was on the verge of being sold the year Krakowsky signed on. In August 2002, it was disclosed that IPG had uncovered errors in its accounting, setting the stage for a series of financial restatements, an SEC investigation and a multiyear effort to fix “material weaknesses” in IPG’s internal controls over financial accounting. In 2003, Standard & Poor’s downgraded IPG’s corporate debt to speculative or junk status. IPG didn’t climb back to an S&P investment-grade rating until 2015.
Today, the holding company’s financials are on solid footing, but one area that Krakowsky will need to tackle is diversity and inclusion. According to the company, only 2.6% of IPG’s senior executives and managers are Black or African American, 5.5% are Asian, 5.2% are Hispanic or Latinx and the majority, 84.9%, are white.
In June, when Black Lives Matter protests began to sweep the country, Roth became the first agency holding company CEO to release his staff’s diversity stats and also pledge to right pay disparities, among taking other actions on diversity, equity and inclusion.
One person betting that Krakowsky can do so is Pam El. “I was impressed with IPG when I saw what Michael Roth was trying to do from a female and diversity perspective,” says El, the former executive VP and chief marketing officer for the National Basketball Association and now CEO of Pam El Consulting. “Now that I have gotten to know Philippe, I see and believe he will do that and much more.”
El says she never worked with Roth and Krakowsky in a client-agency capacity. “I remember always seeing Michael Roth on a diversity panel or making a speech at a diversity event and I thought, ‘who is this tall, white man?’” El recalls. “I sought Michael, and Philippe, since he was always right by Michael’s side, out because I saw that they were doing things differently than the other holding companies.”
And she believes that will only continue. Krakowsky, says El, “will leave things better than he found them.”