Cheil Looks to Rebuild Barbarian Group as CEO Peter Kim Departs

Parent Company's President-International Aaron Lau Will Serve in Interim

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Peter Kim, CEO of The Barbarian Group, is leaving the agency on Sept. 1 after taking the helm in December, when former chief executive Sophie Kelly stepped down. His departure follows that of numerous Barbarian Group executives over the last six months.

Aaron Lau, Cheil Worldwide president of international and CEO of Greater China
Aaron Lau, Cheil Worldwide president of international and CEO of Greater China Credit: Courtesy Cheil

Cheil Worldwide President of International and CEO of Greater China Aaron Lau will serve as Barbarian Group's interim CEO. To show Cheil's commitment to finding a new Barbarian Group leader, Mr. Lau, who lives in Hong Kong but works out of the Beijing and London offices, said he will spend the majority of his time in New York until a replacement is named. The company is hoping to bring on a new chief for Barbarian Group by the end of the year, but Mr. Lau said he's not going to rush the process. "TBG deserves to have the best leader in the business," he said.

Mr. Kim, previously chief digital officer at Cheil Worldwide, declined to comment on his next endeavor.

Since Ms. Kelly's departure, Barbarian Group's Chief Creative Officer Edu Pou; Head of Account Management Sherri Chambers; Co-Founders Keith Butters and Benjamin Palmer; Creative Director Jill Applebaum; Chief Technology Officer Robert Christ; Head of Talent and HR Michele Prota, among others, have left Barbarian. Ms. Prota recently joined KBS as the agency's first global chief talent officer.

Group Creative Director Adam Lau -- no relation to Aaron Lau -- has stepped up to fill Mr. Edu's role despite having a different title, and former HR and Talent Manager Danielle Sherman has succeeded Ms. Prota.

"We're actively looking for talent to take us to the next phase of the brand's development," said Mr. Lau, who added that he's seeking creative technologists for the agency.

When asked about the string of departures and layoffs in recent months, Mr. Lau said he's "sure there must have been some misunderstanding of some sort," but declined to give further detail since he was not there at the time and "it wouldn't be fair to the people who are here or who left."

"I can't change the past; I can only shape the future," he said.

Ad Age previously reported that Barbarian Group mandated executives earlier this year to make significant cuts that ultimately meant layoffs, according to multiple people familiar with the matter.

"I'm sure there are reasons for those rumors and like everything in life, the reality is never as bad as the perception or never as good – it always lags behind somehow," said Mr. Lau. "In any business, there is always financial pressure, and there is always a desire to make any organization more profitable, but there's a limit."

For 2015, The Barbarian Group's revenue was essentially flat at $22.8 million from $21.8 million in 2014, while Cheil's U.S. revenue dipped from $78.4 million in 2014 to $77.6 million last year, according to the Ad Age Datacenter.

Businesses in this industry have to be stay agile, Mr. Lau said, but his philosophy is that layoffs won't help increase profit. "You're not going to be able to cut your payroll to profitability if you're not doing well," said Mr. Lau. "The only way you can grow profitability is to put the right people in place, go see the client and stand in the hallways, sort out projects and excel and get recurrent income."

According to a person with knowledge of the matter, however, The Barbarian Group had not been profitable for years and to gin up some profit was forced to let go of people with high salaries.

Mr. Lau said he's not t liberty to talk about financials at the company, but said that talent departures, like those at Barbarian over the last year, always cause issues and have an impact on a business. He said the agency "didn't have the kind of growth that we expect of The Barbarian Group."

"We had no major client acquisition in the last year or so," he said, "so for us, it's an issue we have to address because a healthy growing company is important for the staff as well as our clients."

Mr. Lau wouldn't go into specific details about the layoffs, but said the current headcount at Barbarian Group is nearly 100 staffers. The agency's "superdesk" that was built in 2014 was created to fit all 125 employees at the time, but could accommodate 170 people, according to Architect Magazine.

"There was some fine-tuning at the beginning of the year and I think we just didn't manage the story well enough ourselves, so we're now proactively reaching out to share what we're trying to do," said Mr. Lau.

Ad Age also previously reported that the executive departures were causing concern at PepsiCo, for which Barbarian is the lead digital agency on beverages. In June, Barbarian lost its work for PepsiCo's Brisk to VML.

Regarding PepsiCo, Mr. Lau said the "relationship is good and the work is good." This spring, Barbarian worked on Pepsi's new emoji collection, which included five-second TV ads, a partnership with retail concept store Story and an interactive Times Square Billboard. Some other current clients include IBM, Samsung and GE.

Going forward, Mr. Lau said he plans on having "proactive engagement with clients" to share Barbarian Group's plans for the future. He said he also wants to help staffers understand "where we're going and that there's a future here."

Cheil's new "go-to-market" proposition for its agencies is: "Specialisms collaborating around client challenges," said Mr. Lau.

The areas Cheil will focus on right now include digital and traditional communication; live events/social; retail; design and innovation. Mr. Lau said new specialisms will develop down the line, such as e-commerce, analytics and branded content.

To better help agencies around the world collaborate, Cheil is in the process of unveiling an online mobile platform that will allow staffers to work together in real time. The Cheil-designed operating system, named Rollercoaster, is being rolled out in Europe and will be available globally by 2017. Mr. Lau said the company is still trying to figure out how agencies in different regions can collaborate financially and share resources.

When it comes to addressing client challenges, Mr. Lau said he wants to appoint leaders and agency CEOs within Cheil who can bring the "specialisms" to light and understand "a broader sense of business above day-to-day operations."

Seoul-based Cheil Worldwide, which also owns Iris, McKinney, MDLab, BravoAsia, BMB and PengTai, bought a 47% share of Barbarian Group in December 2009 and in April 2010 increased its ownership to 75.56%. In first-quarter 2014, Cheil upped its stake in Barbarian Group to 100%.

Mr. Lau doesn't attribute any of the recent turbulence within Barbarian Group to cultural disparities. "There will be different cultures in any global organization and I think oftentimes people are lot more similar to each other than they are different, and unfortunately, the last few months the differences are glaringly in the press, but there are still a lot of common practices and shared values" between the companies, he said.

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