The Player: Hearn regroups Cordiant to boost dismal performance

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By his own count, David Hearn is doing two-and-a-half jobs.

He is CEO of the Bates Group, but also handles the vacant CEO post for Bates Americas, as he transitions into CEO of parent Cordiant Communications Group. He'll formally take over in March from London-based Michael Bungey, who is retiring. Mr. Hearn, already in New York, will do the job stateside.

Mr. Hearn, 47, is overseeing an unusual combination of the Bates agency network and three more successful Cordiant networks-141 marketing services, design firm Fitch, and Heathworld. The four, comprising 80% of Cordiant, will be run separately, but operate with a single profit and loss statement and report to regional CEOs, who in turn report to Mr. Hearn.

"The only way Cordiant is going to be successful is if the new grouping is," he said. "If it is, a lot of opportunities open for us."

Despite Cordiant's dismal performance this year-including a first-half net loss of $20.3 million and a 10.2% decline in revenues-and lack of new business, real savings may be found in real estate and staff costs. The four companies will combine back-office functions and in some cases, offices.

"We'll put them on one site, everywhere in the world where it's physically or economically viable," he said. Cordiant will take a $41 million exceptional charge to cover property and people costs. "By putting them together, we'll not only build up the agency and create a much larger business, I hope there will be spinoff from having four businesses in the building, with new bursts of creative and account people [leading to] new clients and new business opportunities."

Depending on who is hired, the Bates' worldwide and U.S. CEO jobs may be combined, Mr. Hearn said. "Revitalizing our U.S. agency is a critical objective," he noted. Filling the jobs won't be easy. A candidate for the U.S. CEO job, Steve Davis, an ex-president of WPP Group's J.Walter Thompson, Chicago, has withdrawn his name. Insiders say rebuilding an agency depends upon amassing a charismatic leadership team to attract new clients. Those who have met Mr. Hearn credit him as open to learning the nuances of the agency business.

small has advantages

Mr. Hearn entered the agency world in March; he had been a food marketer, earning mixed reviews in his last job, downsizing and cost-cutting as CEO of underperforming Australian food group Goodman Fielder. Mr. Hearn also had been CEO for Europe and Asia at U.K. snacks company United Biscuits, and served a stint in Barcelona as CEO for Europe of Pepsi-Cola Co.'s food business. Born in England, he is living in the U.S. for the first time.

Although Bates and Cordiant are widely believed to be too small and too troubled to survive independently, Mr. Hearn makes a virtue out of Cordiant's size in a land of giants.

WPP Group Chief Executive "Martin [Sorrell] recently said WPP has 286 P&Ls," he said. "That makes it difficult to do something seamless and coordinated."

contributing: lisa sanders

Fast Facts

Name: David Hearn

Age: 47

Title: CEO, the Bates Group, and CEO-in-waiting of Cordiant Communications Group

Challenge: Save Bates, especially failing U.S. agency

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