Leaked report lambasts True North
By JOHN TYLEE, campaignlive.co.uk, Friday, 26 February 1999 12:00AM
Speculation that True North faces eventual break-up or sale is gaining momentum after a brutally frank report from the company hired to find its new chairman.
Speculation that True North faces eventual break-up or sale is
gaining momentum after a brutally frank report from the company hired to
find its new chairman.
Lack of growth, insufficient operating margins and global reach, culture
clashes and too much reliance on too few global clients are cited as
major problems confronting the FCB and Bozell parent company.
The report, prepared by the executive research company, Heidrick &
Struggles, and leaked to Adweek magazine in the US, says that whoever
succeeds Bruce Mason at the top of True North will ’need to improve
relationships with the subsidiaries and the board which (it is fair to
say) are not currently as good as they should be’.
And it warns about the fragmented nature of the company, describing it
as having ’two and perhaps three different cultures’.
A former senior FCB manager described the appraisal as ’a very fair
summation of True North’s problems’ which could result in the company
being ’in play rather than being a player’.
The report blames True North’s disappointing stock performance partly on
lack of topline growth and partly on profit margins of 9 per cent,
compared to 12 or 14 per cent for rival networks.
It also warns about the group’s over-dependence on the Daimler Chrysler
account at Bozell and the SC Johnson household products business at FCB
which, it says, are ’the only two truly global clients’ on True North’s
This week, True North suffered a further blow when Kimberly-Clark moved
its global tissue business out of FCB and into J. Walter Thompson
Industry sources suggest that the high prices paid by True North for
technology companies in the US and agency acquisitions in the Asia
Pacific region lie at the heart of its problems.
One source commented: ’True North’s top management doesn’t feel
comfortable outside of the US. It is playing on a stage on which it
doesn’t want to be.’
This article was first published on campaignlive.co.uk
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