Adland's creative accountants
By Francesca Newland, campaignlive.co.uk, Friday, 01 December 2006 12:00AM
Behind every successful agency there is an inspired finance chief. They're the unsung heroes who can transform creative ability into commercial success.
Aegis' chief executive, Robert Lerwill, was one; so was Sir Martin Sorrell, WPP's chief executive. In fact, so too was Omnicom's supremo, John Wren. Today, some of the most powerful advertising practitioners came from the finance department, so you'd better think twice the next time you roll your eyes in boredom as the finance director starts to speak.
It's tempting to think finance directors are empowered only because they "control the purse strings", but that's not it. Their power comes from the fact that they balance the books. The best FDs will keep an agency's profits stable, irrespective of the agency's performance that year. Arguably, a good FD will keep an agency buoyant when there's a weak chief executive, while even the strongest of chief executives will fail miserably if they haven't got a capable FD on board. This is a view supported by Robert Campbell, the executive creative director at United London, who says: "The trouble with ad people is they're not very good at running companies. Often the finance director is more like the managing director or chief executive."
Rumour has it that when Paul Hammersley took the helm of DDB in 2004, he was given carte blanche to change anything he felt necessary, anything, that is, except the FD, Shirley Watson.
Finance directors are important to any business, but advertising requires a special set of skills. There's one important reason for this, and that is advertising is a creative business. The FD of a client company is a different beast from that of an advertising agency.
The FD at Clemmow Hornby Inge, Peter Walker, believes the attributes that make a good advertising FD are exactly those that you won't find in those individuals who work in other businesses. "Advertising FDs must be able to relate to people; they've got to be flexible. They need to think on their feet more than they would in a structured department."
Campbell adds: "A good FD knows it's all about getting out the best possible work as cost effectively as possible. They must understand that lunches are a justifiable expense; that sometimes you need to scratch the back of the production companies.
"You don't need a bean counter, you need a creative accountant. A good one knows ideas have value."
Today, it is important that the wider agency is financially literate; the account directors will be talking to clients about matters that will effect remuneration. This means the FD must have the personality to engage colleagues who would otherwise glaze over when numbers are mentioned.
Although FDs have long been crucial to the success of an agency, the need for a skilled one has become more important than ever. There is a popular saying: "creative wins accounts and account management loses them", but today, the role of the FD in securing a new piece of business has come to the fore. It's not unusual for a client company to pick an agency after a competitive creative pitch then enter into negotiations with the agency for several weeks before an appointment is made. That's when the FD gets to practise their magic. They have to be skilled negotiators, on top of all the data.
The procurement director's involvement in agency hiring and firing is well documented. A good FD not only has to meet their needs, but also guide them into accepting the needs of their agency. As Walker says: "We must embrace procurement directors and help them to understand our business."
Nigel Jones, the co-president of DraftFCB, points out that the demise of the commission system has made agencies' commercial success much harder. "Commission is long gone as a basis for remuneration. Being proactive here, and generating imaginative ways (and formulae), in which agencies can get fairly remunerated, but which are fair to clients, is essential."
Over the past few years, Sarbanes-Oxley has risen like an evil spirit above the wider business community. FDs in adland have had to get to grips with complicated filing arrangements. For example, they need to prove categorically work to a claimed value has been carried out. The fact a satisfied client has paid the bill is not proof enough.
But Walker laments the changing finance departments. He believes the role, even at agencies, is not attracting the mavericks it once did. "There's less passion and more perfection," he says. "The stuff I used to get away with at Ogilvy, you couldn't do it now," he adds.
This change is inevitable. To succeed in the modern landscape, a talented FD and a high regard for the alchemy that they perform is essential. As Jones says: "Success needs a more financially literate, focused management. It's not enough to knock out good work and expect you'll make a good return.
"It's easy to be good creatively and still make no money. To avoid this, you need a chief executive who's passionate about the work and the finances and an FD partner who's buttoned down and commercially imaginative."
It takes a great FD to turn ability into commercial success; without one, the best ideas would be lost.
MATTHEW CLARK - Partner and finance director, Mother
1988-90: Barker Nicholson Lewin
1990-95: Reay Keating Hamer
1995-99: Mellors Reay & Partners
1999-99: Grey London
"I was in a meeting with our Britart.com client, discussing how we could use the shop windows that Selfridges had kindly given to Britart for two weeks.
"I thought it would be great to have each window given over to a different Britart artist, and let people bid for the art by standing in front of the window and using their mobiles to text their offers in.
"Poke, our sister digital agency, found a company that could handle the technology, and so the 'Very Public Art Gallery' was born.
"The project was a great success and to cap it all, I won a gold Pencil at the One Show Awards, a feat that Robert Saville reminds me he has yet to achieve."
- Robert Saville on Matthew Clark
"Matt is a highly creative accountant (no sniggers). When we first met Matt, I sensed he understood Mother's creative ambition (he even won a One Show gold Pencil in 2003 for Britart, which is more than I've ever done - bastard!).
"It was always an intention to bring in a financial partner - an essential, some might say, in a creatively driven business. We probably left it a bit long to find him, since the cash flow was in a poor state when he arrived.
"Very quickly, the controls and systems he established built the foundation for Mother to be able to pursue its ambitions to expand the family. This is where Matt's entrepreneurial skills and his flexibility have come into their own.
"He has been at the heart of Mother's successful diversification into media, digital, TV and design, as well as Mother's moves into the US and South America (not easy markets to get your head around). As a finance director, he's proud of his plums."
PETER WALKER - Finance director, Clemmow Hornby Inge
1978-87: Arthur Andersen and others
1987-90: Young & Rubicam Europe
1990-93: Leo Burnett
1993-98: WPP, including four years at Ogilvy UK
1998-02: Leo Burnett EMEA
2002-03: BBDO Europe
2003-date: A number of interests including: CHI (2004-); HatPin plc,
non-executive director (2003-) and Minit Group, private equity-backed
retail business (2005-06)
"As a simple bean counter, perhaps it should be the privilege of meeting and working with lots of talented people who have become friends in many countries from the 'many' networks I've been with (but that's a bit soft and fluffy). So, how about the phone call I did not take from Sir Martin because I was on a golf course; or having to explain where Absurdistan is to some nice people in Chicago.
"On a more serious note, it could be introducing CIPS to the IPA and ISBA several years ago; or the feedback from training courses, where, over the years, we've tried to improve the professionalism in the running of our business; or working with entrepreneurs and developing business which continue to flourish.
"It ought to be taking the opportunity to work with three splendid fellows at CHI, but the proudest has got to be making it on to the A List (once!)."
- Johnny Hornby on Peter Walker
"Finance director is a title that undersells what Peter's done for CHI.
"I learned how crucial the role is when we were about to launch the agency, and Rupert Howell was kind enough to spare me and our business plan a few hours with Robin Price. Robin had a look at what we were about to ask the bank to lend us and suggested we ask our first few clients to pay us quarterly in advance. We did, they did, and we saved ourselves a £300,000 loan, and have never had a penny of debt. I wanted a Robin Price; everyone told me that I should meet Peter - that's one of the best things that has happened to us.
"Early on, we were pitching to a big FTSE company that was nervous about hiring a little two-year-old agency. I took Peter to the next meeting and he showed them our business strategy and 'shared success' remuneration principles - he gave them the confidence to go with us."
ROBIN PRICE - Chief operating officer, McCann Erickson
1978-82: Arthur Young
1983-87: Frontline Television
1998-02: Chime Communications
2003-date: McCann Erickson
"Blagging £250,000 from the bank to set up Howell Henry Chaldecott Lury and using less than £50,000 to become cash-positive in four months by persuading clients to pay fees up front.
"Putting the entire agency on a negotiation course.
"Investing in a full-page ad in the FT to launch the 'Media Strategy' concept and then taking Thames Television to court to respect our contract when we were fired.
"Creating a separate consulting division to sell strategic services to clients in advance of advertising needs.
"Buying Nigel Maile a beer in return for an explanation of how the debits and credits in advertising worked.
"Telling Axel Chaldecott that he was free to buy whatever company car he wanted (a Fiat Uno duly arrived).
"Always looking to take a commercial, rather than a purely financial, perspective and not being afraid to change things if they didn't work our first time around."
- Rupert Howell on Robin Price
"Robin is not a finance director, he's a chief operating officer, which is why he's brilliant. Sure, he's a qualified accountant; but he also has a law degree, has run a production company, led a management buyout backed by 3i, founded an agency, chaired the UK's largest independent bakery and helped make me look good for 20 years!
"He's always been an enabler: someone who says 'yes, and ...' or 'yes, but ...', but rarely 'no'. He stays calm, considers all the options and then provides practical solutions. For that reason, he is a great sounding board and helps me either improve my ideas, or reject the stupid ones. He is a great collaborator and facilitator - he just makes teams work better together."
SHIRLEY WATSON - Board finance director, DDB London
1977-84: Ernst & Young
1984-88: Marketing Solutions Limited
1988-89: BMP PLC
1989-date: DDB London
"Client and staff confidentiality prevent me from telling any tales out of school. I suppose I could say preventing Jeremy from claiming bottles of 'expensive fine wine' when out lunching.
"But seriously, being part of the visionary team which helped BMP to evolve over the years into DDB London, the most-awarded creative agency to date; our media department to become OMD, the fastest-growing media company in the UK, and to have nurtured BMP Interaction from a one-man-band to Tribal DDB, one of the top-awarded digital agencies in London.
"Through all that, I've been the voice of sanity in Bishops Bridge Road and still managed to hit our American parents' demanding financial target for 17 years in a row. Who could argue that finance directors aren't key?"
- Michael Bray on Shirley Watson
"A good CFO is more than just a financial person, but has to be a real partner for the chief executive as well.
"Shirley is technically excellent and understands the business we are in. She thinks ahead, manages her department well and gets on with the rest of the agency and its department heads. She understands when to be firm and when to be flexible. She's been here for 17 years and has hit her target every time - that's not an easy thing to achieve in Omnicom."
NIGEL MAILE - Chief financial officer, Bartle Bogle Hegarty
1975-76: John Haddon & Co
1977-82: Spicer & Pegler
1982-date: Bartle Bogle Hegarty
"The sale of 49 per cent of Bartle Bogle Hegarty to Leo Burnett in 1998 will probably be the defining moment of my 24-year career at BBH. Of course, that doesn't beat being run over by a bulldozer while I was building the M25 and living to tell the tale, but that was before I got into advertising.
"It's been a good deal for both parties and has stood the test of time. Burnett, now Publicis, is getting a more than decent return on its investment.
"From BBH's perspective, the deal ticked a lot of boxes. It helped Motive in the consolidating media market when it merged later with Starcom in London. It spread shareholding and set up a structure that has helped us to retain talent. Lastly, it allowed the founders and 50 or so key players to realise some capital without losing independence.
"I'm also proud of the great bunch I work with in finance. We are respected for the contribution we make."
- Nigel Bogle on Nigel Maile
"Nigel joined us a few months after we started in 1982. He was a 27-year-old accountant at Spicer & Pegler, looking for a change of pace. He has stepped up to every big financial move we've made over the years, and played a blinder every time.
"The deal we did with Leo Burnett and the sale of our share in Starcom Motive to Publicis Groupe were executed by him with great skill and amazing attention to detail. The best deals are not just about the price, but also about terms and conditions you can live with afterwards.
"He has hired well and integrated the finance function into the agency. He cares hugely for the business and the people in it. He's also fun to be around, with a laugh that would stop a charging rhino."
This article was first published on campaignlive.co.uk
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