Wanted: one chief executive to turn around the fortunes of an
advertising company with sluggish growth, internal culture clashes and
an over-dependence on too few international clients. Responsibilities
include gladhanding Wall Street and smoothing over troubled relations
between the company and its subsidiaries. Salary: approximately dollars
Not your usual job ad. But chief executive of True North, the holding
company of FCB and Bozell Worldwide, is no ordinary post. And after
seeing the description of the task prepared by the executive search
company, Heidrick & Struggles - and leaked last week to the US trade
magazine, Adweek - it will be a brave candidate who volunteers to take
over from the outgoing Bruce Mason.
The search document gives a damning verdict on the state of affairs at
True North, and its publication adds to the concerns raised when the
company announced Mason’s imminent retirement without having a
replacement lined up. It says the new chief executive must ’improve
relationships with the subsidiaries and the board which (it is fair to
say) are not currently as good as they should be’.
It warns potential candidates about the fragmented nature of the
company, describing it as having ’two and perhaps three different
In a statement to Campaign, True North dismissed the Adweek article as
’vintage tabloid sensationalism, rife with an overabundance of ludicrous
But an internal memo from David Bell, the president and chief executive
of Bozell Worldwide, reveals a more serious attitude to the article. He
describes the report as inaccurate and ill-timed, but goes on to say
that there is nothing in it that should surprise anyone, adding: ’We
should be pleased that the company has the will and resolve to address
its issues head on and to develop the strategies to move smartly ahead
during their resolution.’
The divisions highlighted in the report have made it difficult to find a
new chief executive from within True North. Chuck Peebler, the chairman
of Bozell Worldwide, was the favourite to succeed Mason, but the choice
of someone from the smaller network is understood to have been unpopular
with executives at FCB. Meanwhile, Brendan Ryan, the chief executive of
FCB Worldwide, is thought not to want the job.
With less than a month to go until Mason retires, True North looks
The appointment of Heidrick & Struggles highlights the difficulties
advertising groups have in finding leaders who understand Wall Street as
well as the ad industry. An inability to play to Wall Street was
considered one of Mason’s major weaknesses and his successor will have
some repair work to do.
The loss of Kimberly-Clark’s global tissue business last week dealt a
further blow to FCB, which has already lost substantial business from
clients such as Levi’s and Campbell’s in the past year or so.
At the same time, the brutal exposure of True North’s weaknesses have
led to speculation that it could now be a takeover target.
’True North is still very dependent on a few clients and the loss of
Kimberly-Clark will hit very hard,’ a former senior FCB manager
’In the next few years, we will see the number of global players in the
ad industry come down to three or four major companies. True North would
be attractive to the likes of Omnicom or Young & Rubicam, and would make
a very credible third-string operation for WPP.’
Maurice Levy, the chairman of True North’s former global partner,
Publicis, has made little secret of what he regards as the US company’s
lack of ambition and inability to turn itself into a truly significant
As Publicis is a True North shareholder, Levy - who mounted a takeover
bid of his own at the end of 1997 - will not comment on whether the
company could be a takeover target. But he warns that it cannot go on as
’There is no room in the market for a holding company with two weak
networks, and both FCB and Bozell need to be strengthened on a global
basis,’ he says.
’For many years now, the only growth at True North has been through
At the end of 1997, the stock was trading at dollars 28 a share and I
was offering dollars 30. Since then, the stock market has gone up by
about 25 per cent and True North’s stock is still trading at around the
dollars 25 to dollars 30 range. So they have added no value at all.’
But others believe that the predictions of True North’s demise are
ill-founded. Roger Edwards, group chairman and chief executive of Grey,
says the company will ride out the current storm.
’True North is strong financially and it would be difficult for anyone
to buy a business like that unless the management agreed,’ he argues.
’It is not in play as a conventional, publicly quoted stock over here
might be. The leak will be damaging from a recruitment perspective, but
I doubt that it will do any more long-term damage.’
Michael Bungey, the chairman of Bates Worldwide, agrees: ’Nobody wants
to read that kind of thing about their agency - it’s hardly a
But headhunters aren’t necessarily the world’s leading experts on
running ad agencies.’
Whether recent events prove to be the beginning of the end for True
North, or no more than a blip in its history, one thing is certain:
whoever takes over at the helm of the company will earn every cent of
that fat pay packet.