Editorial: IPG is no longer critical but needs rehabilitation

The best that can be said of Interpublic's gradual emergence from a prolonged period in intensive care is that its injuries are healing, but the holding company still faces extensive rehabilitation before good health returns.

As the physician in charge of the recovery programme, David Bell can draw some comfort from the fact that IPG has evolved from a stretcher case to merely walking wounded. Indeed, such has been the seriousness of its illness that even a cut in its first-quarter losses to $5.4 million compared with $13.5 million for the corresponding period last year looks like substantial progress.

As Bell, IPG's chief executive, indicates on page 24, the company has had to swallow large doses of nasty medicine. Thousands of jobs have gone and acquisitions that now look foolhardy and reckless have been disposed of.

What is now clear is that IPG's illness has been largely self-induced.

Not only did it put on too much excess weight but it allowed financial mismanagement to fester because of lax accounting controls. Bell's best hope must be that with IPG's exit from its disastrous foray into motorsports and the measures in place to ensure the accounting discrepancies at McCann WorldGroup are never repeated, the purgative treatment is over. Nevertheless, Bell may yet have some difficult treatments to prescribe.

Would Lowe, soon to be under the command of its tyro chief executive, Tony Wright, be better off if its centre of gravity switched from the US to its spiritual home in London? Would it be better served by focusing on creativity rather than trying to match the reach of its global rivals?

And what of FCB? The network has always struggled with its late entry into Europe, has yet to name a successor to its veteran chief executive, Brendan Ryan, and maintains a worrying dependence on its long-time client, SC Johnson.

The verdict on Bell's progress in clearing up the mess he inherited has to be "so far, so good". He has never seemed like a stop-gap appointment, as some had feared, and is comfortable facing cynical Wall Street analysts.

If he can see the job through successfully, the $1 million bonus awarded to him last year may seem like a small price to pay.

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