The Networkers: Simon Sherwood

As Bartle Bogle Hegarty's third man and chief operating officer, how does Sherwood hold on to that BBH magic, while driving the group's international growth? Claire Billings investigates. The usually calm and collected chief operating officer of Bartle Bogle Hegarty, Simon Sherwood, becomes quite hot under the unbuttoned collar of his smart blue shirt when questioned about the state of the ad industry.

"Agencies are run on the fear of losing clients," he says with uncharacteristic passion.

It is all very well for Sherwood to criticise the hand-to-mouth existence of rivals from his position at the top of BBH, a creative-led agency that is selective about its clients and enjoys a pre-eminent position, particularly in the UK, because of it.

But bullishness comes with confidence, and that's something BBH oozes, particularly since emerging unscathed from the recent downturn, which battered its larger rivals.

"You see a lot of agencies doing things defensively. As holding companies own more assets, the fear level gets greater because losing business and big clients creates a big knock on their share price."

Sherwood's directness is typical of a man whose no-nonsense style has earned him his place as BBH's third partner alongside Nigel Bogle and John Hegarty, since John Bartle retired in 1999. Sherwood's pragmatism and drive are a good foil to Bogle, who, by his own admission, is more visionary.

His single-mindedness, particularly on the subject of what's wrong with the industry, is reflected in BBH's structure. He rejects the description of a "micro network", a new term to him, and refutes that it is a network at all, but more like "one agency with five offices".

The BBH Group embraces operations in Singapore, Tokyo, New York and Sao Paulo. Each outpost was set up to handle existing clients' business and has turned the agency into a global business with billings of $1 billion and revenues of $100 million, according to Sherwood.

The deployment of each of the group's four non-UK offices is down to Sherwood and his calculated approach to turning the founders' vision into reality means that new offices only open in a location where there is sufficient business potential.

Singapore, Tokyo and New York were all Levi's led. The latest addition, the acquisition of Brazil's Neogama, was inspired by the promise of more Unilever business.

BBH's expansion plan was kick-started in the mid-90s and Sherwood, who was the agency's longest-serving employee apart from the remaining founders, was the natural choice for leader.

Sherwood and his young family jetted off to Singapore - a typically BBH-ish, unconventional location - at a time when the then-tiger economy was booming. Singapore also allowed the agency to flex its international ambitions out of the spotlight of North America. "We thought if we got it wrong, it should be somewhere other than the biggest advertising market in the world," he says.

No-one is better placed than Sherwood to carry the BBH torch around the world. He joined the agency with Tim Lindsay (now the chief executive of Publicis) in 1982 - Lindsay ran Levi's, while Sherwood, a car man and a former account manager on the Volkswagen business at DDB, ran Audi.

The two rose through the agency almost side-by-side but, in 1996, Lindsay bailed out along with Jerry Judge, one of the founding partners. Bogle says the duo "didn't believe in our vision of a global agency without a conventional network". Sherwood, however, bought into the vision and was rewarded with a Porsche 911 to go with his Audi Quattro.

The 911 aside, Sherwood's decision to stay and become a BBH-man turned out to be a defining moment both in his career and in the agency's development.

The decision to go international was the most dramatic move in the agency's life, which at the time spanned 14 years, and seemed counter-cultural to the BBH philosophy. But Sherwood argues that the BBH blueprint has ensured that it is a network with a difference. "Networks by definition are a collection of multi-local offices and we don't want to be that. We want to be an agency in five or six or seven places. We want to be a different kind of network."

Keeping the business small and focused makes it easier to realise the agency's vision of making each global office an extension of London, Sherwood claims, while tailoring the service to suit the local climate. "One of the core components of our success is our ability to reinterpret the BBH brand for the market it exists in," he says.

His measured and calculated approach, however, means that the decision to launch a new office is driven by client potential.

"We would only open an office if it were near a big source of client potential, such as the west coast of America. But we don't look at a map and think: 'Oh shit we haven't got an office in Central America.' We would only open one if there was a good reason to build one beyond the fact that we haven't got one already."

It is easy to take the moral high ground and claim small is beautiful when you have the safety net of being plugged into the mighty Publicis network, which, through Leo Burnett, owns a 49 per cent stake in BBH.

The deal, struck in 1998, was instigated by Bogle to give BBH access to the international media operations of Starcom, which was merged with its own media shop Motive. It also allowed Leo Burnett to learn from the BBH model of putting ideas first. And when BBH finally concluded the sale of its Starcom Motive stake back to Publicis earlier this year, it earnt itself a significant war chest to fuel further growth of the BBH brand.

Sherwood admits that the arrangement with Publicis has proved crucial in cementing relationships with its growing number of global clients: Leo Burnett handles Sony Ericsson (a BBH client in other markets) in China and South America, for example.

Sherwood - who clocks up as many as 100 flights a year, developing and oiling client relationships and keeping close tabs on local operations - perhaps sounds disingenuous when extolling the virtues of BBH's small structure. After all, the agency taps into the Burnett powerhouse when appropriate. But the structure allows BBH to live up to the reputation of its black sheep mascot and do its own thing.

Its continuing strategy to keep the work as a beacon of what the agency stands for has paid dividends with multi-national clients. Unilever - now BBH's biggest client - has just asked it to take on its Mentadent and Signal dental healthcare brands. If the agency agrees - it would have to resign its Perfetti dental care account in Italy - it will bring the number of Unilever accounts at BBH to 12.

Clearly, the BBH/Unilever relationship has blossomed since Sherwood, who also has senior client relationships with Audi, Perfetti, Mentos and Sony Ericsson, took over the business in 2000.

He admits that not all BBH and Unilever relationships have run as smoothly as he might like, including Salon Selectives, because some of Unilever's people are too "conservative and risk-averse". But apart from those more conforming brands, Sherwood doesn't see any reason why the relationship shouldn't "grow and grow".

After the Leo Burnett deal, BBH resisted the temptation to fall into line with Burnett's status as a Procter & Gamble agency and the decision to remain faithful to Unilever has resulted in a constant injection of new accounts. Sherwood says the decision also helps demarcate the agency's fiercely guarded independence from the Leo Burnett parent, Publicis Groupe.

Publicis and BBH are so separate that Sherwood hasn't even met Maurice Levy and, while he recoils as he admits it, it underlines BBH's claims of autonomy.

But despite support from its favourite clients, BBH's international growth has not been an unmitigated success. Difficulties in establishing a foothold in New York continue, six years after the agency opened its doors for business there. The problems there have been largely creative ones. The agency's original creative director, Ty Montague, left in 2000 and the creative department was rudderless for six months. Its most recent creative chief, Kevin McKeon, also left after only three years in the job. The agency, once again, is without a lead creative. Hegarty has taken on a roving creative role and the task of finding a replacement.

Sherwood admits the New York agency hasn't cracked its creative offering and needs to produce a piece of work of the calibre of Levi's "launderette", to work the same magic on Manhattan that Nick Kamen in boxer shorts did for London.

As for the future of the group, there are plans to build on its music publishing and content businesses, radio and programming, and, while international expansion is on the agenda, it's not with a view to becoming one of the big players in terms of scale.

"We're not aiming to get into the big guys' league. We're in a niche, that's what makes us interesting and that's why we want to stay in a niche."

After 22 years, Sherwood himself seems in something of a niche. His relative anonymity on the local and international stage - a partner but without his name above the door - is not, he claims, something that has ever rankled.

Becoming the third man since Bartle stepped down and having respect from within the agency is enough for him.

He still sees his future at BBH, admitting that the offers to launch start-ups (he was famously rumoured to have once plotted one with Lindsay) and calls from headhunters have pretty much dried up. "They've realised it's impossible to get me out," he says.

And he does still get passionate about the business, particularly when it comes to debating what's wrong with it.

"You'd think that, with all these incredibly smart people, the industry would be the most forward-looking, progressive, front-foot, innovative business. But it isn't. The quality of work that comes out of agencies can be exceptionally high and the UK leads the world. But the way the industry is structured and operates doesn't reflect that at all, because we're living on fear."

To counter this fear, Sherwood believes in succession planning - having people earmarked for senior agency roles as much as five years in advance - and fee-based payments, which will be implemented across all BBH clients next year. These two strategies, he believes, will allow the group to be more forward thinking, compared with networks whose "horizons are the next financial reporting period".

"No-one's asking: "What does the industry need, how do we redefine this business? How do we take an initiative and provide some real leadership here?" In our own little way, we are trying to do that."

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