CLOSE-UP: NEWSMAKER - ANN FUDGE. Y&R's new chairman slips in under adland's radar

Will Ann Fudge's business acumen help steady Y&R? Mark Sweney investigates.

The appointment of Ann Fudge as the chairman and chief executive of Young & Rubicam took the ad industry - which quietly prides itself on knowing about most major events in advance - by surprise.

The departure of her predecessor, Michael Dolan, wasn't unexpected - there had been some speculation that he and the WPP chief executive, Sir Martin Sorrell, had clashed over the future of Y&R. But, as a former client who'd never worked in advertising, Fudge wasn't on anyone's radar.

A scan of Fudge's CV confirms that when it comes to business her track record is impeccable. She is a former president of Kraft Foods, responsible for the $5 billion beverages, cereals and desserts division until her departure in 2001 (she ran brands including Maxwell House and Jell-O). Fortune magazine has named her as one of its 50 most powerful women.

Nevertheless, Fudge acknowledges that getting to grips with the Y&R global network, including Burson-Marsteller and Wunderman, will require quick learning.

"The most important thing to focus on is that I am bringing experience and perspective to run the business and build on talents in the organisation. The first three things on my 'to do' list are listen, listen and listen. Mike (Dolan) and I have used my first few days to contact clients and staff in the Y&R group as part of the transition. The most important thing is not to come in with a pre-set agenda."

Sorrell is quick to dismiss any queries over her advertising inexperience - focusing on her business acumen: "We believe that Ann is an enormous talent. She has a strategic marketing perspective from the client point of view and a tremendous understanding of the importance and nature of the creative process. Ann and Michael Patti (the New York agency and worldwide creative chief) will make a great partnership. She also has a great business background through directorships at General Electric, Honeywell, Marriott Hotels and The Federal Reserve Bank of New York."

Her ability to run a successful business and her client background make Fudge's appointment timely. In the middle of a painful ad recession, her ability to understand client needs and implement efficiencies couldn't be more relevant. Sorrell isn't the first to look clientside for a candidate to turn around a troubled network. Saatchi & Saatchi brought in Kevin Roberts, Cordiant hired David Hearn and, more recently, IPG recruited Chris Coughlin as its chief operating officer.

Fudge believes that her lack of experience is not an issue as the industry moves away from the traditional client/agency relationship to one of business partnerships. "You should focus on what a person brings to the business and less on whether they are client side or agency side. When I worked with Ogilvy it was not an agency but a partner and over time the agency/client relationship will blur."

The strength of Rainey Kelly Campbell Roalfe/Y&R in the UK can give a misleading impression as to the strength of the network as a whole. London may be performing, but the same cannot be said of the rest of the network. Y&R's North American business, in particular, needs attention. The agency has lost key clients including Kentucky Fried Chicken, United Airlines and Jell-O business (the review came after Fudge left), which the agency had held for more than 50 years.

To this end, Fudge fits the bill to redress the problems - she is well connected in the US, very high profile and has the ability to attract new business. She's also likely to strengthen the agency's relationship with its Kraft client.

Her hiring is part of a wider shake-up in New York that in February saw Patti appointed as the worldwide creative director and chairman and chief executive of the flagship Y&R office.

While the US network has recently shown signs of recovery, picking up the bulk of the $340 million Burger King account and the consolidated TexacoChevron business, sources expect further senior management hirings to bolster the NY office.

A major focus for the ad network is the development of the Y&R/Wunderman alliance - part of Sorrell's plan to offer clients an integrated advertising approach.

It is thought Dolan and Daniel Morel, the chairman and chief executive of Wunderman Worldwide, had a difficult relationship. One key sticking point was that Morel reported directly to WPP, bypassing Dolan in the NY office.

This confusion of reporting lines - which reputedly has hampered the growth of the alliance - has been obliterated, with Morel now reporting to Fudge. Closer working ties between Wunderman and Y&R are now expected.

Fudge says: "I have ideas, having worked with agencies. I like to think of ourselves as a full-service marcoms firm with advertising as a big part of that. But clients want a business partner and I want to look at the business holistically."

William Eccleshare, the chairman and chief executive of Young & Rubicam/Wunderman EMEA, is confident that Fudge has the alliance high on her priority list: "Ann has an extraordinarily impressive track record and news of her appointment has been greeted with universal excitement. Her experience on the client side makes her well qualified to build a distinctive and relevant proposition for the Y&R Group. We are already well advanced in developing the Y&R/Wunderman alliance in Europe and I know Ann is utterly supportive of this strategy."

The question of whether Fudge is in over her head in running an advertising agency network is only relevant under the assumption that an agency is a vastly different beast from a traditional company.

That may have been true once, but not anymore. Sorrell has a bottom line to watch and Fudge knows how to run large-scale, multi-faceted companies.

In any case, Fudge won't be responsible for creating ads - perhaps the only function that differentiates an agency from any other business out there. Given the current economic climate and the focus on financial performance and integrity, Fudge has the pedigree to get the job of strengthening the network done.

- Stuart Elliott, p21.