Close-Up: Newsmaker - Gatfield risks it all with a new management plan

Steve Gatfield believes Lowe's London agency can operate without a chief executive. Brave or foolhardy, Noel Bussey asks.

Whether you think Steve Gatfield, the Lowe Worldwide chief executive, is barking mad or a genius for making the decision to leave his London agency without a chief executive, you do have to admit that he's got some balls.

Last week, the Yorkshire-born network chief forced Amanda Walsh out of Lowe London only 15 months after hiring her.

This followed the high-profile departure of Nancy Hill, the chief executive of the New York office, who departed towards the end of last year and has now taken the helm of the American Association of Advertising Agencies.

So Gatfield has lost two key chiefs in quick succession.

He brought in Walsh to replace Garry Lace, who had left the agency following an internal investigation - a damaging set of events for the agency's local image.

As a result, it's tempting to wonder if Gatfield's decision not to replace Walsh is partly a result of this run of high-profile management difficulties.

Instead, the plan in London is to hand the reins to the capable Ed Morris, the executive creative director and famously well-paid golden boy, and Rebecca Morgan, its planning supremo, in whom Gatfield has extreme confidence.

Gatfield says: "Rebecca and Ed are top-class professionals who have great front-facing relationships with clients. They're also both magnets for talent."

However, an industry source who has worked with Morgan before, and knows Morris well, questions Gatfield's decision, saying: "Rebecca is a brilliant planner with a great advertising mind, but she does not lead people well."

It could even be possible that Gatfield, who knows that Morris and Morgan can work well together, is feeling a little gun shy about bringing in an outsider.

Rumours abound of some very ugly, and destructive, politics in the Sloane Avenue agency over the past few years. Insiders say that Walsh and the agency's former marketing director Judy Mitchem were involved in regular, long-running spats. Meanwhile, Morris and Morgan are said not to have worked well with Walsh. Lowe has long had the reputation of being something of a political "lions' den", so, perhaps, Gatfield feels it best to avoid rocking the boat with a new face.

In addition, Gatfield and Tony Wright, the Lowe Worldwide chairman, will be spending more time in London, taking on some of Walsh's responsibilities, despite already having their own hectic schedules.

Weight has been added to Wright and Gatfield's belief that they can handle any issues thrown up by the London office by the fact that they have also decided to move the network's headquarters to the capital.

However, the significance of this is something that Gatfield is eager to downplay, saying London's new role amounts to it becoming an "administration centre".

Despite this, it can still be seen as a particularly risky move to forge ahead with a plan to have your network hub agency running without a domestic chief executive.

A good chief executive will not only work on high-level pitches, schmooze top-level clients, handle regulatory issues, motivate the troops and raise the agency's profile, but they will generally invest so much of themselves that the business will become an extension of their personality.

So what exactly is Gatfield thinking? Is there method in his madness? He explains: "Agencies are being paid for selling a product, not the old-school client servicing."

But more central to his line of thinking is the way that Lowe is evolving as a multinational network, and not as a conglomeration of local offices.

He adds: "We've moved a long way as a global enterprise. And as the company evolves, so does the job. Amanda did a job for us in London, but where we are going, a London-facing chief won't work."

Gatfield then points to the fact that most of Lowe's revenue comes from its big international clients, such as Johnson & Johnson, Unilever and General Motors.

"We have some domestic business, but we also have a great deal of multinational business. This means a large part of our income is multimarket. This is where we have to concentrate," he says.

"A large part of client movement has more than a local market focus.

When you look at Lowe London's domestic client list, you can see what he's talking about. John Lewis is the only notable piece of non-network-aligned business.

It is fair to say that the agency bears little resemblance to its former self. It was the UK's second-biggest agency after its merger with Lintas in 1999, according to Nielsen figures. Today, the shop hovers around the 20th mark, having been overtaken by the likes of WCRS, Fallon and Delaney Lund Knox Warren & Partners.

So, instead of fighting the decline, the decision not to appoint a chief executive appears to be giving up on London building itself back up into the UK's top ten using local account wins.

There's a sense from Gatfield that part of his reason for not hiring a chief executive in London is because he doesn't believe he can get a good one. He thinks that the very best managerial talent wouldn't be satisfied with a domestic role, or to put it another way, wouldn't put up with constant interference from global managment. Lowe, one source who has worked closely with the network says, is populated by very powerful account barons.

Gatfield says: "There's a very small handful of very good people, but they want a bigger canvas. Very few substantial agencies can throw the keys to someone and say 'it's yours'. You can't be an island."

So what is his vision for Lowe? He sums up his masterplan by saying: "I want it to be a truly high-value, ideas-centred, multicultural creative network."

However, it is the final part of this statement that underpins the thinking behind his idea.

With a focus on global accounts and new business, Gatfield believes that drawing on skills, talent and experiences from around the globe is invaluable.

He points at the recent $300 million Magnum ice-cream win, which used a pitch team made up of people from different offices around the network as proof.

The global Beck's win is another feather in his cap. For such presentations, Lowe would assemble a team of senior talent plucked from its Indian, Argentinian and British offices, for instance.

This has given Gatfield a recent confidence boost, and he appears extremely upbeat about how successful his plans will be.

However, people are already beginning to wonder what his long-term plans are. For one thing, his contract is up for renewal in April 2009, and many are reading a lot into this date. But not Gatfield. He says: "My plans are to continue operating in the environment I'm currently operating in, but I haven't started having those conversations with IPG yet." One source who knows him says that Gatfield's ambitions lie in Asia, where he used to work for Leo Burnett.

Either way, the message for London seems to be that global management is concerned with global revenues. And there's no doubt that without a local chief executive, the network's key hub office will lack dedicated management focus. Local rivals will like that.