Moray MacLennan is celebrating finally becoming chief executive of M&C Saatchi PLC. But he’s not at Dukes with a Grey Goose martini in hand. He’s standing outside a rented house with a bunch of strangers.
It’s New Year’s Eve 2020 and a glass on your doorstep is as glamorous as it gets for anyone. Though, this being MacLennan, the house in question is on a grand Victorian terrace in Camden, the crystal goblet is full of Bollinger – 2012 vintage – and the strangers are artists and intellectuals.
In a fit of optimism before the second wave of Covid-19 – and possibly in anticipation of the enlarged pay cheque ahead – the impeccably connected, Fettes College and Cambridge-educated former army brat moved out of his house in Primrose Hill so it could be renovated. Weeks into the new year, he’s still a way off moving back, due to Brexit-induced supply shortages. But it’s not Italian cabinets that are the issue.
“I didn’t know that plasterboard came from Spain,” MacLennan quips. “Marble’s not a problem apparently. There’s lots of marble around. It’s the plasterboard.”
At the end of January, MacLennan presented his vision for the new M&C Saatchi to the City in a bid to put a gruelling 18 months behind him.
The accounting scandal that rocked the company – and its investors – from August 2019 and led to a huge boardroom split at the end of that year meant M&C Saatchi was already struggling before Covid hit.
The company responded by merging eight entities and shutting 14 operations around the world, including its Los Angeles office.
“That’s not something which is quick and easy,” MacLennan explains. “There are people involved; there are contracts involved; there are clients involved; there is property involved.”
At the same time, MacLennan was working on “fixing the finance and financial function” – crucial work as the year-long Financial Conduct Authority probe into the company continues.
As Campaign went to press, M&C Saatchi shares were 92p, down more than 70% on their price before the misstatements become public.
MacLennan – who is largely unscathed by the scandal despite being part of the leadership at the tiller – dismisses City speculation that M&C Saatchi could have gone bust last year as a result of the money owed in shares to the agency’s founders around the world. He concedes there were a lot of unknowns: the cash situation; whether client contracts would dry out; and if the economy would grind to a halt. But, he says, the company’s recovery was born from that place.
“All those unknowns led to one absolute laser-like focus,” MacLennan says. “In my head there were only two things to do: support the people, serve the clients. I know people will be cynical about this, but I’ll be eternally grateful that clients didn’t take the easy option. Our people did an extraordinary job during that time. And we pulled out of that nosedive.”
MacLennan claims M&C Saatchi hasn’t lost a major client anywhere (“I wouldn’t call Twinings [which reviewed in the UK this month] major”) and picked up new accounts, including the UK census, TikTok, Iceland, Kia and Origin.
“There were so many reasons not to appoint us last year,” he says, his usual bravado a little chastened. “The headlines made clients’ life awkward with their legal or procurement department. So, they didn’t thank us for it. Nevertheless, they judged us by the work and the service that we provided.”
The global network was also fortunate to have accounts in durable sectors, such as finance and retail, as well as government business in the UK, Australia and the US.
“That has certainly helped,” MacLennan says. “The other thing is, it’s remarkable the extent to which people accept and they adapt and they get on. It’s been extraordinary; the resilience of the people who work within the sector and within our agencies around the world. There has been quite a bit of pain but the only upside of that is we’ll come out, genuinely – though it sounds like a cliché – we will come out leaner and stronger.”
M&C Saatchi will now be split into five divisions Global and Social Issues; Brand, Experience and Innovation; Performance Media; Passion Marketing; and Connected Creativity. Sitting on top of the divisions will be a global growth platform, built using third-party software but driven by the people within the company, MacLennan says.
Connected Creativity will be the home of the “traditional” ad agency, although MacLennan bristles a little at the idea there is anything of the sort left in the industry. “What’s called traditional advertising is probably under 10% of our business,” he says. “It’s everything from transformational creative ideas, which are still obviously part of the brand, through to personalisation, digital content and data insight.”
Shelia Mitchell, a long-term client in the UK in her former role as director of marketing at Public Health England, says the “reinvention of the agency is real”. When PHE started working with M&C Saatchi in 2008 what it needed was a “big creative brand idea”, she explains. Now, marketers need agencies to be much “faster and more agile” and, under the leadership of chief executive Camilla Kemp and chief creative officer Ben Golik, the agency has delivered. For example, it turned around the “Better health” campaign in little over a month.
New offerings include M&C Saatchi Fluency, which will work with advertisers to get value out of their existing data. A sustainability practice will help brands meet consumer demand for improved environmental, social and corporate governance. And a digital innovation capability will open in the first half of 2021 to develop new products alongside clients. The latter follows research findings that 54% of large companies predict half of their revenues in three years’ time will come from products that do not currently exist.
If all of this helps M&C Saatchi get back to delivering anywhere close to £20m in profit each year, it might start looking undervalued. Alex De Groote, a City analyst, says: “If Moray can stabilise the ship, M&C Saatchi could end up being a really good recovery story.”
MacLennan has no plans to replace himself as chief executive of M&C Saatchi Worldwide (the network), labelling the former structure where he reported to his predecessor David Kershaw, the PLC’s chief executive, as “idiosyncratic”.
A new executive board will lead the company, with key people taking responsibility for remits such as commercial, talent or business development, as well as running their own businesses. He is committed to bringing in local entrepreneurs to form the network.
“That new, more rigorous, strategic approach means that I don’t need to replace myself,” he says.
The founders of M&C Saatchi, Kershaw, Jeremy Sinclair, the chairman, and Bill Muirhead, an executive director [and Lord Saatchi, before he left the business], shared an expansive office high up on the seventh floor of Golden Square before they exited the business at the end of 2020.
MacLennan is – Covid business practices excepting – based on the sixth floor with the rest of the worldwide team. When asked whether he has plans for the hallowed space above him MacLennan jokes, “a jacuzzi”, before switching tack. “I was very tempted to go up there but I’m happy on the sixth. We’ll use the seventh floor as a communal space for clients and companies within the building to work together. It’ll be a great symbol of a new way of working.” He pauses, before adding: “Although I reserve the right to move in there myself if I change my mind.”
MacLennan will not be drawn on whether the directors who resigned in December 2019 (including independent directors Lord Dobbs, Sir Michael Peat and Lorna Tilbian as well as co-founder Lord Saatchi) did so because the prior regime refused to appoint an independent chairman – a standard City practice – and a co-CEO.
Kershaw, Sinclair and Muirhead stuck around to see the accounting scandal through, while the shares dropped to 30p in April 2020 (and a surprise investor, Vin Murria, a tech entrepreneur, bought a 13% stake).
The three amigos, as the financial press likes to call the co-founders, tuned in to MacLennan’s presentation but Kershaw says he does not plan to take one-time WPP chief Sir Martin Sorrell’s approach of publicly criticising their former company.
“This may come as a surprise to people,” Kershaw says. “But we think once we’ve left the company, and are shareholders, it’s much better to talk the company up than to insult it in public. We will not interfere more than any other shareholder, other than if we can help with new business. And even Moray would have to concede, we have over the years.”
In an earlier, cordial conversation with Campaign alongside Kershaw after his promotion was confirmed, MacLennan thanked “David, Bill and Jeremy for their extraordinary service and for creating a wonderful company”, prompting Kershaw to interject: “He’s always been full of shit.”
MacLennan, who first worked with the trio in 1983 when he joined Saatchi & Saatchi and followed them to M&C Saatchi in 1995, continued, undeterred: “Honestly, it isn’t about people leaving or taking over. It’s been incredibly difficult for 15 months and people are looking forward, they can see the light at the end of the tunnel, as perhaps the rest of society can. And for us, it’s doubly needed, given the difficulty. So, I think people are ready and waiting and optimistic.”
Kershaw, meanwhile, will have more time to perfect his 6pm martini, the serving of which he has had to take on himself during lockdown. MacLennan cites Kershaw’s method as the most useful piece of advice he has received from his former boss.
Sinclair will also be able to provide more unsolicited comms advice to the government – as he has already done during the Covid crisis via his contacts in the Conservative Party.
As a mantra, “meaningful change” is quite a leap from Sinclair’s brutal simplicity of thought. Indeed, colour has even found its way into the agency’s brand identity for the first time.
But the industry is also much changed since M&C Saatchi was founded 26 years ago. MacLennan doesn’t even drink during the working day – it was nothing stronger than spicy tomato juice at The Wolseley lunch where (now) chairman Gareth Davis told him he’d got the job.
MacLennan has been on board the M&C Saatchi boat since the start and stayed, even though he had a decent chunk of equity at the time of its stock market float in 2004. He is unlucky to have taken the helm in choppy waters, and the listed company remains vulnerable if an activist investor gets involved. But the Saatchi brand has righted itself before, and what a great tale it will be if MacLennan can pull it off again.