One could be glib and suggest that something embedded deep within the IPG DNA - a time-delayed allergic reaction to the ingredients found in Coca-Cola? - requires a wrenching restructuring at the top levels of management every three-and-a-half decades. The stunning turn of events last week, which led to John J Dooner Jr leaving his posts as chairman-CEO to return to the McCann-Erickson World Group division from whence he came, echoed the dramatic dislocations that occurred at Interpublic in November 1967. That's when Marion Harper Jr, who invented the concept of the advertising agency holding company when he founded Interpublic seven years earlier, was deposed by a board of directors angry over what its members perceived as reckless overspending.
In Dooner's case, it was not spending too much that spelled his downfall and the concurrent rise of Interpublic's vice-chairman, David Bell, as his board-picked successor. Rather, the culprit was a litany of woes that never quite seemed to be resolved no matter how many assurances were forthcoming that there soon were to be glimmers of light at the end of the proverbial tunnel.
Alas for Dooner - and for James Heekin, who was abruptly sacked from the McCann-Erickson posts that Dooner is stepping down to take - that light turned out to be a veritable aurora borealis of headlamps from the proverbial oncoming trains. Accounting irregularities forced earnings to be restated, not once but twice, reaching a total of $181.3 million. Those problems initially were attributed entirely to book-keeping errors at the European operations of McCann-Erickson, but that explanation subsequently was amended to include examples of cockeyed counting at several other Interpublic operations.
And investors, suffering battle fatigue from dodging the bombshells dropped by Interpublic in the past six months, are bracing themselves for additional arsenals that may be headed their way, most imminently when the agency company releases results for the fourth quarter and full year 2002, now planned for 6 or 7 March. Already there have been reports that losses from the motor-car racing operations of Octagon, the sports marketing unit, may have ballooned far above initial estimates of $58.4 million.
It could be that the only reason Bell's first remarks as the new chairman and CEO won't start out with "Oops! I did it again" would be a reluctance to quote a pop star who endorses the Omnicom soft drink. While it's hard to find anyone who predicted back in August, when news of the accounting irregularities first surfaced, that the mess at Interpublic eventually would cost Heekin his job and Dooner his seat at the head of the table, the trajectory of ensuing events reflects, oddly enough, the agency business itself these days.
It used to be, once upon a time, that a shop running out of gas, losing accounts and top talent, could pull over to the side of the road, regroup, recover and eventually re-enter the race. Today, that's well-nigh impossible, thanks to impatient shareholders, anxious clients, antsy regulators and headline- and deadline-crazed media reporters.
The results? Dooner and Heekin no longer need ask for whom the bell tolls, and Interpublic is now where the Bell toils.