Entering his third year as chief executive of McCann Worldgroup, Nick Brien admits he has a problem. But it’s not the one you might expect for a man overseeing the company’s embattled flagship, McCann Erickson. The world’s largest agency network has struggled to win new U.S. business while bleeding global legacy brands like Nestlé’s Nescafé and ExxonMobil—ending a 100-year relationship with the oil giant. And in another stinging loss, Lufthansa—the world’s fourth largest airline—took off for a small independent German shop amid sniping press coverage that legendary McCann is fast losing altitude.
Is Brien’s problem that he hired too many outsiders with big titles and less than relevant experience to reinvent one of advertising’s strongest agency cultures?
Is the problem that the ambitious—some say too ambitious—media-agency turnaround exec focuses too much on the Big Vision at the expense of serving clients in the trenches?
No, none of that.
The problem, Brien says, is public relations.
He insists that he has only failed to convey what he calls his great progress in transforming the legendary century-old agency. “One of the areas I didn’t consider as important as I do now is communications,” Brien emphasizes between sips of espresso in his temporary corner office with sweeping midtown Manhattan views. Like the transitions at McCann, the space is short-term until the completion of a redesign to open up the floor plan, allowing for more collaboration to reflect the larger cultural shift underway. Architecture as environmental public relations, you might call it. “Communications need[s] to be delivered with ruthless efficiency and regularity,” he continues. “And that hasn’t been the case.”
Ruthless regularity, certainly. Brien is working with his fourth PR exec since taking the top job at McCann in April 2010. Even in the smoke-and-mirrors world of advertising, those who know Brien say that he more than most industry execs manages through a prism of PR spin. For a man who joined Interpublic’s Universal McCann seven years ago—then quickly fixed the troubled media agency—the buzz about his latest challenge has not been good. As one former company executive puts it: “The McCann culture has always been about winning, aggressiveness, power, a not-to-be-denied mentality. Now they’re not winning. They’ve lost power. They’ve lost confidence.”
What’s at stake is far more than just reinventing one of advertising’s most traditional agencies. Worldgroup accounts for some 30 percent of Interpublic’s $7 billion in revenue, so the fate of its largest operating unit directly impacts its publicly held parent. In a May research note, Pivotal Research Group’s Brian Wieser called McCann’s turnaround key to IPG, highlighting account losses, risk to L’Oréal and the departures of executives who were important to account relationships. On the positive side, he pointed to growth in China, healthcare wins and additional business from GM and Nestlé Waters.
Raised in London by an Australian orthodontist father and German museum docent mother, 50-year-old Brien exudes a worldly air as he casually greets a visitor in a suit, sans tie. A naturalized American, he confesses that his U.S. passport is his most treasured travel possession in an ad career that began in the British capital as a media planner with Grey. Next, he moved to Leo Burnett London as media director, where he rose to become that agency’s CEO before hopping the Atlantic to Starcom MediaVest Group, Chicago, to lead corporate development. He went on to become CEO at Burnett’s marketing services arm, Arc Worldwide in Chicago. In 2005, he moved to New York as CEO of UM, which he overhauled before joining Mediabrands in 2008, reinventing the media management unit along with overseeing the resurgence of Initiative.
A big personality and intensely driven, Brien is a man who by his own admission hates standing still. But his strengths can also come across as his weaknesses—a confidence that can be perceived as arrogance, an impatience that appears impulsive. He sees himself as a leader taking a view from 30,000 feet, while appointing people to dive into more gritty details of business. (A small but telling detail: Brien, who received a $1.25 million bonus in 2011, was the only one of Interpublic’s five top execs who required a personal driver, according to last year’s proxy, something even holding company CEO Michael Roth didn’t need.)
Brien believes resilience is his best characteristic, a quality much in need at McCann these days. In addition to the global accounts lost on his watch, the agency’s U.S. client departures include Verizon Wireless (which was heading out the door before he arrived), Avis, Unilever’s Bertolli and P.F. Chang’s brands, Nestlé’s Nesquik and Coffee-Mate. Clients like Kohl’s and Staples are putting out feelers to other agencies for work, while McCann resigned Applebee’s in review. In non-incumbent pitches, the firm failed to win business such as Hennessy, Norwegian Cruise Line, Burger King and Stolichnaya. Meanwhile, the agency’s San Francisco creative crown jewel, Twofifteen McCann, is holding on to Hewlett-Packard PSG Americas for now, despite losing global project work for HP. Also gone on the West Coast: iShares, the exchange-traded funds marketed by BlackRock, which has been one of Interpublic’s largest investors.
Account losses are tough at any shop. But McCann’s history and world growth have been deeply intertwined with big-name multinational marketers like Unilever, Coca-Cola, General Motors, Nestlé and L’Oréal, not to mention recently fled ExxonMobil. The dollar amount of business lost during Brien’s tenure is difficult to calculate. But Nescafé’s loss provides a glimpse: The brand generated an estimated $25 million annually for McCann. While Nesquik and Coffee-Mate represented an estimated $4 million to $5 million in U.S. revenue, the symbolic loss of such prominent brands was more damaging to McCann. A holding company statement insisting thatNescafé’s exit would not impact financial results only underscored Nestlé’s significance.
But Brien is sanguine about change at McCann, calling the agency’s transformation a marathon, not a sprint. “I inherited a culture that was comfortable, that was very steeped in working a certain way,” he says, of combining the old and new hires and attitude. “Now it’s one McCann, and [it] is jelling very well.”
When Brien took over from longtime McCann account man John Dooner, Interpublic bet that a media-agency exec with a digital orientation had a better view of the industry’s future. Given license to shake things up, he dug in with a barrage of top-heavy hires with titles like chief integration architect, global director of performance analytics, global IQ director, chief experience officer, director of project leadership and executive strategy partner/creative technology. If the unusual monikers raised eyebrows, the roles seemed to signal a cultural shift toward a digital think tank rather than an agency known for its street-fighter attitude and fondness for cigar-chomping, red-meat lunches at Patroon.
Even for a man who lives by the motto “Fortune Favors the Bold,” Brien’s most audacious move was recruiting Swedish creative director Linus Karlsson, the co-founder of Mother New York, who left a 146-person Manhattan boutique for prominent roles in two McCann offices with a combined staff of more than 700. As the new chairman, chief creative officer of McCann New York and London, the mellow pick-up truck driving Swede hired fellow Scandinavian transplants like Andreas Dahlqvist as the New York creative lead with little experience in Gotham’s cutthroat advertising scene.
Hiring outsider Karlsson was a bold roll of the dice at the culturally bound agency. While Brien believes he has a communications problem, he now appears to acknowledge he also has a casting problem. Fifteen months into Karlsson’s tenure, Brien moved him aside into a vague, newly devised role of chief creative officer, global brands, along with Dahlqvist who assumed similarly unclear duties as deputy CCO of global brands. Two longtime McCann employees, Sean Bryan and Tom Murphy, replaced them in New York as co-CCOs. While the return of more traditional influence reassured many agency marketers, some of the creatives hired by the Swedes are not too pleased.
Next, Brien juggled other key positions, including hiring U.S. Grey N.Y. rainmaker Alex Lubar as CMO of McCann North America, effectively replacing Barbara Yolles, who lasted a year as the region’s chief growth officer. (She, in turn, replaced Mitch Caplan who was the agency’s North America CMO for just seven months.) It remains to be seen what happens to London-based global chief growth officer Lotta Malm Hallqvist, an ex-Mother colleague of Karlsson’s with little previous hands-on experience in the U.S.
With more staff shifts likely, Brien argues that corporate vision is more important than the people needed to deliver it. “I’m a strong believer in your vision sets your strategy and that sets your plan. People populate the plan,” he says. “With more traditional agencies, it starts with the people, but we were very clear it starts with the vision.”
The big picture, as Brien paints it, promised to empower workers through decentralizing. Yet to some inside, the changes feel like a top-heavy management structure with roles ill-defined by an executive fond of business-book speak. “Nick thinks he can change an organization of that size overnight with platitudes and bringing in people at high levels with no operating experience,” says a former McCann exec. “Things absolutely needed to change, but there is a path you take to do that. The team he’s assembled has been chasing new business without addressing the needs of existing clients.”
Therein lies the rub. McCann chief executives have always prided themselves on their long-standing client relationships. But Brien has little recent general-agency management experience beyond his early years at Burnett. To some observers, the media agencies place more emphasis on size, clout and power rather than the finesse needed to cultivate marketer relationships and agency talent. (Along these lines, Brien’s close aide and confidant from his Mediabrands days, Worldgroup’s CFO Tara Comonte, quickly ruffled feathers with her abrasive style and intrusion into operating policy beyond financial boundaries, sources concur.)
The agency’s affable new North America president Hank Summy has also not run a general agency, coming from back-end digital technology shop SapientNitro. After McCann lost Avis in February, he may have shown his inexperience when he publicly described the loss as “not very sizable,” a seeming snub to the brand. (His boss probably didn’t take offense. In a similar vein after losing ExxonMobil, Brien played down the impact, saying that McCann handled Mobil, the “smallest’ part of the account, while the “big money” ads were handled by Havas agency Euro RSCG.) In March, Interpublic intervened in providing client management support. The holding company insisted that Gustavo Martinez, president of Worldgroup Europe, and Luca Lindner, who holds the same role in Latin America, each be given additional client responsibility as president, global brands.
McCann’s Swedish connections paid off last year with two assignments from Ikea to overhaul its website and catalog. And Brien points to organic growth as evidence that existing clients are signing on to his transformation. “We are not going to chase new business like wild pack animals in the Sahara desert,” he says, ticking off gains from General Mills, Sony and two global assignments from Coca-Cola. The agency added a social assignment from Nestlé Waters and held onto the estimated $15 million to $20 million U.S. Army account. It also picked up incremental Chevy business in global markets, but those gains resulted from a procurement-driven General Motors review to reduce expenses.
At UM, it took Brien some two years to show results, so some say it’s too soon to pass judgment. “Nick is making very ambitious changes at one of the oldest, hidebound agencies,” says Russel Wohlwerth with External View Consulting Group. “It takes time to change, given the enormity of the task.”
One existing client rumored to have a wandering eye for other agencies lavishes praise. “Under Nick, McCann has become more dynamic, more aggressive, more collaborative,” says MasterCard chief marketing officer Alfredo Gangotena, citing the credit card company’s new Priceless Cities pitch. Focused on Facebook and Twitter, the campaign builds off previous sweepstakes and promotions. As for MasterCard looking elsewhere, Gangotena calls such speculation “rubbish.”
Meanwhile, rumors continue to circulate about troubles with Paris-based L’Oréal, which began before Brien joined Worldgroup. Regardless, McCann’s ill-fated Beauty Village new agency venture under his watch didn’t help. The idea was to combine the French company’s namesake brand with its Maybelline business, blending two accounts previously split between McCann and Interpublic’s Gotham unit, respectively. Though a year in the making, a top L’Oréal client had not approved the strategy, which had to be scrapped two months after its debut last year in an embarrassing about-face.
While Wall Street analysts appear supportive of Brien’s efforts, the loss of any L’Oréal business could change that. As of mid-July, the stock was trading around 10.50, 17 percent off from its 52-week high. But as became apparent last year when the stock dropped 13 percent after Interpublic reported a slightly lower-than-expected increase in profits, investors can bail in a New York minute in a business where significant revenue can disappear in 90 days after an account loss.
The man most concerned with that, of course, is Interpublic chief Roth, who holds around 978,374 company shares with an indicated worth of more than $10 million. In earnings calls, he has gone out of his way to affirm his solid support of Brien and his team despite the negative “noise” about progress in McCann’s turnaround. As Roth tells Adweek: “Nick gets the new world. He brings the kind of energy, expertise and vision that will bring McCann into that new world. Transformation of the size of Worldgroup takes time, and we’re not expecting it overnight. We’ve had some bumps in the road, but the talent and direction are right.”
The talent keeps changing. The direction? Only time will tell.