Client Exec Launches New Era at Y&R

Bounding out of an elevator in the lobby of Young & Rubicam’s New York headquarters, worldwide CEO Ann Fudge was all smiles last Tuesday. As she headed into her first big meeting with staffers, she was an energized politician ready for a new role—her first job at an ad agency—and for the overflow crowd of about 300 that had been stunned by the change of guard announced the day before.

Inside the meeting room, a whir of chatter simmered down when outgoing CEO Mike Dolan spoke positively—albeit haltingly—about the move. Fudge later thanked him for his seven years of hard work, leading a sustained round of applause.

Fudge, 52, a former division president at Kraft Foods, left the lectern to get close to her audience, breaking the ice with a few bons mots and personal tidbits (she’s a grandma, she likes to travel). But her upbeat remarks could not erase the reality that while Dolan seemed to be on a roll this year, WPP Group CEO Martin Sorrell had lost his patience with the weakest performer among his three big agency networks.

Sorrell’s move marks the end of an era at Y&R. Three years after WPP Group bought the agency, Dolan is the last in a line of top execs to leave, following Tom Bell, Linda Srere and Ed Vick.

Dolan, 56, a mild-mannered leader, also came from the client side (PepsiCo) and had no agency experience when he arrived as CFO in 1996. He recently led the agency’s pitch for the $95 million global ChevronTexaco account, which Y&R won in January. In February he recruited BBDO’s Michael Patti to run the New York office and lead creative efforts worldwide. And in April, Dolan’s high-level ties to Burger King parent Texas Pacific Group paid dividends when Y&R landed the bulk of its $350 million U.S. account.

Those highlights came after a prolonged dry spell, however. Sorrell’s hiring of Fudge as chairman and CEO of both Y&R and its group of companies suggests that three years after paying $4.7 billion for the global marketing network, he was ready for a bold change. Few clients have successfully crossed over to lead high-profile agencies—Saatchi & Saatchi’s Kevin Roberts is one exception—and that’s the big question hanging over Fudge.

If the Harvard Business School graduate is worried about it, however, it doesn’t show. “I keep saying, it’s less of a challenge than an opportunity, because I do think that client partners today want people to help them with their total business, not just advertising,” Fudge said after the staff meeting. “They want input to help think about how they build their business. And so, if we can put together that weight behind all the great creative and all the other work, I think it’s a real plus.”

Her new boss echoed that sentiment. “Her career at General Mills and Kraft has given her an in-depth understanding of the marketing opportunities and challenges facing the clients,” Sorrell said.

Fudge, a Washington, D.C., native, spent 15 years at Kraft, developing a reputation for team work and consensus building. She held several high-level posts and when she left in 2001, she was president of the beverages, desserts and Post cereals division, which generated $5 billion in sales annually. Among the brands she oversaw were Maxwell House and Post, both handled by Ogilvy & Mather, and sources said she developed a rapport with Ogilvy CEO Shelly Lazarus. (Lazarus, visiting the Y&R building Tuesday for an American Education Foundation meeting, brought Fudge flowers.)

A self-described honest, open and straightforward leader, Fudge told the staff: “I don’t really like BS at all, and I’m a good BS sniffer.” In her first week, she has encouraged dialogue, even promising to answer every e-mail. Fudge, a mother of two adult sons, said she is a fan of brown-bag lunches and other small get-togethers as a way to get to know the troops.

During her tenure at Kraft, Fudge worked with Y&R on brands such as General Foods International Coffee, and then-CEO Peter Georgescu called on her regularly. Georgescu, now chairman emeritus, said Fudge, whom he called a “class act” and “talented manager,” has the skills to be a great agency CEO. “Ann will succeed and thrive because she understands the customer and the relationship between a customer and a brand,” he said last week.

Harold Levine, co-founder of Levine, Huntley, Schmidt & Beaver and a neighbor of Fudge in Westport, Conn., said: “She is an extraordinary woman who brings a real understanding of what clients want from their ad agency and a message to the entire agency business that all doors must be opened to all minorities.”

Fudge said she left Kraft for another client-side job, but after first taking a few months off, decided to pass up that post and enjoy an extended hiatus. During her two-year break, she pursued philanthropic interests (she sits on the Boys and Girls Club of America board) and served on the boards of General Electric, Marriott and Honeywell. Job offers came along, but she said nothing grabbed her until WPP came knocking about two months ago.

Sorrell also noted that Fudge is “an extremely good people person, intelligent, articulate and a great presenter. Finally, her marketing expertise is balanced with a great understanding of business through her experience of non-executive directorships.”

Sources said Burger King CEO Brad Blum was upset over Dolan’s exit, which he learned of in a call from Dolan Monday morning—four days after a key franchisee meeting. While recognizing Dolan’s contribution in a statement, Blum noted his own connection to Fudge—the two held marketing posts at General Mills during the 1980s—and emphasized that BK has bought into the new Y&R team.

Patti, hand-picked by Dolan, felt as though the rug had been pulled out from under him, said sources. The contrast between the packaged-goods-client CEO and the creative hotshot was not lost on colleagues. Still, Patti said he was optimistic. “I believe what’s ahead of her is what’s really important: running an agency network that not only has packaged-goods clients but other clients like Sony, Burger King, Xerox and AT&T,” he said. “I believe her savvy business sense will make this a challenge she’ll succeed in.” —with Eleftheria Parpis