Fudge Makes Her Big Move, But Is It Enough For Y&R?

Ann Fudge finally made her move to revive one of the ad industry’s most well-known agency brands last week—14 months after joining WPP Group’s Young & Rubicam Inc. as chairman and CEO.

Reaction to the news was mixed, with executives describing the plan as everything from “a shot in the arm” to “more rhetoric and restructuring.”

In an effort to “build one Y&R,” the former Kraft executive is putting all six Y&R offices in North America under one P&L, eliminating the CEO titles in regional offices and replacing them with “managing partner” titles. Any of the six managing partners can cull talent to put together the best team possible for a particular client or new-business pitch, regardless of geography, according to Fudge.

In addition, she is forming a “catalyst team” of planners and creatives to disseminate ideas across the network.

“Sometimes we get bogged down rightly or wrongly in what [individual offices] need,” Fudge said last week. “Bigger is what Y&R needs.” She added, “As a former client, I got so confused with titles, I didn’t even know what everyone did.”

Many praised the plan as a step toward fostering cooperation among Y&R’s famously territorial offices. One executive called it a “shot in the arm” for a sluggish shop whose New York office alone has seen billings shrink from $3.4 billion to $1 billion since 1998. “They’ve got to get that swagger back,” said the executive.

Others questioned whether much expertise is gained from tapping into other Y&R offices.

“If the other WPP divisions were involved, then I could see how each office could benefit from specialty services like interactive or direct marketing,” said one executive.

As part of the revamp, worldwide creative director Michael Patti, who is also chairman and CEO of the New York office, loses those two titles and becomes vice chairman. When asked if the change represented a loss of power for him, Fudge responded, “That is farthest from the truth. … Think of Michael now as the orchestra leader.”

She added that she and Patti are “trying to get this engine moving.” But the prospect of management leadership is partly what lured Patti away from a long, lucrative contract at Omnicom Group’s BBDO in New York, where he was one of its stars. Patti could not be reached for comment.

In a memo to the worldwide staff last week announcing the plan, Fudge wrote, “This new agency structure in North America gives us greater entrepreneurial freedom and flexibility to build the right teams and access the right resources for all of our client partners.”

It could not be determined, however, how those clients felt about the restructuring. A Sears rep said, “It’s not our policy to comment on other corporations’ businesses.” A Xerox rep had no comment; Cadbury Schweppes did not return calls.

WPP CEO Martin Sorrell was unavailable for comment. “The role WPP played was helping identify talent,” Fudge said. “Beyond that, Martin saw the announcement like anyone else.”