As leaked by loquacious staffers at Interpublic Group prior to Thursday’s board meeting [WAMN: 27-Feb-03], the game of musical chairs went pretty much as the grapevine predicted.
Chairman/ceo John J Dooner Junior has been repatriated to his old stamping ground, Interpublic’s flagship network McCann-Erickson WorldGroup, ousting in the process the shop’s incumbent chairman/ceo, James R Heekin III.
Kevlar pants hoisted, Interpublic’s vice chairman – and former True North boss – David Bell (59) moves into Dooner’s still-smouldering dual hotseat. According to the Wall Street Journal, IPG executives’ reaction to the news was to hail each other with the phrase: “The Bell Tolls!”. Which corny quip says something or another about the state of original thinking within IPG’s corridors of power.
Nevertheless, Bell’s appointment was hailed with approval by many staffers and observers who see him as pair of safe hands. Says Tim Fidler, research director of Ariel Capital Management, one of IPG’s larger shareholders: “David Bell did a very good job of branching out True North from its single agency network. We thought he was a solid manager.”
His first priority must be “convincing the institutional investors and analysts that Interpublic has fully evaluated and revealed the issues that have caused the problems,” believes Abe Jones, managing director at specialist investment bank AdMedia Partners.
Bell’s own priority for IPG, he says, is to “focus on our balance sheet, improving and increasing margins and organic growth.” He will also be “reaching out to the financial communities to actively communicate the strength of Interpublic.”
The while, demoted Dooner wasted no time in returning to the scene of the accounting disaster that almost brought the house of Interpublic to its knees. His success in re-energizing the network’s performance is seen as critical to the stability of the parent group.
But, according to the Wall Street Journal, the mood within McCann was anything but welcoming when Dooner revisited his old fiefdom Thursday afternoon, proclaiming himself “excited” at his return. Heekin’s office was empty, his desk cleared – although insiders say his spirit was pervasive.
McCann staffers’ loyalties are likely to be sharply divided between the Heekin and Dooner camps. And it certainly won’t help that Dooner and his top IPG lieutenants appeared oblivious to the fact that McCann’s crucial accounting problems were forcing the company to ratchet up its estimate three times before coming up with the ‘final amount’ of $181.3 million as the restatement of earnings.
To the surprise of many, Interpublic’s chief financial officer Sean Orr is still in situ, although insiders say his days with the company are likely to be limited. He could not be reached for comment.
Data sourced from: The Wall Street Journal Online; additional content by WARC staff