Is all okay at McCann-Erickson?

By , agencyfaqs! | In
Last updated : October 29, 2002
A spate of big business losses, followed by the resignation of its president Nikhil Nehru… McCann-Erickson is in the midst of its biggest crisis ever

When Nikhil Nehru, president, McCann-Erickson, India, announced his resignation last week, the reaction among the agency hands ranged from complete surprise to utter disbelief. Complete surprise because there were no seething undercurrents like that preceding the departures of two other advertising big shots in recent times - Sunil Gupta of JWT and Preet Bedi of Lowe. Disbelief because father figures are not expected to leave their underlings in the lurch one fine morning.

But Nehru has made up his mind that after 35 years in advertising, and seven years at the agency, he needs time to "chill out"…

While the news of his resignation is gradually sinking in, there are two questions that remain unanswered. One, why did Nikhil Nehru leave? And two, who will take over from him?

Let's take the second question first. Here, it seems to be a big guessing game and the names of potential candidates range from Preet Bedi - who 'seems' to be firmly ensconced at TBWAAnthem otherwise - to Sandeep Goyal - who was earlier group broadcasting CEO at Zee and who is now on a sabbatical. Another bit of speculation gaining ground at McCann-Erickson offices is that a senior McCann-Erickson Worldgroup executive, who is currently based in London and manages some globally aligned businesses in the region, could be the one to step into Nehru's shoes in course of time. All Sorab Mistry, CEO, McCann-Erickson India (who is also area director, South Asia, and executive vice-president, Asia-Pacific, McCann-Erickson Worldgroup), would say on this is, "I have to assess all possibilities carefully before I take a decision. But nothing is going to happen in the next two-three months."

Now the first question. Both Nehru and Mistry are non-committal. When contacted by agencyfaqs!, Mistry echoed what Nehru said earlier, "He wants to take a break." Nehru, for the record, has said time and again that he never wanted the top job. "It is not as if I am leaving because I wanted to become the CEO, and didn't. I have had a wonderful seven years at the agency and now I want to take some time off to do other things like … quit smoking…. lose weight…"

There's nothing wrong in taking a break, but this break assumes significance when one looks at the timing of it. All looked fine at McCann-Erickson till it lost three big accounts in quick succession - Reckitt Benckiser in April, adidas in September and Gillette, which is currently looking for an agency partner to shift its advertising account. The first two are big in terms of billing, and the third is no less important in terms of the prestige factor. In revenue terms, these three accounts translate to a loss of around Rs 6 crore, aver agency insiders.

But agencies do gain and lose accounts… it's part of the game, isn't it? So can the loss of Rs 6 crore worth of potential revenue cost the president in an agency his job? After all, the three in this case were globally aligned businesses and are moving because of some decision taken in another country in another hemisphere…

"The issue is bottomline," reveals a senior executive at McCann-Erickson's Mumbai office. "McCann Worldwide is a very bottomline-driven company. Okay, you don't have control over your businesses or revenues; but what about costs? Internationally, human resources account for bulk of the agency costs. So if you lose big money in terms of revenues, you downsize, slash staff, and continue. It's not as easy here. In India, it is overheads - like rent, upkeep, materials - that eat up bulk of your monies. These are not so easy to cut … not in the same accounting year at least. Now we have lost big businesses, so what do we do? Move to a smaller office? Skimp on materials?"

Adds another, "All these things blew up a couple of months ago; some felt while all the credit was going to one particular centre/bunch of people, all the flak was landing up in another. The issue eventually boiled down to one of balance of power." And if agency sources are to be believed, Nehru put in his papers in September. "It's obvious the top brass kept the cards very close to its chest," says an old timer at the agency. "After all, after 35 years in the business, it's not easy to accept violation of your hard-earned freedom." © 2002 agencyfaqs!

First Published : October 29, 2002
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© 2002 agencyfaqs!