Why muddled agency mergers like TBWA UK’s can create orphan agency networks

My previous piece on the TBWA news of the appointment of Peter Souter as the new Chairman and ECD of the London office has provoked a reaction, in particular one from Neil Christie, the managing director of Wieden+Kennedy London. Neil was one of the management team at the time of the merger between TBWA and Simons Palmer. Neil summed up the rolling mergers of us, then GGT etc., as a mess. I agree, it did become a mess.

I think it is worthy of a little bit more analysis as it provides some broad insight in to what is more likely to work versus what isn’t in the world of mergers.

There is a convincing argument which suggest there are no such things as mergers; a senior management consultant said to me some time ago there are no such things as mergers, only takeovers. This has three major implications.

I’ll use the facts from the TBWA example as illustration.

Firstly, right from the start, it’s essential that the actual facts are made clear to all parties involved. Our deal was driven by Omnicom because they were not happy with the performance of TBWA in the UK. Also the deal made us shareholders, i.e. owners of the the enlarged business. However Alistair Richie who was the president of TBWA outside the US walked around telling TBWA staff that they had bought Simons Palmer. Implication: TBWA was the acquirer and by default they remained in charge.

This was a big mistake because I had to stand in front of the massed ranks of TBWA and tell them this was not the case. So off to a very bad start.

The lack of clarity and communication almost scuppered the deal before the ink was dry. Lesson number one is always tell the truth otherwise everyone gets their knickers in a twist.

Also, someone has to be in charge. It’s hopeless if this is fudged because it creates confusion at minimum and chaos at worst. After we moved both agencies in to the building in Whitfield Street London we had a very difficult job of getting everyone from both agencies to buy in to the same manifesto – but we did get there eventually. The last thing needed was other people, not involved in the London ad agency, wandering around willy nilly.

And this means taking some tough decisions. Another one of Alistair Richie’s ‘speak before you think’ moments was telling Trevor Beattie (pictured) that he would be the ECD of the combined business without mentioning this to us. This was simply not an acceptable position, initally due to sensitive client relationships and also the retention of some key creative people. Our suggestion was three sets of group creative directors to cover the extensive client list but Trevor didn’t buy it and walked (to GGT as it happened!).

The second lesson is a thought borrowed from M&C Saatchi – brutal simplicity – make sure there is no confusion about who is in charge, even if it is tough initially.

Thirdly the critical question of culture. I think this is the biggie.

Both BMP and AMV post their mergers with DDB and BBDO respectively (the other big Omnicom ad networks) maintained their founding cultures for a long time, AMV still does to this day. They provided both Omnicom agencies with a strong culture that was at the root of their respective successes.

I think it is fair to claim in our (short) time at the helm of the enlarged TBWA business that we had also imprinted our culture on the business successfully. However once the GGT acquisition was made another culture was grafted on and with another group of people wanting some of the power. That was three culture shifts in less than two years; no wonder it began to turn in to a bit of a mess.

What I found confusing at the time was that both BMP and AMV retained their agency names, first as in BMP/DDB, so we had assumed the same model would apply with us so it would be Simons Palmer/TBWA. However the highly emotional and aggressive Bill Tragos started throwing his toys out of his pram and won the battle of naming. Everyone told me not to worry about it but my instinct said it was wrong. Why change a successful precedent?

Interesting the former BMP agency in Bishops Bridge Road is now adam&eve/DDB! A return to the model? As culture reflects philosophy it is probably the magic dust in the ether that makes an attractive acquisition desirable – so why meddle with it?

On a final point, I mentioned in the last piece the the notion of management stability and succession. AMV/BBDO appears to have been a very stable business, from an outsiders perspective anyway. Michael Baulk (left) was brought in to support the founders as CEO and he was there for some considerable time. He handed across the CEO baton to Cilla Snowball who has also been there for a very long time. Spookily AMV has maintained its position as number one in the UK for over a decade. Much of this must be due to the continuity, stability and maintenance of a culture enjoyed internally and by some very long-standing clients.

Returning to TBWA I don’t understand why it was allowed to chop and change so frequently and allow internal power plays to disrupt the reputation of the agency. TBWA has always been the poor relation to its Omnicom stablemates, almost like the maverick child in the family always getting in to trouble with the police.

Given that Peter Souter was another long-term member of AMV perhaps he can engender a similar approach and stabilize the ship for a number of years. I hope he can.

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About Paul Simons

Paul joined Cadbury-Schweppes in brand management and then moved to United Biscuits. He switched to advertising in his late 20s, at Cogent Elliott and then Gold Greenlees Trott. He founded Simons Palmer Denton Clemmow & Johnson in the late 80s, one of the leading creative agencies of the 90s. Simons Palmer then merged with TBWA to create a top ten agency. Paul then joined O&M as chairman & CEO of the UK group. After three years he left to create a new AIM-quoted advertising group Cagney Plc. He is now a consultant to a number of client companies. Paul also shares his thoughts on his blog. Visit Paul Simons Blog.

One comment

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    There were many great stories around the various TBWA mergers. Here’s just one.

    Trevor Beattie, having learned that he would not in fact be made ECD of the merged agency, as related above, decamped to the agency pub The Waterside (since demolished to make way for The Guardian’s new HQ) to hold court with a group of sympathisers. Jo Hoare, who was at the time Chairman or CEO of TBWA-Hoare Wilkins (as a result of a previous merger with Hoare Wilkins) made a rare visit to the pub to try to win over the crowd. Jo addressed them: “Trevor – three words. It. Will. Be. Sorted.”
    The response: “Er, that’s four words, Jo.”
    How we laughed.
    Exit Jo and, not long after, exit Trevor.