Education: B.A. and M.S. from Adelphi University, New York
Career: Entered advertising in 1984 as EVP, Needham Harper Worldwide. Part of the team that founded Omnicom in 1986. Appointed CEO of Omnicom’s Diversified Agency Services in 1990. Appointed President of Omnicom in 1996, CEO in 1997.
Interests: Golf, reading, spending time with family
What does the majority stake in Mudra signify? Will it unlock Omnicom’s growth here in India?
It’s a very important step for Omnicom. We owned a very small stake in the company and for 15 of those 20 years we have always wanted to do more and the stars and the moon weren’t properly aligned. They are now and we had the opportunity. There was no special event or trigger which caused it to happen, just a natural evolution of things that were able to reach an arrangement and to move to majority. For us, that is very important because in India where, I would have to admit, I have competitors that are larger than I am right now. That’s not my life-long ambition, I would change that in short order!
I would have to say that out of 100 important brands that constitute Omnicom, I probably only have eight of them successfully deployed in India today. It’s my ambition to bring as many of those brands as quickly as I can to the marketplace. In order to do that in a service company, even if you have great relationships with other companies around the world, you don’t want to offer them a service unless it’s of an equal strength and quality as they would find in other markets.
What Mudra represents is a great company, and Madhukar and his leadership team have done a great job of hiring, developing [and] educating a number of people and they have a very good reputation. I think from a creative product point of view, it’s very consistent with the culture of my companies in other parts of the world. It sends a message that we are here, we are going to be here a lot, we are going to bring as many important brands as we can to service our clients and it’s just terribly important.
Anil Ambani has been offered a position on Omnicom’s International Advisory Council. There are reports that he was offered a board position on Omnicom, during the course of taking majority control. I think it’s unlikely, but would you clarify that?
It didn’t come up in this transaction, at this point. I believe in the past, and it was casual in the years past, I have suggested that if he was at all interested, I needed as much advice in Asia and markets as possible. I don’t know where that came from, but that was not part of this. You will have to speak to him. I don’t think we brought it up because I don’t think he would want it. He is still my partner [and] having his counsel and advice is great. So, I am very happy in the way this all came about.
You say that there is no trigger, but it’s a long patient vigil that Omnicom has kept, isn’t it? Hasn’t it taken the past two years to get to this point of majority control?
Yes, but it has all been subtle. I have reflected on it a lot and said, ‘hmm! what happened here?’ and I can’t point to one thing. I think over the last five years, there has been an increase in activity and other subsidiaries. It’s probably the changing landscape.
BBDO launched three years ago, OMD is here. As for TBWA, you have completed the buyout of the Indian partners.
We are free now to extend ourselves and to do many other things that we have ambitions to do. Even with Mudra, probably over the last 4-5 years, there has always been great cooperation and a great feeling. We’ve probably collaborated a lot more. Various little subsidiaries, different services Rap Collins, Tribal DDB… they’ve extended here. All those little steps, I think, resulted in us being able to get to where we are now. Now, it lets me get on with the business of really deploying resources here, to make certain that I come a lot, to make certain that I speak to clients as often as I can. And to get the best talent as I can.
You are familiar with the comment and criticism that Omnicom, compared to other holding companies like WPP and Publicis, has been slow in India and even Asia. Will the scale of Omnicom’s operations change completely now?
It’s going to be a contributor and it’s going to be a confirming step. Mudra and my partners in Mudra are going to try to grow as fast as they possibly can. That’s important to stress with both domestic companies as well as global companies. You’re correct. Out of all the holding company heads, I am probably the least visible at least in terms of the outside media. Almost mythical…
There’s value to that by the way! It may have been a strategy. But, if you look at the few things that I’ve spoken about in the last two years and where I’ve spent my time increasingly, I am spending it in this region. That’s where I am dedicating my time, my attention. When I get engaged and when I am around and present and looking, it speeds the process up a bit. Yeah, so I am here, we are here, we have a lot to accomplish. I don’t apologise for anything in the past because I can’t do anything about anything in the past. But actually I look at the difference in size between us and others you might compare us to as a grand opportunity because I have that much to grow. Clearly that’s a statement of intent, but why didn’t this investment happen earlier? The attempts really started in 2005 when you created for the first time the Asia Pacific CEO position.
Actually, it was more than attempts then. If you went back and focussed on China then, you would have made the same observations, then. If you go into China right now, we are perceived to be on par with the biggest player there and that’s in a pretty short period of time. I am planning to accomplish that here. I just think I can probably do it faster. I hope to. But what’s interesting [is that] the difference between us and others is that ‘big’ isn’t my strategy, because what ‘big’ leads to is bad decisions. If all you are interested in is being big, then you don’t focus on the right things, in my view. If you focus on being the best, and you can be the best, two things come from that – you normally get bigger and you certainly get bigger profitably. Yet, till about two years ago, ‘biggest’ was one of the adjectives to describe Omnicom. Was size then not by design?
Oddly enough, and this is again the education of John Wren possibly, I have been the CEO for a very long period of time…since the early ’90s. When I took over, I think Omnicom was the third largest holding company. In 1996, we became the largest [and] stayed there until 2009. If you look back at every press release we ever issued in that period, we never said biggest, we said leading. Until I wasn’t the biggest, I didn’t realise how much that might have bothered me. When I had, it didn’t matter.So, it was incidental…
Yes.. .because it’s always been the best even then. I can’t say I’m obsessed about it. And I won’t do silly things or change my behaviour to recover it. But I am better focussed on the fact that it is important to other people and so, therefore, perception being reality, I am in the service business so I am going to fulfill the perceptions of everyone. I have grand plans, I have the resources to do it, we have a fabulous balance sheet, we have a great run company, I have five divisions and they are all equally strong and so I have a lot of assets. I have a lot of talented people that I can deploy to marketplaces. And this market is terribly important to us. No excuses for what’s happened up until this moment, only a promise of what’s to come.
How much impact is Europe having on Omnicom’s business?
If you look at the world and the state of the world of Omnicom, we are everywhere. Asia, [where] the developing, emerging markets are, I’m not sure what the proper word is… they are contributing quite a bit to our growth. If you get to the USA, our growth is above reported GDP and I think because of the cost-cutting and things that went on in the past, people are focussed on the top line so marketing is benefitting from that now. Northern Europe has been growing and has been exceeding our plans and expectations throughout the year and I kind of hope it continues.
Southern Europe has been in decline since 2008 and it has actually gotten to be a smaller and smaller part of our business. As a result, it’s almost stabilising at a level right now that it’s not terribly important one way or the other. And the Middle East, except for where there is some turbulence, those markets are growing and I suspect that as they settle down they will be growing again. So the world is operating really at five different speeds. I think business is better than the reports, at least our conversations reflect that. What concerns me is the lack of political leadership. Especially in the USA where the countdown to the November 2012 Presidential elections have begun?
Well [in] America [and in] parts of Europe, decisive leadership is missing. Hopefully, we get clarity. When you are in a political season, people are telling their citizens that things are bad. They tell [this] often enough and long enough and maybe people start to really get afraid and that’s the biggest risk we have. Does the Occupy Wall Street movement worry you? What’s the effect that will have on consumer sentiment and confidence?
No. I think they have some very legitimate concerns and they need to be heard and they need to be dealt with. There are probably 3,000 different points of view there, but the central themes of what they are doing are very interesting. As a matter of fact, I was at a wedding in Washington DC [recently]. So, very early, on a Sunday morning, I was dressed in a pair of jeans and a jacket and I walked over to the park where the equivalent was done and I didn’t explain to them who I was and what I was doing. They asked me and I said I had a job in NYC [New York City] and I didn’t tell them what the job was. The two people that I spoke to at 7 in the morning were legitimately concerned.
Two broad groups – I don’t know what their agendas are – a bunch of 50-year-old people who have mortgages and thought they had a lifestyle and found themselves unemployed and now they don’t know what they are going to do. And the other, I have a son and a daughter and they both are employed, thank God, but kids coming out of school who are finding it difficult to find a job. People need to work. I mean to have self respect and to do a lot of different things and when governments give big bailouts and they don’t take care of their citizens, there is legitimate basis for conversation, so I think it’s going to be interesting to see how it evolves. I hope people address themselves to the legitimate questions and don’t turn it into a political football in various markets because that won’t be productive, but there are a lot of legitimate things.The last decade has seen explosive growth, a recession and continuing global financial turmoil. It has also seen the rise of digital media and technology that’s changed the world. What keeps you excited and inspired?
The best way to describe me is I am a pretty happy person, I am pretty optimistic, I am never really satisfied completely so what keeps me challenged is the opportunity to grow, the opportunity to make Omnicom a better place, to extend my services. I have gone through the entire decade, asked those questions of myself many times and I decided that that’s actually what I do best and what I enjoy most and that’s why I am doing it. And I serve at the pleasure of my board and other people and as long they are happy with me I will continue to do it and so I am having fun.
(This story appears in the 02 December, 2011 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)