Brands trying to reinvent themselves are finding that bringing in talented modernisers from outside can turn out to be a short-term solution. Last week, marketing gurus hired to help reinvigorate Coca-Cola, Marks & Spencer and Barclays bank all found themselves out of a job.
One of those stepping down was Coca-Cola president and chief operating officer Steve Heyer, a former ad executive and Turner Broadcasting director who was brought in three years ago to inject some creativity into the soft drinks giant’s marketing. In his three years, he brought more streetwise advertising to the cola giant and helped move it away from the bland ads of the past.
Heyer’s departure comes after he was passed over for the top job to replace chief executive Douglas Daft, who retired earlier this year. It is thought Heyer’s prickly, entrepreneurial management style, which clashed with the reserved, gentlemanly culture of Coca-Cola, made him unsuitable to run the company. In the event, Coke has brought back retired executive Neville Isdell to take the top job, so it was a case of out with the new and in with the old.
A few days later Marks & Spencer announced it was parting company with Vittorio Radice, the saviour of Selfridges, who joined M&S just over a year ago to revamp its homewares offer and subsequently rose to become manager of general merchandise. He is leaving as a result of a shake-up instigated by new chief executive Stuart Rose, who said that the flamboyant Italian’s approach did not fit in with the M&S way. “I didn’t feel he was a square peg in a square hole,” said Rose.
Other executives brought in to modernise M&S are also being forced out. Director of marketing Alice Avis, who joined the company last year from Diageo, has this week announced her resignation after Rose brought in Steven Sharp, the marketer who worked with him at Arcadia, to head the department (MW June 3).
Meanwhile, Barclays personal banking marketing director Andrew Gillespie resigned (MW last week). One source says this decision came after he had struggled to shift the bank’s emphasis from being product-led to being consumer-led.
Officially, Barclays says he is leaving because a merger of the personal banking, business and premier divisions means there is only one vacant marketing director’s job, and this has gone to commercial director Paul Morrish. But the bank accepts that Gillespie was part of the push to increase Barclays customer orientation – spearheaded by former group marketing chief Simon Gulliford, who left earlier this year.
It is not easy joining an organisation as an agent of change. It is in the nature of giant corporations to be resistant to modernisation, so those brought in to carry out fundamental shifts face an unenviable task. They are hired to challenge a culture of inertia, but this often creates the momentum leading to their own downfall.
One moderniser who was ousted from his role says that it is important to keep up the impetus of change because as soon as you stop, the old guard will use the hiatus as an opportunity to re-assert itself. “If you come in with one project of reform, make sure it is swiftly followed by another. If you sit still for too long you become a sitting duck, you allow a range of forces to regenerate and fight back. That is as true for M&S as it is for Barclays and Coke.”
One observer believes that companies get into trouble because they fail to strike the right balance between change and stability and that modernisers are often hired for cosmetic purposes but not given the power to finish what they start.
“You have got to have the right structure to accommodate an agent of change, one that allows for dynamic change, to create something stable that is there to be reinvented every six months. M&S, for example, needs to embrace change as part of its structure,” he says.
The observer believes brands such as Dyson, Virgin and Tesco have a stronger emphasis on experimentation. “At Tesco they have a culture of adventure, risk and giving people autonomy, which is a common element they share with Virgin. People are allowed to take risks and can succeed and fail on their own terms, they have the power to take decisions without needing a signature.” He contrasts this with Sainsbury’s, where important decisions are often made through a committee structure.
The departure of Radice from M&S echoes the circumstances surrounding Heyer’s exit from Coca-Cola. He was brought in to add some colour to M&S’s homewares offer and store design by former chief executive Roger Holmes. But as soon as Holmes’ team were replaced two weeks ago, Radice’s card was marked.
He had been promoted to head of general merchandise, but it was clear that the incoming Rose would want to take control of the all-important area of womenswear. It is understood that Radice was offered the chance to go back to the role of head of homewares, but as he had set his sights on the chief executive’s position, decided that this was not for him.
Just three months ago, Radice was being feted as the man who could breathe some life back in to M&S as he presided over the opening of the chic, very un-M&S, Lifestore homewares shop in Gateshead. This has suffered poor sales so far, though it is early days and a second Lifestore is to be opened in Kingston.
“He seemed like a fish out of water at M&S,” says analyst Nick Bubb of stockbrokers Evolution Beeson Gregory. “He was just not an M&S kind of guy. His reputation was built up during the bureaucracy of the Roger Holmes era, but it was all or nothing. He had flair for store design, but whether he was the man to restore M&S to its former market share was always in question.”
A striking example of an organisation hiring a manager from a very different culture was the Football Association’s appointment of former Saatchi & Saatchi boss Adam Crozier as its chief executive.
The smooth-tongued ad man cut an extraordinary figure at the hide-bound and old-fashioned FA. He moved its headquarters to trendy Soho and took the revolutionary step of hiring Swede Sven Goran Eriksson as England coach. But the ensuing culture clash made it unlikely he would last long in the role, and he was ousted along with marketing director Paul Barber by traditionalists who were irked by the direction in which the pair of them were taking the FA.
Even though the modernisers can ruffle feathers at big organisations, they often leave a mark on the companies they try and change. English football has had a strong run under Eriksson, even though the national team lost to France this weekend. Coca-Cola has become just that little bit cooler and M&S has at least experimented with radical store designs. But the truth is: organisations need to adapt to accommodate the agents of change if they are ever going to make the best use of the talent they pay so much to hire.