Smoke and fire: WPP AUNZ boss Jens Monsees rubbishes rebellion rumours as board instigates CEO review; counters Sorrell on S4 Capital's 'new model'
Jens Monsees is one year into running WPP’s AUNZ operation and the market is now heaving with talk of broad internal leadership unrest over how he’s transforming the business and 'doing culture'. In this conversation, Monsees addresses talk of a fallout with COO John Steedman after the veteran's recent, abrupt exit, a board-instigated review of Monsees' performance across staff and clients and he fires back at S4 Capital’s jibes around the troubled future of holding companies.
Jens Monsees was hired with a singular brief: transform Australia’s largest advertising and communications holding group, root and branch, while keeping shareholders happy. So last year he relocated from Germany and took on his first agency role.
Within weeks, Australia was battling its worst bushfire season on record, followed up a few months later by a global pandemic.
Suffice to say, Monsees has not had it easy - and if talk of internal unrest said to be broadly across WPP's leadership team has any basis, there are more difficulties to traverse.
With 70 brands under the umbrella, bending WPP’s wires to fit Monsees framework has inevitably led to some disquiet from business unit leaders. There is now much talk in market of a failed effort by senior leadership to convince the WPP AUNZ board and WPP globally to address what is claimed to be a culture clash and a dictatorial leadership style with little room for nuance around operationalising Monsees' transformation plan. A recurring complaint is that most of WPP's leaders agree with the need to overhaul the business - but Monsees gives little scope for adjusting to challenges that arise in execution.
"There are some people in WPP AUNZ who probably need to go," said one insider familiar with the situation. "They've been there too long, they're stuck in their ways. But Jens has put everyone in the same basket of resisting change. The biggest criticism is he doesn't listen, he dictates and is ruthless around what his incentive is."
Central to Monsees' three-year plan is rebalancing the group’s income from mostly traditional advertising and media revenues towards a 50/50 split between traditional work, and tech and CX.
Monsees' unfamiliarity with WPP, its people and everything that went before, has given him a clean, unbiased slate. His brief from the board is said to have been to shake the business up - and a shake-up certainly seems to be what the board is getting.
“In Australia, there is always a lot of gossip. We worked very closely together. I am very thankful that Steady stayed so long and helped me to get my feet under the desk ... I think with his age, around 70, it's time to retire.”
Talk is cheap
For his part, Monsees in today's podcast rubbishes talk of rebellion in the ranks and dismisses suggestions that COO John Steedman’s departure, announced 12 October with immediate effect, was the result of a falling out.
He also insists the board-commissioned CEO review now underway was instigated at his behest, and that shareholders are happy both with WPP AUNZ’s direction of travel - and the profits - given the challenges of the last 12 months.
Per WPP AUNZ's latest financials, while revenue for the September quarter fell 14.3% to $153.6m year on year, profit climbed 15.4% to $24.6m, helped by £23m worth of cost cutting plus $5.9m in government support.
“In Australia, there is always a lot of gossip,” says Monsees. He’s not wrong – and given his remit to restructure, one or two noses were always going to be pushed sideways. Steedman, however, does not fall into that bracket. His departure was not “abrupt” but long planned, according to Monsees.
“We worked very closely together. I am very thankful that Steady stayed so long and helped me to get my feet under the desk,” he says. “It was a fantastic first year. We created especially for Steady that role of COO to get me into the market, into the clients, into the team with his great experience,” he adds, pointing out that Steedman had twice previously attempted to hang up his boots. “I think with his age, around 70, it's time to retire.”
Meanwhile a review after 12 months at the helm is necessary, says Monsees, and not an instrument to be feared.
“In a modern organisation, there's nothing exciting about it. You bring in a neutral third party to ask clients [for views] and to give feedback to our leaders - and to see if there’s any room for improvement towards our staff in a very difficult year,” says Monsees. “Also, our investors need to be informed how we are driving our transformation, what we have achieved and where we still have work to do.”
Yet some say there is no smoke without fire - and Monsees is not so singularly focused to be blind to tension resulting from the rebuild he was hired to deliver.
“There is for sure the need to change - and everybody is acknowledging and buying into that. Then the question is, what is the right direction and what is the future role of our campuses, our brands, our different solutions space?
“There's no silver bullet. There's not one answer, so then you need to listen in carefully. You have to have that dialogue and you have to have that exchange - and that tension,” says Monsees.
He is “very grateful for different opinions” on strategy, because that is how answers and pathways are chosen. But Monsees points out that the strategy WPP AUNZ is taking is “ultimately not that much different” to WPP’s global strategy. “I think the main difference is that here we are a publicly listed company. In other markets, we have just country managers who are driving the business.”
Pushed on the question of broad unrest within the WPP’s AUNZ leadership team, Monsees is emphatic.
“No, there's not - and thank you for asking this question so I can give some clarity: If we are decided this is the right way to transform the business, and we have alignment with London, with the board, with the management team among us, then we are going down a certain track,” he says.
“If there are some people that are not aligned to the strategy, then it's always their choice to support the strategy or to also say, that's not for me and step off the bus,” says Monsees.
“But there's a broad alignment and we are regularly meeting every week. So I would just say there's a lot of gossip in the market.”
“If we are decided this is the right way to transform the business, and we have alignment with London, with the board, with the management team among us, then we are going down a certain track. If there are some people that are not aligned to the strategy, then it's always their choice to support the strategy or to also say, that's not for me and step off the bus.”
Campuses, consultants and competitors
Rumours duly scotched, Monsees outlines progress on the bid to combine its operations and people – while retaining WPP AUNZ's agency brands – into campuses.
Sydney and Melbourne agencies will retain separate P&Ls, though incentives have also been overhauled to foster greater collaboration. In other cities and New Zealand, brands will be rolled into a single P&L.
“In the past, we had a lot of different brands sitting in different areas in Sydney and Melbourne - and in all of the other offices that we were running,” says Monsees. “From my point of view, in a connected, digital world, you cannot be disconnected.”
Clients, he says, need end-to-end solutions and when staff are housed together they can better collaborate to deliver that need – with the client choosing which agencies and capabilities they wish to harness.
However, Monsees reiterates that WPP AUNZ’s agency brands will remain as distinct entities. The arguments for a single deep brand – similar to the approach taken by management consultancies – are given short shrift.
“From my point of view, WPP is a very strong platform where our brands can flourish. But the brands are holding the client relations – and that is a very strong pillar of our strategy and philosophy,” says Monsees.
He points out that some of its tech brands are also viewed as stronger than consultancies in key areas of martech, with “AKQA outperforming according to Gartner within marketing cloud implementation, where there is Deloitte and also Accenture”, he says.
“So we are strong on that arm, and on the other side we have the whole media business, and we have the creative and the content part in our hands. So that that makes us, very competitive versus the other holding companies but on top, it makes us also very competitive towards the consultancies and the IT implementers,” Monsees suggests.
“Because normally, after the IT implementation is done, the consultancies are leaving - and we see that a lot of times then the clients are puzzled.”
“They have their new machine, but how to operate it, how to run it? This is where I think there's a gap and it's a sweet spot we can tap - because we are delivering on the creative content, delivering on the media operations and delivering on IT and marketing cloud implementation.”
Firing back at S4 Capital
Monsees says he found it “funny” listening to S4 Capital APAC CEO Michel de Rijk in an earlier Mi3 podcast lobbing bombs at ’legacy’ holding company structures and arguing that they are too big and beholden to shareholders to reinvent.
S4 Capital’s founder, Sir Martin Sorrell also founded WPP, only to be ousted in 2018 after 33 years at the helm. Since then he’s never knowingly passed up an invitation to take a swipe at his successors’ strategies.
“Sir Martin Sorrell did a fantastic job in building WPP,” says Monsees, but he suggests de Rijk’s comments imply Sorrell has learned a lesson he perhaps should have applied earlier.
“When you listen to that podcast, there is one thing that he’s now learned and is changing – and that is full integration. That is what we are doing as part of step one of the transformation. We integrate so we have fewer and stronger brands,” says Monsees.
He points to the acquisition of NZ-based Adobe specialist Dominion earlier this year by way of example.
“We don't let it stand alone, siloed. We immediately integrated it 100 percent into AKQA - and that is the new norm,” says Monsees.
“And I think that was the learning that also S4 Capital now realises. It's funny to hear on the Mi3 podcast, but I was smiling a bit and saying, ‘Well, somebody learned a great lesson’.
“And now maybe with S4 trying to get into the market here, we will show that we are transforming much quicker than some people in the market are thinking,” Monsees suggests.
“From my point of view, WPP is a very strong platform where our brands can flourish. But the brands are holding the client relations – and that is a very strong pillar of our strategy and philosophy.”
Proof in the profits
Whatever the market, competitors, or indeed staff talk about, Monsees says the key metric is whether clients like the new model – and he thinks Covid is actually proving that it can deliver sharper results. He cites Bunnings by way of example.
“We were running their whole e-commerce journey in Covid times. Our people were working weekends to make it happen - that case study is amazing. And we are now talking to other big retailers that are considering a similar journey,” says Monsees.
“So I think there's so much upside in it. But I agree with one thing that Michel de Rijk said, and that is if you stay at the traditional holdco model, doing only the traditional stuff and not tapping into technology and martech integration, then you probably have some very challenging times ahead.”
“The numbers never lie. You can see that the tech play was holding us strong and making us stronger than the overall market.”
Creative investment required?
The commerce, tech and data, and customer experience parts of the business are delivering double-digit growth, says Monsees. Without those pillars WPP would have suffered a much bigger Covid hit than -14%.
“The numbers never lie,” he suggests. “You can see that the tech play was holding us strong and making us stronger than the overall market.”
WPP’s traditional advertising and media business, however, is still a big beast and delivers by far the biggest chunk of its revenue. Will WPP need new types of creative talent and capabilities within those businesses to align with its sharper focus on tech?
Monsees takes a broader view.
“It's not that we need other creative capabilities, but we need to define creative in a totally different way. Creativity for me is not only having a fantastic tagline, photo shoot or artwork or TVC. Creativity is also how well is the app working? How is the customer interaction on the website? What do we do with all the data that sitting within our clients and what are the creative ideas and the insights that we generate out of it?”
As such, it is “no longer good enough to define and delegate creativity to the creative agencies”, says Monsees. “It is part of every project.”
2021: Return to offices, return to growth?
Monsees thinks some people may never return to the office full time post-pandemic. In the medium term, he suggests WPP may land at a 25:75 homeworker to office ratio, though will be guided by the staff and client surveys currently being undertaken as part of the board-commissioned review.
In terms of the business returning to growth, Monsees hopes to blend acquisitions, especially within martech, adtech and data, with organic performance, where WPP AUNZ has 1,500 existing clients to upsell a greater number of services.
“They [clients] now need to understand that digital journey through omni-channel parts of their business, the customer interactions on the virtual and physical space - and obviously big growth is coming from there,” says Monsees.
But before heading too much further into year two of the masterplan, Monsees is planning a trip to South Australia over summer.
Naturally that will include face time with WPP’s Adelaide offices, but also some downtime - a trip to Kangaroo Island, and hopefully, “a sip of wine in the Barossa Valley”.
He might need a couple.
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