Y&R's Fudge Heads for the Exit

After an unexceptional 3½-year tenure during which key clients departed, Young & Rubicam's chairman plans to retire at yearend

Ann Fudge predicted it would take three to five years to turn around Young & Rubicam Brands when she took over the chairman and CEO post in May, 2003. But that goal eluded her as she struggled to make Y&R thrive amid an advertising downturn, a somewhat frosty reception, and a role that proved to be a poor fit for her skills (see BusinessWeek.com, 3/29/04, "Act II").

On Nov. 28, Fudge, 55, said that she will retire at yearend to focus on nonprofit work, serving on the boards of groups such as The Rockefeller Foundation and the Council on Foreign Relations. Having lost the role of running Y&R's flagship agency earlier this year—a task since taken up by Hamish McLennan—it was only a matter of time before Fudge finally headed for the exit.

So what went wrong?

To some extent, Fudge had the odds stacked against her from the start. As a former Y&R client and marketing star at Kraft Foods (KFT), she came to the clubby conglomerate with a distinct lack of ad industry experience. At the time, a number of top executives made critical comments about her decision to take two years off after leaving Kraft in 2001. To them, it was a signal that she didn't have the fire in her belly to move Y&R to the next level. As one peer put it: "A few years is a long time to be away."

Unhappy Clients

Fudge didn't help matters with her focus on internal operations instead of mind-blowing creative work. In her first major speech to staff, she talked about "Lean Six Sigma"—a detail-driven quality process popularized by General Electric (GE), where she sits on the board. That hardly inspired the troops. She also tried to ignore the clandestine politics of an organization that had been through a tumultuous initial public offering in May, 1998, in which many top executives cashed out, followed by a stormy takeover battle led by WPP Group (WPPGY) CEO Martin Sorrell that brought Y&R under his control in 2000. Through a spokeswoman, Fudge declined to comment for this article.

But the real issue came down to clients. A number of them simply weren't happy with the quality of work coming out of Y&R's ad agency. Burger King (BKC), Computer Associates (CA), Sony Electronics (SNE), and even Kraft defected during her tenure. Some spoke of what they perceived as a lack of attention from Fudge herself, marked by her absence at key meetings and lack of engagement in key campaigns (see BusinessWeek.com, 4/14/05, "Short on Sizzle and Losing Steam").

Some of the other parts of the Y&R network have thrived over the past few years—most notably, Burson-Marsteller public relations agency, Landor Associates brand consultancy, and ad agency Cohn & Wolfe. But they were basically doing fine when Fudge arrived and have separate CEOs at the helm. Her task was to revive the troubled core agency, founded in 1923. Unable to do so, she was destined to move on to yet another fresh chapter in her career.

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