Minick-Scokalo’s star in the ascendant after Pearson picks her boss as next CEO?

October 3, 2012

What now for upwardly mobile executive Tamara Minick-Scokalo? I ask because her immediate boss, John Fallon, has just emerged as the future chief executive of Pearson, owner of – among other things – the Financial Times and Penguin.

When last encountered on this blog, Minick-Scokalo – for most of her career a Procter & Gamble executive, but latterly occupying high-octane posts at Cadbury and Kraft – had managed to secure a plum job at Pearson as president of the Europe, Middle East, Africa and Caribbean elements of its international education business. She reported directly to Fallon, who was chief executive of all areas of the business outside the USA.

In one sense the choice of Fallon to succeed Majorie Scardino, CEO of Pearson for the last 16 years, is a great surprise. He’s not even on the main Pearson board yet. What’s more he’s essentially a marcoms man, having served as director of corporate affairs at Powergen before joining Pearson in 1997, and in a variety of comms roles in the public sector before that. The more usual recruiting ground for FTSE 100 company chief executives is the finance department. And, as it happens, Pearson has the perfect paper candidate: Rona Fairhead, chief executive of Financial Times Group. Right age (about 50, the same age as Fallon); right sex; right background, as former chief financial officer of Pearson; and already a main board member to boot.

So why Fallon? Look at his record. It cannot be an accident that in the five years he occupied Minick-Scokalo’s current role, and the four since in which he has been chief executive of the division, international education has become the mainstay of Pearson’s reputation – not to mention its credibility with shareholders. For once, I cannot put it better than the company statement on the subject:

“With more than 15,000 people in 70 countries, this division is fundamental to Pearson’s growth strategy. Under John’s leadership, international education sales have increased from £322m to £1.4bn and profits from £12m to almost £200m in the past decade.”

It should be added that Fallon has also demonstrated a shrewd talent for acquisitions  – a reassuring quality in any future leader of a global company. These include the Wall Street English education business and the China-based Global Education and Technology Group. By way of perspective, profits across the ramshackle Pearson empire  as a whole totalled £942m in 2011.

Fallon seems likely to continue Scardino’s strategy of pruning Pearson’s over-extended interests – which at one time included investment bank Lazards, one of the best vineyards in the world and Madame Tussauds. Next on the chopping board may be the Financial Times itself. Certainly Fallon did nothing to reassure anxious hacks on the subject. When pressed on whether his appointment makes it more likely that Pearson will seek to dispose of the FT Group, he merely observed: “I very much recognise and value the FT as a valuable part of the company.” I’ll take that as a yes then, particularly from a former PR man. One more reason, perhaps, why Fairhead – very much at the heart of the FT – didn’t get the top job.

But what’s bad news for the FT may be very good news for Minick-Scokalo’s career prospects. She seems in prime position to claim Fallon’s former hot seat. Let’s put it this way: if she doesn’t get the job, she will probably be disappointed enough to leave Pearson’s employ.


Tamara Minick-Scokalo resurfaces in top role at Pearson

February 22, 2012

The career of high-flying international executive Tamara Minick-Scokalo has, it seems, become a staple feature of this blog. So it might be of interest to note that she has just landed another top job.

Pearson, owner among other things of The Financial Times and Penguin, has picked her as president Europe, Middle East, Africa and the Caribbean of its education business.

Minick-Scokalo, who is currently based in Geneva, has had a somewhat chequered résumé in recent years. Twenty years into a marketing career at Procter & Gamble, she briefly switched to senior European marketing roles at EJ Gallo and Elizabeth Arden before surfacing at Cadbury as head of global commerce in 2007. That move was a success, but the subsequent appointment to president of Cadbury Europe was not: she left less than a year later. Only to emerge triumphant and phoenix-like, in 2010, as the new president of chocolate Europe, following Kraft’s takeover of Cadbury.

But the title was an illusion, and carried much less weight than her previous operational role at Cadbury. Minick-Scokalo – like other senior ex-Cadburyites – seems to have found Kraft excessively bureaucratic and the idea of a career centered in Zurich frankly unappetising.

She left less than 6 months later, and – interestingly for such a corporate creature – set up as an entrepreneur. Trax, which is what she founded, is an IT/sales and marketing operation specialising in retail. What will happen to it now, I have no idea.

The international education division, headed by chief executive John Fallon, is viewed as one of Pearson’s most aggressively expanding operations. It has made several large scale acquisitions in recent years, including the Wall Street education business and the China-based Global Education and Technology Group. Minick-Scokalo clearly has experience of corporate integration at the highest level. Nevertheless, her marketing pedigree is probably more in demand at Pearson.


WPP hurls BRICbats at Publicis Groupe’s performance figures

February 11, 2012

An arcane row has broken out between agency behemoths WPP and Publicis Groupe over the latter’s claimed financial performance.

First, some necessary background to the dispute.

These days, only two things really matter for global agency holding companies presenting themselves in the annual financial beauty parade. Two things, that is, beyond a clean set of figures showing decent organic growth, enhanced operating margins and a handsome improvement in earnings per share (EPS).

They are: how much revenue is digital (as opposed to derived from ‘traditional’ advertising). And: how much comes from emerging economies.

The annual figures merely tell us how well the company has been stewarded in the recent past. But the other two criteria are much more exciting because they are predictive. Get them right and you tantalise shareholders with the thought of future gain, garner positive headlines in the financial media, boost the share price and – if you are one of the company’s most senior executives – make yourself still richer in the process.

By these standards, Publicis Groupe has just produced a corker. Never mind revenue growth of 5.7% to €5.8bn in near economic-blizzard conditions, or operating margins of 16%, or EPS up 14%. What really mattered to The Financial Times was a sound-bite: Publicis’ US digital revenues are set to overtake those of traditional media.

And to be fair, it is a pretty singular statistic considering that, as recently as 2006, digital was only 7% of PG’s revenue globally; now by comparison that global figure is nearly 31%.

“Digital” is of course shorthand for: our share of the pie in the only bit of the advertising economy still growing in developed economies, such as the USA and Europe.

Of no less importance as a corporate virility symbol is “emerging markets”, the geographical counterpart of “digital’s” sectoral dominance. Maximum bragging rights are accorded to those who can establish leadership in the most significant of these markets, the BRICs (Brazil, Russia, India and China).

PG chief Maurice Lévy’s claim that 75% of group revenues will in the “pretty near future” be derived from a combination of digital and emerging markets such as “Brazil and China” is therefore music to the investment community’s ears.

Better still for investor returns, Lévy claims he will reach this milestone ahead of his rivals Omnicom and WPP.

Not surprisingly, these rivals are livid at the suggestion. So incensed in fact that WPP, for one, is challenging the factual evidence on which Lévy has built his ambitious projections.

It has dissected PG’s webcast financial presentation and done a slide-by-slide demolition of PG’s BRIC performance. I won’t bore you with all the details. But here’s the gist:

Slide 32, Brazil. Lévy mentioned last year that Brazil was PG’s 4th largest market. Now he’s saying it’s the 6th. What happened?

Slide 33, China. WPP takes issue with PG’s assertion that it will double its size in this all-important market by 2013, from a $200m 2010 revenue baseline. It says the ‘3 creative network leaders’ claim is a myth. R3 sourced figures actually put WPP and Omnicom agencies ahead of PG’s. Cannes performance also suggests WPP outguns Publicis. PG claims to be top in media buying: this is flatly disputed by WPP, which says RECMA figures prove it is overall leader in Greater China. The key argument, avers WPP, is over organic growth. Here, PG is achieving about 8.5% while WPP appears to be nearing 16% a year.

Slide 36, Russia. PG claims leadership in this market both in media (Vivaki) and creative (Leo Burnett and Publicis Worldwide). WPP asserts that there are no reliable creative rankings in Russia and where media is concerned it is emphatically on top with 28% share versus PG’s 23.2%, according to RECMA figures.

Slide 37, India. PG claims to be number one in new media business (Vivaki) and no 2 in creative (Leo Burnett), quoting R3 as the source. But R3 does not do a new business table for India, says WPP. PG claims strong positions in digital, healthcare and PR, but with no source attached. PG’s digital presence is “tiny” (says WPP), and it has made no recent acquisitions. As for media, according to RECMA, WPP’s GroupM has 42.7% share while Vivaki is 3rd with 9.4% share. Creatively, the latest Economic Times 2011 Brand Equity rankings for agencies (the only authoritative source on this subject) puts two WPP agencies Ogilvy and JWT first and second, while Burnett is 6th and Saatchi & Saatchi 17th.

It’s no surprise, of course, to find these two deadly rivals engaged in another slanging match, albeit disguised in high-falutin’ finance speak. What will be interesting is if Publicis has a riposte.

POSTSCRIPT. I note that, despite a strong set of figures and robust balance sheet, PG has maintained rather than increased its dividend. As Lévy explained, that’s because PG needs to hold on to all the cash it can in case it has to buy back up to €900m of Dentsu shares later this year. In view of recent developments, this seems highly likely.


Peter Scott gambles on Engine flotation sooner rather than later

September 13, 2010

A splash in the Financial Times today is all the confirmation needed that the publicity skills of Peter Scott, chairman and joint-chief executive of marketing services group Engine Group, remain as undimmed by time as his financial engineering expertise.

Taken at face value, it’s a non-story cleverly placed at the nether-end of the silly season. But what an interesting non-story. So, Engine won’t be launching itself onto the market this autumn? Struth, knock me sideways with a feather! Scott and his City audience will have known that an IPO wasn’t a goer this year by May at the latest; and the unfortunate Ocado experience should have sobered up the precious few bulls who remained.

The subtext of what Scott is saying is very different.  He still very much intends to go to market – at the first moment conditions will allow. City commentators take that to mean next spring: for the moment, fears of a double-dip recession have been banished and some pundits are predicting the FTSE 100 will coast to 6000 by the year end. Here, in the FT, we can read Scott’s warm-up report for a spring launch, favourably comparing Engine’s performance with similarly sized Chime (already quoted), and delivering some knockabout stuff at WPP’s and Aegis’s expense (easy to do, because they are bigger, and their growth rates correspondingly more sluggish).

Scott, however, is treading a tightrope. Engine’s momentum is fueled by debt, which it must begin to repay by 2013. At one time he was clearly hoping to acquire a media buyer (Booth Lockett Makin, as it happened), which would offer better cash generation and richer margins. Walker Media, for example, is a major part of the M&C Saatchi success story. But Engine has been less lucky: decent media independents these days are few and far between. So the sooner Engine can tap into public market funds the better.

Not only that, nearly 80% of Engine is owned by its employees, who will be keenly following Scott’s every market utterance: their fortune depends upon his hunch being right. They will not wish to believe they have delivered themselves into the hands of a latter-day Pied Piper of Hamlin. A trade sale, with a lowly valuation attached, does not even bear thinking about.

No pressure, then, Peter.

UPDATE 16/12/10: It’s now clear I was too cynical in dismissing Peter Scott’s gloom over the prospects of an Engine IPO as verbal legerdemain. The group has gone on to plug its medium-term debt gap by raising £32.5m from private equity fund HIG Capital. Quite a lot of the initial proceeds (£22.5m in fact) is being used to buy back shares from existing holders. Not entirely coincidentally, a number of them – including Engine chairman Robin Wight, Adele Biss, Leon Jaume, Ed Escandarian and Julian Hough – have stepped down from the main board. That will relieve some of the pressure on Scott – for now. More on Scott’s Plan B can be found at Bob Willott’s Marketing Services Financial Intelligence.


iPad – the newspaper industry’s false messiah

May 26, 2010

Personally, I blame the iPad. Its imminent launch here seems to have stimulated a bout of weltschmerz among newspaper proprietors, who are now outdoing each other in the gloominess of their predictions about the end of the Gutenberg era (c1453-2015, RIP).

Latest to join the swelling chorus is Pearson, owner of the Financial Times. Pearson’s director of global content standards Madi Solomon has come up with the rather snappy phrase “the sunset of print”, which FT executives expect to happen in about 5 years’ time. If anything, the 5-year estimate is a tad on the optimistic side. It could have been sooner but the financial crisis, and people’s avid interest in it, has artificially prolonged the time horizon.

Rusbridger: Prophet of gloom

Put it this way, the FT won’t be investing in any more printing presses. And nor will the Guardian or Times Newspapers (as it is still quaintly called). Guardian editor Alan Rusbridger has long claimed he felt “in his bones” that new printing presses installed at the time of the Berliner relaunch (2005) would be the last. But he originally scoped in 20 more years of production. Now he reckons that was vastly optimistic. John Witherow, editor of The Sunday Times, also predicts that his presses, installed in 2008, will be the newspaper’s last. For a fuller litany of pessimism, consult this page in PaidContent.

I hesitate to voice dissent, particularly when the consensus is so eminent, but isn’t all this pessimism a little overdone? An old adage about “cart” and “horse” comes to mind. The cart I have in mind is the so-called electronic reader, of which Kindle, the Sony Reader and iPad are the most successful examples to date.

First though, let’s go back to a fundamental issue: why do people read newspapers, as opposed to glean their information from the internet? Granted age and social conditioning may have something to do with it. But is not also true that newspapers, and for that matter most magazines, are a more enjoyable, tactile medium? The internet is excellent for any kind of search-based activity, but it can scarcely be described as a “great read”. Ah, you say, but that’s where this new, reader-friendly technology provided by iPad and its like comes in. It will make electronic browsing fun – once little glitches like flicker, eye-strain and inadequate battery life have been ironed out (as they inevitably will be in a few years’ time). No one, it seems, is subscribing more enthusiastically to this techno-salvation than newspaper proprietors themselves. In it they discern a form of commercial lifeline – a means of making internet joyriders pay for the colossal, but legitimately-engendered, costs of newsgathering – via licensed apps. A means, in short, of ditching the enormous financial burden of print and building a new and more viable commercial model.

I’d like to believe them right, but can’t bring myself to do so. There have been many annunciations over the past few years of the Coming One – the technical application that will enable us to transfer our loyalties effortlessly from paper to the electronic screen. Of those so far, the iPad holds the most promise. But, though ingenious and popular, it is likely to prove a false messiah – so far as the newspaper industry is concerned. For a start, the revenue stream from licensed products cannot possibly compete with those extracted from traditional newspapers (especially after Apple has taken its 30% cut), even if we allow for a reduced industry overhead. More importantly, what is the iPad for? Newspaper proprietors may read into it a form of salvation, but that matters little if punters don’t see it the same way. And the early indications from America are that they don’t.

Put another way, reading a newspaper via iPad is near the bottom of their user priorities. Printers, don’t despair: the press will be stuck with chopped-down trees for a good few years yet. Certainly more than five.

POSTSCRIPT. Such has been the momentum of Apple, which has just overtaken Microsoft as the world’s biggest technology company by market capitalisation, and such the success of its latest ‘tablet’ product, the iPad, that some experts are now writing the obituary of Google.

One such is Richard Holway who, in a recent presentation, claimed that a combination of Apple-sponsored apps and Facebook will “block out” Google’s sponsored search model by allowing consumers to go directly to brands and media owners.

Not so fast, says one reader of the article in which this vaulting claim appears. Sam Rothstein points out that a) nearly every phone will soon be a type of smartphone – most probably powered by a Google product, Android; b) Apple’s domination of its latest niche, the tablet, will face a similar challenge. A number of netbooks/tablets running Android are launching imminently.


BP brand plunges from Deepwater to Ground Zero

May 11, 2010

I’m beginning to feel sorry for Andrew Gowers. Having had an exemplary career at the Financial Times, he had the misfortune to become its editor. In the wake of a complex and expensive libel case, he was ‘let go’  by senior management in 2005. With contacts like his, why worry though? A glittering future in PR beckoned.

And so it proved when he became head of communications at blue-chip investment bank Lehman Brothers London. How was he to know that, in two  short years, he would be at the epicentre of the global financial meltdown? Never mind, pick yourself up, dust yourself down and move on to…BP. Weeks later, the Gulf of Mexico explodes into uncontrollable life.

Avoiding reference to Jonah, I’ll confine myself to the observation that, for a man with Gowers’ peerless experience of crisis management, he seems to have been pretty slow on the uptake. Yes, he’s been indefatigable on the airwaves, mainly pointing out that it’s not all BP’s fault. Which it isn’t: try the Swiss-based company which leased the rig to BP, and the US maintenance outfit which passed the defective shut-down valve as fit for purpose. Also, BP is only a two-third investor in the oil well. But no one wants to hear about that; certainly not President Barack Obama and the American people.

What Gowers, and his colleagues, conspicuously failed to do was mobilise their chief executive fast enough. The oil rig explosion took place on April 20. BP may not have known the leak’s rate of flow, but it certainly knew this was a very serious industrial accident indeed. Yet it was not until three days later that the company released its first statement from group ceo Tony Hayward and, as far as I can make out, not until May 3 that Hayward himself made a broadcast public statement.

Did it really take that long to determine this oil spill is quite possibly the worst man-made ecological disaster to date? Not in the minds of journalists who – like nature – abhor a vacuum, and fill it with speculation. And not – crucially for any crisis management specialists these days – in the social media space, where any half-way decent speculative theory gets magnified a gigafold. Does Gowers or BP viscerally understand this? I suspect not. Until very recently, if you had looked up “BP Oil” on Google you would have found hundreds of references to the incident – on blogs, Twitter, YouTube and the rest, but almost none seeded by BP itself. Does BP imagine its investors take no notice of all this? £19bn knocked off the share price suggests otherwise: they will get their information wherever they can.

Credit where credit is due, Hayward is now cleverly framing the disaster as a common threat, with BP in the front line of resistance. His language has an appealing Churchillian ring to it. But the initiative may already be lost.

Of course, from a corporate standpoint, BP’s caution is entirely understandable. Make light of the disaster while it is still unfolding and it projects an uncaring image which will do endless damage to the brand later. Rash admissions, on the other hand, will expose it to years of litigation, with its toll on management focus and corporate profits. No one knows this better than Hayward, who has spent three years cleaning up the company’s reputation and settling claims after the March 2005 explosion at  BP’s Texas City refinery, which killed 15 workers and injured about 170. Corporate negligence ill fits the image of a company that has struggled hard to position itself as environmentally friendly with a cuddly logo and a $4bn alternative “Beyond Petroleum” energy initiative.

And yet all that misses the point. The speed of mass communications these days no longer permits – if ever it did –boardrooms to dictate the pace of events. Another fine example of crisis mismanagement, admittedly on an infinitesimally smaller scale, reinforces the point. Johnson & Johnson is rightly considered a model in consumer marketing circles for the way it dealt with the 1982 Tylenol scare, in which seven people died after some pain-killer capsules were laced with cyanide. But now it has come a cropper, after the US Food and Drug Administration warned that some of its proprietary over-the-counter medicines for children (including Tylenol) had too much active ingredient in them, and thus failed to reach the acceptable public safety benchmark.

Although there is no evidence of anyone being harmed, and J&J acted promptly and efficiently in organising a voluntary recall, it failed to explain itself to anxious parents, who have become increasingly restive. They quickly availed themselves of Twitter, Facebook and various parenting blogs to express their frustration at not being able to get a straight answer out of the company about what was going on. This is only the latest of a number of poorly explained recalls, which could have catastrophic knock-on effects for the company’s reputation. As one parent, quoted in the New York Times, put it: “Another recall for baby Tylenol. Well no more baby Tylenol, back to generic brand.”

Although J&J can scarcely blame the forces of nature for its self-inflicted disaster there are, nevertheless, parallels with the BP situation. In both cases, the companies seem obsessed with procedures and asserting internal control, which conveys the unfortunate impression that cover-up rather than communication is the ultimate agenda.

As I commented in my blog post on the Maclaren baby pushchair crisis last autumn, a bunker mentality is the default company reaction in these situations, and it’s actually disastrous. True, some crises are worse than they seem; acting upon them could aggravate their severity, whereas left alone they may quietly subside. But can you really afford to take that risk? Suppose this is the big one, the corporate reputation-wrecker?

Whatever you do, don’t hide behind PR flunkies and hope it will go away. Get the chief executive out there early, personally engaging with the media. Maclaren didn’t do that, with disastrous results for sales in its main market, the USA. BP and Toyota eventually did, but I bet they wish they had wheeled them out earlier.


Freesheet Standard sails close to the wind

October 3, 2009

LebedevOh no! Just as I thought it was safe to venture unmolested on to Oxford Street again, Alexander Lebedev announces his newspaper, the London Evening Standard, is going to become a freesheet. Cue: a fresh army of street distributors (or possibly the old ones, recycled from disbanded thelondonpaper, and soon-to-be-disbanded London Lite) jostling with the chuggers to hawk their wares as we head for the Underground entrance.

It’s  a curious one, this decision by Lebedev. He sounds a bit like first world war generalissimo Marshal Foch: “My centre is giving way, my right is in retreat; situation excellent. I am attacking.”  The Standard is clearly haemorrhaging red ink; its circulation is in tail-spin. So what does its chief do? The counter-intuitional thing: he doubles the guaranteed circulation, while at the same time writing off a £15m-a-year revenue stream. If only we could be certain Lebedev will be half as lucky as Foch.

The hope is that a 600,000 circulation will provide the mass to persuade advertisers, particularly classified advertisers, to put the Standard back on their schedules. Lebedev and his team will have been emboldened in their stratagy by the disappearance of Murdoch from the London publishing scene. It also seems highly likely that they have come to some sort of understanding with Associated Newspapers – a 25% stockholder in the Standard – over the imminent closure of the remaining competition, London Lite.

But audience volume, a competitive ratecard and uniqueness do not, I’m afraid, lead inexorably to success. Media buyers will also be interested in the quality. Ah yes, the upmarket, youthful London demographic to die for, you say. Well thelondonpaper did die for it. The fact is, thelondonpaper’s quality, largely reliant on syndicated news and B-list celebrity chit-chat, wasn’t good enough.

The danger is the Standard will go the same way. To be sure, it will start with good intentions. But the loss of revenue will have to be made up from somewhere. And that will eventually mean cutting deeply into the ranks of an expensive journalistic establishment – the very reason why readers are likely to be attracted to it in the first place. Smoke and mirrors will only deflect for so long, before the publishing model is revealed for what it is: bankrupt.

This last hurrah for freesheet publishing contrasts curiously with another story I stumbled upon: “Paid content is the only way to safeguard journalism, says Financial Times chief”.  Ceo John Ridding (for it is he) has been busy punting the online launch of the FT’s luxury magazine, How to Spend It.  More interesting are his asides on the future of newspaper publishing. “I fundamentally believe readers are willing to pay for quality journalism,” he told mediaguardian.

He may be right where the FT and other owners of “must-have content”, such as the Wall Street Journal, are concerned. I doubt the applicability of his dictum to general news. And so, clearly, does Alexander Lebedev.

In the coming year, we’re going to find out who’s right about general newspapers, Ridding or Lebedev. Because one is surely wrong. Let’s hope it’s not both.


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