WPP AUNZ’s new strategy won’t involve redundancies, insists CEO Jens Monsees

In his first major interview with media since taking the helm of WPP AUNZ five months ago, CEO Jens Monsees said he is confident his overhaul of the holding group won’t involve redundancies, explained that the new campus model will not impact the Sydney and Melbourne markets, and quoted Queen.

“I was just referring in my investor call to the last Queen concert that I saw here in Sydney. There is a nice song where they sing ‘I want it all and I want it now’. This is exactly the consumer of today, striving for convenience,” Monsees said in a media briefing following WPP AUNZ’s announcement of its ‘transformation strategy’ and full-year financial results.

Monsees has assured media that the new structure doesn’t equal redundancies

Serving those consumers under the new strategy will “significantly change our operating model”, and see WPP companies – such as media agency arm Group M, PR firms like Ogilvy and Opr, and creative agencies including VMLY&R and Wunderman Thompson – accountable for each others’ performance, incentivising them to work “closer together”.

“In the past, our Australian brands were operating independently from each other and just incentivised by their own P&L, not operating as a fleet. We have multiple IT systems and processes … in the past, we did things differently,” Monsees said.

“If you think about a market like Perth or Adelaide or Auckland or Wellington, they are quite remote. They are serving an addressable market in that region or in that city. In the past, we had not much collaboration between the brands sitting in Perth, in Adelaide, or in Auckland. Now, the new model is that we have one leadership team per campus that is across the brands.

“So, for example, for Perth, we have identified one strong leader and one P&L for all the brands that are sitting in Perth and serving our clients in Perth. It is, from my point of view, a much better model.

“And the second thing is that even in cities like Auckland, we had more than seven different facilities and buildings. And now, we bring all our people together in one building and then they can collaborate much better and exchanging much better [which is] what our clients really need.”

The campus model will not impact the Sydney and Melbourne offices, though, given their size. Instead, agencies in both cities will continue to prioritise their own performance rather than that of the entire group.

“At the moment, we leave Sydney and Melbourne, because they are very large operations, as they are. [At the Kent Street campus in Sydney and Freshwater campus in Melbourne] there is not one leader or one leadership team leading all of them and having a solid P&L line,” Monsees clarified.

“In the smaller markets, like Brisbane, Perth, Adelaide, Auckland and Wellington, we have one leadership team, one P&L, and one solid reporting line.”

The new strategy [Click to enlarge]

The strategy and the company’s full-year financial results were posted to the ASX simultaneously. Headline earnings before interest and tax (EBIT) were down 8.7%, thanks to 16 consecutive months of declining ad spend, tough economic conditions, and account losses (those factors were also blamed for the first half results last year, delivering a loss of $253m due to a near-$300m write down of WPP AUNZ’s agency brands).

The share price rose in response to this morning’s announcements to 62c, up from 56c at close on Friday. WPP still has quite a ways to go before its share price recovers from the steep drop following Mike Connaghan’s exit as CEO, from 78c on 19 October 2018 to 51c on 26 October, three days after his resignation.

WPP’s share price hasn’t recovered since Mike Connaghan’s departure

Monsees added that the company is targeting an operating margin over the next three years of between 15% and 17%. However, the overhaul is not expected to result in job losses, he assured media.

“We review our current skillset and make it future proof. That means we invest in our people, we get them more tech savvy,” he said.

“There will be a new leadership model in place so obviously we are driving change, but I think it’s a balanced approach. So there are not job losses. They are more changed from some more traditional skills towards some more digital skills.”

When asked if those without such digital skills are at risk, the CEO was decisive.

No. That’s not what I said. I said we are investing in the skill set because we have a fantastic team in place and in the future, I think we need to do much more to evolve our people.”

Monsees was an unexpected choice for the position vacated by Connaghan in October 2018. Prior to taking over from John Steedman, who acted as caretaker CEO while the search for Connaghan’s replacement was underway, Monsees was corporate vice president – leading global digital, corporate planning, and product strategies – at the BMW Group in Germany. Before that, he was global CEO of digital marketing at Arvato AG, branding director for automotive, consumer goods, food retail and health care at Google Germany, and held various marketing and branding roles at Mondelez and Schwarzkopf and Henkel.

A foreigner to both agencies and the local market, his first challenge was understanding where WPP was placed locally, and where it needed to go. Next came devising the strategy. And then there was communicating that strategy, which Monsees did with WPP’s leadership team last month at an offsite event, last week with the wider team, and this morning with investors and media.

Monsees presents to the WPP team

The Sydney team’s event was held on Thursday afternoon at the Museum of Contemporary Art in Circular Quay, away from WPP headquarters on Kent Street and Group M House in North Sydney.

“For the first time ever, we have the whole team in Sydney in one location. And it was a big welcome, lots of energy in the team,” Monsees said.

“The teams were meeting for the first time and exchanging thoughts.”

He’s excited about what the new strategy can do for the Australian and New Zealand arm of the world’s largest advertising company.

“There is obviously more to come, but I am very confident that we are prepared for driving the change in our future and driving our own destiny.”


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