Business Comment: Go-it alone Cordiant rediscovers an old truth

How Lord Saatchi must be smiling to himself - that is if he has time to in between trips to Conservative Party Central Office, where he is advising the Prime Minister on election strategy and advertising. With its demerger announcement yesterday, Cordiant, Maurice Saatchi's former company, has all but run up the white flag, in effect admitting that it is unequal to the task of regrouping and reinventing itself after the traumas of the last five years.

This is strongly denied by the present Cordiant chairman, Charlie Scott, who rightly points out that the group is achieving the targets it set itself at the time of its 1995 rights issue. None the less, it is hard to avoid the comparison with WPP, which after a period of vaulting ambition and hubris not dissimilar to that of the former Saatchi & Saatchi suffered the same near-nemesis. Unlike Lord Saatchi, however, its creator and guiding light, Martin Sorrell, managed to survive, if only by the skin of his teeth, and he has restored the advertising giant to rude health.

The same cannot be said of Cordiant, which has struggled to stay afloat since Lord Saatchi deserted ship ,taking some of the company's best talent with him. Now it seems to be throwing in the towel altogether, the attempt to find a cohesive approach and culture in effect abandoned for good.

Lord Saatchi may be able to take some satisfaction in what has happened, but there should in fact be no shame or criticism attached to what Cordiant is doing. This is the company's way of unburdening itself of its past, of finally drawing a line in the sand and putting its businesses on the right footing for the future.

Demergers most often take place in companies with starkly different businesses. It is unusual to see a company all of whose interests are in the same business splitting itself in two. But advertising is different, a people business made up of big egos and volatile temperaments encompassing a wide number of successful formulas, most of which don't mix terribly well.

In fact there are few advertising businesses organised as holding companies that manage to achieve a unified approach and culture. Certainly there is little value the holding company structure can add to the work its agencies are already doing on behalf of clients. In any case, Saatchi & Saatchi, Bates and Zenith always were very different sorts of company and they never lived happily together. Bates has found the association with Saatchi's positively restrictive, raising conflicts of interest that prevent it competing for an estimated 10 per cent of the world advertising market.

There is every reason to believe both Bates and Saatchi's will function better alone than together. But those who think it will also make them obvious takeover targets have perhaps forgotten the lessons of the late 1980s and early 1990s. The City may have forgiven Martin Sorrell for the spectacular loss of shareholder value he oversaw in that period, but you'd be hard-pressed to find anyone willing to support another bout of empire-building in the advertising industry as we approach the millennium. Advertising may be one of those businesses where to be small is to be beautiful.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions