Global product design group Ideo has acquired a 25 per cent stake in The Fourth Room – the strategic consultancy set up earlier this year by Michael Wolff with former Newell and Sorrell directors Piers Schmidt and Russell Lloyd, and market research specialist Wendy Gordon.
Both parties are reluctant to quote figures for the deal, but The Fourth Room chief executive Schmidt puts it at “closer to millions than thousands (of pounds)”. He says it is likely to be “a long engagement” of three to five years, with a view to a total takeover.
The consultancies are already collaborating on projects and plan joint initiatives. These include a study of the potential of digital radio, due to be published by The Fourth Room as a FutureScape report in about a month’s time.
The deal follows a trawl by The Fourth Room for “a benevolent parent”, says Schmidt. “We want to be a ‘fast’ company,” he says. “But that burns cash like there’s no tomorrow. We wanted a partner as passionate as we are, with an international reach and which could plug us into technology.”
Ideo was also looking to link up with a “strategy house”, says head of Ideo Europe Tim Brown. The consultancy, in which US office furniture giant Steelcase has a majority stake, already offers strategy, but is not expert in areas such as brands, he adds.
Under the deal with Ideo, Brown joins The Fourth Room’s board. The Fourth Room is meanwhile looking to recruit a fifth team leader, from the strategy side. Lloyd, former finance director at Newell and Sorrell, and Gordon, who ran The Research Business International, are managing director and head of insight respectively. Wolff is head of imagination.
The Fourth Room – described by Schmidt as “a futuristic think-tank” – is likely to set up offices outside the UK, “quite quickly”. Brown says these may be within Ideo offices in California, New York, Massachusetts or Illinois.
The Fourth Room expects to boost its 15 staff to 20 by the end of the year.