So, after much speculation and a few false starts, Wally Olins is stepping down from the group he co-founded 32 years ago, making way for the second generation of management.
The MBO deal stipulates that Olins, along with the other two current major shareholders Brian Boylan and Jane Scruton, will stay involved in the company for the first few years of new management – a crucial point in this “people business”, and one that any venture capitalist would demand to maintain continuity.
There will be a minimum period specified for Boylan, while a role for Scruton, who is credited with nurturing the company culture, is under discussion.
Meanwhile, Olins sees his role as “ambassadorial”. He says: “I don’t want to be there too long and it would not be good for the company for me to be there too long.”
A change of hands has been on the cards for a couple of years, so the real question was whether Wolff Olins’ major shareholders would favour selling the business on or accepting an offer from a management buy-out team.
Olins has had plenty of offers from outside bidders and this is not the first time an MBO team has shown its hand. Such a deal is said to have been near completion this time last year, but as with the outside offers, it appears the difficulty was in agreeing on a sum which would satisfy everyone.
In light of the decision to go with the MBO, Olins says any other route would have been destructive. “We had to think about the generational change. Do we have the size to sustain our growth on a global basis?” he asks. “I am sure we are right to preserve our unique character, stay independent and continue to grow organically.”
Managing director Charles Wright agrees that an MBO is the best way to stay in control of the group’s growth and culture. “We can move more easily not being part of someone else. We can pursue things that we want to and carry on the changes put in place two or three years ago,” he says.
However, the new management will have to satisfy the needs of its new backers, who are likely to put the pressure on to generate income.
This is the group’s second year of rapid growth, but it wants to avoid growing too quickly and repeating the “boom and bust of the 1980s”, says Wright.
Now such growth will be monitored by the new backers. “One of the weaknesses of Wolff Olins [in the past] was being unduly dependent on UK business,” says Wright. But its international client list is looking strong now, and includes Credit Suisse and Tata, India’s biggest firm.
And it is not just the client base which is changing. Over the past five years the emphasis has shifted from creativity almost to management consulting – what Wright prefers to call a blend of “strategic creativity”.
This blend may be very attractive to any of the venture capitalists the MBO team is courting, but in some ways it is an unknown quantity, says one industry source: “The core business is moving away from what it was five years ago, and no one knows if it will be successful.”
The deal will have to strengthen Wolff Olins’ position to compete effectively with all its networked competitors, such as Interbrand and Diefenbach Elkins. “There will be four or five major players in the next ten years and most are owned by larger US advertising groups,” predicts Olins. Interestingly, Interbrand parent Omnicom and Diefenbach Elkins were both rumoured to be bidders for Wolff Olins.
And once the deal is done and dusted, the new management will have to get to work on the second generation perception, says an industry source. For many people, Wolff Olins has meant Wally Olins, and the time is ripe to shake off that image.
“It’s now a question of what these guys do with the spirit of the brand name, what they are actually buying and whether they will farm the potential of the name,” says co-founder Michael Wolff, who left in the early Eighties.
Without that effort “in a sense there is no real change”, says an industry source, except that “a few of them are wealthier”.
In Wolff Olins’ 32-year history it has been responsible for some of the UK’s most high-profile identities.
Top of the list must be the “prancing piper” marque created for BT in 1991. This followed Prudence for the Prudential in 1986, First Direct in 1989, and Forte in 1991.
A repeat of the success of the mobile phone brand Orange, launched in 1994, was hoped for last year with the eclectic but unhappy goldfish for the Goldbrand credit card for British Gas.
Current projects include the Channel 5 branding and Concert, formed through the merger of long-time client BT with MCI Communications.