Pinnacle

Saatchi and Saatchi CEO Runs Global Business, Maintains Roots in New Zealand

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BEVERLY SCHUCH, HOST (voice-over): Kevin Roberts has a Herculean commute. Once a month, the CEO of Saatchi and Saatchi says goodbye to his wife, Rowena, in New Zealand, and flies to his offices either in New York, London, or Paris.

KEVIN ROBERTS, CEO, SAATCHI AND SAATCHI: I developed this kind of idea of things I would never, ever do, and the one thing I would never, ever do is to leave New Zealand.

SCHUCH: He loves New Zealand so much that when he was offered the job of a lifetime three years ago by the outgoing boss of Saatchi and Saatchi, he refused to uproot himself or his family.

ROBERTS: When Ed Wax (ph) asked me if I would want to come here, I said sure. He said, "Where do you want to live, New York or London?" I said, "Now you got to read this list, you know, because I'm never going to leave New Zealand."

So we came to this arrangement where I would live in New Zealand, in New York, in London, and wherever else.

SCHUCH: The deal means Kevin Roberts spends only one week a month at home, and a lot of time on planes. He travels more than 35,000 miles every month.

(on camera): Do you ever feel a little schizophrenic? I mean, do you wake up and not know where you are?

ROBERTS: No, I have a really well-established routine. You know, I have homes in those three locations. I have offices in three locations, infrastructure support, friends, and so on, three tennis rackets, you know, one in each place.

ROWENA ROBERTS: It's a bit bizarre. People think it's a bit of a bizarre lifestyle. But it works for us. Whilst he's not here all the time, the time that we do get with him are fantastic, like condensed weeks of lots and lots of fun.

SCHUCH (voice-over): The commute wasn't the only unusual aspect of Roberts' appointment. He spent years building a formidable reputation in management and marketing at such corporate giants as Gillette, Procter and Gamble, and Pepsi, where he became notorious for his legendary zaniness. He once shot a Coke machine when he worked for Pepsi.

But he never worked a day in his life in advertising.

(on camera): All right, you were an out -- Mr. Outside when you came here. You'd never run an agency before.

ROBERTS: Yes.

SCHUCH: Was that a positive thing, or did it hurt you?

ROBERTS: I think for me it was fantastic, because I was 48 years old, and the chance to run what I considered to be one of the most famous companies, famous brands I'd ever been associated with was really exhilarating.

For the industry, I think, it was, you know, somewhat of a surprise and a shock.

Just deep, deep, deep, deep red.

SCHUCH (voice-over): Three years in, the casual-dressing Kiwi still cheerfully admits that he doesn't know that much about how an ad agency operates, nor does he want to. He says his job is to stand back and let his troops do their best work.

ROBERTS: What turns me on is people. I love people, I love working with people. I love coaching people, I love mentoring people. I love being part of a team.

G'day, Mike. He's actually a nice guy. Hi, man, how you doing?

SCHUCH: Roberts may not know a lot about how an ad agency works, but he seems to have a gift for inspiring others.

MIKE PRATT, UNIVERSITY OF WAIKATO: Whenever you spend any time with him, you feel partly exhausted afterwards, but partly exhilarated. And you leave believing that, well, you can actually do anything, nothing is impossible.

SCHUCH: It was that quality that Saatchi and Saatchi sorely needed. The company was still reeling from the loss of its two founders, brothers Charles and Maurice Saatchi. Charles left under pressure from shareholders, and Maurice was ousted during a boardroom coup in 1995.

According to the London newspaper "The Guardian," the company was, quote, "out of control" with mounting debts.

(on camera): When the Saatchi brothers were forced out and took a third of the clients with them, there was talk that the company might in fact go under.

ROBERTS: Yes, I think that Saatchi and Saatchi's bigger than two guys, even if they were the founders. I think there may have been a moment -- when founders leave company, willingly or unwillingly, there is a moment when people go, Wow, what's going to happen next? What happened here is that the people at Saatchi and Saatchi stepped up to the plate.

SCHUCH (voice-over): With the creatives slugging it out in the field, Roberts became the coach shouting encouragement from the dugout. He ended up running the whole team.

ROBERTS: And all we need to do is to give them an idea, liberate them, and get the hell out of their way.

SCHUCH: How a kid with little formal education from an industrial English town got to the top in advertising -- the story of Kevin Roberts next on PINNACLE.

(COMMERCIAL BREAK)

UNIDENTIFIED MALE: Right when you open the door...

ROBERTS: Right.

UNIDENTIFIED MALE: ... you come in and then there's the Jenny Holtzer (ph), and then the Eve Klein. You can see...

ROBERTS: Perfect.

UNIDENTIFIED MALE: ... diagonally through the space.

SCHUCH (voice-over): Kevin Roberts always knew he wanted a better life. He was born into a working-class family in Lancaster in the industrial north of England. His father worked in a mental hospital, his mother in a retail shop.

(on camera): Were you proud of your parents?

ROBERTS: I was just a normal kid, you know, I mean, I was more influenced by my peer group and my brothers and sisters than my parents. I think my parents worked hard and did the best that they could in the environment that they knew.

SCHUCH (voice-over): Desperate for adventure, but without the means to fund it, he ran away from home several times. But it was as a scholarship student at the Lancaster Royal Grammar School that he firmed up his ideas about what money represented to him.

ROBERTS: When I was 14, we were in an English class, and I had a fantastic teacher, guy called Peter Sampson. And he was asking us, "Hey, look, you know, you guys have got to have inspirational dreams. You've got to have goals. And you've got to talk about what they are."

And I said, "Well, look, it's really easy, I want to be a millionaire." Everybody laughed and giggled, you know, because I had no money whatsoever. And he said, "Why?" And I said, "Because I have a lot of things I want to do."

SCHUCH: Roberts decided he would become a millionaire by the age of 30. The question was, how? Although he played rugby well enough to turn pro, he knew that wasn't going to make him rich. ROBERTS: I realized that, you know, there were probably a lot of rugby players and not a lot of million-dollar ones out there.

SCHUCH: He was 16 years old when he ran away from home for the last time. He went to London. As the Beatles were proving, it was the ideal time for a talented working-class kid to get ahead.

Roberts walked into one of the hottest fashion companies of the '60s.

ROBERTS: I went to Mary Quant and happened to get -- you know, get really lucky, I...

SCHUCH (on camera): You just walked in?

ROBERTS: They couldn't get a lot of good people, and I was a young guy, I spoke French and Spanish, and they said, "Boy, we want to get into Europe." And I said, "Well, I'll do it for half of whatever the current guy's doing it for." Which I did.

SCHUCH: Do people remember Mary Quant?

ROBERTS: Well, I certainly do. I mean, she was the inventor of the miniskirt, so every red-blooded male who was 17 in the '60s looks at her with awe and reverence and a great deal of, you know, thanks.

SCHUCH (voice-over): Roberts met his wife, Rowena, a model at Mary Quant. They married in 1975, and he took a job with Procter and Gamble. The job took him from Britain to Morocco and Switzerland.

At Procter and Gamble, Roberts reached his first goal with a year to spare. He became a millionaire at 29.

(on camera): When you became a millionaire, this is a 15-year goal that you had set. What was the feeling like?

ROBERTS: I felt better, you know, because I was able to help my family, I was able to help my friends. Because people tell me it's tough at the top, and I just think that's the biggest load of nonsense I've ever heard. It's really, really, really tough at the bottom.

SCHUCH (voice-over): In order to keep his family close, Roberts bought the house next door and divided it into apartments for his children. Despite his constant traveling, the family stays close.

ROWENA ROBERTS: He's never been a nine-to-five man. So we're used to him being away, and time we get together is really quality time.

SCHUCH: But the drawbacks to his long-distance lifestyle were horribly revealed a year and a half ago. Roberts' daughter, Rebecca, contracted meningitis and collapsed in a coma. Roberts had just arrived in London when he got the news that Rebecca was not expected to live.

ROBERTS: I got onto the plane and they put me in 1-A. And the girl said, "We understand what's happening, and we're not going to put anybody in the seat next to you." So I had to fly back 14 hours to Los Angeles, which were a very long 14 hours.

SCHUCH: In Los Angeles, Roberts heard that his daughter's prognosis had slightly improved.

ROBERTS: Rebecca was unconscious, and the doctors said that she wouldn't die, but that there was -- she had no feeling at all on the left side of her body, and that they had no way of knowing whether she would recover or whether she would have brain damage or paralysis or whatever.

I then had to take a 12-hour flight to Auckland. Rowena met me at the airport at 5:00. I walked into the room and I saw my daughter lying there with -- unconscious with tubes white (ph), and two lovely nurses just taking care of her and holding her and cuddling her. And it was just incredible.

Three hours later, Rebecca came round, and she said to me, "I've just been to heaven, and I saw Joseph's granddad there." Joseph was a friend of hers whose grandfather had just died. "And he told me that I was too young to go, to tell Joseph that he's fine, and I have to go back."

SCHUCH: Rebecca did come back, and she made a complete recovery.

(on camera): But was it a life-changing event? At least philosophically at all?

ROBERTS: No, I tell people, no, it wasn't, you know, because I love my kids, and I want them to be the best they can be, and I want -- you know, I want me and them to live our life to the utmost. So I didn't change my life at all.

I know that we're not immortal and that we're going to die and things. It wasn't life-changing, it was life-threatening.

Whereas this would have been totally the answer for that. It's very cool.

SCHUCH (voice-over): When PINNACLE returns, why Kevin Roberts loves failure, and what he really thinks of advertising.

(COMMERCIAL BREAK)

UNIDENTIFIED FEMALE: And they put stuff in there. They're able to treat...

ROBERTS: Way cool.

SCHUCH: Kevin Roberts didn't go into his office in New York or London on his first day at Saatchi and Saatchi. He flew to a conference with 300 Saatchi executives in Istanbul.

ROBERTS: I remember standing in front of them for two hours without a single acetate or slide and just talking about what was in my gut.

And then with a big scratch-and-sniff...

UNIDENTIFIED FEMALE: It's a great idea.

SCHUCH: His gut feeling, a lot of conventional ideas about business management and advertising don't work. He thinks advertising agencies need to elevate their vision and change their tactics.

ROBERTS: I am absolutely hacked off with management, especially all this management talk about military, you know, the art of Chun Tsu (ph) and all this military crap. Strike from rivals, deploy sales forces to capture customers. It's all nonsense.

SCHUCH: The same goes for the reliance on familiarity of brands to sell a product.

ROBERTS: So I'm here to tell you it is not going to be OK. Brand has become bland, standing for nothing, falling for everything.

SCHUCH: Under Roberts' guidance, Saatchi and Saatchi doesn't talk war, it talks love, the art of advertising is the art of seduction.

ROBERTS: What's going to stand out now is those brands that (UNINTELLIGIBLE) into something we're calling love marks, which is, instead of being built on information, you now have to be built on a relationship, because a relationship is much more important than information. You choose your partner on the basis of how you feel, not on an analytical benefit.

Harley Davidson, I think, is an unbelievable love mark. Or at Zippo lighter, it's a fantastic love mark. Coca-Cola is a love mark, and McDonald's is a love mark. I mean, you don't go to McDonald's for the food, you go to McDonald's because the experience of socializing and so on is fantastic.

SCHUCH: Other great love marks? Think sensual, like the iMac computer, or the Volkswagen Beetle, and think of Kevin Roberts as less of a CEO and more of the guardian of the Saatchi and Saatchi love marks.

ROBERTS: It's just a minor hiccup.

SCHUCH (on camera): How do you view your role here at Saatchi? What are you, exactly?

ROBERTS: My first role is to position Saatchi and Saatchi as an ideas company with la difference. So I spend a lot of time thinking about that. My second role is to inspire our people to be the best they can be and get the hell out of their way.

SCHUCH: How do you inspire?

ROBERTS: Through caring about people, through sharing a vision with them, sharing an inspirational dream, giving them an elastic- sided sandbox to play in, and then focusing on their strengths and never talking about their weaknesses. When you do that with a bunch of people, show them that they can pursue failure and failure is fine as long as they learn from it, show them that you have tremendous ambition and that you have faith that they can reach the stars, people never let you down.

We stumbled upon sports. It wasn't -- we didn't start by looking at sports, we were looking for a model where people could be the best they could be and could operate at their peak. And we found that in these great sporting institutions.

SCHUCH (voice-over): He set his theories down in a book called "Peak Performance." Co-authored with three university professors, it looks at why teams like the Chicago Bulls, with stars like Michael Jordan, and Roberts' beloved All Blacks (ph) are consistent winners.

The project was born out of Roberts' other job. Once a month, he teaches an NBA course at the University of Waikato in New Zealand. The kid who never went to college has an honorary doctorate and a chance to air his left-of-field ideas.

ROBERTS: I really use the university, a hothouse, a lot of embryonic ideas, to see if they pass sniff test with very smart people.

We will be relentless, we will relentlessly pursue this.

SCHUCH: One of Kevin Roberts' first ideas for remaking Saatchi and Saatchi was a bold one.

(on camera): You took the word "advertising" off the name Saatchi and Saatchi.

ROBERTS: Yes.

SCHUCH: But isn't that what you do?

ROBERTS: No. We build emotional connections with consumers. We build lifetime love affairs. We turn brands into love marks. That has nothing to do with advertising. "Advertising," I think, is a word that is 20 years past its use by date. We're all about emotionally connecting with consumers.

You want to be in the territory of sensual design so that you touch it, you curve it. Why? Because your users are women, not male.

SCHUCH (voice-over): From choosing soap powder to automobiles, Roberts believes that emotions are the key to every decision we make. Take the laundry, for instance.

(on camera): What makes Tide better than Cheer?

ROBERTS: Mystery, sensuality are vital, you know, and...

SCHUCH: We're talking about laundry detergent. ROBERTS: But a laundry's an incredibly sensual experience. Think about it. When you see the water going onto the product, splashes up like a great big waterfall, you get this incredible vibrant fragrance. Clean clothes smell great. And you feel deep inside your heart, you're a better woman, better mother, better guy.

This is a very emotional experience, the laundry.

SCHUCH: That's what you see in doing laundry.

ROBERTS: Absolutely right. And that's what women tell us. That's what -- I mean, you've got to penetrate, you know, people. They have three parts of their brain, right? They have the cortex, the neocortex, right, and then they have the limbic. Deep back there is the reptilian. And when you get into that reptilian brain, women like going down to the laundry. It's their private quiet time.

SCHUCH (voice-over): It's this kind of deeply personal detective work that Roberts thinks makes great advertising.

ROBERTS: Research is one of the biggest problems facing our business today. The research vampires are out there, and what they're doing is, they're measuring the wrong stuff. So they're measuring awareness, cut through communication, strategic benefits. All this nonsense instead of getting deep into the reptilian instincts of a consumer and saying, What is it you really feel?

The only really question research should ask is, Do you love my brand more after seeing this commercial than you did before? Period. Do you love it more?

SCHUCH: Kevin Roberts loves New Zealand more and more. Why he's chosen to make his home on the edge of the world when PINNACLE returns.

(COMMERCIAL BREAK)

SCHUCH (on camera): What was the defining moment of your career?

ROBERTS: I think coming to New Zealand was the most exciting thing I did.

SCHUCH (voice-over): In 1989, Kevin Roberts left Pepsi-Cola in Canada to head up Lion Nathan Breweries in Auckland. The globe- trotting executive thought it would be just another short tour of duty. Instead, he fell in love.

Like Kevin Roberts, New Zealanders have a reputation for being outspoken and no-nonsense. They're also mad about sports.

Twelve thousand miles away from his birthplace, Kevin Roberts has found a home.

ROBERTS: In New Zealand, there's nothing holding us back except the powers of our own imagination. I love that. I love the pragmatic attitude of Kiwis. They're problem-solving people, you know, because they've had to exist, you know, with very little resource. I like that.

SCHUCH: Roberts is no unassuming citizen. He's passionate about getting New Zealand back on track after a decade of growing social and economic problems.

ROBERTS: As a country, we've enormous strengths and advantages. I am an optimist. I'm a New Zealand patriot, and I know there's always a better way. And we need to find one really quickly, because we're going down the gurgler (ph).

SCHUCH: Kevin Roberts says he does his best thinking in New Zealand, preferably surrounded by his extensive collection of modern art. One of the subjects that concerns him is the future of advertising, especially the relationship that exists between agency and client.

(on camera): How do you compensate ideas?

ROBERTS: Yes, it's a good question, you know. We give them away right now, because we have a long-term partnership with our clients, and we say that any idea that we work on for you is yours. So -- and I think that's fair enough.

SCHUCH: How do you quantify? It took all this work to get to that idea.

ROBERTS: Yes, we don't quantify it, because that would be an accounting way of looking at things. I think the best system for me would be when your sales go up, we should get more. When your sales go down, we should get less.

There's a lot of people talking about it, Beverly, and very few people doing it. We have a system now with P&G where that is actually occurring, that we're going to be compensated directly as a result of sales growth. Which I think makes fantastic sense for us, very motivating for us.

SCHUCH (voice-over): Saatchi and Saatchi was taken over by the French company Publicis last June. At that time, Kevin Roberts re- signed for five years but says he has no ambitions within the larger organization. He plans to concentrate solely on the agency.

(on camera): How have you grown your billings in the past three years?

ROBERTS: I mean, I think that our billings are up, I don't know, double digits every year, 10 percent. We'd be above $7 billion U.S.

SCHUCH: All right, you lost, I know you did lose 12 clients in '99. Is that a big deal?

ROBERTS: Yes, I didn't know that, so, you know, you're obviously, you know, I -- we're (UNINTELLIGIBLE). What we did was put on more new business than any other agency in 1999. So that's a good thing.

SCHUCH: Your two biggest clients, Toyota and Procter and Gamble, which account for a third of the agency's revenues...

ROBERTS: Yes.

SCHUCH: That would make me a little nervous, I think, if...

ROBERTS: It makes me really excited.

SCHUCH: If Toyota got really upset that you were bought by Publicis?

ROBERTS: Yes, I'm really excited about it, because they're, like -- you know, if you could pick any two clients in the world to work with, wouldn't you pick, you know, Procter and Gamble and Toyota are two of the finest companies. They've been around a long time.

SCHUCH (voice-over): Kevin Roberts is excited about every aspect of his life, from working with Saatchi and Saatchi's clients to promoting his adopted homeland, New Zealand. But he admits more than a quarter-century of global travel is taking a heavy toll.

(on camera): What's your worst habit?

ROBERTS: The thing I don't like about myself the most is letting people down, and letting friends down, because I travel so fast, I -- and travel so often, that I am never in the same place frequently. And I feel that I let a lot of people down. So it's very hard to make arrangements, you know. I've missed a lot of my kids' growing up, I've missed a lot of birthdays, a lot of anniversaries. And I let people down through my scheduling.

And I think that's a really terrible thing.

SCHUCH: Can you keep this up forever?

ROBERTS: I've signed a five-year contract with Publicis as part of the acquisition, to make sure that our shareholders, our clients and our people feel that we have continuity. So I'm going to do this for five years, then I'm going to stop.

SCHUCH: So you know now that you're going to only be home one week a month for the next five years.

ROBERTS: Yes. I'm going to be in New Zealand one week a month for the next five years. Yes.

SCHUCH: So you're going to keep missing your kids' events.

ROBERTS: My wife's ecstatic, of course, which I think is why we've been married of 25 years. It's really only, like, eight years, so she's pretty happy about it.

SCHUCH: Are you evangelical about this company?

ROBERTS: I mean, I've been a client for 25 years. I love the company. I'm never going to do another job. This is it. I'm going to run Saatchi and Saatchi, and I love it, luckiest guy on earth. I'm not going to do anything else after this.

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