A commercial success: Ann Fudge takes the helm as the first African American to head a major advertising agency. (Newsmakers).

In what many insiders are calling a surprise, Ann Fudge will succeed Michael Dolan as chair and chief executive officer of Young & Rubicam Inc. and Y&R Advertising, Young & Rubicam's largest operating unit. The agency had reported billings of $3.4 billion in 2002. Other media marketing companies in the group include Landor, Wunderman, and Burson-Marsteller. The appointment makes Fudge, 52, the first African American to head a major advertising firm.

Dolan, who saw Y&R through its acquisition by holding company WPP in 2000, resigned after seven years with the company. In his departure speech, he said there had been a number of changes in top management since the acquisition, and it was time for him to move on. Media insiders, however, say he had a rocky relationship with WPP Chief Executive Sir Martin Sorrell.

Fudge will be responsible for making sure the agency continues to be a leader in the industry. Although billings for Y&R rose 5% in 2002, the company had been experiencing a dry spell and had lost several accounts, including Mattel Fisher-Price and most of Kraft. Two recent gains, however, include accounts with Chevron Texaco and Burger King, the latter estimated at $350 million.

"I know transitions are tough, and I know it's tough when there are changes in leadership. People are uncertain about what this [new] person is all about," said Fudge, who addressed Y&R staffers on her second day on the job. In a conference room at the Young & Rubicam building in New York City, Fudge outlined her management style. "I hope you will work with me and be honest. I don't want to hear what I want to hear. I need truth. The only way we [all] win is through truth and being open."

Fudge's management style served her well throughout her career in the packaged food industry She spent nine years at General Mills, where she rose from marketing assistant to marketing director. Until 2001, she was president of the $5 billion Beverage, Desserts, and Post division at Kraft Foods. While at Kraft, she managed packaged food brands, including Maxwell House Coffee, Gevalia Kaffe, Kool Aid, Crystal Light, Post cereals, Jell-O desserts, and Altoids. Her background has elicited concern from media insiders who say agency executives and those on the client side approach advertising differently But she is not the first client-executive to make such a transition. Kevin Roberts is a noted example. Roberts, who also marketed packaged goods, left the client side to become the chief executive of Saatchi & Saatchi. But Fudge dismisses doubters. "I understand what the client wants," she says. "I'm a big proponent of listening--not just developing wonderful creative, but also helping the client think things through strategically. I also love building teams and developing talent."

Jack Feuer, national news editor at Adweek, says Fudge, because of her background, is a logical choice. "Clients have a much better understanding of mundane business practices that agencies know little about," he says, noting that the evolution of advertising firms from idea factories to more strategic businesses may necessitate a different kind of leadership. "Advertising companies are now full-fledged marketing companies that have to compete with other marketing companies. A marketer at the helm makes sense, and in Ann's case you have one of the most respected marketers in the business. There's also a lot of overlap in the brands Ann would work with, and has worked with, and those represented by Y&R," Feuer says.

Fudge, who received a B.A. from Simmons College and an M.B.A. from Harvard University, has been featured in many publications, including BLACK ENTERPRISE, and is recognized as one of the most powerful women in American business. She serves on the board of directors of General Electric, Honeywell International, and Marriott International. She also serves on the board of governors of the Boys and Girls Club of America, and she is a trustee of the Brookings Institution.

Fudge is enthusiastic about her new post, and says she is ready to dig into her new position. "Since my time off, I am so energized. I'm excited about the growth prospects for the company." Longtime employee Stephanie Kugelman, Y&R's vice chairman-chief strategic officer, also expresses optimism. "If she's a great simplifier [as she expressed in her address to employees], that would be great for the company Her approach of being open and honest is a perfect fit for the Y&R people."

EDITED BY Alan Hughes E-mail: [e-mail]