The Morning After

Before the #MeToo movement, a female takeover of an advertising agency’s leadership team would’ve seemed as impossible as electing a female president: Totally doable under normal rules, but completely impossible in a seemingly rigged system. But a lot has changed in the past year, especially at the Martin Agency, the 53-year old ad firm that brought the world the Geico Gecko and the slogan “Virginia Is For Lovers” and was rocked by a public sexual harassment scandal last December. Two women have effectively taken over what was once a male-dominated company in a male-dominated industry: Karen Costello is chief creative officer and Kristen Cavallo, the chief executive officer. And now the Martin Agency is one of the only large firms in the country to be led by a female duo.

That the women came to power under unfortunate circumstances means they operate under a shadow, and they know it: “I think it’s fair to say that a lot of men, whether it’s here or somewhere else in the industry, assume ‘well, you got the job because you’re women and you were coming out of this crisis,’” Costello says. “That doesn’t mean that either one of us weren’t the absolutely most qualified people for these jobs. Was a similarly overqualified man overlooked so that I could get this job? No. But did I get this job because I’m a woman? Yes.”

It’s a frank assessment but Costello would rather be out with it. For women who have replaced men who behaved badly, it’s the elephant in the room — so, why pretend it isn’t? Better to own it and get on with the work, which is what this interview is really about. I was invited here to Martin’s Richmond, Virginia, offices listen to the story of what happens when women take over. This conference room (called “the client suite”) has a bar in it. We’re eating salads and drinking Diet Coke at a grand walnut table, where I imagine the boys’ club of years past may have swilled scotch and smoked cigars.

Cavallo says that transforming a company into a women-led, parent-friendly one that now offers paid paternity leave, more flexible working arrangements, and a new “Talent and Culture” department is boring compared to the salacious tales of sexual harassment. The sad truth is that an explosive fall, and all the dirty details of a #MeToo ouster are much more exciting than what comes after: the long, slow, vexing work of creating a new framework for office life.

“In 2016 Karen was ranked in the top 100 most creative people in the country,” Cavallo says of Costello, a veteran creative director, who’s won more awards than she can count. “She gets the job and two-thirds of the article are about her predecessor, the controversy, the drama, the scandal — not how capable she was, how she’s earned this, how she’s one of the best creative directors in the country regardless of gender.”

That may be true. And yet the shadow of the scandal is probably the most important part of their re-making of the agency, says Joan Williams, director of the WorkLife Law Center at UC Hastings College of Law. “Historically, for men [harassment] has been virtually riskless for them. If she does complain, she’ll get fired. Here this company has now sent a really strong message that this is not a riskless frolic. Sexual harassment at this agency can destroy your ability to support your family and practice your profession.”

The presence of female leaders is also important. Just 29% of creative directors in the industry are women, according to The 3% Movement, an ad industry group that was formed in 2011 to increase the number of women in those roles. Even if that’s progress, that figure represents mid-level positions for women who still answer to chief creative officers (real-life Don Drapers) who are typically men. Female chief creative officers are so rare that there is still no data on how many there actually are. As for a duo that represents both the financial and creative sides of a firm? That’s “as rare as a unicorn,” says Lisen Stromberg, who leads research at The 3% Movement.

To Cindy Gallop, an ex-ad exec turned activist and entrepreneur who has long fought for the ad industry to change its ways, The Martin Agency’s leadership change has the potential to be revolutionary. “They are doing more than any other company to genuinely tackle diversity and inclusion and do something about it,” she says. “Sexual harassment magically disappears in environments that are gender equal.”

On the point that more women leads to less sexual harassment, Gallop’s views echo that of researchers like Williams who says that a culture of sexual harassment in environments that have gender parity in leadership is if not impossible, pretty much unheard of. Cavallo believes that this moment has to be about more than just sexual harassment, but also the other ways business as usual can hold women back: the wage gap, the motherhood penalty, and the casual sexism that wears women down day after day, keeping them from rising to the top.

Since Cavallo’s been at the helm at Martin, they’ve grown the number of women on the nine-person executive committee to four, done an internal audit of salaries and corrected the wage gap, and added six weeks of paid paternity leave to the benefits package. They’ve also begun to re-shape the staff itself: 34% of new hires this year are people of color. Cavallo and Costello have also both made it a point to make parenting and motherhood central to their leadership philosophies. “We’re trying to show that you can be a national player, you can win new business, you can win awards, and you can create a humane environment, for everyone, but particularly for parents because it’s a particular pain point in advertising,” Costello says.

After a year at the helm, Cavallo admits that whether these changes pay dividends in terms of long-term changes for the advertising industry depends on the company’s performance. “At the end of the day nice companies go under all the time,” she says. “We have to be good and profitable. We have to be great at both.”

The truth is, neither the culture nor the business were doing all that well when Cavallo arrived in January. Cavallo would know — she had previously worked at the Martin Agency between 1998 and 2011 as a planning director and SVP. Her takeover as CEO marked her return after seven years. According to Cavallo, the agency was roughly half the size and half the profitability of what it was when she left in 2012. And now with the all the turmoil, she’d have to assure clients and get them to stay on, and work to earn the trust of her 345 new employees. Employees, who were, by the way, apparently very pissed over the way events had shaken out.

A month before Cavallo was hired, the company’s CCO Joe Alexander was put on leave and then let go. When it was announced on December 1st, 2017, he was leaving — without a word as to why — angered employees leaked details to the industry trade publication AdWeek, which soon after published an investigation detailing years of sexual harassment allegations against Alexander as the reason he was let go. (At the time, Alexander denied wrongdoing, and said the choice to leave Martin was his.) The piece included two former employees who spoke on the record, saying they went to managers about Alexander at various points to no avail. Most damning though was a 2013 settlement between the agency and an unnamed woman. The same day the investigation published, Adweek obtained an internal memo from Martin’s then-CEO Matt Williams that apologized to employees and clarified: “The behavior that Martin’s former CCO, Joe Alexander, is accused of is inexcusable. That’s why the only alternative was for him to leave The Martin Agency. That decision was ours.”

The following week, the Wall Street Journal published more details about the settlement, including that it was for $275,000 and confirming that it involved allegations that Alexander groped a former female copywriter at the agency and coerced her into sex on a business trip. “In my 26 years at the agency, I never fostered or condoned an environment that was harassing, unsafe or inappropriate,” Alexander said in a statement to the Journal at the time. He also said that the 2011 incident was a “consensual one I am not proud of,” before citing a confidentiality agreement that prevented him from speaking further. Refinery29 attempted to reach Alexander for comment but did not hear back by press time. As part of her settlement, the woman was banned from ever working at Martin or at another agency connected to its parent company, Interpublic Group. While Alexander went back to work, she was effectively thrown out of the IPG family.

IPG maintains to this day that they did not know of the settlement until a reporter brought the details to them in 2017, according to Tom Cunningham, IPG’s spokesperson. IPG says it was also not aware of any alleged misconduct until a formal complaint was made in November 2017.

In the aftermath, both Williams, as well as the President and COO Beth Riley-Kelly (who oversaw human resources in addition to other duties), stepped down. “There was obviously a need for a change and we saw an opportunity to hit refresh,” Cunningham says. Both Williams and Riley-Kelly stayed on until early 2018 to help Cavallo transition. (Refinery29 sent requests for comment to both via LinkedIn, but was unable to reach either of them by press time.) Since Cavallo has taken over, the ban on the woman’s employment at IPG has been lifted. Also: Cavallo now reports directly into IPG. Before, the structure had Martin’s top brass reporting into another agency owned by IPG.

“More so than what would happen at other agencies, this felt like a personal betrayal and people really needed to talk,” recalls Costello, who had only been full-time at Martin for roughly three months when this all went down. She says she had no knowledge of any allegation against Alexander, or any inkling things were awry. When she was asked to co-lead the creative team with another colleague last November, she was simply happy to help. She spent the weeks after the fallout talking to her reports until late at night. “There was so much emotion. [I told them] I will stay until 10 p.m. if you just need to talk and you need support. There was this endless need to connect.”

When Cavallo arrived in January, she hired a third-party investigative team to come in and invited anyone else who had a complaint to come forward to an unbiased listener. She also promoted Costello officially to CCO. At the same time, the company set up meetings to review harassment policies and procedures, and employees had to undergo unconscious bias training as well as conflict resolution workshops. When the agency celebrated Equal Pay Day in April they did so by conducting an internal audit of salaries and correcting pay disparity among a handful of employees.

In May, the same month Martin hosted Time’s Up Advertising’s inaugural meeting, Cavallo created the position of Chief Client Officer in order to make room for Danny Robinson, the agency’s first Black executive. There is also a new Chief Culture Officer, Carmina Drummond, whose goal is to “disrupt HR” with a newly created Talent and Culture department (which she says is not the same as HR) that oversees everything from recruiting, to diversity and inclusivity initiatives, and training and career development programming. As part of its effort to stop sexual harassment in its tracks, the team also rolled out a new tool called Tiny Pulse, an online anonymous engagement survey, which checks in with employees every other week. (The company says it gets regular feedback from 20 to 30% of employees each time). They’ve also created new awareness around how to report concerning behavior, either directly to IPG or to Talent & Culture or to management.

Though the agency has made steps forward in terms of gender balance (roughly 50% on the leadership team and 63% of the agency-wide workforce is women), the creative department is still very male-dominated (just 36% of the people under Costello are women). Of course this means the men at the company have questions too, Costello says. “They want to know what does this mean for me? Is my voice still valuable? What is the role of men in the #MeToo movement? Am I doing something wrong? Am I going to be promoted?,” Costello says. “I take this as a positive. I think it’s great that they feel comfortable coming to me to ask these questions and that they are thinking of those things is fine.”

When the third-party investigation closed in March, investigators determined that two concerns which surfaced required “no further issue nor action,” per Martin’s spokesperson, Britt Flippo. (As Cavallo put it to me in her office in October, there were two cases where “we ended up siding with the men. So I think there were moments here where it wasn’t just feminism at all costs, it was really about discernment and truth.”) They also found, via a culture survey, instances of what Cavallo termed to me, “workplace disagreements that had to do with giving and receiving constructive criticism.” In the end, nobody lost their jobs and no one left the company, which Cavallo sees as evidence that everyone was ultimately happy with the outcome.

When I point out that because Martin is the only large advertising agency in Richmond, that it’s very possible people needed their paychecks more than they needed to be happy with the outcome of a corporate investigation, she demurs. “I don’t know what I’m allowed to say,” Cavallo says, before taking a moment to think. “There were some areas where we realized there were hurt feelings. There were areas where things were labeled things that weren’t actually what they were labeled, but where we realized that repair work had to be done. In every case, it’s been ongoing. In some cases we’ve changed reporting structures. It’s been ongoing support, and really trying make sure people feel like they have a voice and they’re heard. But people did not lose their jobs because of it.”

As for non-disclosure agreements, a tool that’s been criticized for the way they have protected bad actors and the companies they work for from public exposure: “NDAs have not stopped. I think that’s another thing we’re going to tackle next year. NDAs aren’t necessarily a bad thing,” Drummond says, during my sit-down with members of the Talent and Culture team. “People assume it’s to make things go away. But it’s just been a business protocol.”

When I tell them that it’s also a business protocol that has allowed sexual predators to continue on in their careers, while silencing victims, Martin’s head of talent resources Tina Chamberlain chimes in: “I would say that in this environment, we’ve learned that we cannot just say ‘so and so is leaving now to pursue other opportunities.’ In this environment the transparency is there. We’re not going to protect and reward bad behavior.” Later, I asked Cavallo about this and she told me she had to check with IPG and get back to me. “Non-disclosure agreements are an important part of any company’s business practices, and are meant to protect employees, work, and clients,” Flippo e-mailed in response.

So how profound is the change? It’s hard to know. My visit was positive. Everyone I met seemed extremely committed to not only doing great work, but creating an inclusive environment. But it was also produced — Flippo was with me pretty much the whole time. LinkedIn messages to multiple agency employees sent afterward went unanswered. One told me only that she is leaving the agency at the end of the year, adding “I wish Martin nothing but the best with their new leadership.” Glassdoor reviews from 2017 are mostly positive, a noticeable difference compared to the negativity of the year before.

These are good signs, but research suggests it can take 10 years of constant, consistent effort to change an organizational culture. “A culture is what defines common sense,” Williams says. “It’s built into 10,000 small workplace interactions, and very often every single one of the basic workplace systems. So you can change a few things but you still have that forcefield of the culture still pulling in the old directions. You have to change enough, and keep at it.”

In the meantime, Cavallo also has a business to run and so far so good, she says. They’ve landed big new accounts (Buffalo Wild Wings and another they can’t share publicly just yet, which are both in the agency’s top 5 largest accounts), were named a Top 25 Agency by Campaign US (an industry pub), and have achieved double-digit increases in revenue and margin. Cavallo is upfront that she doesn’t plan to stay for 10 years (her personal deadline is four, though she doesn’t rule out staying longer), but she’s adamant that diversity and equity are business issues. As an ad industry and a society, “there is no question. We have to change,” she says. “I’m not going to just run a company and say that’s not my problem. It is my problem. All I can do now is say I am going to make as much possible change as I can in the time that I have here.”