Pat Fallon, who was known to sign off on every major ad and piece of strategy that went out the door when he was CEO of his namesake agency, was hands-off during the selection of Darren Spiller as the shop's new creative chief in Minneapolis. Fallon, who shifted from CEO in July 2007 and is now chairman emeritus, relied heavily on the judgment of colleagues at the agency and its new CEO, Chris Foster, whose creative instincts were honed on Procter & Gamble laundry and household cleaning products at Fallon's Publicis Groupe sibling Saatchi & Saatchi.

It's hard to imagine the word emeritus in the energetic 63-year-old's vocabulary, yet alone his job description at the agency he co-founded in 1981. Yet sources say while Fallon still attends client meetings at Purina or Travelers, he typically visits the office only one day a week and is mostly focused on his role as a single dad to his three young children. He likens his job at the shop these days to "hood ornament," said a source. (Fallon declined to be interviewed for this story.)

The end of Fallon's day-to-day influence is one of the more poignant examples of the fragility of agency cultures created in the shadow of charismatic founders. Larger-than-life personalities have been the lifeblood of advertising, one of the business world's most idiosyncratic enclaves. Individuals who shoulder the risk of starting an agency do so to challenge the status quo -- no small amount of ego there -- and to assert a personal creative point of view. How do you institutionalize and pass on such unique manifestations of human nature?

Pat Fallon, Hal Riney, Cliff Freeman: The fall from grace of their eponymous shops offers a cautionary tale about the volatility of such businesses. There are numerous causes for any founder's exit: retirement, loss of interest, the sale of an agency to a larger/publicly traded company. But all such developments leave a major and nuanced challenge in their wake: whether and how the agency can evolve and succeed while deprived of the founder's influence. Hammering out a succession strategy is a difficult art in any industry. In founder-led ad agencies, it is the delicate stuff of spinning porcelain.

Fallon's own delay in securing a cultural caretaker helped to trigger his own replacement, amid hemorrhaging of accounts and creative turmoil: Spiller is the agency's third chief creative officer since David Lubars, Fallon's onetime heir apparent, left for BBDO in 2004.

The fact that Spiller and his work are largely unfamiliar in the U.S. -- he has worked in Melbourne, Australia, for the last 14 years -- already suggests an unknown direction for the Minneapolis agency, which showcased some of the country's best advertising and attracted global accolades to an advertising backwater.

Robert Senior, one of the five founders of Fallon's London office, says Spiller and Foster need not be carbon copies of Fallon. "Rather than ask, 'Are they like Pat?' you need to ask, 'Do they share the values of Pat?'" says Senior, now U.K. CEO of SSF Group, the Publicis unit in which Saatchi and Fallon are aligned. "They need to be true to the broader principles of the agency. It's very easy to say you can never re-create 'X,' but that depends on what the heartbeat is behind it. They share those high moral values."

"Pat has been at the helm until recently," says Publicis Groupe CEO Maurice Lévy. "He's still there and is helping to build and grow the agency. Fallon went through a difficult period -- it lost two big accounts in BMW and Citi -- and this destabilized the agency. [New CEO] Chris Foster is doing a good job rebuilding while respecting the culture and at the same time, making various changes that need to be made for the future."



In general, Lévy says, "the culture is different at each of our agencies. We should never bring something alien to them. We need to make sure the culture is protected and developed appropriately at each agency."

Still, coming up with a brand extension of a creative figurehead is no easy challenge.

"DDB lost what they stood for when [Bill] Bernbach left, but Ogilvy & Mather was able to maintain it through the iconography of red and in the way they do business" after David Ogilvy's exit, says Jon Bond, co-founder of Kirshenbaum Bond + Partners. "A first-class way to do business, the rational side of the industry, is a more scalable idea. A creatively driven agency is harder to scale. All good creative is not the same -- it's not just about being good, it's about a special brand of creativity."

Bartle Bogle Hegarty creative founder John Hegarty says deft handling of founders' exits is key. "Too often they don't want to go, and if this is handled in the right way -- if they genuinely empower the next generation of management -- they can offer tremendous stability. They are icons of a company. They represent its philosophy and soul in a way that offers a huge value in a transient business," Hegarty says.

Agencies face similar issues as they expand into new markets. "BBH's role, voice and prominence here is very different than from London, and that's the way it should be," says Kevin Roddy, CCO at BBH New York. "As Nigel Bogle always says, 'There are principles, and there are practices. The practices can change, the principles cannot.'"

At Mother, the physical office space is what reflects not only the agency's founding beliefs but also its literal roots in partner Robert Saville's kitchen.

Andy Medd, another partner, says that as the shop has expanded from London to Buenos Aires and New York, it seeks the same kind of large space that allows everyone to sit together. "Physical environment is massively important to who we are," Medd says. "Our offices are all built around everyone seated at a 'kitchen table.' We believe the best ideas and conversations happen there. It's completely open, so everyone knows what others' crises are, as well as their successes."

Even when founders continue to be involved, their stepping back or narrowing of focus often makes for a bumpy ride. In 2006, GSD&M Idea City CEO Roy Spence relinquished creative oversight to focus more on business development, his interests associated with Hillary Clinton's presidential campaign and setting up Idea City's new Purpose Institute. In December of that year, GSD&M lost its largest client, the $570 million Walmart/Sam's Club business, and has grappled with upheaval in its creative department.



"We've made a covenant with our next generation: Perpetuating the values of our culture is our business; how you do that is their business," Spence says. "When you have that leadership transition, the ship is going to rock but not tip. It will straighten out."

In San Francisco, Hal Riney cut a singular figure in the industry landscape and epitomized his own hugely influential agency.  Some former staffers contend that he could not sanction the shop's ongoing success without him and did little to prepare for that time. Riney retired in 2002, and his handpicked CEO, Scott Marshall, unexpectedly quit a year later. There have been three CEOs since and an exodus of the agency's major clients. Some believe Riney, who died in March 2008, had a difficult time relating to the company that he sold to Publicis Groupe in 1998.

"It's a real tightrope to keep that heritage alive and at the same time be part of a holding company," says Kirk Souder, former president and ecd at the agency. "You can understand how it would be really hard for someone so independent and hugely talented like Hal Riney to be part of a larger collective."

Lévy says he should have become more involved in running Riney's agency. "At that time, Hal was in and out of the agency," Lévy says. "Decisions had to be made, and he didn't have the taste for making decisions."

If Riney's successors grappled with reinventing the agency in his absence, executives at Cliff Freeman chafed at what they considered the overarching control of Freeman himself. For 16 years, the New York agency had no CEO before bringing in Ogilvy & Mather veteran Jeff McClelland in 2005. In the past year, it has parted ways with two of them. McClelland left in November. His successor, Clayton Ruebensaal III, a senior account director from BBDO, split in April after just five months.

"Cliff couldn't let go of what had worked for him in the past, and as a result, we weren't able to build a real future," says McClelland. "I believed I was hired to add strategy and process and a true internal infrastructure to Cliff's creative genius. But Cliff could never get past trying to repeat what had worked for him in the past. He had his opinions and a gut feel and that's what he was going to trust regardless of sound reasoning and debate to the contrary."

Freeman disagrees with McClelland's contention. "The whole agency is populated by young people, and we're constantly open to what kind of media is being addressed. The difference is in the quality of writing, art direction and thinking. I'm there as a backup to make sure the quality is there. I don't think our stuff is dated," Freeman says.

Freeman adds that he's not looking for a new business-side partner. "I'm completely controlling the agency now and really enjoying it," he says. "Hiring people from big agencies is a mistake for us."



In recent years, Freeman's agency has become a shadow of its former self. The shop bid farewell to Snapple last October, and the Quiznos and OSI Bonefish Grill businesses left at the beginning of this year. Sources estimate there are 15-20 people working at the agency now.

Efforts by Canada's MDC Partners to infuse new creative leadership into its Margeotes Fertitta & Partners unit also ended badly. MDC bought design boutique Powell in 2005 and merged it with Margeotes, with Neil Powell becoming chief creative officer. CEO George Fertitta left a year later, and what was left of the 34-year-old agency, with $255 million in billings and 167 employees at the time of the merger, was folded into MDC's Kirshenbaum Bond in 2007.

"Any time an agency brings in a new top creative person, sometimes it's wonderful, sometimes it's dangerous," says Chuck Porter, chief strategist at MDC and co-chair of MDC's Crispin Porter + Bogusky. "[In the case of Margeotes], new people came in who were perhaps not right for existing clients and they were not able to generate enough new business to solve that problem."

Grooming a new generation of management is top of mind for Porter at Crispin, which has added another 10-15 agency stakeholders to its original four. In January, Alex Bogusky, the creative face of the agency, assumed a co-chairman title and turned over the day-to-day running of the agency to ecds Andrew Keller and Rob Reilly. Porter says: "The one thing we've learned is the best new leaders are already at our place and we need to promote from within."

More broadly, Cliff Freeman wonders how many more larger-than-life personalities will forge agencies that need protecting: "Our generation was much more confident, self-reliant, less timid -- today, a lot of creatives run in packs. They don't see themselves as big players. They just want to do award-winning work. It was easier to become famous back then with a commercial. Now, with so much media, it's harder to have that same impact."