Linda Sawyer Takes CEO Role At A Trying Time For The Agency

Growing up in Rockland County in the suburbs of New York City, Linda Sawyer would listen closely whenever her father would talk about work. Simon Jeruchim was a package designer at Revlon in the 1960s before opening his own design shop, and he spoke often about company meetings and the agendas that would unfold from them. Sawyer’s education on the working world—in particular, what motivates certain people and what doesn’t—had begun.

“I grew up reading marketing briefs,” she says. “I happen to love business.”

Smart, dynamic, honest, self-confident—these are the words one hears repeatedly from people who know and have worked with Sawyer. It is these qualities, along with what colleague Val DiFebo calls “an intuitive business sense,” that have propelled Sawyer’s career, which gets another boost this month when she is named CEO of Interpublic Group’s Deutsch.

“She kind of sneaks up on you,” says Donny Deutsch, who will remain the agency’s chairman. “She comes across as nonthreatening, but she’s calculating and methodical. And I mean that as a compliment.”

In her 16 years at Deutsch, Sawyer, 44, has operated largely in the shadow of her high-profile boss. But he and others admit that since 2001, when she was named COO, Sawyer has been the de facto CEO. Now, as Deutsch, 47, further develops his second career as a cable-television talk-show personality, it made sense to make Sawyer’s position official. “Linda has been the yin to my yang for many years,” says Deutsch. “She’s a brilliant manager and strategist. She’s one of the reasons we’ve been as successful as we’ve been.”

Still, the transition comes during a difficult period. Following in Donny Deutsch’s footsteps would be challenging for most executives in the best of times. And these are not the best of times for the 36-year-old agency. Between 1989 and early 2004, the agency expanded at a breakneck pace: Billings grew from $78 million to $3 billion in that time, and revenue jumped from $8 million to more than $300 million; but in the last 20 months, the agency lost more than $675 million in billings, according to Adweek estimates. And revenue dipped to below $250 million, sources said.

Once a new-business powerhouse, Deutsch is 2-for-7 in competitive pitches this year, after going 8-for-8 in 2004. The most recent bitter pill: an unsuccessful bid for the $315 million Lowe’s account, which went to BBDO and OMD last week. Clients that have walked away from the agency in the past two years include DirecTV, Mitsubishi, Bank of America, Revlon, Monster and LensCrafters. Deutsch/LA has seen its staff level shrink from 325 to 225 in the past 20 months, sources said.

Deutsch executives shrug off the downturn as a “hiccup,” a “blip,” a “bump in the road.” But it does put added pressure on Sawyer to demonstrate that she can step in, become the new face of the agency and chart an effective course for the future.

Sitting down for an interview in her meticulously neat office at Deutsch’s New York headquarters on Eighth Avenue and 15th Street, Sawyer, in a spotless white pantsuit, finishes putting some folders away. “I hate clutter,” she says cheerfully and somewhat apologetically. In conversation, Sawyer is friendly and affable, direct but not blunt, and can exude warmth while remaining slightly guarded.

The younger of two daughters (her sister is a lawyer), Sawyer describes her childhood as typically suburban and American. As children, her European parents fled from the Nazis, an experience her father recounts in his 2001 book Hidden in France. (Although Linda could speak only French when she entered kindergarten, she somewhat sheepishly admits that now she is barely conversant in the language.) Entering the advertising business, she worked at a handful of agencies, including Lintas, before landing at Deutsch in 1989.

Where does she plan to take the agency as CEO? Sawyer says she is working on a new business model for Deutsch to match how the industry is changing, but says it is too early to discuss specifics. But she warns not to expect any radical departures. In fact, she is quick to point out the similarities between herself and her boss, who took over the agency his father founded and built it into one of the hottest shops in the industry. While she and Deutsch may seem quite different on the surface, they “have a lot of simpatico in terms of our management philosophy,” Sawyer says. “We’re both great listeners. We’re both good at inspiring people. We’re direct and no-nonsense. We both have good business and people skills, and we’re both extremely decisive.”

Others, though, are just as quick to point out the differences between the two, especially those of style and temperament. Sawyer is not as visible a presence as Deutsch has been, at least until the last few years, among the 775 staffers at the agency’s headquarters. She doesn’t walk the halls. She is not gregarious. She doesn’t stand on tables, making sweeping pronouncements to motivate the troops during meetings. “She’s not a schmoozer,” says one ex-staffer. “Linda is the quietest of all the partners. But believe me, she knows who everyone at the agency is and what they do.”

Deutsch himself describes Sawyer as someone who “seems to have no ego. She’s not driven by that kind of stuff. It’s been a good balance.”

There has been some speculation in the industry about whether Deutsch’s burgeoning fame and his increased responsibilities as host of CNBC’s The Big Idea with Donny Deutsch have been a distraction that came at the expense of the agency. (His show expanded from 13 weekly episodes in 2004 to five nights a week this year.) Deutsch disputes that notion. “We lost a couple of pieces of business. I have a TV show. It’s sexy stuff,” he says nonchalantly about how industry watchers have connected the dots—inaccurately, in his opinion. “My role has been what it’s been for the last few years,” says Deutsch, who began to pull away from day-to-day management duties further in 2003, appearing in fewer new-business pitches and curtailing his client interaction.

There is another factor at work, too: Even with Deutsch less involved, it will be no small challenge for Sawyer to get out from under his shadow. The agency’s image remains very “tied up with Donny Deutsch,” says Sanford Bernstein analyst Michael Nathanson. “As you watch him every night on CNBC and The Apprentice, he is now bigger than his agency. They’re going to have to do a lot of work to present a new face to the agency.”

Even Sawyer’s admirers recognize the difficulty of the task. “She has a lot of backbone. You sense it. She doesn’t seem like someone who’d crumble,” says one executive who tried to recruit Sawyer for a top job last year. “The question is, has she been drafting [all these years] or pulling the strings?”

According to people who have worked with and inside the agency, Sawyer has been the power behind the throne for years. “It doesn’t say so on her business card, but she has been the CEO for at least six or seven years,” says Peter Connelly, a former executive at Ikea and Tommy Hilfiger, both ex-Deutsch clients. “I’ve worked with her for 16 years and never questioned anything she or her people ever told me.”

“Deutsch, with hands-on leadership from [managing partners] Val [DiFebo] and Kathy [Delaney], has done a great job helping us to drive our brands for better business results,” adds Deborah Dick-Rath, executive director of global advertising for Novartis. “Linda’s vision for the agency and her role in helping us leverage Deutsch to meet our business needs have contributed to our partnership over the years.”

Indeed, all the Deutsch managing partners were integral to the shop’s success as its fortunes rose. For the past 18 months, the agency has tried to develop a strategy that brings Sawyer and those other partners—DiFebo, Delaney, Cheryl Greene, Peter Gardiner, Mike Sheldon and Eric Hirshberg—more into the limelight.

Sawyer, in particular, has been taking a more active role in industry events like those organized by the American Association of Advertising Agencies. She is also vice chairman of the Advertising Education Foundation. She will meet with clients to discuss their long-term needs, but will not necessarily interact with them more on a daily basis. “I provide behind-the-scenes counsel,” she says.

“Her job is not to become Donny Jr.,” Sheldon says. “She’ll maintain the streetfighter, anti-establishment culture we have. She’s a good businesswoman and a great coach.”

As COO, Sawyer was never a fixture in new-business pitches, and she doesn’t plan to change that. Rather, she concentrates on managing resources and meeting clients’ business needs, according to DiFebo. “We talk about the vision of the agency every day,” DiFebo says. “She’s working on how to poise us for the next 10 years. Linda is able to add perspective because she’s not interfacing with clients and running accounts.”

Deutsch’s role will not change greatly as chairman. As it has been in recent years, his main role will be as an inspirational leader to whom the partners can go for business counsel. “He’s an amazing leader who’s imparted a lot to us that’s in the agency’s DNA,” says Sheldon.

Of the agency’s travails during the last 20 months, Sawyer says, “It is bizarre timing and the perfect storm. Obviously, we’ve lost a few big pieces of business. You can’t ignore that. But each one had special circumstances. Our attitude is, ‘This is a hiccup.’ Our team is very strong.”

“There’s just been some bad luck over the last year,” adds Sheldon. “We know we still have the juice. We didn’t wake up stupid yesterday. You can’t point to a root cause for it. If you say it’s because Donny’s less involved, that’s not accurate. He doesn’t run accounts, and he hasn’t been involved in new business in years.”

Sawyer points out that through it all, the agency has picked up business from clients like Cici’s Pizza, Intel/Microsoft, Pier 1 Imports, PacifiCare Health Systems, Babies R Us and ConAgra’s Orville Redenbacher. And it has grown organically as well, adding new assignments from clients as Johnson & Johnson and Novartis.

She also sees the bright side of the agency’s recent losses. “Revlon and Mitsubishi are two categories we now have a great track record in,” Sawyer says. “This is an opportunity for us to upgrade—be a little scrappier and see if we can reinvent and reinvigorate. Nothing is broken.”

As a manager, Sawyer simply wants to maintain the Deutsch culture. “You need to have an environment where people feel OK to fail or to put themselves on the line in a roomful of people,” Sawyer says. “Fear demotivates people. They hide. They become passive-aggressive. They revert to being children.”

Deutsch says he well expects Sawyer to “manage in her own style. You don’t give titles; titles are taken. She’s been my right hand. She’s the ultimate shark, except nobody knows it.”

He means that as a compliment, too.