Uphill Battle for Bernardin As He Settles In at Burnett

Tom Bernardin’s business address has changed, but his business problems have not. Leo Burnett’s new worldwide president and U.S. CEO inherits an agency in transition—a condition he faced at Lowe in New York.

The Chicago shop’s decision to bring in an outside leader for the first time in its 68-year history is a testament to the lack of viable candidates within the agency to step in and lead on short notice, following the top-management departures and client defections of the past six months. Despite Burnett’s reputation for being unwelcoming to outsiders, Bernardin, 50, joins with the understanding that he will ascend to global CEO of the $10 billion agency when current CEO Linda Wolf, 56, retires in the next 12-18 months.

“He faces an incredible challenge dealing with the power structures there,” one former Burnett exec said of Bernardin, a native Midwesterner.

Bernardin said last week he is not coming in with “an agenda of massive change.” Rather, he plans to get to know the agency before making any moves. “My role is to listen and immerse myself,” he said.

Even so, it may take bold moves to get Burnett’s house in order. In the past year, the agency has lost an estimated $250 million in billings. The network lost Philips Electronics globally, and the flagship Chicago office lost U.S. creative on Sara Lee’s Jimmy Dean and Ball Park brands, Delta Air Lines and Polaroid. Most of its wins, including the biggest, Gateway’s $200 million account, were attributable in part to business-to-business boutique LB Works, which Wolf folded back into the main agency in December.

Executive defections included worldwide president Bob Brennan, who departed in October, six weeks after COO Stephen Gatfield left. Also, LB Works chief creative officer Steffan Postaer left and its CEO, Jeff Jones, is leaving.

The question posed by many current and former Burnett staffers is whether Bernardin will have the support to make changes from the entrenched top managers who remain. “If I thought I was walking into a situation that couldn’t work, I wouldn’t have taken [the job],” Bernardin said. Wolf said she and the rest of the agency’s management are “committed” to making it work.

Bernardin is credited with helping to turn around the troubled New York office of Interpublic Group’s Bozell in the late 1990s, growing the operation from $700 million to $1 billion over three years (though billings did fall prior to the shop’s merger with IPG sister Lowe last February) and improving its creative reputation. In 1994, when Bernardin was co-president of Bozell in Southfield, Mich., that office won the Grand Prix in Cannes for a Jeep/Eagle spot.

“He was very helpful in selling the concepts we wanted to sell,” said Gary Topolewski, who worked with Bernardin on Jeep/Eagle and is now chairman and chief creative officer of Chemistri in Troy, Mich. “Tom had a way of putting things into ‘client-speak.’ ”

Bernardin arrives with baggage from Lowe, however. First as U.S. president and COO of Lowe, then as CEO, Bernardin was moored by his ties to the $300 million Verizon Wireless account he brought with him from Bozell. The telcom began reaching out to other IPG agencies at about the time Bernardin was approached by New York headhunting firm Marcus St. Jean about the Burnett position. The account has since gone into review, with the client shifting duties to McCann-Erickson in New York. McCann is participating in the review; Lowe is not.

That made Bernardin, named CEO of Lowe New York in June, a minister without portfolio. After Bernardin’s resignation, Lowe chairman and chief creative officer Gary Goldsmith said in a memo to staffers that a restructuring plan had been in motion for “the past several weeks” and was “not affected in any way by Tom’s departure.” (Last week, Lowe promoted client-services chief Susan Cantor, 36, to New York president and named CFO Robert Laub as COO.)

Still, many Burnetters seemed pleased simply to have a succession plan and global managers in place. “At some point, you’ve got to trust your leadership,” said one executive. “This company’s got two choices: get behind this guy, or get out.” —