Leo Burnett 're-engineers' itself from top to bottom -- Staff Reorganization Is Based on Similar Clients, Agency Reassembles Pieces of the Puzzle By Jim Kirk and Beth Heitzma

CHICAGO--Leo Burnett Co. has undertake

The move, which groups employees based on similar clients rather than strictly in their vertically structured departments, is the result of an intensive eight-month internal review by “re-engineering” specialists Andersen Consulting. Although no dollar amount could be determined, it’s estimated Burnett spent less than $100,000 on the project, but is expected to save hundreds of thousands of dollars over the long haul.
Insiders said Burnett tried to figure out a way to include its account service and creative teams under the plan, but added the agency and Andersen have yet to come up with a structure that would work well with all 34 of Burnett’s clients. Burnett officials denied both departments were considered at this time.
However, Burnett officials said the agency is constantly looking at ways to improve both its creative and account management operations, and changes down the road wouldn’t be out of the question.
“It’s pretty much a back-room project,” said Jim Thompson, executive vp/client service director, who spearheaded the project. “We took a look at our internal processes and how we could do it all better.”
According to Thompson, individuals who had been grouped according to department are now grouped according to the account. For example, someone who works on Procter & Gamble business in internal media will now be in closer contact with his or her counterpart in accounting. The process streamlines communication and is expected to cut down on the amount of paper in the agency.
“A lot of it has to do with communication,” Thompson said. “If you house people in the same place, it’s a tremendous saving in efficiency.”
Although not necessarily revolutionary, the reorganization is one of many things Burnett is considering to update the agency, insiders said. All agencies, like Burnett which has relied on straight 15% commissions in the past, are finding it increasingly difficult to maintain higher profits when clients are demanding much more integration. The difficulty is deciding how to do it without sacrificing any of the Burnett culture.
Thompson didn’t rule out future changes in client service and creative. He pointed to the agency’s recent announcement that it had restructured the Oldsmobile account team into four key client service groups as a recent change.
“You’ll look at ideas any place you can get them,” Thompson said.
Anderson Consulting’s re-engineering program concentrates on the profitability dilemma and has helped other agencies over the hump as clients redirect their advertising spending to other disciplines.
Anderson assisted Pittsburgh-based Marc Advertising in overhauling its agency. As a result, Marc eliminated most of its back-room departments and made each team run like an independent business unit. In that effort, Marc reduced its staff 20% as a result.
Burnett’s Thompson said the recent layoffs were not the result of the restructuring.
Organizational re-engineering hasn’t received high praise in all circles, however. In some cases, companies that were completely overhauled by the elimination of titles and departments went back to the old system after a period of time because employees wanted a more clear cut path of advancement.
Copyright Adweek L.P. (1993)