New Leadership Breathes Life Into Leo Burnett

In recent years, Leo Burnett's U.S. operations were mired in stagnation. Though the agency had added some new accounts, revenue growth was relatively flat (the shop posted only an estimated total gain of 5 percent from 2001 to 2004), and management turnover was rampant, with five leaders in five years. Many inside and outside the shop could only describe it as rudderless.But for the first time in years, the agency is showing a sense of direction. Since 42-year-old Rich Stoddart came in as president of Burnett's $1.3 billion headquarters, the Publicis Groupe agency has regained some of its confidence. "They've shaken off their bad self to some degree," said Russel Wohlwerth, president of Santa Monica, Calif., search consultant Select Resources International. "The re-emergence of Burnett is happening."The shop in December named popular internal candidate John Condon as its new creative chief, taking over for Cheryl Berman, who will continue to provide counsel on some key accounts. The shop has landed blue-chip clients Samsung, Coca-Cola and Washington Mutual (worth a combined $200 million in billings for the U.S. alone) in the past six months, which offsets the loss of the U.S. Army's $200 million business. "There would have been a lot more hanging heads and finger-pointing" if the shop had lost the Army account one or two years ago, said Ben Kline, who joined the agency in November 2003 as chief marketing officer. "I think [the agency is] more focused."Granted, much of the optimism is based on attitude rather than tangible results. Beyond the new business wins of the past six months, the shop fell short in reviews for ExxonMobil's $40 million account and creative duties on Office Depot's $80 million business. But even that's progress considering that in years past, the agency has struggled to make the final round of many sizable accounts. Most point to Stoddart as the driver of the so called "re-emergence." A former Burnett employee, the gregarious and personable Stoddart came from Ford Motor Co. with a mission to shake the agency out of its stagnation. "We needed clarity, consistently clear leadership and an end to the looking back," he said. Stoddart's leadership was evident last year in two atypical moves for Burnett, which prides itself on long-standing client relationships and rarely walking away from an account. Last April, the agency bowed out of the review for Sony's $100 million U.S. ad account after a poor chemistry meeting. And in July, the shop quit the $80 million Morgan Stanley account after its client called a review.The decisions, Stoddart said, were not as important as the message. "The point was not that we did something different," Stoddart said. "The difference was that we did it, and we told everyone about it and stood by it." Such leadership was something the agency had been lacking. Since 2000, five different executives have been handed oversight of U.S. operations. In December 2000, Brad Brinegar joined the shop as U.S. CEO, but lasted only 11 months after clashing with worldwide president Bob Brennan (who also had special oversight over North America). After two years of lacking new business wins, Brennan left in September 2003, and global CEO Linda Wolf took on responsibility for the U.S. Wolf recruited Tom Bernardin from Lowe as worldwide president and U.S. CEO in February 2004. Later that year, as he prepared to succeed Wolf as global CEO, he hired Stoddart to lead U.S. operations as president."They clearly had some issues in terms of leadership," said SRI's Wohlwerth, who ran the Washington Mutual review. "I think a stable management has helped."The new energy is evident to clients as well. "They come in with confidence about their ideas," said Marlena Peleo-Lazar, chief creative officer for McDonald's Corp. "They have a renewed sense of confidence about the knowledge that they have."But the agency still has hurdles to overcome. Losing the Army account was a blow, though Stoddart said he didn't foresee any layoffs thanks to the new business wins of Samsung, Coke and Washington Mutual. And, though popular, Condon is untested in such a leadership role. Meanwhile, Bernardin has been mostly absent from the U.S. operations. His absence was mocked in a skit at the agency's annual breakfast last December, in which the U.S. management—dressed as a jug band— accounted for the good year, and asked, "And where was Tom?" according to sources.Bernardin chuckled at the skit. Aware that his job as global CEO tends to pull him away from the U.S. headquarters, Bernardin said he is working on being more available, writing a blog on the agency's internal Web site. He noted that while most of Burnett's previous leaders came up from the ranks in Chicago, he comes in as an outsider with a different focus. "The company has to get accustomed to the fact that they have a global CEO that's doing a global job," Bernardin said. "My job is to look after the entire company and have the entire company feel as loved and taken care of as Chicago always has." And while the agency's new business record is improving, the shop has yet to put together sustainable momentum. Chief marketing officer Kline has targeted several industries such as telecommunications, technology and pharmaceutical for growth. The agency also has to address perceptions of its tradition as an account-service-focused, packaged-goods specialist. "The biggest struggle they're having is they talk a better game in terms of how contemporary and integrated they are," said one consultant. "They're moving hard and fast to get there, but they're not there yet."

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New Leadership Breathes Life Into Leo Burnett

Aaron Baar

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Aaron Baar