CHICAGO Last December, Leo Burnett worldwide CEO Tom Bernardin restructured the agency's operations in an attempt to bring the shop closer to its below-the-line sibling Arc, particularly in the U.S. In doing so, Bernardin named U.S. president Rich Stoddart and Latin American president Juan Carlos Ortiz co-presidents of the agency's North American operations.
Since then, the two have worked out the reporting structures of the two agencies, with Stoddart overseeing Arc and Burnett in Chicago and Detroit and Ortiz overseeing Toronto, Mexico and Arc's San Francisco operations.
In addition, Stoddart will focus on account management and current client relations, while Ortiz will oversee new business and creative. It's not the first time the agency has had dual oversight: in 2001, the shop had a worldwide president, Bob Brennan, who had special oversight for North America, and a U.S. CEO in Brad Brinegar. Ultimately, that structure proved confusing for leaders and staffers alike, resulting in Brinegar leaving the agency after less than a year on the job. (Brennan left a year later.)
Last week, Stoddart and Ortiz answered questions about what's different this time around for the Publicis Groupe agency.
Why is this structure good for Leo Burnett?
Rich Stoddart: We didn't build this to be good for Leo Burnett. We built it to be good for our clients. If you think about the world and the marketplace as it now exists, this is exactly what our clients are asking for. It's what marketing needs. And so we set out to build a solution that goes at that.
Why not do an out-and-out merger then?
RS: Often, merger is just a friendly word for takeover. In that scenario, normally what happens is the conqueror disbands the expertise of the conquered. If you believe in a specialist model and a specialist world where there's value in each of these disciplines—digital to shopper marketing to CRM—and you believe clients need it across the entire spectrum, if the winner ends up subsuming the loser, the specialists that are there kind of get scattered to the wind.
Juan Carlos Ortiz: Something that is key for us is what we need to give to a client to add value on all his processes. One of the things we need to keep for us is expertise. It's how to give them added value, plus keeping all the expertise. That's why it's not a merger.
I don't know if that fully answers the question. Even in the case of a merger, the reason one takes over the other is because some people are in control and they have a way of doing things. And people find the simplest way to do things.
RS: I'm not saying a merger isn't simpler. We think it's wrong, but that doesn't mean it's not easier. A merger is certainly an easy thing to do because it's all about power. It's not about collaboration, it's not about shared beliefs. It's about, "I'm right and you're wrong. Now we're doing things a different way."
How is this different than, Now we're doing things a different way?
RS: We're trying to bring these organizations together rather than one taking over the other. This is a harder path; we think it's a much higher reward path. We think it's a model for the future, not the takeover model.
JCO: Two years ago in Latin America, where I come from, we started moving Leo Burnett and Arc under one P&L but keeping expertise, and adding the two teams together. And it worked very well. Another thing that is important is that the process is part of the trip. We can't have 100 percent of the answers. What we know right now is that there is a model that we're building. We don't have 100 percent of the answers because it's a model that has not been done like in a book. And it's a part of the challenge.
So that leads to a question about the scale. In the U.S. Burnett is big and there are turfs, as much as people don't want to admit them, and anytime something is done differently people are apt to think their turf is being encroached upon. How do you work around that?
RS: Let me be clear that whatever we said is version point one. No agency has ever implemented change overnight. You do it step by step. You try stuff, you learn from it and you evolve. We don't think it's solved. We wouldn't proclaim that to any degree.
How are you dividing your duties. Are you trying to implement some sort of divide and conquer type strategy?
JCO: One thing that's important to know is we're not having a company that's split in two. What we are doing is adding skills. That means in terms of reports we need to have clear messages inside the company about clear reports. But we are working as a team and sharing the information. That is absolutely crucial. It's not about people talking about two agencies. We're adding to have one strong agency.
RS: If we build the Juan Carlos agency and the Rich agency, that's failure to us. That's not what we desire to build. We have drawn a reporting chart, because people need to know who they report to. Someone needs to own you and someone needs to be responsible. While we have done that, it doesn't mean that Rich Stoddart isn't going to be involved in new business. Or Juan Carlos isn't going to be involved in existing business.
OK, but many agencies—including Burnett in the past—have had what appeared on paper to be partnerships, but it just hasn't ever seemed to work out. Why would this be any different?
RS: Those are ancient history at Burnett. It doesn't really influence or impact us. I wasn't here and he was thinking about other things and other geographies. Partnerships only work if two people really believe, if they really want to make it work, if they trust each other. Partnerships work because people want them to work, just like marriages work because they want them to work.
JCO: Talking about history, the partnership is not going to work because it's a partnership. It's going to work because of the history. There's great partnerships and great stories about partnerships. But it's not about the model. It's about the people.
Going to Rich's marriage analogy, most marriages don't have to report to someone every year about how successful their union is?
RS: I get you. This is business. This is not a partnership that's a "mamby-pamby, hugs and kisses, we really like each other" thing. This is about getting results. This is about doing great work. It's about growth and it's about winning. Juan Carlos is as committed to results and is as aggressive as anyone I know.
If you're maintaining two different brands, how does that convince the outside world that anything has changed or is fundamentally different about the agency?
RS: That's not the endgame. The endgame is to operate in a different way and deliver a different product for clients. This is not some "paint the room yellow and tell everyone that we're different today." We're not trying to bullshit our way through this. This is substance. We're changing the way we operate and the way we work. It's not to deliver some sort of message to the world about how we're changing.
JCO: It's a message of a new culture and a new world about what we need and what we need to offer to our clients. Normally when you're focusing on clients and ideas and people, it's very important to understand that. Real life is about real life. Have you heard someone in the street talking about below-the-line ideas? Or someone saying I love the above-the-line spot I saw in the Super Bowl? I think our new culture is about all the expertise about these practices, but understanding that this line doesn't exist. We're bringing the culture of the big idea from everywhere. We're killing this line and having all of the process under the same roof and bringing the expertise and power to client solutions.
Let's at least address Altoids. From a creative standpoint, it was a calling-card account. How important are accounts like that, and are you trying to get one back?
RS: The work that was done over a period of more than a decade and was consistently that strong is something we're proud of. We'll always aspire to do that kind of work over a period of time with that kind of stunning business result for every single client on our roster. It's hard to argue that wasn't a wild success.
JCO: What's very important in life is how proud do you feel about what you do. In this case, Altoids has been a great case about advertising, communication and business results. What we as a company can feel is absolutely proud of the work. And that's what's important, who you are and what you do. It's a case that is there, and Leo Burnett did it.