For Burnett’s LB Works, Success Proved to Be a Mixed Blessing

During its nearly two-year lifespan, LB Works—started as a high-tech and business-to-business specialty division—helped bring in more than $200 million worth of new business to parent Leo Burnett USA.

In that same time period, Leo Burnett’s Chicago office struggled in major reviews and won only a handful of new clients on its own, with combined spending of about $50 million, a drop in the bucket for the $3 billion U.S. headquarters.

With the departure of worldwide president—and staunch supporter—Bob Brennan on Oct. 1, LB Works’ return to its parent company’s fold was only a matter of time. Global CEO Linda Wolf has never been a fan of separate entities operating under the Leo Burnett banner, and with Burnett’s weak new-business record, she also saw the chance to take better advantage of the operation’s success.

“I think it makes a whole lot of sense to have that [new business] success within the larger agency,” said Wolf, long a proponent of maintaining one Burnett. In the late 1990s, Wolf ended the shop’s short-lived experiment with seven “mini-agencies.”

Last week’s decision to fold LB Works into Burnett, which takes effect Jan. 1, was also prompted by what Wolf termed “overlap” between Burnett and its subsidiary. An executive at one search consultancy agreed there was confusion as to exactly where the two shops differed. Internally, the lines between parent and offspring became blurred as LB Works helped land Gateway’s $150 million account in March. LB Works handled creative and Burnett handled account management.

Jeff Jones, the CEO of LB Works since its inception, admitted to being “bummed on a personal level” about seeing his division disappear. But, he added, “if I separate from the emotion, there’s a lot of pride in building something that has been successful and take it into something larger.”

One LB Works account, Starbucks, was resigned following the announcement of the unit’s dissolution because of a conflict with Burnett’s McDonald’s. LB Works had been working on a project for the chain for about three months, including some holiday-oriented outdoor advertising. In a statement, Starbucks said, “We will complete our current contract with them and appreciate the work they have done.”

LB Works was created from the remnants of the Leo Burnett Technology Group in the wake of the dot-com crash. Agency managers, particularly Brennan, believed Burnett could benefit from retaining the group’s technology and b-to-b expertise. “His advocacy was strong, and he held it close to his heart,” said one source of Brennan.

Brennan personally recruited longtime Burnett ecd Steffan Postaer to become chief creative officer at LB Works, sources said. Brennan’s staunch support for the unit stemmed from his desire for Burnett to get back to the ideals on which the shop was founded—a goal the larger agency did not pursue but that LB Works attempted to put into practice.

Jones and Postaer will retain their evp titles within Burnett, but their new roles and official titles have not been finalized. Several sources have pointed to Jones, 36, as a potential next-generation leader of Leo Burnett. Neither Jones nor Wolf, who turns 56 at the end of the month, would comment on such speculation. “We look at anyone who’s been able to grow clients’ business” as a potential leader, Wolf said. “Having [Jones and Postaer] within an overall management group would be a benefit to everybody.”

Sorting out Postaer’s role could be tricky. When LB Works was formed, Postaer, 41, was said to be in the running for a top creative post at another Chicago agency. Moving to LB Works gave him an opportunity to hold a leadership position while remaining with Burnett, sources said. Postaer could not be reached for comment.

In the short term, the task facing Jones, Postaer and the other 100 LB Works staffers moving to Burnett will be to smooth the transition of the unit’s 10 clients, including Earthlink and Lexmark. Wolf and Jones said no layoffs are planned and that LB Works staffers will continue to work on their accounts.