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THE PUZZLE: Leo Burnett Revamps Agency Structure For the Future By Jim Kirk and Beth Heitzma

Leo Burnett Co. has undertaken a substantial reorganization of its accounting, internal media, broadcast services, and t

The move, which groups employees based on similar clients rather than strictly in their vertically structured departments, is the result of an intensive 8-month internal review by ‘re-engineering’ specialists Andersen Consulting.
Although no dollar could be determined, it’s estimated Burnett has spent less than $100,000 on the project, but is expected to save hundreds of thousands of dollars over the long haul.
Insiders say Burnett tried to figure out a way to include its account service and creative teams under the plan, but say 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 deny both departments were considered at this time.
However, Burnett officials did say 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 businesses they work on. For example, someone who works on Procter & Gamble business in internal media will now be in closer contact with their counterpart in accounting. The process streamlines communication and is expected to cut down on 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, insiders say the reorganization is one of several things Burnett is considering to update the agency. All agencies, like Burnett which have 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.
Andersen Consulting’s re-engineering program concentrates on the profit dilemma and has helped other agencies over the hump as clients redirect their advertising spending to other disciplines. Anderson helped Marc Advertising, Pittsburgh, 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.
Copyright Adweek L.P. (1993)