CLOSE-UP: NEWSMAKERS/NEIL HENDERSON AND PHIL TEER - Calling time on quirks at an older, wiser St Luke's - St Luke's has appointed its first MDs so it can get back on track, Jenny Watts says

When St Luke's burst on to the agency scene in 1995 after its management buyout from Chiat Day, it fascinated the ad world. With its quirky employee scheme that required every single employee to be a shareholder.

With Andy Law and his former Chiat Day deputy, David Abraham, at the helm, doubting Thomases were forced to eat their words. St Luke's' strategic communications consultancy approach was heralded as the new way of thinking.

But myth and reality appeared quite different last April when the sudden departure of Abraham to the Discovery Network Europe combined with rumours of dissension in the agency ranks.

Some complained that the staff were merely paying lip service to the agency's founding ideals - a contrast to the long-running complaint that St Luke's devotion to its principles borders on cult-like obsession.

Now, in a changing of the guard, St Luke's has created its first managing director roles in the biggest transformation of its management structure since launching.

The agency has promoted Neil Henderson, the client services director, and Phil Teer, the planning director, both key players on the agency's important BT business.

Henderson joined St Luke's from Bartle Bogle Hegarty in 1996. He has worked on Midland Bank, Ikea, Fox's Biscuits and BT. Teer was one of the agency's founding partners.

Commenting on talk of the agency being a directionless ship following Abraham's departure, Henderson says: "It was kind of inevitable because he was the founder. He had a very particular view of the company. It was a bit of a surprise to everyone - naturally there was a moment of 'who's going to take it on?'."

Law took over the day-to-day reins, and Teer says: "When David left, Neil and I had to step up a gear.

They maintain that Abraham had largely pulled out of client relationships, so the upheaval was not too traumatic.

The two have since been getting to grips with what was a difficult year. Last February the agency lost its £40 million BSkyB business, something Henderson candidly describes as "a very very big hit".

Later Ikea moved its business in-house, and then further rubbed salt into the wound by appointing Karmarama, the agency set up by Naresh Ramchandani and David Buonaguidi, St Luke's original creative directors.

Management restructures were put on hold as the agency battened down the hatches and concentrated on winning substantial new business to replace the departed billings.

It had an effect, with the agency winning business from BT, Quorn, and the international accounts for AMP and Emirates.

"The agency has definitely matured. We've moved into an area where we're taking on substantial accounts - we're not the new kid on the block anymore,

Henderson says.

Appointing two managing directors allows one to manage the agency while the other can concentrate on thinking of the future - and the pair seem to have been selected on these grounds.

"Phil is a profound thinker, and Neil is a very good manager of the train set,

Mark Earls, the executive planning director of Ogilvy & Mather and a former planning director at St Luke's, confirms.

"Phil has a fantastic brain,

he continues. "He's very passionate, but he's unlike most of the people who do advertising, in that he's definitely a working-class Scottish lad."

Teer admits to a deliberately low profile, despite speaking at several industry events. His promotion has surprised some observers who thought the job might be handed to either Andy Palmer or Tim Hunt, both of whom were promoted to managing partner, along with Henderson, in November 2000.

While news of the dual appointment did not meet with universal acclaim, Henderson says: "Whenever appointments are made people are going to be dissatisfied, and there's going to be a response to it."

So what now for the agency? St Luke's has 125 staff across London and Sweden, and if it doesn't want to sell, it needs to further evolve.

"Every start-up gets to a point after five years where you have to reframe what you do,

Earls agrees.

Henderson and Teer hint there are plans afoot, but as yet won't reveal further details.

The agency is obviously ambitious to recover its business losses. It seems to have weathered the storm of growing from an experimental start-up and, despite the agency's problems last year, it maintained a consistently high creative output.

"We've stocked up our creative department so we have a senior set of creative directors who are very close to our clients,

Henderson responds.

The two maintain they won't need a new style of managing or agency positioning to take the company forward.

"St Luke's is about reinvention and innovation,

Henderson says. "We're looking at ways we can diversify our offerings - such as Glue and Klondike - we're going into advertising-funded sponsorship, and we've built a consultancy business."

But will they be keeping the unconventional St Luke's culture?

"St Luke's reputation in the media is a bit 90s. I'd prefer the company to be known for its work, action and investments rather than its quirky image,

Teer says.

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