Close-Up: Can agencies succeed without a CEO?

CEOs are traditionally the focal points of agencies. But are they really needed?

The best way to tackle the economic gloom, Nigel Bogle wrote in last week's Campaign, is for agencies to ensure that they have a strong leader, someone capable of putting a firm hand on the tiller.

Tradition tells us that this means an agency needs a strong chief executive, someone willing to be solely responsible for meeting the challenges of the next year or two head-on. But some agencies are starting 2009 without a chief executive, preferring, in Lowe's and Euro RSCG's cases, to have planners and creatives leading the way.

Garry Lace, the former chief executive of Lowe, has been particularly vocal on the issue. "It's extraordinary that there's anybody who believes that a business with ambitions to grow can do so without a chief executive," he says.

Ben Fennell, the chief executive of Bartle Bogle Hegarty, agrees: "As chief executive, you are the ultimate brand ambassador for the business. You are the guardian of all of the agency's output and the binding agent of the leadership team."

Of course, an efficient agency means providing an effective service for clients, and most believe that a chief executive is key to this.

"In a new-business context, we'll often find that a marketing team will judge an agency through its chief executive," Paul Phillips, the managing director of the AAR, says. "Clients need to know there's someone driving the agency, that there's a line of defence and a first point of call that they can come to."

Indeed, the lack of chief executive has been pointed to as one of the main reasons why Lowe had such a disastrous 2008 and, in particular, why John Lewis, its flagship account, called a review.

Farah Ramzan-Golant, the chief executive of Abbott Mead Vickers BBDO, warns: "Sometimes clients need a confidant, and they won't feel comfortable speaking to someone with an ulterior motive, if the person is also a planner or creative too."

"When it's going bad, a chief executive would ensure that you don't just immediately wave the white flag," Lace says. "Look at AMV - it's good at retaining business, and that's because it has strong leadership through its chief executive."

Historically, chief executives have been suits, because they are seen as the best-equipped out of advertising's disciplines to handle the leadership and business duties. But there have been many good chief executives from different backgrounds - it's just that in the past, they were rarely asked to combine the role with departmental responsibilities.

However, Steve Gatfield, the outgoing Lowe Worldwide chief executive, says it's simply more logical and cost-effective for a senior planner or creative to fulfil two roles.

Kate Robertson, the group chairman of Euro RSCG London, adds: "An agency can't run without a leader, but, in most agencies, the title of chief executive is rubbish. If you've got someone who is a natural leader, then, with experience, they will be able to run a business efficiently, no matter what discipline their background is in."

However, Robertson does concede that time constraints could be an issue because of the sheer weight of having to carry out the chief executive's responsibilities on top of their existing roles. She admits that she will be keeping a close eye on how Russ Lidstone, Euro RSCG's chief strategy officer, and Mark Hunter, the executive creative director, cope with their added duties following the exit of the chief executive, Mark Cadman.

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FORMER AGENCY HEAD - Garry Lace, managing director, Admedia

"A chief executive is much more than someone who stands at the top of a company as a figurehead. They take the responsibility of deciding the company's direction and have the ability to take the flak that comes the agency's way.

"There's very little genuine top talent available today for agencies looking to hire a chief executive, but that doesn't mean that they shouldn't try to find one.

"What's laughable is that not having a chief executive is essentially a cost-cutting measure being dressed up as strategic principles. It's obvious that the reason an agency like Lowe didn't appoint a chief executive is that it was one of the ways those agencies tried to manage costs in 2008."

AGENCY HEAD - Kate Robertson, group chairman, Euro RSCG London

"We'd lost three accounts in a row, which is not acceptable, so I asked: 'Where are my leaders?' I needed someone to lead the agency, and that's where Russ (Lidstone, who is sharing the chief executive duties with Mark Hunter) comes in.

"I believe that in a cut-and-thrust world, it's the people who stop you in your tracks that count. There are people you simply want to work for, and that's because of their character, not because of their title.

"I've also been at agencies before where an overbearing chief executive has created a leadership vacuum, which can be detrimental to the success of the agency. Which shows that not every agency should necessarily follow the same structure."

INTERMEDIARY - Paul Phillips, managing director, AAR

"In troubled times, agencies tend to get rid of chief executives, and I think that's wrong.

"There needs to be a distance between the day-to-day deliverance of work for the client and the management team. The chief executive isn't necessarily involved in everything that happens on an account day to day, but they still carry far more influence.

"That's because a chief executive has to be far more agnostic in their point of view as they have a number of different stakeholders that they have to manage."

AGENCY HEAD - Laurence Green, chairman, Fallon

"At Fallon, we're functioning without a chief executive, but the job is still being done. The only distinction between my role as chairman and a chief executive is that the chief executive is in a position of sole responsibility for the business, whereas, as a chairman, I can be there to encourage debate and input.

"But the key thing is that as there will obviously be some differences of opinions between senior staff at times, I can be there to take the flak and make the final decisions. I think every agency needs someone with the ability to do that."

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