Close-Up: Live Issue - How CHI became a benchmark for the start-up

Clemmow Hornby Inge's fifth birthday wishes include creating a 'big' ad and a full-service agency, James Hamilton writes.

Five is a major milestone for most start-ups. It's an age when senior management's thoughts often turn introspective: is the agency as good as the founders thought or hoped it would be? Should they think about selling up or sharing the wealth? What's the plan for the next five years?

If any of Simon Clemmow, Johnny Hornby or Charles Inge are suffering from a bout of birthday-induced navel-gazing, it doesn't show. The trio are busy building what they are calling CHI mk II and, for the record, they're not selling.

Five years ago, when Clemmow and Hornby left their big, comfortable jobs at TBWA\London and Inge walked away from Lowe Lintas, new-business opportunities were thin on the ground.

Few doubted the skills of the three founders: Clemmow and Hornby had had a conspicuously successful time at TBWA; Inge had won a Cannes Grand Prix at Lowe. But would that translate to a successful start-up?

On paper, the three partners complemented each other perfectly. Clemmow's strategic vision introduced the "big idea" concept to CHI's offering. In it, clients participate in a day of brainstorming before the agency's pitch; it's what most people credit CHI's new-business success with. Hornby brought drive and determination. Inge added a fierce creative intellect. It came as little surprise that the agency began appearing on and walking away with pitches.

Indeed, the biggest criticism levelled at the agency by critics (who could be forgiven for the odd pang of jealousy) is that CHI's creative product has always been subordinate to winning new business and managing accounts. When Inge offers figures to refute this - CHI was a top-20 agency in last year's Gunn Report and the second-most-awarded agency outside the US the previous year - the cynics point to the Tango anomaly. The agency won big on a handful of ads whose creative DNA was engineered in the soft drink's former home, the then HHCL, they said.

Such stones barely rattle the glass with Hornby, although one suspects the more introspective Inge feels their sting more keenly.

"We are always building our creative department," Inge says. CHI's highest-profile hiring recently has been Ewan Paterson, who joined as the executive creative director from Bartle Bogle Hegarty in November last year. "Ewan is a fantastic hiring for us, and he has already made some great hirings. Dan Beckett, our designer, is probably the best in London, and our digital creatives are on fire," Inge adds.

However, Hornby does concede that the agency does need a big ad to stake its claim as being up there with the homes the founding partners left to build CHI.

"The one thing we haven't done is the big commercial. The jaw-dropping ad that's the agency's 'cog' or 'double life'," he says. "It's something we'd like to do and we can afford to spend less time winning new business going forward and creating that one ad."

While we're on the subject of the agency's detractors, what of that other barb - that CHI is something of a sweatshop. Hornby seems genuinely shocked that anyone would say that about his agency. "I'd be very surprised if staff thought of it like that," he says. "If only because our staff turnover has been minimal. CHI is an agency that throws two good parties a year, pays lots of bonuses and makes sure everyone shares in the success."

The three founders have certainly done well out of the business. Two years ago, they paid themselves a controversial £700,000 dividend each, although payments such as this were an anomaly thought to have been afforded by the final payment from Safeway when the supermarket was purchased by Morrisons. Still, such stories do little to quieten rumblings that the three are in the business to take as much out of it as possible. Are they sure they won't sell? Was last year's offer from Omnicom (one which would have seen the agency merged with TBWA\London) not in the slightest bit attractive?

None will confirm there ever was an offer. Hornby pulls the conversation around to their ideas for CHI mk II. "We're much more likely to share than sell," he says. "The plan is to continue to build a group of ideas companies that work as one. It's not in those people's interest to leave, because we've shared quite generously." So Naked Inside and Hall Moore CHI will become a fully integrated part of a wider group, what Hornby describes as "one big ideas company".

Clemmow goes one further. "My idea is to have a full-service agency," he says. "It's hard to pull off - you can do the planning, but the big part of the picture is the buying. That's the philosophy behind CHI mk II."

Over the past five years the agency's performance has been exceptional. Only M&C Saatchi could claim to be a start-up that enjoyed as rapid an ascent. Its new-business prowess and construction of a group offering have made CHI a difficult agency to beat. Clemmow, Hornby and Inge's success has set the bar very high for anyone thinking of setting up shop.

But despite the three founders' protestations that they won't sell, there can be few in adland who think that the agency will be celebrating its tenth anniversary as an independent.