The World: 'We're not a cowering and dejected agency'

Having lost a number of key accounts and personnel, Fallon Minneapolis now finds itself in a difficult place.

In its documented 26-year history, Fallon has endured its share of financial and creative challenges, but perhaps none compare to those currently engulfing the Minneapolis office, centre of its global empire, and the long-time jewel in its creative crown. In the past two years, the agency has seen some high-profile personnel defections, has made questionable creative signings and lost a number of big-hitting clients, including BMW, Lee Jeans, United Airlines and Citi.

On top of that, it has failed to reel in any sizeable new accounts, losing out to Arnold Worldwide in the Volvo pitch and dropping out of last year's Audi pitch. And while Fallon offices such as London and Tokyo are winning new business, awards and plaudits, Minneapolis' recent woes cast a pall over the agency's future, not to mention the continuing munificence of its Publicis Groupe owner.

The latest departure last April was that of the executive creative director, Kerry Feuerman, who was brought in from Leo Burnett just 13 months earlier after the abrupt firing of London import and predecessor Paul Silburn, himself in situ a mere 11 months. For an agency that prides itself on its creative reputation, such missteps are costly, disruptive and telling.

"Of the past two creative hires, one was disastrous, and the other just did not work as we wanted it to," the agency chairman and co-founder, Pat Fallon, admits. "There is more to it than that, but I was seduced by Silburn's reel. Then I swung too far the other way. I need-ed a healer after the Silburn era, so I wanted someone who was kind. I've gotta take the hit on that. Guess I'm painting myself as the arsehole, but Kerry couldn't have worked harder. All leaders need followers, and we didn't have the new-business track record we needed. That's about as candid as I can be."

But some are questioning if the latest creative director appointee, Todd Riddle, formerly a group creative director at Fallon, and who was also said to be unhappy, is even the right person for the job. "He has enormous internal support based on his body of work and his leadership," Fallon explains. "Maybe he was getting frustrated, but he's extremely committed to Fallon and this promotion made him more so."

Regarded as one of the US's great agencies, Fallon, with its iconic culture and reputation for quirky humour, still commands loyalty and respect, as well as engendering criticism and controversy. According to one former employee: "London's the flagship office now. It's sad, Fallon's a great brand. I think Pat's been loyal to too many of the wrong people. Maurice Levy (the Publicis Groupe chairman) must be wringing his hands as he watches his investment go down the drain."

Some contend that the rot had set in after the former creative director, Dave Lubars, the one-time heir apparent to Pat Fallon, departed for BBDO in 2003. "Lubars gave us five great years," Fallon says. "But Minneapolis is in a very challenging period, mainly based on the loss of Citi. United Airlines was our smallest account by far, and it was emotional for me, because I was close to the previous executives."

Fallon puts the Citi loss down to a change of management. He says: "There's a new chief executive and head of marketing and advertising at Citi, which happened at BMW as well." And as for the failure to win accounts, he adds: "On Volvo, we went from 16 to two contenders. We don't have anything to hang our heads about."

He says he is doing everything he can to avoid redundancies, but it all must give potential clients pause for thought. With the Fallon Singapore office already doubling as a Publicis office, is there a danger Minneapolis might also get folded into Publicis? "Not unless you know something I don't," Fallon declares. Singapore, he says, was situational. Publicis needed creative leadership and Fallon's office needed background support.

Some observers question the role of the vice-chairman, Bill Westbrook, who returned to the agency last year, after serving as the creative director in the 90s. "Pat has to start again," a former employee says. "He needs to bring in people who see the future. As great as Westbrook is, I'm not sure he's as open to it as he thinks."

According to the New York headhunter Susan Friedman: "Unless Pat Fallon, who was always on the cutting edge, embraces the newest concept, which is total integration, he should walk away. Pat, at least, has met some of the most interesting contemporary marketing and creative minds, and while obviously none clicked, he should think about what their visions were, and come up with a new one."

But Fallon defends the agency's vision, and points to several new hires and other plans in place that will emerge in the next 60 days. "I've always attempted to break down everything and put it back together in a way that's exciting and appropriate for us," he says. "The world talks about content and new media, but we've done it more than anyone. We just don't talk about it. We've broadened our platform, we're way into new technology and we'll get more into interactive.

"The agency will still stand for creativity. We have great depth here, and, even with more turnover than usual, we have more stability in the creative department than most creative departments. We're a frustrated agency, we're a pissed-off agency, but we're not a cowering and dejected agency!"