A SHAKEN AMMIRATI SLOWS STRATEGIC PLAN, REGROUPS: MANAGEMENT CONSULTANT CALLED 'WRONG PERSON IN THE WRONG PLACE'

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Just weeks ago, in Ammirati Puris Lintas' Manhattan office, Rick Hadala and Martin Puris crowed that the ad industry's future lay in providing strategic thinking to clients, a la management consultancies. Mr. Puris, the agency's chairman-CEO and chief creative officer, pointed to Mr. Hadala, a former McKinsey & Co. consultant, as a key player in achieving that goal for Ammirati.

Last week, after just six months on the job, Mr. Hadala stepped down as Ammirati's New York and North American chairman-CEO, amidst complaints that he pushed the management consultant emphasis too far. Clients and staffers bristled under what they said was Mr. Hadala's aggressive and often arrogant manner.

"It just was the wrong person in the wrong place," said Mr. Puris, adding that the agency will continue to develop strategic practices. "It wasn't the concept [that failed]. It was the personality."

BRIDGING THE GAP

The agency, Mr. Puris said, is still committed to bridging the gap between strategic consultants and traditional ad agencies. However, several Ammirati executives claim the pace of the shift will slow down immensely.

One senior Ammirati executive said Mr. Hadala's North American post won't be filled for at least a year in order to give agency management some time to regroup.

Mr. Hadala's New York duties will be handled by James Allman, 48, previously multinational client director on Unilever (see related story at right). Insiders say Mr. Allman's calm, smooth management style is a much-needed change in the wake of recent agency shake-ups.

"Rick was more confrontational; the new guy is more courtly, more of a consensus kind of guy," said one Ammirati executive.

Mr. Hadala's abrupt departure is just the latest in a string of public trevails at the agency. In recent years, Ammirati has suffered from numerous high-profile account losses and heavy management turnover. And many staffers blame Mr. Hadala, 41, for much of the recent exodus; at least five senior-level staffers departed under Mr. Hadala's short watch.

In numerous interviews with Ammirati executives and those close to the situation, Mr. Hadala repeatedly is painted as a man with sharp strategic acumen who simply lacked the personal skills for the job. Mr. Hadala did not return repeated calls for an interview.

'AMBITIONS KNEW NO BOUNDS'

During the past six months, Ammirati staffers privately complained Mr. Hadala lacked knowledge of the ad industry. Those insiders also say Mr. Hadala tried to usurp Mr. Puris' power, both within the agency and with clients.

"That man's ambitions knew no bounds," said another Ammirati executive. "Anything he did, he rubbed people wrong."

Agency executives also griped about Mr. Hadala's sweeping New York reorganization in October. That restructuring moved two-thirds of the office's top management into new positions. Several staffers were forced out.

"Some of these firings were very hurtful for morale," said one creative at the agency.

UNSUCCESSFUL TRANSPLANTS

Ammirati is the latest in a short list of agencies that have unsuccessfully tried to transplant consultants into their organizations.

"Over the past five years, various large agencies have brought people in from the management consulting side and it just hasn't worked," said Arthur Anderson, managing principal of Morgan Anderson Consulting, New York. "The fact is that agencies reject the management consultants like a body rejecting an implanted organ."

Although Phil Geier, CEO of Ammirati parent Interpublic Group of Cos., reportedly handpicked Mr. Hadala, Mr. Puris supported the decision. Mr. Geier was out of the country last week and didn't return calls for comment.

Yet both men were said to have been heavily committed to hiring someone with a management consultant background. But current and former executives say the move to consulting was too abrupt for clients just looking for advice on advertising, not counsel on how to run their businesses.

A BRIGHT STRATEGIC THINKER

Mr. Hadala "was a very bright strategic thinker, but he was like a bull in a china shop," said one staffer who worked closely with Mr. Hadala. "He was telling clients things they weren't ready to hear."

The agency has had its ups and downs over the past several years. Although it won Iridium and Air France, it has lost such blue-chip accounts as the $200 million Compaq Computer Corp. business; $100 million in Sara Lee Corp. media buying; and the $100 million MasterCard International account.

Also, the agency's linchpin account, Burger King Corp., was dealt a blow last week with the resignations of two top-level agency staffers. And one executive at another IPG agency said last week that Ammirati is on rocky ground with Johnson & Johnson and Unilever.

Ammirati also constantly is fending off rumors that General Motors Corp. is unhappy with the agency's service. The agency handles GMC Trucks and OnStar Division.

For the record, GMC Advertising Manager Bob Kraut dismissed the talk, telling Advertising Age: "Ammirati is our agency for the next millennium."

After the management turnover at the agency, there are only two remaining members of the management committee put in place 18 months ago, according to one former executive. During the last three years, the agency has lost five executive creative directors-Brent Bouchez, Mark Johnson, Tom Nelson, David Page and Helayne Spivak.

For all its perceived troubles, Mr. Puris counters that Ammirati remains on steady ground.

"We had some problems in New York that I think we've solved, but the agency's doing well," he said.

Indeed, the financial picture is healthy. U.S. gross income grew 11.6% in 1998 to $156 million, according to Ad Age data. Worldwide, gross income on a consolidated basis topped $1 billion last year, a 9.2% increase.

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