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They may not agree on why their shop has forged such a winning reputation, but the folks at Goodby, Silverstein & Partners have a bevy of awards to show their methods work.

Indeed, the San Francisco agency is the right place for hot creative these days, this year winning a slew of honors including Advertising Age's Best of Show for 1994 TV commercials, a Kelly's sweep, an Effie, Addys and Obies, for more than a half dozen of its clients, especially the California Milk Processor Board and Norwegian Cruise Line. The agency is also expected to do well at the Cannes International Advertising Festival that begins this week.

To the principals, the success is rooted in the agency's culture.

"Hiring real smart people and maintaining an atmosphere of creativity and encouraging openness," said Jeff Goodby, 42, co-chairman and creative director. "It sounds crazy, but that's what makes it work."

Co-Chairman and Creative Director Rich Silverstein, 46, agrees. "We've got the magic because we allow people in the company freedom," said Mr. Silverstein, a self-proclaimed "benevolent dictator."

Outsiders, such as University of California at Berkeley lecturer Clay Felker, see it as a highly controlled type of creative arrogance. "My guess is they work very hard on the research and somehow they're able to loosen up, then come up with a certain wit, even an irreverence, that has an edge to it."

The shop traces its roots to 1983, when three Hal Riney & Partners creatives began moonlighting on a project for Electronic Arts. Copywriter Andy Berlin sold the idea of going independent to his colleagues: Jeff Goodby, a rising creative star thought to be Mr. Riney's likely successor, and Rich Silverstein, an art director with a meticulous sense of design and detail whose aspiration was to create icons of contemporary culture.

"Rich insisted on high standards. Jeff was the philosopher king, breathing brilliance in the way he responded to situa-tions again and again, and I was the adrenalin," said Mr. Berlin.

By 1992, with the agency 100% owned by Omnicom, Mr. Berlin restlessly insisted on opening a New York office, or merging with Omnicom's Tracy-Locke with him in charge of the combined shops. Messrs. Goodby and Silverstein balked.

Amid much media fanfare, Mr. Berlin took another Omnicom job as president of the DDB Needham Worldwide office in New York. When he left, Mr. Berlin said the move was an opportunity to work with world class creatives.

That remark fired up the Goodby creatives, who then went on to their biggest winning streak ever, picking up the $50 million Sega of America account within months of his departure.

"When Andy chose to leave, I had concerns," said Richard Gillmore, director of marketing services, American Isuzu Motors. "He was the big noisemaker, but the rainmakers were still there. We didn't miss a heartbeat when he left."

The agency grew from billings of $120 million at Mr. Berlin's departure to $316 million in 1994. This year, billings should grow another 14% to $360 million.

Challenges ahead for the agency daunt even Messrs. Goodby and Silverstein, who have re-upped with Omnicom for five years and conceded that growth is bound to level off.

Mr. Silverstein wonders how the shop will ever outdo last year's creative awards haul. He's also concerned that the agency, now scattered throughout three buildings, find a new home that's distinctly San Francisco so visiting clients will understand why the shop prospered in the city on the bay.

Meanwhile, agency president Colin Probert is helping build the organization through its successful design group, which brought in 15% of agency revenue last year, and a media organization. Although the agency always has purported to be profitable with the exception of 1989, financial pressures recently caused a wage freeze and a crackdown on expenses.

Mr. Probert is growing the agency horizontally, with the top people handing off more responsibilities to upper-level creatives. For example, Associate Creative Director Sam Pond and Account Director Rene Cournoyer put out the fires at client Sega of America last year. Steve Simpson, an associate creative director now heading the Pacific Bell team, will help tackle the agency's greatest challenge presented by a client to date.

Even with the help, Mr. Probert acknowleged, "I don't know of anybody else who can take over for Jeff and Rich. They are irreplaceable" in terms of talent, the standards they set, and the style they bring to the place, he said.

Peers and clients agree that style has defined the agency.

There's "an element of confidence in the simplicity of their idea and the elegance and deftness of the execution," said Bob Welke, chief creative officer for Leo Burnett USA, Chicago, who headed Advertising Age's Best Awards for 1995.

Goodby alum Mike Shine, partner at Butler, Shine & Stern, Sausalito, Calif., pointed to his former agency's skill in reining in client's demands. "Rich and Jeff had a little more patience" with unrealistic or dead-end client demands, noted Mr. Shine. "They could think their way around it and outsmart them."

Jeff Manning, executive director, California Milk Processor Board, added: "They were humble, relatively speaking. They didn't pretend to know everything. They had very astute observations about how people feel about milk. They presented the deprivation strategy and then got a focus group to go one week without milk. [The focus group] felt tortured. It was a pretty interesting idea."

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