Roger Haupt, the incoming CEO of Leo Burnett Co.'s new holding company, adheres to the philosophy that the sum will be greater than its parts.
On Jan. 1, Mr. Haupt becomes president-CEO of the Leo Group, a global holding company that will comprise three Burnett units: Leo Burnett Co., Starcom Worldwide, and Bartle Bogle Hegarty, the London-based agency in which it holds a 49% stake.
Mr. Haupt is now chief operating officer of Leo Burnett Co. Rick Fizdale, now chairman-CEO of Leo Burnett Co., will relinquish the latter title on Jan. 1. Leo Burnett Co. President Jim Oates is retiring at yearend.
Mr. Haupt, 51, said he hadn't determined who will lead the agency, Leo Burnett Co., after he and Mr. Fizdale officially move to the Leo Group.
Mr. Haupt said a holding structure makes it easier to coordinate the global offerings of the agency, Starcom, Bartle and future units. He would not specify capabilities that will be split off into separate units but said promotion, direct marketing, public relations and interactive all are candidates.
The holding company structure is "an effective way to manage special services around the world. We have the benefits of strengthening the group as a whole," he said.
Only two years ago, Burnett had 77 full-service agencies around the world. Today, it has almost tripled to 280 operating units, most devoted to direct or database marketing, interactive, PR, and other rapidly growing marketing arenas. Worldwide billings are $6.7 billion.
"Building a brand is a more complex idea than it used to be, and you need to be master of so many disciplines," said Mr. Haupt, a 15-year Burnetter.
Burnett also is resolving its globalization issues. In two years, the agency has bumped its worldwide presence to 81 countries, up 20% from the 67 it had serviced.
Mr. Haupt wouldn't outline plans for Starcom but said it is negotiating acquisitions in Europe and elsewhere.
Discussions are said to have been conducted regarding merging Starcom with MacManus Group's Mediavest, and it's believed a full-scale merger of Leo Burnett Co. and MacManus also was under consideration.
Another stalled endeavor is a deal to sell a minority stake in Burnett to Tokyo-based Dentsu, the world's largest agency brand. A deal for Dentsu to acquire at least 10% of Burnett was expected by spring, but the timetable has been pushed back. Mr. Fizdale maintains a deal will be reached.
Referring to the past two years, Mr. Fizdale said, "Most of the things we tried worked."
One that didn't was the mini-agency system within Leo Burnett USA, the largest division of Leo Burnett Co. The idea was to regroup by industry into specialties such as healthcare and retail.
DIVERSITY OF EXPERIENCE
The agency-within-an-agency system was supposed to make Burnett USA more lithe as well as increase internal integration and communication. But clients wanted diversity of experience, Mr. Fizdale. said.
That 2-year-old system is being revamped and may include restructuring into just a few units, down from seven. An announcement could come by month's end.
One thing not on the table is Burnett's going public or merging, Mr. Haupt said. As one of the last private agencies, Burnett does not have the access to cash that a public Omnicom Group or WPP Group may have, but Mr. Haupt said that's been no hindrance.
"We've done a great job" expanding without public funds, he said.
Copyright September 1999, Crain Communications Inc.