Leo hits half a century in Canada

The year was 1952. When the Chicago-based Leo Burnett Company decided to open its first international ad agency in downtown Toronto, it had a staff of 10 and exactly one client. Radio and print were the ad media of choice. Queen Elizabeth was poised to ascend the throne, Canada's exploding population had passed 13 million, and the baby boomers were just babies.
Oh, how times have changed.

The year was 1952. When the Chicago-based Leo Burnett Company decided to open its first international ad agency in downtown Toronto, it had a staff of 10 and exactly one client. Radio and print were the ad media of choice. Queen Elizabeth was poised to ascend the throne, Canada’s exploding population had passed 13 million, and the baby boomers were just babies.

Oh, how times have changed.

The seeds of the Canadian shop had been sown 17 years earlier when a former journalist named Leo Burnett, a short, strong-willed, chain-smoking Midwesterner, founded his own agency of eight people in Chicago. It was August 5, 1935 – the depths of the Depression. To brighten up the stifling, spartan office, the receptionist set out a fresh bowl of apples – a symbol of optimism and wholesomeness that pervades dozens of international Burnett agencies to this day.

Surrounded by jars of freshly sharpened black pencils, Leo would adjust his trademark black, horn-rimmed glasses and tirelessly strive to ‘create the best ads in the world, bar none.’ He drove his staff crazy with his creative perfectionism, yet commanded undying loyalty. His stubborn genius proved infectious. Over the decades, his often corny-yet-inspiring aphorisms – ‘Leoisms’ – cemented his status as a living legend. ‘I didn’t go into advertising’ he once observed. ‘Advertising got into me.’

He believed in the old-fashioned virtues: integrity, fairness, honesty, openness and hard work. He didn’t like people out for a fast buck; he did like people bristling with great creative ideas. He thought honest toil was better than genius, and rewarded it generously. He was like the archetypal sports coach who always makes you feel you can do better – and you do.

Not unlike the brands he and his colleagues would champion – the Jolly Green Giant, The Pillsbury Doughboy, The Marlborough Man, Kellogg’s Tony the Tiger, the Maytag Repair Man, Star-Kist’s Charlie the Tuna, and Nine Lives’ Morris the Cat – Leo himself would eventually be transformed into a timeless cultural icon.

Today his legacy is omnipresent: Leo Burnett is a $10-billion multi-national titan with over 200 operating units in 83 markets around the world. And the Canadian office, with 21 clients, a current staff of 210 and billings of $210 million, has transformed itself from a traditional, packaged goods-oriented branch plant to a fully integrated communications company competing globally toe-to-toe with the best in the business.

Yet, ironically, Leo Burnett the visionary adman, never really foresaw the amazing staying power of the unique corporate culture he would spawn. And it was Canada that would be his first outpost in a global empire – the firstborn child who would eventually grow up to teach the paterfamilias a thing or two.

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When the Toronto office opened for business in the fall of 1952, it was the dawn of the television age in Canada. CBC-TV had just broadcast its first signals only weeks before. The launch of a powerful new ad medium would help generate a mass consumer culture of unprecedented scope. Leo Burnett’s pioneering strategy of creating telegenic animated characters such as the Jolly Green Giant, Tony the Tiger and the Pillsbury Doughboy – each designed to embody the unique personality of the product – would reap huge rewards in the post-war boom.

In those early days in Toronto, it was all about adapting work out of Chicago for the Canadian marketplace. They did a few ads on their own, but Leo, a fierce believer in centralized creative control, had never been big on the idea of installing an office outside the U.S. How could he maintain his demanding standards of excellence?

But when Kellogg Company of Canada of London, Ont. pressed for a shop on Canadian turf, Leo reluctantly agreed, as Toronto wasn’t too far away. The initiative was partly based on the need to translate ads for the Quebec market. Toronto Burnetters took turns taking Canadian creative to Chicago for Leo to sign off – a ritual that continued until his retirement in 1967.

One such Burnetter was Kerry Rubie, a green 23-year-old Australian who joined the Toronto office as an assistant account executive in 1964. There were 427 people in the Chicago office and only 23 in Toronto.

‘I was incredibly fortunate to have that early experience’ recalls Rubie. ‘I discovered how little I knew about advertising. It was a steep learning curve. I’d deliver the ads and have a brief audience with Leo. He was gruff but genuine. He was covered in ash, lighting up one cigarette after another. I remember him as being intensely concerned about the creative work – it was all that mattered. He was passionately committed to delivering against the client’s expectations.’

When Rubie became president of the Toronto office 15 years later, he knew the agency’s future depended on building a roster of Canadian clients: ‘It didn’t take a genius to see that as long as American ex-pats were running the Toronto office, our potential to attract Canadian clients and talent was limited.’

VISA acquisition – a turning point

The acquisition of the $2-million Chargex Plan (VISA) account in 1979 proved both a major coup and a turning point in the agency’s history. ‘It was my goal to have an equal mix of Canadian and multi-national clients’ says Rubie. ‘We made a strong statement about the agency – to be seen as being capable of delivering against the expectations of the Canadian market.’

Rubie would later pass through various Burnett offices internationally, eventually becoming chairman of the London office. But it was a principle he learned in Toronto that he would later consistently apply internationally: hiring a ‘qualified national’ to run the offshore offices. ‘The local business has always changed dramatically as a result’ he notes.

Jim McKenzie, current president and CEO, says his sense of executive stewardship stems largely from Rubie, who hired him as an account executive in 1977. In fact, Rubie, now a 38-year veteran, recently flew in from the U.K. for one day just to honour McKenzie on his 25th anniversary with the agency.

‘When it comes to people-orientation, leadership and charisma, Kerry is like a god to many of us,’ says McKenzie. ‘I would have crawled across broken glass for him and so would countless other people, including clients, from all over the world. He just shows that he really cares about people. I learned so much from him, especially how to handle crises. I took that in as an account director and now it’s indelibly in my genes.’

CEO breeding ground

While Leo Burnett has traditionally cultivated a culture of employee-retention, it also has earned a reputation as a hot house for training future leaders across all areas of the industry. Those who have chosen to move on have typically distinguished themselves elsewhere: Leo’s prominent alumni include Tony Altilia, president and CEO of Downtown Partners DDB, Gerry Frascione, president of BBDO, and Rupert Brendon, president of the Institute of Communications and Advertising.

Brendon, who worked at the agency as an account director from 1973 to 1978, remembers the 1970s as a ‘golden age’ of Leo Burnett Canada.

Several people working with him would later become client-side presidents and CEOs, including Tom Knowlton of Kelloggs, John Morgan of Labatt, John Bell of Nabob and Bruce McDonald of Boyle Midway, a cleaning products company. Another Burnetter, Craig Simpson, later became head of McCann Erickson.

‘It was extraordinary, both for the times and for the agency’ Brendon says. ‘The place was literally a CEO-breeding ground.’

‘There was such high hiring standards and a high calibre of people in Toronto at the time. Then, once you got there, you had the advantage of working with Leo Burnett Chicago, which had about 1,500 people at the time. They had expertise coming out their ears, including Dr. Joe Plummer, the inventor of lifestyle research, and Dr. Seymour Banks, the guru of media research.

‘It was a great place to work, probably only equaled by Ogilvy & Mather,’ he adds. ‘We generated an esprit de corps that gave us the feeling that we were better than anyone else. And you could always turn to Chicago where somebody had written a book or published a study.’

Brendon remembers the winning of the Nissan account in 1974 and the subsequent opening of the Vancouver office as a major milestone. Also, he recalls that when the agency commissioned the Canadian singer Hagood Hardy to compose and sing a jingle, ‘The Homecoming’ for a Salada Tea campaign in 1976, it went to become a Juno-Award-winning platinum hit single – a brilliant reversal of the conventional process. The head of TV production at the time, Peter Anastasoff, later went on to become president of Toronto commercial production company Rabko.

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The year 1986 marked another watershed in the agency’s history with the hiring of Tony Houghton, who arrived from O&M to become the first creative ever to be appointed president. ‘That was the real start of a major creative upswing’ says McKenzie. ‘Tony had grown up in creative; he had major impact on getting people to think creatively and making it the focus. I learned under his watch and we gained great momentum.’

Houghton, now retired, remembers the late ’80s and early ’90s as ‘The Camelot Years.’ As Houghton brought in many of his former connections at O&M, the agency was able to quickly land a lot of new business, including Kraft, 7Up, Neilsen Cadbury, and National Sea, makers of Captain Highliner, a character that Houghton invented. Work with Telecom Canada, the business calling side of Bell Canada, was eventually parlayed into the acquisition of the entire Bell account.

Houghton took out a regular series of house ads in Marketing touting Leo Burnett as ‘The New Place to Be.’ Picking up on the ‘corny’ Leo Burnett culture in Chicago, Houghton gave it his own personal twist. He knew management often has trouble communicating with its own employees, so he started assembling the entire agency staff after work, to serve drinks, show all the ads they had created and generate frank and open discussion. He’d even show the company’s financial numbers.

Fireside chats

Eventually the meetings grew into regular ‘Fireside Chats’, complete with a cardboard fireplace and group sing-alongs accompanied by a piano. New employees would be lightly hazed, made to stand on tables in clown noses and read a speech, word for word, that ended, ‘I am very happy to be working at Leo Burnett.’

When it moved out of its downtown Toronto offices at University and Adelaide in the summer of 1989, the agency realized it had a golden opportunity to do one of the things ad agencies are supposed to do – attract attention. An army of animated characters including Tony the Tiger, Snap, Crackle and Pop, the Pillsbury Doughboy and the Little Green Sprout, led the entire staff, wielding banners, up University Ave. to its brand new digs at Bloor and Church. Just before the parade started, someone noticed a bagpiper in full regalia standing on the corner. He was spontaneously offered $50 to head the procession.

The Toronto Sun published a photo of Tony the Tiger pushing a giant shopping cart stuffed with cereal products. The headline read: ‘Grrrrrrreat move!’

Shortly after settling in the new offices, McKenzie noticed a major appliance in the kitchen and instantly ordered it replaced – it wasn’t a Maytag, one of their long-standing clients. Using a rival’s product was unthinkable – something Leo himself was fervent about.

McKenzie remembers the period as part of a personal and professional transformation. ‘As you grow up in client services, you are rewarded for your business-client relationship skills. The down side is you can be way too focused on that aspect. This business is almost ridiculously simple: we’re in the business of creating the best advertising in the marketplace to help grow our client’s business. If you ever lose sight of that goal, you’ll never be a great agency. Advertising is an extremely simple business that too often we try to make complicated.’

Recession proof

In spite of the recession of the early 1990s, the Toronto office increased its billings by more than 10% from $120 million to $135 million within a single year, winning virtually every pitch. Houghton says it was partly luck – attracting recession-proof clients or those who believe in investing in advertising during a downturn.

In 1995, the Canadian office was named Leo Burnett’s Global Agency of Year, beating out over 60 other international offices. The same year, the agency formed its interactive arm. Then in 1996, it won Strategy’s Agency of the Year. The following year, it scooped the Leo Burnett Global Agency of the Year Award for a second time.

‘It was a tremendous run’ recalls McKenzie. ‘We had arrived as a creative force. We won some awards at Cannes, which was one of my personal goals. We were particularly proud because there’s always a feeling that a local, multi-national agency couldn’t really climb such heights because they are too saddled with packaged goods clients. Yet the year we won Agency of the Year, it was all with packaged goods clients like P&G and Kelloggs.’

Alas, the ad business is nothing if not unpredictable. Internal shufflings and restructurings by Bell Canada’s CEO, Jean Monty, led to Leo Burnett losing the account to Cossette in 1998. ‘That was a killer’ recalls McKenzie. ‘We had just finished congratulating ourselves on doing best body of work we had ever done for a client.’

Then, in a painful irony, the Toronto office would lose its 50-year-old Pillsbury account this year when General Mills bought the company.

‘How ironic – we start out in 1952 with Kelloggs and Pillsbury and 50 years later we lose one because of the other’ says McKenzie. ‘Even though we gave General Mills all the assurances that there would be a firewall to prevent cross-pollination of information or people, the chairman in the Minneapolis office could not get his head around working with an agency that had Kelloggs as a client. Like Coke and Pepsi, Lever and P & G, General Mills and Kellogg, there are a few competitors out there who have always been deadly enemies.’

‘That was a really tough loss’ he adds. ‘I started as an account executive on Pillsbury 25 years ago, especially given our fabulous relationship with them and the great work we did. We had an amicable parting, but it’s a bittersweet part of our story.’

Happily, the Pillsbury loss was offset by the landing of two P&G global brands, Cheer and Gain Detergent in 1999 and 2001, and the landing of AOL Canada in 2000 and Zellers in 2001. Over the past two years, the agency’s revenue from non-traditional advertising has grown 40%.

‘Even if you are a great agency, you always want to be better’ says McKenzie. ‘That statement can often be misconstrued – it can come off in a headline as ‘McKenzie unhappy with creative product.’ It’s just something that requires constant attention.

Today Leo Burnett delivers a full arsenal of digital, direct, promotion, plus great creative – keeping pace with client demand for truly holistic communications.

‘Only a few years ago, if I was trying to impress you about our creative, I’d pop in a tape of 15 TV commercials’ says McKenzie. ‘That’s not good enough anymore. You have to show you can take each of those ideas and translate them into holistic communication pieces. Great creative fluctuates, like the business cycle itself. It’s our joint mission to try to maintain a high level.’

‘For the better part of two decades, we were basically a packaged goods outpost for multi-national clients. It’s been an amazing transformation that’s been a long time coming.’

Quebec office

Hired six months ago from Cossette, Nicolas Lefebvre, the new general manager of the Montreal office of Leo Burnett, has been charged with the task of convincing more English clients to invest in original French campaigns in Quebec.

To date, the office has achieved great local success with Kellogg’s Mini-Wheats, now the leading brand in Quebec. And by using a popular local comedienne, Pascal Monpetit, as the spokesperson for AOL Canada – ads show Monpetit installing the AOL CDs herself, demonstrating the ease of the new-user experience – they have created a new presence in the province for a virtually unknown Internet brand.

And Quebec is the only market now adapting and changing the original American spots for Nintendo. If it works, Lefebvre says, it will become a template for introducing other brands into the francophone market.

Lefebvre sees the strong Leo Burnett culture as nothing but a positive asset, even in francophone Quebec. ‘Clients know that Leo Burnett is a stable, well-structured, well-organized agency that delivers on time and on budget’ he says. ‘The time is ripe for us to leverage the Montreal office and show new clients there’s an advantage to being in Quebec.’

Starcom

Starcom, a separate media division of Leo Burnett opened in October 1999 with a staff of 35 on the eighth floor of the Toronto office. Today, under managing director Scott Neslund, it has more than doubled to a staff of 75.

Because of the traditionally high turnover rates of media departments, Neslund sees a huge advantage to belonging to the larger Leo Burnett culture.

‘It’s an engrained part of our history to grow and reward own people’ says Neslund, a 14-year veteran who was hired out of college by the Chicago office in 1988. When he got his MBA at the Kellogg School of Business, he remembers a case study that touted Leo Burnett and Kellogg’s as a classic example of the growth of a business partnership.

In his travels to the Milan and Tokyo offices, Neslund has seen how the Burnett culture thrives globally; and he sees Toronto’s office as at the top of the heap: ‘I simply wouldn’t be here if it wasn’t such a great place to work.’

Publicis purchase

In recent years, Leo Burnett Worldwide was in danger of slipping out of the Top 10 global agencies because it did not have access to capital markets to acquire what it needed to expand. But that all changed on Sept. 25 of this year – almost exactly 50 years to the day after the opening of the Toronto office – when Publicis Groupe of Paris, France acquired Bcom3, Leo Burnett’s holding company.

‘Leo always believed that an agency should be private, totally focusing on your client’s business and not being distracted by Wall Street’ says McKenzie. ‘If you’re in a service business, your dirty laundry shouldn’t be washed in public and your client shouldn’t read about it.

‘But those views were held at a time when an agency could be private’ he adds. ‘If you think for a minute that Leo – one of the most driven, competitive people anybody ever met – would ever allow the agency to become second rate by clinging to private ownership well after the concept had passed, you’d be dead wrong.’

Back in the 1970s when McKenzie first joined the agency, if somebody said a foreign company would buy it, it was considered heresy. ‘But Publicis has gone on record saying the Leo Burnett brand will remain a free-standing company under the new ownership,’ he says. ‘It makes sense – why dilute the key strength of the asset they acquired? All the things that Leo stood for remain alive and rich.’

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At the dawn of the 21st century, Leo Burnett’s traditional, homespun values remain as palpable as the iconic bowl of apples sitting in the foyer. When you walk into the 10th floor of the Burnett office at Bloor and Church, you encounter a mirror on the wall. As you gaze at your reflection, you see Leo’s signature black, horn-rimmed glasses gazing right back at you and the tagline: ‘Where’s Leo?’ Below, the body copy begins: ‘Maybe he’s sitting at your desk right now…’

On the glass door leading into the offices, you’ll find the text of Leo’s famous 1967 retirement speech, ‘When to Take My Name off the Door’ (see p.18). He said that when money becomes more important than fun and creativity, when you lose your conscience or compromise your integrity, when you start giving lip service to this being a creative agency and stop really being one, that’s the day to ‘throw every goddamned apple down the elevator shafts.’

A film of the speech is shown to all new employees as part of their initiation into the Burnett culture. ‘I’ve seen that film countless times and I’m still affected by it’ says McKenzie.

As industry rival David Ogilvy once famously quipped: ‘Leo died years ago, but he has not yet retired.’

Leo Burnett, both the man and the brand, seems to have achieved a form of immortality. That’s why his name is still on the door.