Few issues facing Canadian agencies are as fraught with potential problems as growth management.

To begin with, the way an agency chooses to expand can have an immediate impact on its physical space and staffing requirements ­ two key issues for any company and one requiring a sure management hand to maintain control of expenditures and employee morale.

But more importantly in terms of an agency’s longterm prospects, decisions made regarding growth and expansion have to be lived with for years into the future, and can either propel the enterprise on to new heights or hang like an albatross around its neck.

As the recent spate of mergers between medium-sized Canadian agencies and international agency networks attests, the idea of hooking up with a powerful global firm remains a tempting one for independent Canadian agency owners.

While this route is not for everyone, most agree that the resources and connections such arrangements afford can be invaluable.

Unlike mergers of the past that saw the Canadian agencies swallowed up, more recent mergers such as Harrod & Mirlin with True North Communications, Roche Macaulay & Partners with The Lowe Group, and Bensimon Byrne with D’Arcy Masius Benton & Bowles, have left the Canadian partners with more control.

Roche Macaulay & Partners of Toronto already had international work under its belt prior to its merger with The Lowe Group a year ago.

Andy Macaulay, senior vice-president, says that at the time IKEA Canada was looking to consolidate the marketing function for North America in Philadelphia, and the agency had been given a project by IKEA Germany, now its largest client.

Roche Macaulay found itself needing access to international resources and/or a distribution channel through which it could export work being done for Ikea Germany.

‘That need occurred at the same time The Lowe Group approached us to say they felt they needed a new solution for their network in Toronto,’ says Macaulay.

‘We said we’d only be interested in something where we maintained majority ownership, and therefore control and complete management independence. That was fine with them.’

‘Most multinationals are distribution systems,’ adds Macaulay. ‘We never want to be a distribution system. We want to be the originators of the work, the exporters, not the importers.’

Frank Palmer, president and ceo of independent Vancouver agency Palmer Jarvis Communications, says there isn’t any right or wrong way to grow an agency but rather each individual company has to decide what is the right way to fulfill their vision.

‘If we were heading down a particular road that required an awful lot of capital that wasn’t available, I would have to look at ways and means to do it. That could mean selling to a multinational, going public, finding venture capital, whatever is needed.’

Palmer’s growth strategy has been to reinvent his agency, changing it from a full-service traditional agency to a full-service communications company comprising several specialized companies.

Palmer says he reinvented the agency six or seven years ago because clients didn’t want to have to pay for the ‘full-meal-deal’ if they wanted to order a la carte.

Due North Communications is an independent Toronto agency that opened its doors with the Goodyear Canada business in July 1993.

Headed by President Mark Weisbarth, Due North employs an unusual structure consisting of a core of full-time people in account service and media planning that is augmented by senior media planning and creative people who work on a contract basis.

The contract workers are dedicated to specific clients and stay with the account long term.

Media buying has been outsourced to Optimedia since day one.

By customizing a dedicated service team for each client’s needs, Weisbarth says the agency d’esn’t have to build a client list just to provide work for a group of employees who would otherwise be a drain. Rather, when the agency picks up new business, it assigns the creative and senior media functions out to new team of contract workers.

Bensimon Byrne, a Toronto agency Jack Bensimon and Peter Byrne launched in October 1993, merged with New York-based D’Arcy Masius Benton & Bowles last month.

The move resulted in the loss of two Bensimon Byrne clients because of conflicts with clients on the dmb&b roster.

But President Jack Bensimon says the merger was consistent with the agency’s philosophy of looking only to the next stage and no further.

He says the growth of the agency was handled in carefully considered stages, first increasing billings to a level where the agency had three or four anchor accounts of substantial size.

Core services such as strategic planing, creative and production were handled in-house, while below-the-line services and media were outsourced.

After three-and-a-half years, Bensimon says the next step was to pursue larger international and domestic accounts. But to do that, the agency needed to deepen its resources.

That is why, Bensimon says, the merger with dmb&b was the next logical step.

‘dmb&b was not the first agency to approach us about merger [but] they were the first to approach us with an opportunity that matched what were seeking.’