Chiat/Day's man in L.A.

Chiat/Day's man in L.A.

Bob Wolf's desk at Chiat/Day/Mojo is no place for anyone who suffers from office envy.

Wolf works in a cubicle so ordinary it looks like a clerk's office. It may well be the smallest office occupied by any ad agency president in Los Angeles.

But Wolf, the president and CEO of Chiat/Day/Mojo's Los Angeles office, doesn't need a big desk and a carpeted inner sanctum to assure himself he's in a top spot. He runs the headquarters office of the biggest ad agency on the West Coast.

Chiat/Day is the undisputed king of the hill in the L.A. ad industry, the shop that other L.A. agencies envy, the place that so many other agency presidents mention when they want to give an example of a competitor that produces creative, imaginative advertising.

The agency enjoys its reputation in large part because founder Jay Chiat has managed to pull off a trick that many in the ad industry considered impossible: building a big agency ($1.1 billion in 1989 billings) that still maintains a reputation for bold, distinctive advertising.

That's no small feat because conventional wisdom in the ad business says imaginative ad agencies have to be little boutiques. Big shops, so the wisdom goes, are clunking juggernauts that subdue advertising audiences is the same way a sledgehammer smashes a carpet tack.

Possibly more than anyone else, Wolf has shepherded Chiat/Day in its transition from a shop with several hundred million in billings to the 25th-largest agency in the country. Chiat conceived the grand plan, but Wolf has executed it on a day-to-day basis in Los Angeles, where the agency has its biggest single piece of business - the Nissan advertising account that propelled Chiat/Day into the ranks of the big agencies.

Wolf came to the L.A. office in September 1987 from New York, where he had built billings from $10 million to more than $200 million during one of the most difficult and competitive times in the history of the ad industry - an era of turmoil and changing times in which many agencies merged or cut back to survive, and an era that continues today.

In doing so, New York City native Wolf accomplished something no other Los Angeles-based agency had ever done; establish a New York office. It had always been the other way around. New York was the center of the advertising industry, and New York shops established branches in L.A.

Wolf's main challenge in New York was building an office, but in Los Angeles he faced a different kind of challenge: hanging onto existing business.

He says of his move here that Chiat/Day had "reached a very important point in its life cycle" where it had to make the transition to big-agency status. In winning the Nissan account, he says, the agency had hit a high point after sinking to a low point a year earlier, when it lost the prestigious Apple Computer and Nike shoe accounts within a month of each other.

"We had just won the Nissan business, which was the biggest account this agency had ever seen," Wolf explains. "We had just come off a record of winning and losing some very large accounts, so the prospect of working as hard as we had worked and coming as far as we had come to win the Nissan account - but maybe not knowing how to manage it so that it would stick around for 10 to 15 years - was a very important one for the agency."

One of Wolf's main assignments, then, was what is known in the ad agency business as account management, which means keeping the clients happy and managing the business profitably. (It's a specialty of MBA Wolf, whose entire background is in account management, except for a brief stint when he worked for the Los Angeles division of a Japanese company that made TV commercials and once asked him if he could find a U.S. market for some pornographic films it had produced in Japan.)

Wolf wasted no time in stamping his imprint on the Los Angeles office, making sure everyone knew that he meant business. Soon after he arrived in Los Angeles, in a meeting that is now legendary at Chiat/Day, he assembled the agency's executives to talk about a problem that he says was costing the agency several hundred thousand dollars a year.

Chiat/Day was losing the money on what is known as "agency absorbs" - expenses an agency has to absorb because it incurs them without first getting approval from a client. Such expenses could include anything from the cost of printing an advertising brochure to the cost of filming a TV commercial.

"These were things the agency was being forced to pay for because people were not getting estimates signed," Wolf says. When he spoke to the assembled executives, he says, "My speech went something like: Here are the rules. We don't spend money unless it's approved."

And then Wolf uttered the words that continued to echo and circulate through the agency for weeks: "Anybody who's going to come in to see me with some big agency expense that hasn't been approved had better bring an updated resume."

That established Wolf's reputation as a tough guy, a reputation that he says is deserved. But he says there's more to his management style than just being tough. His philosophy, he says, is to "hire terrific people and give them the latitude to do their jobs. But if they don't, be prepared to take action. I think people would say of me `he is tough and demanding, but he's fair. And you always know where you stand.'"

Wolf also gets involved in the creative process because, he says, he loves it and it's what advertising is all about.

"Probably the biggest criticism of me coming here early on was that I was too involved in the creative (process). But it's an area of tremendous interest for me and I think I'm good at it. Not that I could write ads, but I think I'm a good critic of advertising. I understand what good advertising is, and I think I'm helpful to the process," he says.

The trick, he explains, has been to maintain the creative spirit at the agency while converting it to a better-managed, more businesslike enterprise. "I think my value to Chiat/Day has been that I've been able to bring an important dimension to the agency that was missing without screwing up what was great," he says.

Wolf came to Chiat/Day in 1983, when he joined the New York office, after 15 years in which he had worked for an advertising agency client (Lever Bros. in New York) and as an account manager and agency general manager in Los Angeles.

He started his career on the client side in 1968 with Lever Bros. in New York, where he spent three years and learned that "about 90 percent of my job satisfaction came from about 30 percent of what I was doing." The part of the job he liked was working with the Lever Bros. ad agency, SSC&B, so he looked for a job with an agency and found one with Wells, Rich Greene in New York.

He moved to Los Angeles as an account manager at the Wells office in 1978 and later became general manager. In 1981 he left the advertising business for the only time in his career, lasting about a year in what he calls "a brief flyer" with a Japanese company that made TV commercials and pornographic films.

Wolf signed on as president of the Japanese company, which he viewed as an "entrepreneurial opportunity" because the company said it wanted to build its TV commercial production business and revitalize its U.S. division. The company named Wolf president of the division and gave him a substantial chunk of stock.

But Wolf laughs when he recounts the job because the company, besides building its TV commercial business, wanted him to market 500 "pornographic films" it had produced in Japan. Wolf says "pornographic films" with quotation marks around the phrase because the movies were mild by U.S. standards. The films weren't marketable, Wolf says, but to find that out he had to sit through a bunch of them.

"They had a library of about 500 of these things that they had already shot and made and paid for in Japan. I remember sitting in a darkened screening room and watching one after another of these things and being bored out of my mind. They were not very sensual movies," the Chiat/Day president recalls.

Wolf returned to the advertising business in 1981 when Kenyon & Eckhardt, a New York agency, opened a Los Angeles office. Wolf was the first employee of the new office and its general manager.

He says the office was "weak creatively" but managed to win accounts despite a lack of imaginative advertising. "We had prospective clients come in who would say `Let me see your reel (of commercials)' and we would say `Get this man a Danish,'" Wolf recalls. Kenyon & Eckhardt nonetheless won $50 million of business in 18 months, a track record that many L.A. agencies would have trouble duplicating today.

Wolf came close to joining Chiat/Day during his early days at Kenyon & Eckhardt, once coming within days of being president of the agency. As he recalls, he and Jay Chiat had talked from time to time about Wolf joining the agency, but the timing had never been right. Then one night Chiat called Wolf at his Kenyon & Eckhardt office to say "Meet me in New York. I want to talk to you about a job."

They met at a restaurant, Wolf says, and soon after they sat down Chiat said: "I had this great job for you until yesterday. I was going to talk to you about being president of Chiat/Day."

But Guy Day, who co-founded the agency with Chiat and had been on a sabbatical, had decided to return to the agency and take the president's job. Day has since left the agency permanently and is now vice chairman of keye/donna/pearlstein in West Los Angeles.

A few months later, Chiat called again. This time it was the offer to join the agency as president of the New York office, which ultimately led to the presidency in Los Angeles and the little cubicle at the agency's headquarters office in Venice.

The headquarters itself is vintage Chiat/Day: a converted warehouse designed by architect Frank Gehry to reflect all the quirkiness and individuality that has always characterized the agency. The concrete floor is uncarpeted except for some of the thin, indoor-outdoor variety at work stations. Visitors sit in the lobby on wicker chairs surrounded by bright yellow walls and a vast, open warehouse ceiling revealing brightly painted pipes and beams. A sculpture hangs from one beam. A large conference room shaped like a cross between a Quonset hut and a fish dominates the center of the building. It has always been this way for Chiat/Day. When most other L.A. ad agencies moved to the Westside, Chiat stayed downtown in the Biltmore Hotel. When it finally moved, it went to Venice, farther west and south than the other agencies.

But Wolf says the quirky design and the cubicles that executives occupy aren't just an effort to be different for the sake of being different. It's all part of creating the right atmosphere, he says.

The cubicles, separated only by chest-level partitions, are an effort to encourage communication and access. Wolf's cubicle is the same size as his secretary's, which is the same size as Chairman Chiat's. The only concession to rank is that Wolf doesn't share his cubicle with a secretary, as all other Chiat/Day executives do. The accommodations are the same at Chiat/Day offices in other cities, Wolf says. When people need to have private meetings, they use conference rooms.

Maintaining access and communication, Wolf says, is more than just lip service. One of his major concerns is retaining what many old-time Chiat/Day workers tell him is the "sense of family" the agency had when it was small. When Wolf had a series of lunch meetings with staffers from throughout the agency, losing that closeness was one of the chief complaints.

So Wolf tries to devise events to restore the feeling. One of his recent efforts was a get-acquainted party where each of Chiat/Day's 375 Los Angeles employees received a list of five other workers that he or she wasn't likely to know. The idea was for each worker to have the list signed by the five people on the list as a way of getting to know people from other departments or parts of the building.

That "family feeling" is important for business reasons, too, Wolf says. He says each Chiat/Day worker has to understand the agency's mission if it is to continue producing good work. "Our belief system is about two things. One is that the most important consideration here is the quality of the work. The other is that, after the quality of the work, the most important consideration is the quality of the life at work."

Wolf says that, thanks to the emphasis on these tenets, Chiat/Day's workers understand their mission better than those at any other agency in L.A. "I'm convinced that you could go to almost any other agency in town and, with very few exceptions, take 100 people from any department and ask them `What's this agency all about? What do you think the mission is?' and very few of them could tell you. But you could take 100 people out of any Chiat/Day office and ask them the mission, and they could tell you."

The Chiat/Day president and CEO says he spends about 40 percent of his time working on Los Angeles accounts, about 25 percent on new business for L.A. and other offices, 25 percent on general corporate issues and 10 percent on administrative matters for the L.A. office.

Much of that time is on the Nissan account, but only in an advisory way. Other Chiat/Day executives manage the Nissan business on a day-to-day basis. Winning the big auto advertising account has changed the agency, Wolf says, but he thinks Chiat/Day has done as well as could be expected in maintaining its corporate culture.

"For me to say it hasn't changed the agency would be a lie. Of course it has changed the agency. But I think it hasn't changed our basic belief system, and that's what's most important. Culturally, it's the same agency," he says.