At an age when others might think of retiring, Jay Chiat has undertaken his most ambitious reorganization of Chiat/Day yet.
In 1968 Jay Chiat opened a one-man ad shop that started to gather steam immediately. Today, Chiat/Day is one of the world's top agencies, billing US$896 million in 1993. It was Chiat who created Apple's "1984" Superbowl spot, and it was Chiat who popularized that Energizer bunny for Eveready. In March of 1993, while on the slopes in Telluride, Colorado, Chiat had an epiphany: Too many people in advertising are pre-occupied with internal politics and absorbed with corner offices. On January 1, 1994, starting with the West Coast office, he banished all the trappings of traditional business from his company: no more titles, no more offices. In effect, Chiat is pushing his people to spend more time with their clients. Chiat runs his agency from Venice, California, but in a recent visit to his offices in New York, he explained the rationale behind his new organization.
Wired: How do you think the advertising of technology is changing? How should it change?
Chiat:
I don't know how it's changing. But I think technology advertising will have to stop addressing how products are made and concentrate more on what a product will do for the consumer. Technology is the fashion of the '90s. It affects everyone, and everyone is interested in it – either from fear of being left behind or because they have a real need to use technology. Right now most of the communication going on about technology seems unnecessarily obscure and overly technical. Apple still seems to do the best job.
Tell me about Apple. You created what is widely regarded as one of the all-time groundbreaking TV ads with the Apple "1984" spot. But you don't have the account anymore. What happened?
Steve Jobs was there until the last year of our relationship, and then Sculley came in. Jobs was able to make decisions. He was the quickest study I've ever met. Even if there was something he didn't know, he'd pick it up really quickly. He was the smartest marketing guy I've ever met. He just intuitively understood things. I say that even given his current troubles with NeXT. Despite the fact that he was moody and erratic, he was brilliant. He was a lot of fun to work with. We had a great connection; we were both daring. Sculley came out of a different corporate culture – the sort of culture we're trying not to be. Sculley had a limo at Apple.
What does that mean about the structure at Chiat/Day? How will things change?
There are two things that are important to understand about what we're doing: that there's an intellectual architecture and a team architecture. The intellectual architecture means focusing on doing great work instead of focusing on agency politics. The team architecture means setting up an organization that helps people produce that great work in teams. Under the new organization at Chiat/Day, you don't have to come to work at 9 a.m. if you don't need to be here. By the same token, you don't win any points for staying at the office late at night. What you get when you come in to work is a locker – and a computer and phone you can check out for the day. You come to work because the office is a resource: The office is a place where you can meet with other people, and the office has libraries of books and information on CD-ROM that might help you with your work.
Everyone gets a locker?
That's the way it works across the board, whether you're brand new at the agency or if you've been here for twenty years and make a very good salary. We don't have titles on our business cards. No one really gets any special treatment. No one gets a corner office to put pictures of their family and their dog in. Everyone answers their own phones and makes their own coffee. We're trying to structure things more like a university, rather than like an elementary school. Most businesses are run like elementary schools – you go to work and you only leave your office when you have to go to the bathroom. That sort of thing breeds insularity and fear, and it's nonproductive. The important thing to focus on is what kind of work you do.
Will all this new organization save you money? Some people say you're doing this because you recently lost the US$60 million American Express account, and by getting everyone to telecommute instead of coming to the office, you'll save money that you'd be spending on building rent.
That's wrong, and it shows exactly how much people can misunderstand what you're doing. First, this isn't about telecommuting, because we still have offices that people will come to regularly when they need to brainstorm together, meet with clients, or do research in the library. We're re-architecting our offices with sofas, desks, chairs, and conference areas that have much more of an open-space feel in order to more closely reflect our goal of group work. That costs money. Lots of money. Second, we're spending a huge amount of money on technology so that everyone can check out laptops and portable phones. We're spending more money to write our existing information into databases or onto CD-ROM. We don't want people to file their notes about clients into their desk and forget about that information. We want people to share what they know, and to file their information in databases others can access. It's about teamwork. And setting up that organization costs money. It would have been cheaper to leave things the way they were. In the past year, we've spent more than $5 million reworking our Los Angeles office alone.
Some have said that David Ogilvy represents the past of advertising, you represent the present, and Michael Ovitz of the Hollywood talent agency Creative Artists Agency represents the future. What do you think?
I would hope that we're good enough to be the present.
The future is bullshit. Eighty percent of what everyone's talking about never happens. I don't mean in terms of product development that's happening right now, I'm talking about the far-flung visions of the future. In the '20s they were telling us wed all have our own private plane and take vacations to the moon.
When Coke hired the Creative Artists Agency to create its ads – among them were the "Polar Bears" commercials – people worried that the traditional advertising agency structure was threatened. They said that the future of advertising would belong to Hollywood. Did that one deal represent a paradigm shift?
That was the best thing that happened to the advertising business because it proves that it's all about the quality of the work. McCann-Erickson had the account, and they were doing dreadful work. But the reality is it's been highly successful. Tell me the last time you heard anything from Pepsi except defensive response. Plus it was good because as a result of that we got some of the Coke business.
What account were you the happiest to lose in your career? The saddest?
Reebok. Twice.
What will be the Betamax of the '90s?
Is the Betamax a success or failure in your mind? Even though the Betamax didn't succeed commercially, it was acknowledged to be technically superior. The products I think will be great successes in the next few years are personal digital assistants, wireless laptops you can network with, cellular phones, and almost anything you don't have to plug in to use.
Who outside of advertising has influenced you the most?
Outside of advertising, the person who's influenced me most is quite possibly Frank Gehry. He continues to prove there's no age limit on innovation, and he continues to grow. He astounds me with every architectural project he attacks, including the new house he's designing for me.
How will you know in three or five years whether Chiat/Day's reorganization has been a success or failure?
It's a success right now because the work hasn't gotten any worse, and some of the work looks better. And we haven't destroyed the company. I have a very simplistic concept for evaluating risk. I first analyze the downside. What's the worst thing that can happen if the project or enterprise fails? How much money can be lost? Image destroyed? Careers shattered? Empires lost? And if the analysis isn't too grim, we proceed.
You're 62 now. Most people your age have started to think about retiring. Are you going to be walking the halls at Chiat/Day in fifteen years?
No, no, no. I didn't plan to be around this long.
I planned to get out when I got bored. The last four years were anything but boring, but they weren't that good. Now times are getting good again, and they're still not boring. I think I'll get out when we transfer successfully to the next generation. No other agency has ever really done that. Young & Rubicam created great work in the '50s and '60s and then sort of lost its momentum, and many others have come and gone. Transferring successfully to the next generation means producing work that's as good as or better than the work of the first generation that founded the agency. That's what we're trying to do, and I think we're going to do it.
