The Ad Agency to End All Ad Agencies

It's lunchtime at St. Lukes, a one-year-old advertising agency on the edge of London's Bloomsbury district, and the daily battle for Ping-Pong supremacy has resumed in the corporate lunchroom. Today's employee-competitors are not Andy Smith and Vince Gant; true to the British fondness for nicknames they are "Smudger" and "Banco." Because the two contestants are more adept at graphic production and finance than Ping-Pong, a lob occasionally lands solidly, if unintentionally, in someone's plate of pasta. On a nearby shelf a boombox blasting Tchaikovskys "1812 Overture" sounds an appropriate anthem for this agency's explosively original experiment in ownership structure, management, and business philosophy.

Smudger and Banco, as well as all of the diners -- every single one of the 55 employees of St. Lukes -- own the company. Not the token percentage that accompanies the traditional corporate stock participation program -- they own it all. Everyone holds equal shares -- from the people who answer the switchboard to the creative director. St. Luke's was created with an obscure communal ownership structure, established by the British Parliament, called a "Qualifying Employee Shareholder Trust." The acronym has a heroic ring: it is referred to as a QUEST.

A five-member council governs the firm. Rather than call itself a "Board" -- which smacked too much of pinstripes and privilege -- the group borrowed the acronym to call itself the Quest. Two seats on the Quest are elected by the employees; they are now occupied by a print production manager and an account executive, positions that at any other ad agency would be decidedly low in the management food chain. All financial decisions are debated publicly and voted on by a treasury committee made up of everyone in the company who commits money on behalf of the agency or its clients.

But the Quest is more than a name for the firm's ownership structure and governing council. It also fits the sense of mission that infuses the work of the men and women of St. Luke's, who see themselves on a larger quest to offer a profoundly different model of what the advertising industry must become: honest, ethical advertising that represents a company's Total Role in Society. Advertising, in short, that takes the advertising out of advertising.

In case anyone needs a reminder about this corporate mission, placards in the company's hallways proclaim St. Luke's crusade:

Profit Is Like Health.

You Need It, But It Is Not What You Live For.

The Treasury Monitors the Profit We Need.

The Quest Monitors the Lives We Lead.

The sentiments seem vaguely Orwellian, mildly messianic, and absolutely alien. But it is part of St. Luke's distinctive heritage : this agency is a revolutionary child of Chiat/Day, in its time the most revolutionary of ad agencies. In fact, St. Luke's was born at the moment that Chiat/Day ceased to exist as an independent, questing firm.

Now the young agency has picked up the torch, seeking to redefine what advertising is and how it works. The implications, according to the people at St. Luke's, go beyond advertising to the heart and soul of business.

It is an industry of alchemists.

Copywriters and art directors routinely use the sorcery of slogans and images to turn toothpaste into a sexual lure, athletic shoes into a totem of hipness, and gasoline into an expression of manliness. Yet despite its ability to transmute the base metal of human insecurity into gold on behalf of others, the advertising industry has been stuck with a decidedly leaden image of its own. A 1995 Gallup poll asked Americans to rank more than two-dozen occupations in terms of honesty and ethics. Advertising executives were narrowly defeated for last place by members of Congress and used-car salesmen.

The code of St. Lukes, in contrast to this pervasive image, is positively chivalrous. Andy Law, the firm's chairman, is a vicars son with a degree in Greek and Latin literature. He has been known to interrupt a discussion of a client's marketing problem with a tangential anecdote of how the hexameter meter of Homer's "Iliad" approximates the sound of hoofbeats approaching Troy.

Sitting at a table on the perimeter of the St. Luke's "refectory" (the company cafeteria for those working on the other side of the Atlantic), Law sweeps an upraised palm over the room as if consecrating the diners. "I'm just working with the raw material I have," he claims, as he explains the genesis of St. Luke's. "These people were all teenagers when Thatcher came to power. These people were adolescents when AIDS reared its head. Their interests are self-motivation, personal growth, and working for a company they're proud of."

About a year ago, "these people" also worked at another ad agency, one with its own reputation for eccentricity. That's because in a previous incarnation St. Lukes was the London office of Chiat/Day.