The Ad Agency to End All Ad Agencies

This lineage is instructive. During their orbit as the London satellite of the wildly gyrating planet known as Chiat/Day, the people who would eventually form St. Luke's acquired their penchant for antithesis and their taste for risk. And it is ultimately the decay of Chiat/Day's gravitational field which triggered the birth of this unique new agency, for St. Luke's is fashioned from fragments rescued from a culture in collapse.

In the New Testament, the third book, the gospel of Luke, tells the parable of the son who wastes his wealth through riotous living. In the history of this St. Luke's, the story is reversed; here it is the prodigality of the parent on which the allegory spins.

Founded in 1968 by Jay Chiat and Guy Day, Chiat/Day flourished for decades as an agency marked by equal parts creativity and arrogance. In the early 1990s its billings reached $1.1 billion; Advertising Age called Chiat/Day the "Agency of the Decade." By 1992, Chiat/Day had become one of the most famous -- and infamous brand-names in the advertising business. It created perhaps the most recognized commercial of all time -- the Apple Super Bowl-halftime "1984" ad -- and launched the Energizer bunny. Its quirky creative work in the 1980s for Nike, Reebok, and other big name clients earned it a cult-like status within the industry.

Chiat/Days provocative work for its clients was matched by its frequent reinvention of itself. Long before the concept of the open-plan office had become popular, chairman Jay Chiat had demolished office doors in order to shatter hierarchies. Later, boasting that he had stripped employees "of all their ego needs," he banished desks entirely and implemented one of the country's first "virtual offices." The company's quixotic culture bred a pious devotion among Chiat/Day's employees. A company T-shirt proclaimed the revolutionary corporate creed: "We're the pirates, not the navy."

By the early 1990s, Jay Chiat had become convinced that the ad industry was an elephant lumbering toward its graveyard. The process of producing advertising had become convoluted, requiring a huge support staff, which Chiat saw as extraneous, even detrimental, to the creative process.

In 1992, with characteristic fanfare, Chiat announced his intention to create "The Agency of the Future." In 1992 he assembled a hand-picked team representing each of the agency's core disciplines and asked them to figure out where the advertising industry was going and what Chiat/Day needed to do to get there first. From the London office Andy Law and David Abraham, an account director, were brought in to participate.

From the beginning the omens were dark.

On May 3, 1992, the members flew into Los Angeles for their first meeting -- only to find the city in flames. A full-scale riot had erupted in the wake of the Rodney King verdict; the entire city was on alert, braced for much worse. Whisked off to the Ritz-Carlton in Laguna Niguel for three days of meetings, the group began its work, dubbed itself "The Chrysalis Committee" as a sign of regeneration, and sought to invent the future.

Getting to work, the Chrysalis group focused nervously on the micro-issues that most agency's grapple with. Should Chiat/Day spin its media department off as separate unit? How should the agency approach the Net and its impacts on the communication stream between clients and customers? How could the agency get paid to do more strategic thinking -- which is fun -- and less execution -- which isn't?

Over a series of meetings that stretched into the next year, the Chrysalis committee began to suspect the real crisis facing Chiat/Day -- and the entire corporate world -- was that there was something wrong with business itself. Something systemic.

One afternoon, Law and Abraham walked into a Chrysalis meeting, propped up a picture of Aristotle on an easel and drew a single word on the chalkboard:

"It's a Greek word," Law told the group. "It means 'ethics.' And we think this is what we've been looking for."

Law and Abraham proposed that Chiat/Day, which had successfully managed to eliminate doors and desks, had one more anachronism it needed to dispose of: advertising. If the engine of 20th-century economic growth had been marketing, they argued, the successful companies of the 21st century would prosper through the willful application of a set of principles first described 2,500 years ago by Aristotle: ethics.

In an increasingly balkanized world of communications, a corporation's interaction with its stakeholders ultimately would become its most powerful communications medium. Ethics would not be an option, but a requirement.

In the Chrysalis groups imagined narrative, Chiat/Day would become a strategic consultantcy helping clients understand and design their "TRS" -- their Total Role in Society. To Chiat, the appeal of graduating from merely communicating a client's ethos to designing it was irresistible. He decided to move the Chrysalis group from the philosophical to the practical by joining the committee himself.