A tonic for sick Saatchi's

When Lee Daley was appointed chairman and chief executive of Saatchi & Saatchi UK just over a year ago, the world's most famous advertising agency was a shadow of its former self.

Its successes of the 1980s were far behind it, and it was living on past glories. The Charlotte Street office in London had a poor record at winning new business and there had been a high turnover of senior managers. Its culture was trapped in the past.

Daley, a fast-talking northerner who previously ran WPP's Red Cell network, was hired to restore Saatchi's London office to greatness. Since taking control in October 2004, replacing Kevin Dundas, who was promoted to worldwide strategy director, he has added a sense of vitality and direction that had been lacking.

Daley has brought a whirlwind of activity, frenetically launching offshoots, hiring executives and introducing new ways of working. He has attempted to jettison the baggage of history.

The rot set in for Saatchi & Saatchi when the founding brothers, Maurice and Charles, were expelled in 1995 after a shareholder revolt. They left, taking a number of top executives and the flagship British Airways and Dixons accounts to their new agency, M&C Saatchi.

In the years that followed, the original Saatchi - whose campaigns helped to put Margaret Thatcher into power - floundered while Maurice and Charles's upstart prospered. Saatchi & Saatchi's worldwide network was eventually acquired by Publicis Groupe of France in 2000. But the London office, known in adland simply as "Charlotte Street", still struggled.

Daley's task is to breathe new life into the agency. He says: "There is great glory in the past of this company but it wasn't necessarily casting the right shadow today. I said, right, this has got to change. I'm not fucking interested in the brothers, I'm not interested in BT and BA. We have got to modernise this company, its identity, its attitude and we have got to remove this obsession with the past."

He says Saatchi's polite culture needs to give way to something more "bloody-minded in helping clients to win". He talks in the sort of forceful US management speak that is supposed to fire people with passion. "I have a street-fighting mentality, I like to feel visceral energy in companies, I like to see massive energy flows, I like to see massive challenges, I like to see provocative ideas," he foams.

Associates rave about his "fierce intelligence" and praise him as "an absolute visionary who thinks way ahead of the industry". Another says: "His brain is full of stuff and it comes out quickly. He is always firing off ideas which people don't understand. You wonder whether he needs a filter, someone to distil his thoughts."

Daley has unleashed a flood of innovations over the past year, though it remains to be seen how much these will revitalise the business. His first move was to hire Kate Stanners, formerly of St Luke's, as executive creative director. "She's very non-big agency, non-corporate," he says.

He claims to have improved the financial performance at the London office through cutting expenses and introducing greater financial rigour for the 500 staff. Daley has set up an innovation unit called Industry@Saatchi and launched Gum@Saatchi, which creates youth entertainment content for brands. There's the new youth arm, "Friends of Jonny", a shopper marketing unit SSX, and he has helped to launch a London branch of the American classroom-based advertising training organisation the Miami Ad School. These moves are manifestations of his view that the future for ad agencies lies beyond "words and pictures". Saatchi's has to become predominantly an ideas company, he believes.

Yet for all the noise, Daley has struggled to bring in significant new business, the key measure of success. This year, the London office has won Standard Life's £7m demutualisation account. Industry@Saatchi's first win is a £5m assignment for the boot-brand Dr Martens. Team Saatchi, the project management division, has won the £2m French tourist board account. But the agency has yet to start reeling in massive new accounts.

Even so, the agency is regularly getting on pitch lists again, something which hadn't happened for a long time. This is attributed to the excitement the 43-year-old Daley has injected into the company, though some wonder whether he is "all sizzle and no sausage." Over the past year, the ad agency has competed for accounts from the Sun and News of the World, Yakult, Fidelity Investments, and is waiting for news on Easyjet, the Post Office and a "major paint brand." And happily for Daley the London agency hasn't lost business.

He believes Saatchi has to address weaknesses in how it articulates strategy in pitches. "We have to become more elegant, eloquent and simple in our arguments and we have to understand how to coalesce all the consumer insights into more powerful, precise and cogent strategic arguments. The agency had got out of practice at doing that in new business," he says.

Insiders say Daley needs to address the problem of final delivery in pitches. Some believe he has a tendency to interfere too much, at times changing a strategy the day before it is presented. "He may often be right, but it is unsettling," says one source. Daley snaps back that he doesn't interfere enough.

Still, he is pleased with the new strategies that have been created for existing clients T-Mobile, Comet, Toyota and the detergent brand Ariel. He is also proud of new campaigns coming up for Tetley's bitter and Visa.

He is described as workaholic, sometimes spiky and often egotistical. But he has a sensitive side, getting "hugely emotional" at times. He has been known to cry in company meetings.

His father, Tom Daley, was a professional footballer who played under Bill Shankly at Grimsby Town. Lee, who was raised in Cleethorpes, describes himself as a "northern soul-boy comprehensive tearaway". He graduated from Manchester University, then took a masters in marketing.

He entered advertising as a "suit", spent time as a strategist and worked his way up through McCann-Erickson, which put him in charge of its New York creative satellite Amster Yard. He was hired by Sir Martin Sorrell in 2001 to "do something" with Red Cell. He set about building up the network of 55 offices globally. He left Red Cell in early 2004 in need of a rest, having notched up some 100 flights a year. He had barely seen his wife and two children.

Some months later, Saatchi's worldwide chief executive, Kevin Roberts, whom Daley describes as "a complete maverick ... brilliant ... slightly mad, a visionary, flies at 50,000 feet", called him into his New York office. Daley recalls: "Kevin said: 'create a renaissance at Charlotte Street, and put it back to its rightful place at the heart of the British advertising community'. I said, 'Let me do it my way, let me get on with it, and please don't let anybody get in the way. If I fuck up, fire me.'"