Charlotte Beers at Ogilvy & Mather Worldwide
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Ogilvy & Mather first rose to prominence in 1950 with its eye-patched “Hathaway Man,” an advertising tool for dress shirts that ran for the next 25 years. Ogilvy’s other initial ads were for Rolls-Royce and Schweppes. Founder David Ogilvy believed that effective advertising created an indelible image of the product in consumers’ minds and that campaigns should always be intelligent, stylish and “first class”. David Ogilvy became an industry legend — his book, Ogilvy on Advertising, became an advertising textbook — and under his leadership the agency became one of the stars of the advertising world. Ogilvy eventually merged with its former parent company, the British group Mather & Crowther. Over time, Ogilvy came to pride itself as “the most local of the internationals, the most international of the locals”. The Ogilvy offices represented four core disciplines: sales promotion, public relations, advertising and direct marketing.
In 1988, Ogilvy was ranked the sixth-largest advertising firm in the world. Because of the stock market crash in 1987, O&M suffered a huge blow in the advertising market because it was too slow to make adjustments. In 1989, WPP Group Plc, a leading marketing services company, acquired Ogilvy and Mather for $864 million. By 1991, Ogilvy had 270 offices in four regions. By this time, Ogilvy was taking huge losses and was losing clients regularly. In 1992, WPP brought in Charlotte Beers as CEO.
Charlotte Beers’ aim as the CEO
Charlotte Beers grew up in Texas, where she began her career as a research analyst for Mars Company. She then moved to Chicago as an account executive with J. Walter Thompson (pg. 5). After cultivating success, she rose quickly to senior vice president for Client Services. Beers was known for her passionate interest in the philosophy of marketing. In 1979, Beers became the COO of the Chicago agency Tatham-Laird & Kudner. In 1992, Beers was brought in as CEO of Ogilvy. At that time, the company was perceived as indifferent and disconnected from consumers. Beers interacted with the company’s clients to know and judge the position of the company in the market. She came to the conclusion that the company’s vast assets should be activated as the clients had lost the image of these impressive assets. She also figured out that the assents did not generate any confidence in the clients as the assets did not tell the clients why they would work. She focused her attention on the quality of Ogilvy’s advertising. During this time all the departments – Creative, Account, Media and Research – were working as separate entities. The company was disintegrating because of the change in the market scenario.
The main objective of Beers was to restore confidence internally and externally. She wanted to bring all the employees of the company back together and knit them together. She believed that clients wanted an agency that understood the complexity of managing the emotional as well as the logical relationship between a consumer and a product. She became confident that she knew what the clients wanted and what Ogilvy’s strengths were. She was totally focused on building brands and attracting clients for the company. She had identified a group of “thirsty for change” people. At the advertising company Ogilvy & Mather Worldwide, the charismatic and creative executive, Charlotte Beers, tried to develop a new vision built on the concept of Brand Stewardship. In order to do this she held big meetings where she invited a group of top executives heading regions or key offices. The stated purpose of one of these meetings was to get a final agreement on the vision of the company and where Brand Stewardship would fit in. In the meetings, Beers decided on three strategies – Client security, better work, more often and financial discipline. This was apparently a participatory, democratic/political group-decision procedure where the outcome was supposed to be the best combination of everyone’s different views and contributions.
Beers tried to communicate the idea of Brand Stewardship to the next level of managers. Her vision for the company was “To be the agency most valued by those who most value brands”. She stressed on Brand Stewardship, which was a tool to create and maintain brands. The company defined Brand Stewardship as “the art of creating, building and energizing profitable brands” (18). To Charlotte Beers, selling the value of a brand is the foundation of successful marketing.
Assessment of the vision
When Charlotte Beers was made the CEO of Ogilvy by WPP, there was apprehension in the ranks of the employees of Ogilvy. She had never worked outside the United States and now she was the CEO of a worldwide company. Her vision for the company was to choose the right people and place them so that their skills are magnified. She also wanted to build Brand Stewardship. Beers herself was selling this concept and was getting a better response from the clients. She had also shown earlier that she was interested in the philosophy of marketing. This showed her enthusiasm for the work which she was doing towards her vision. Charlotte Beers had decided on three strategies – Client security, better work, more often and financial discipline.
*Client security – Beers tried to focus the energy, resources and passion on the clients. She believed that it would take three years to replace the revenue from a lost client.
*Better work, more often – Beers believed that better work which was done more often was the key to success. She tried to make the brand the central focus.
*Financial Discipline – Beers came to the conclusion that the company’s assets needed to be activated and put to better use.
The above strategies were quite comprehensive and were important for the growth and development of the company. These strategies were linked to the vision that Beers had in mind. The vision of Brand Stewardship was the key in getting back lost clients. The clients were intrigued by this concept and thought that it was interesting enough. I therefore assess the vision in terms of these three key strategies.
The vision “To be the agency most valued by those who most value brands” shows that Ogilvy is trying to aim for the number one spot in its targeted market. It shows us that Ogilvy’s focus was on creating, building and energizing profitable brands. This seemed to be a very viable goal, based on the strengths of Ogilvy. Ogilvy was always known for its creative talents and had a strong history of boosting brands. From the “Statement of vision and values, 1993” we can see that Ogilvy was focusing its attention on building brands. In essence, this shows that Ogilvy was taking a closer look of how effectively it dealt with its clients. The paragraph states that Ogilvy always had tried to accomplish a larger customer base for its clients through its creative advertising and Ogilvy’s quest to build a staying power. This relates to the first strategy of client security, where Ogilvy’s focus was on its present clients. Ogilvy realized that it takes three years to replace revenue from a lost client. I think that this first part of the vision was well planned. The decision to place David Ogilvy’s name in the statement was very clever, thus getting the reader to reflect on the past glory of Ogilvy. The statement also focuses on shared values, which the company feels is a key to expanding the culture and reinforce its standards. This statement thus proves that the company was focused on its clients as well as its employees.
Assessment of the process
When Charlotte Beers was appointed as the CEO of Ogilvy and Mather Worldwide, the company was in a bad shape. It needed a change in direction which Beers found out after meeting with the clients. Beers was a charismatic leader. She immediately observed that the impressive assets that the company was holding were not being utilized properly. She also set a vision for herself. She identified a group of employees who desired change just like she did. To do this she called this group for important meetings where the group discussed on how to focus on Brand Stewardship and gain a competitive advantage in the advertising market. The group then came up with three strategies – Client Security, Better Work, More Often and Financial Discipline. These strategies were linked to the emerging vision by a declaration: “The purpose of our business is to build our client’s brands” (9).
The process of communicating the vision and the strategy was very simple. The group members would work towards communicating the strategy to the next level of managers, while Charlotte Beers would direct her energy towards winning new and lost clients. This was a really good strategy as the company got two huge clients – Jaguar Motors cars’ entire U.S. account and American Express’s $60 million worldwide account. Beers also made up a new organization, Worldwide Client Services. This company would try and get the best brains for each account that was held by Ogilvy. WCS was structured to mirror their clients’ organization. This really helped the clients and this shows the commitment that the company had towards their clients.
Brand Stewardship was a new concept in the market. This intrigued the clients and they were interested in Ogilvy again. The only problem was that the employees were not comfortable with the concept of Brand Stewardship. The employees were lost and confused about the whole vision. To remove this confusion and doubt, Beers produced a series of questions that were designed to unveil the emotional as well as the logical significance of a product. This resulted in Ogilvy’s first BrandPrints which were:
a)A Jaguar is a copy of absolutely nothing – just like its owners
b)Dove stands for attainable miracles
The actual process for working towards the vision was decided by Beers. The group of top executives was split into four groups:
1.Develop a statement of shared values that would integrate traditional Ogilvy principles with the emerging values of the new philosophy.
2.Crafting the specific wording of the vision
3.Strategy for communicating the vision to all levels and offices throughout the company
4.Thinking about how to realign titles, structures, systems and incentives to support the new vision. (11, 12).
I believe that the planning and the process involved in developing a vision was quite comprehensive and was well thought of considering the situation of the company which was prevailing at the time of thinking of the vision. I believe that the team has done a good job of going about planning and implementing the vision.
Key challenges facing Beers
Charlotte Beers and her senior team worked hard to push the strategy down to the lower managerial levels. The employees of Ogilvy & Mather lacked experience with, and how to use, the principles of Brand Stewardship. The employees were confused and doubtful about this new concept. They had no idea where to apply it and how to apply it. Only a few employees clearly understood the concept and implemented it. Some were just aware of this concept while the others were totally against it. Planners expressed confusion about how to use Brand Stewardship to develop a creative strategy (12). Recalled one executive, “People didn’t understand such basic things as the difference between a brandprint and an advertising strategy” (12). Charlotte Beers admitted that they did not have much internal support.
The greatest resistance was from the creative side. The creative people thought that Brandprint was an infringement on their artistic license. Others questioned the relevance of Brand Stewardship for O&M Direct (13). Some of the employees were against the notion that direct encourages short – term sales while advertising builds brands over the long – term. Thedens argued “You can’t send a message by mail that contradicts what you show on television. Both disciplines sell and both build the brand” (13).
As the company won several, large multinational accounts the challenges and problems worsened. The company gave priority to brands with high global development potential than the local accounts. But the problem was that the local accounts were the steady stream of income for the company. Furthermore, the employees would at times exceed their authority. There were increasing conflicts between the center and the local agencies too. This created a lot of problem for the company as a whole. As one senior executive explained “Certain local offices have not responded well to some of the advertising created centrally. One downside of global work is that it can end up being middle – of – the – road. When this happens, its bad for an office’s creative image locally.” (13) The costs of the local as well as center were increasing. This was causing a concern in the company. The controversy about how to allocate costs and split fees between the WCS and the local offices was brewing in Charlotte Beers mind. One of the offices refused to do any work for a client, because they did not have any fees.
As conflicts continued to erupt, the senior management was divided on the solution. Some said that the key to all the problems would be the management structure. But the other said that if a right kind of environment was created and have the right people then a whole new structure would not be required at all. Beers thought that if the emotional content was high enough the structure would follow on its own. The finances had to follow the company’s goal of killing geography as a barrier of serving the brand.
At the end of 1993, there was another issue that came up. WCS controlled billings of large multinational accounts. The company had always given the presidents and top executives great prestige and big bonuses. Brand Stewardship required top brand stewards and organizations to center around products and processes rather than the locations. This created a problem as the top executives would have to forfeit some of their earnings for the advancement of the company. Another problem which could arise was the hurdle of working as a team. The members were too polite and this hindered the debates and disagreements between employees.
These were some of the key challenges that Charlotte Beers had to face. Her biggest challenge would be to decide what course of action she would have to take in the future to provide the best stewardship of the Ogilvy brand.