Brand Stewardship

Problem

As the newly minted CEO of Ogilvy & Mather Worldwide, Charlotte Beers faced an uphill battle on how to get the company back on track. In the ever changing advertising market, clients are expecting better service at a less expensive cost. Ogilvy and Mather’s inability to evolve has cost them numerous accounts over the last few years.

Beers defined the problems within company in 2 different areas. 1.) The company had lost sight of its assets- it vast network of offices worldwide, its creative talent, and its distinguished list of multinational clients; 2.) Departments are working separately, and not coming together to create advertising that impressed clients. The company had lost sight of its mission, which is to build clients’ brands.

I personally agree with the problems as Beers sees them. They have been unable to adapt effectively to the global environment and changing customer needs. Their organizational structure is not conducive to collaboration across disciplines (sales promotion, public relations, advertising, and direct marketing), departments (Creative, Account, Media, and Research), or regions. They are not working together to create a superior product that meets customer needs.

Potential causes of the problem are complacency; the company was used to gaining by doing the same thing. They failed to recognize that the changing global environment was changing customer needs. This led to their loss of major clients, revenue, morale, and the hostile takeover. I think another cause of the problem may be the size and organization of the company. Many of the regional offices operate autonomously, including North America and Europe. This made them slow and even unable to change, even after the need was recognized.

Situational Analysis

Ogilvy & Mather Worldwide is an International Advertising agency that has been in business since 1948. They have a long history of being one of the best companies in the industry, and always put the needs of the clients first. After a rough couple years following a 1989 acquisition, Charlotte Beers took over as CEO. She was hired at a time when the company was losing numerous accounts, and its future did not look positive.

The company was being raided in the market. In 1989, the agency lost major advertising assignments from Unilever and Shell. In 1990, Seagram’s Coolers and Nutrasweet withdrew their multinational accounts. In 1991, Campbell Soup withdrew $25 million in business and American Express-the account for which Ogilvy had won “Print Campaign of the Decade”- pulled out $60 million. Despite declines in revenue, the agency found itself unable to adapt to clients’ changing demands. O&M was spending a lot of money at the creative center without cutting back locally- building costs at both ends.

Charlotte Beers realized that the company must adapt to the ever changing business landscape in order to survive. This was partially caused by the firm's tradition of local autonomy, and failure to institute systems for managing collaboration. O&M had the same business model for many years, and she realized that they needed a change.  Clients demanded lower costs and greater service, and Ogilvy & Mather was very slow to change. Beers came to conclusion that moving forward, the company’s main strategies were  1. Client Security, 2. Better Work, more often, and 3. Financial Discipline. These strategies were linked to the emerging vision by a declaration: “ The purpose of our business is to build our clients brand (Ibarra, Sackley 1995).”.