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Copy of Charlotte Beers at Ogilvy & Mather Worldwide

ORGL 680 Presentation
by

Gene Mottolo

on 11 June 2013

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Transcript of Copy of Charlotte Beers at Ogilvy & Mather Worldwide

The finalized vision statement was deeply rooted in the historic O & M values and strengths (Ibarra & Sackley, 2011, p. 18). The new vision set the path for consolidating resources and encouraged the adoption of new techniques and perspectives, all in an effort to push forward with the concept of Brand Stewardship (p. 18)
To assess the vision created under Beers' leadership, we referred to the works of Kouzes and Posner (2006, 2008) and Biech (2007). Kouzes and Posner (2008) say that "compelling visions set us apart from everyone else" (p. 136). They further explain that visions “should transcend the day to day work and find expression in higher-order human needs. Visions should uplift and ennoble” (Kouzes & Posner, 2006, p. 532). Biech (2007) carries this concept further by saying, "Your organization’s vision should paint a picture of the preferred future” (p. 62). With these teachings in mind we asked the following questions.
Did Beers' Vision Set O & M apart from their competition?
Did Beers' Vision lift up and ennoble O & M?
Did Beers' Vision create a vivid picture of the ideal future for O & M?
Beers acknowledges that “the individual pieces of this thinking are not new. But to practice it would be remarkable” (Ibarra & Sackley, 2011, p.9). Further, it was stated that “clients love Brand Stewardship. Competitors are trying to copy it” (p.9).

The Beers’ Vision crafted from Brand Stewardship was unique to Ogilvy & Mather. While other competitors did have a similar brand-focus to their advertisement, O&M created a unique way of marketing such services and coined new terms--Brand Audit, BrandPrint, and Brand Stewardship--that set O & M apart from the competition (Ibarra & Sackley, 2011, p.9).
O'Dea said "we need to move beyond a vision that is useful to the top five percent of account and creative people, to one that has meaning for everyone at Ogilvy” (Ibarra & Sackley, 2011, p.13).

One of the biggest problems with Beers' vision was that it was not clearly communicated across the different levels of the organization (Ibarra & Sackley, 2011, p. 13). This hindered the immediate success and prevented buy-in from members of the organization at all levels. This is evidenced by the observation Beers made some time after the change initiative had already been implemented, “internally, we lack consensus” (p.15).
While Beers' vision created a definitive and vivid image of a possible future for O & M, the lack of intentional and clear communication of the vision across the organization, meant that many employees could not identify with or adopt it (Ibarra & Sackley, 2011).

The lack of wide spread training and support, too few experts in the Brand Stewardship process, and inconsistent articulation of the vision slowed and stifled the momentum and potential evolution of the Beers' vision for Ogilvy & Mather. In short, when Beers' communicated the picture it was vivid but there were not enough others to help spread the message.
"To be the agency most valued by those that most values brands" (Ibarra & Sackley, 2011)
Assessment of the Vision
Creating a New Vision to Lead in a Globalized Market
Charlotte Beers at Ogilvy & Mather Worldwide:
Implementation of the Chewton Glen Declaration
Conclusion
Historical
Synopsis
Problem 1
Problem 2
Problem 3
Problem 4
Problem 5
Problem 6
Creation of "Thirsty for Change Group" (TCG)
Creating the Vision
Beer's Initial Response:
Our Assessment of the Vision Creation Process
The start of vision implementation for O & M was driven by the short-term strategy for 1993 which was generated by Beers and the "Thirsty for Change Group" and focused on three main areas: 1)recruiting and retaining clients , 2) increasing the quality of their work and making quality work the standard, and 3) more efficient management of resources (Ibarra & Sackley, 2011). This strategy was connected to Beers' idea of Brand Stewardship and with this connection, they began communicating the new idea to the organization (p. 9). Beers focused her efforts on communicating the new vision to clients in an attempt to act on item 1 of the 1993 strategy, while members of the Thirsty for Change group communicated the vision to the management (p. 9). With this new vision, came the creation of the World Client Services division (p. 10). This new division was created in an effort to improve the quality and creativity of work O & M could provide to their international clients by pulling creative minds from all regions of O & M (p. 10).
Lack of Teamwork:
A Corporate Culture of Fiefdoms
The original mentality towards international business started by David Ogilvy in 1965 lacked healthy and realistic respect for the variety of cultures and needs encountered by multinational organizations. “Our aim,” wrote David Ogilvy, “is to be One Agency Indivisible: the same advertising disciplines, the same principles of management, the same striving for excellence” (Ibarra & Sackley, 2011, p. 2). At the same time, “Individual offices…were run independently by local presidents who exercised a great deal of autonomy” (p. 2). Describing the New York office one executive said, “People got used to a highly political way of working” in which even within that local office it was “run by czars with big accounts” (p. 4).
Isolated Executive Leadership:
Disconnected from Daily Business Realities
As leadership and decision making became more-and-more consolidated at the regional and local levels, Ogilvy & Mather’s executive leaders in the central office took on a lead-by-numbers management role. “With a light center and strong regions, most creative and operating decisions were made locally. The role of Worldwide Headquarters in New York, staffed by 100 employees, was limited largely to ensuring consistency in financial reporting and corporate communications” (Ibarra & Sackley, 2011, p.3).
Customer Service Conflict:
Local Clients versus International Clients
“Local and global clients also served as magnets for each other: Without local accounts, country offices were unable to build sufficient critical mass to service multinational clients well; without multinational accounts to draw top talent, the agency was less attractive to local clients”(Ibarra & Sackley, 2011, p. 3). At the same time, “The globalization of media and pressures for cost efficiencies encouraged companies to consolidate product lines and to sell them in more markets worldwide” (p. 3). Therefore, the needs of multinational clients to create economies of scale and reduce cost came into conflict with the specialized needs of local clients.
Unresponsive to Market Changes:
Slow to Adjust to Globalization
The globalization of the media industry put increasing pressure on the company to become “lean” in order to reduce costs; yet, Ogilvy & Mather was unresponsive to the changing needs of its larger clients (Ibarra & Sackley, 2011). “Despite declines in revenue, the agency found itself unable to adapt to clients’ changing demands. Budgets were not reduced at local offices, even as large clients pushed Ogilvey to streamline and centralize their accounts” (p. 4). As one executive observed, “We were a high-cost operation in a low-cost world” (p. 4)
Conflict Avoidance Hampered Change:
Corporate Culture Discouraged Dissent and Debate
One of Ogilvy’s founding principles was treating fellow employees with good manners. “In a distinctly British way, collegiality and politeness were highly valued: [Ogilvy said,] “We abhor ruthlessness. We like people with gentle manners and see no conflict between adherence to high professional standards in our work and human kindness in our dealings with others” (Ibarra & Stackley, 2011, p.2). Unfortunately, Ogilvy’s maxim of collegiality and politeness resulted in a corporate culture that avoided confrontation—a culture that made it difficult to navigate past disagreements, maintain debates long enough to reach resolution, or generate change. One executive observed, “We don’t have passionate arguments in this company. We avoid conflict, and debates go off line” (p. 8). Even after the major change initiative set in motion by Beers and Beers’ celebration of divergent thinking and outspokenness, one executive observed, “I think we’re all still very guarded”(p.15). Another executive hoped that her colleagues would become “comfortable enough to disagree openly with one another” (p. 15).
Beers’ later described the corporate culture that she
inherited as, “grotesquely polite” (p. 15).
No Guiding Vision:
Adrift Without an Inspirational Leader
Ogilvy experienced a hostile takeover in May 1989 when it was purchased by WPP Group Plc (Ibarra & Sackley, 2011, p. 4). The takeover caused several experienced top executives, including the CEO, to leave the company leaving the company without strong or charismatic leadership. The CEO's replacement, Gram Phillips, was described as “a brilliant account guy” but “few would describe him as an inspirational leader” (p. 4). The company lost any sense of vision or mission and although many recognized the need for change and talked about it a lot there was no forward momentum (p. 4). One executive observed,
“We tried to work within the old framework
when the old ways of working were
irrelevant” (p. 4).
References
In her initial weeks, Beer's turned her focus towards:
Changing the industry perception of O & M
Emphasized the quality of O & M's work
Shifting organizational focus to be more brand-centric
Creating brands for clients
Creating the O & M Brand
Finding others who were eager to change O & M
Creating a unified organizational vision
Meeting with O&M clients to gain insight
(Ibarra & Sackley, 2011)
Committee of O & M employees that Beers had identified as eager to change the O & M status quo (Ibarra & Sackley, 2011)
Comprised of executives and directors from across the organization's global network (p. 7)
Beers challenged these individuals to surpass their comfort zones and stretch to areas beyond their expertise (p. 7)
In May of 1992, the "Thirsty for Change Group" held their first met in Vienna to brainstorm ideas for change and creating a new vision (Ibarra & Sackley, 2011). This retreat focused on the strengths and weaknesses of the organization. The group struggled with their personal priorities, the process of discussing change, and the diverse personalities in the room. In August, the group reconvened in England to continue the development of a unified vision (p. 9). From this second meeting twenty-two areas were identified as areas to focus on. Beers further distilled these into three main areas to prioritize for the coming year:
Client Security
Better Work, More Often
Financial Discipline
(Ibarra & Sackley, 2011, p.9)
In order to assess how well Beers and her team performed in the process of creating their new vision, the Change Model developed by E. Biech (2007) was used and focus was given to step one: "challenging the current state." Biech wrote, “two keys to success are important for all change efforts: (1) you need to have a plan. The plan must translate the concepts into concrete steps so that employees can implement them. (2) You need to carry out the plan – all of it. Carrying out the plan requires getting everyone involved who has a stake in the change” (p. 21). The overall process of creating a vision for change would likely have produced better results if more time had been spent focusing on the details of how the change would be implemented as opposed to focusing almost exclusively on the content of the change.
Recognize that something
can be different
(Biech, 2007)
Beers delivered a video message to the corporation inviting those who share her dreams to join her in crafting a new vision. She honored David Ogilvy’s leadership as part of their history but not to use it as a compass for their future. (Ibarra & Sackley, 2011, p.6)
Beers recognized the potential and how the vast amount of assets could be leveraged worldwide for greater impact. (p.6)
Others experience renewed energy under Beers' leadership – sense of excitement, ability to inspire
Beers purposely created vagueness around the new structure which in turn created uncertainty for existing employees – discomfort, apprehension, (p. 7)
Identify the need for change
and a compelling case for the change
(Biech, 2007)

Beers' team recognized the clients need for "Speed, Cost-efficiency, and centralization" and that what mattered was not just good ideas but bringing those ideas to many markets very quickly (Ibarra & Sackley, 2011, p.10).
Beers discovered that clients perceived O&M's account managers as “uninvolved, distant and reserved” (p. 6).
Beers identified that the current structure created "fiefdoms” which prevented their global network from collaborating and maximizing O&M's resources (p.6).
Beers' "Thirsty for Change Group" articulated several over-arching problems:
Firm-wide morale problem and need to regain confidence
Lack of a relevant and clearly articulated vision and statement of values
Need for major structural changes to remove fiefdoms (p. 8)
Lack of clear focus--either (1) financial discipline – lean operating business environment or (2) imaginative advertising
Need for brand building through a broader, more
integrated range of communication services
Collect and analyze the data
(Biech, 2007)
Beers conducted interviews, observed client meetings, spoke with executives, clients and investors using an open-ended format to understand their experience, their perspective on the state of the firm and what they felt needed it happen (Ibarra & Sackley, 2011). Beers was very hands-on in her approach to understanding O&M clients' perspectives on the firm--especially, customer service. In her initial months with O&M Beers said, "I met with 50 clients in six months" (p. 6).
Beers attempted to do this by giving out stretch assignments that moved individuals out of their comfort zones to see how open they were to new things (Ibarra & Sackley, 2011). She attempted to remove what was considered valuable--position and title--which creating excitement and anxiety because "people weren't quite sure what their roles were" (p.7).
Determine
organizational readiness
(Biech, 2007)
Establish change
management roles
(Biech, 2007)
“Roles are developed to lead, champion, sponsor, support, design, plan and facilitate the change effort” (Biech, 2007, p. 36). Beers' attempt to do this set herself as the change leader and pulled together a small change management team, the "Thirsty for Change" Group." While the TCG was well utilized to identify and articulate problems as well as concepts for the new vision, its 10 members (including Beers) were not enough people to adequately disseminate the new vision throughout O&M's "272 worldwide offices" (Ibarra & Sackley, 2011).
Create a compelling business case (Biech, 2007)
As Biech (2007) wrote, “a business case presents the rationale for change, using a logical flow of scope, evidence, and analysis that leads up to the recommendations” (p. 45). The group Beer's pulled together analyzed the data, crafted a vision, and identified the key priorities for the firm (Ibarra & Sackley, 2011). The strategies put into place included:
Creation of the (WCS) Worldwide Client Services branch (p. 10)
Articulating the Chewton Glen Declaration which outlined three initial, primary areas of change (p. 9)
Beers' change initiative began occurring without a clear vision
statement or a plan for change management. While there were glimmers of a case being made, a plan for implementing the changes was absent. This created additional frustration and confusion once the initial excitement about change went away (p. 10).
Ogilvy & Mather (O & M) began in 1948 and was lead by the charismatic and creative David Ogilvy (Ibarra & Sackley, 2011). Under his leadership, their advertising became a dominating force in the industry and was well known for clever and impactful advertising such as "Good to the Last Drop" (Maxwell House) and "Don't Leave Home Without It" (American Express) (pp.1-2). In 1965, the company went international eventually having a total of 270 offices across four regions of the world: North America, Europe, Asia Pacific, and Latin America (pp. 2-3).
With Ogilvy's retirement in 1975, the company entered a period of change (p. 2). Four different CEO's succeeded Ogilvy, and while they succeeded at growing the presence of the company, each one lacked the vision to carry the company forward creatively (p. 2). O & M failed to respond to the world's changing markets and in 1989, the company was acquired by WWP Group in a hostile takeover (p. 4). This was the beginning of the company's decline and the situation into which Beers stepped when she took over (p. 4).
Biech, E. (2007). Thriving through change: A leader’s practical guide to change mastery.
Alexandria, VA: ASTD Press.
Bridges, W. (2009). Managing transitions, 3rd edition. Philadelphia, PA: Da Capo Press.
Ibarra H., & Sackley, N. (2011). Charlotte Beers at Ogilvy & Mather Worldwide (A). Boston, MA: Harvard
Business School.
Kouzes, J. & Posner, B. (2006). Enlist others. In J. V. Gallos (Ed.), Organization Development – a Jossey-Bass
Reader. (pp. 518-539). San Francisco, CA: Jossey-Bass.
Kouzes, J. M., & Posner, B. Z. (2008). The Leadership Challenge, forth edition. San Francisco, CA: Jossey-
Bass.
Kotter, J. (2006). Leading change: Why transformation efforts fail. In J. V. Gallos (Ed.), Organization
Development – a Jossey-Bass Reader. (pp. 239-251). San Francisco, CA: Jossey-Bass.
Now, let's look at the problems that led to O&M hiring Charlotte Beers as CEO.
The Process of Creating a Vision
In August of 1993 Beers met with her newly formed Thirsty for Change Group (TCG) and the team identified a wide variety of "to do" items that included 22 priorities that needed attention. Beers distilled the ungainly list down into a focused three point strategic plan called the Chewton Glen Plan intended to serve as a short term vision for moving forward(Ibarra & Sackley, 2011, p. 9).
Thirsty for Change Group Creates Chewton Glen Declaration
Now that we have a historical perspective of the organization, let's analyze Beers' process of creating a new vision to address the problems she inherited at Ogilvy & Mather and to guide the organization into the global market.
Kotter (2006) indicates that change has the highest chance of success when a new leader is brought in and immediately communicates an overwhelming need for change (pp. 239-243). Beers was an outsider in every way and the need for change was apparent at O & M as many longtime customers were leaving and new business was more difficult to obtain (Ibarra & Sackley, 2011). However, in Beers’ haste to create change, she failed to develop and implement a comprehensive plan to shift O & M’s culture. As Biech (2007) wrote, “managing change effectively is the single most important element in organizational success” (p. 7). Beers’ failure to provide a holistic approach to change inadvertently created new problems and left old ones unresolved.
The lack of a comprehensive communication plan resulted in a lack of understanding regarding her vision and change efforts (pp. 12-13). On one side, If Beers had been more deliberate about including players from across the organizational strata and empowered individuals to be change agents capable of communicating her vision, it may have found more traction amongst the different divisions of O & M. Kotter (2006) implies that in the formational stage of change, actions must be quickly brought about, but systems thinking tells us to go slow to go fast (Davidson, 2005). For example, Beers and the TCG developed and introduced new services that were immediately marketable and popular with their clients; yet, these services were implemented without proper training or support. One manager said the popularity of Beers’ changes with clients “created pressure to go public with it before we had every “i” dotted and “t” crossed” (Ibarra & Sackley, 2011. p. 10). The manager went on to describe how clients came into offices asking for one of O & M’s new products but employees had no idea that the new product existed much less how to provide it to the client (p. 10).
Poor communication and lack of training
Change begins with a commitment to a shared vision that motivates individuals to move towards the greater good and away from self-interests. As Biech (2007) reminds us, “individuals and groups inside organizations execute various tactics to “win” the struggle for money, people, space, and even attention. This contradicts teamwork, undermines collective goals, and suboptimizes the organization” (p. 133). In the case of O & M, resistance came from many directions. The “creative” resisted the idea of brand audits and BrandPrints because the approach seemed “formulaic” and “infringed on their artistic license” (Ibarra & Sackley, 2011. p. 12). Smaller agencies resisted the shift towards giving “priority to brands with high global development potential over smaller local accounts" because, for the smaller agencies, their most profitable and stable accounts were from local clients (Ibarra & Sackley, 2011. p. 12). The newly created Worldwide Client Services (WCS) who was responsible for multinational clients would often overstep their authority with the smaller agencies. In turn, WCS felt that they were “being forced to absorb more than their fair share of local costs” associated with multinational accounts and local agencies complained that “their portion of multinational fees was small” (Ibarra & Sackley, 2011. p. 14). This elevated the feelings of distrust and resentment among the WCS and the smaller firms.
Internal resistance
to change efforts
With the advent of WCS and its centralized control of multinational accounts, smaller local offices no longer handled big accounts nor were they responsible for developing the overall strategy for multinational accounts. As one WCS director described it, smaller offices were “more often on the receiving end” they merely “tailored execution to regional markets” (Ibarra & Stackley, 2011, p. 14). The lack of creative license over large multinational accounts created a problem for smaller, local agencies; top talent was not interested in working for them due to the lack of opportunity to manage large accounts (p. 14). The WCS also created difficulty cultivating talent internally. "As the WCS took over the handling of the larger multinational accounts, WCS heads controlled billings larger than the totals for some countries in the network" (Ibarra & Stackley, 2011, p.15). At the same time, Ogilvey had a tradition of giving the “greatest prestige and biggest bonuses to presidents of local offices, countries, and regional chairman” (p.15). This tradition created a mismatch between the pressure and responsibility of WCS positions and the financial reward associated with it. The situation made it difficult to attract Ogilvey’s brightest talents to WCS positions when it meant they would “leave the safety of turf to head brand-focused, virtual organizations (p.15). Members of Beers’ change initiative team—O’Dea and Walsh—noted that structural “organizational changes were necessary to make Brand Stewardship a reality agency wide” (Ibarra & Stackley, 2011, p. 14). Walsh went on to say, “What we don’t have is structure, working practices, remuneration, praise of people—all based on Brand Stewardship” (p. 14).
Unable to attract and retain top performers
Final Thoughts
Over 50 percent of change initiatives fail in the long run. (Biech, 2007. p. 7). The main reason for change initiatives failing is when the leader fails to invest the appropriate amount of attention and resources to managing the change. Biech (2007) wrote, “approaching change holistically means that you must attend to changes created at every juncture. When you change one thing, it affects many others. Sustainable change requires monitoring and making additional changes as required” (pp. 19-20). In the case of Charlotte Beers, she focused on creating a new vision for O & M and introduced new initiatives that resulted in short-term growth and appeased the media, client and investors. However, she failed to focus on the long-term strategies that institutionalizes the change. Beers herself recognized the risk of reverting back to the old behaviors and culture. She commented that “clients love Brand Stewardship. Competitors are trying to copy it. And internally, we lack consensus” (Ibarra & Stackley, 2011, p. 15).
Organizational Leadership 680.02
Created by: Gwen Badgley, Amber Darting, Gene Mottolo, and James Robinson

June, 2013
Full transcript