Charlotte Beers at Ogilvy Mathe

Charlotte Beers at Ogilvy Mather

The McKinsey 7-S Framework Model Analysis

Issues

Shared values

The primary shared value was "gentlemen with brains". They focused on the creative work and treat clients, consumers and on another with respect. They liked people with gentle manners and avoided conflict between high professional standards in their work and human kindness in dealing with others. This shared value guided the development of Ogilvy Mather in several decades. Then the company Vision changed to "just keep doing the same thing, just better", which is a conflict with the trend of the world. The globalization of company became mainstream with "mergers to form mega-agencies and the concept of transporting brands around the world". And the costumers wanted "more service at lower costs".

After Beers was hired as CEO, she brings in new Vision to meet the demand of the market. There are eight values that she is willing to share: 1.They work for Brands;  2.They work with the clients as Brand Teams who respect the collective skills of clients and themselves; 3.They encourage innovation; 4.They value candor, curiosity, originality, intellectual rigor, perseverance, brains, and civility; 5.They prefer the discipline of knowledge to the anarchy of ignorance; 6.They prize both analytic and creative skills; 7. They watch the line between confidence and arrogance obsessively; 8. They respect the intelligence of their audience.

Strategy

To maintain their revenue, the executives of Ogilvy Mather came up three strategies in 1993. First was to focus most of their energy, resources and passion on current clients especially multinational clients. Second was to continue improving the quality of work and inspiring creativity. The last one was to establish a new financial discipline to change the poor resource management. Although these strategies well met the short-term requirements, Ogilvy Mather could not build their clients’ brands with them.  

To spread her new Vision, Beers uses communication strategy. She assembles the current employees who are interested in creative tension. According to the main problems and current issues company faced, they make the new Vision together and communicate it to all levels and offices throughout the company. But they fall to make a group decision. Although they talk about it, the majority of decisions are made by Beers and specific individuals. Since the lower level employees do not participate in the creation phase, there are lots of challenges in making all staff accept the new shared values.

Structure

Ogilvy Mather is a global company with 270 offices in four regions: America, Europe, Latin America, Asia, and Australia. It has three level of vertical structure: The Worldwide Headquarters, Regional Headquarters, and local offices. The Worldwide Headquarters contained four sectors: Finance, Human Resources, Corporate Communication and Information Services. In every region, there are Regional Headquarters and many offices operating in different countries. Individual offices are run independently by local presidents who exercise a great deal of autonomy. As one executive in New York office said, "People got used to a highly political way of working" in which even that local office was "run by czars with big accounts."

This kind of structure causes lack of teamwork between local offices and central offices. Ogilvy Mather has weakened its power to gain new customers and began to lose existing clients because of non-cohesive teamwork and collaboration among departments.

Systems

The presidents of North American offices report directly to the Worldwide CEO which means these offices are most autonomous. While the other presidents of local offices should report to country presidents, who in turn report to the regional chairman. Because of this "light center and strong regions" report system, most creative and operating decision were made by local offices. The Worldwide Headquarters only decide to allocate the key capital and appoint local executives to ensure consistency in financial reporting and corporate communications. This kind of decision-making system leads to isolated executive leadership. The power of executives in the central office becomes weaker as the leadership and decision making became more and more consolidated at the regional and local levels.