Week 12 Leadership Case

1. Week 12 Leadership Case Charlotte Beers at Ogilvy and Mather

2. Changing Industry Context since mid-1980s • Decrease in media-related expenditure (traditionally the biggest revenue generator for ad agencies). • Shifting of marketing effort to new channels (direct, telemarking, promotions). • Changes in how ad work is compensated by clients • Merger and acquisition • Globalization of clients Charlotte Beers at O&M

3. Internal Challenge • Multi-local structure breed local autonomy—structure is not optimized to serve multinational clients. • Success breed strong, arrogant culture; managers internally focused. • Lack of inspirational leaders since the retirement of the founder. • Strong managerial and financial discipline imposed after 1989 WPP acquisition—exodus of creative and account talents. Charlotte Beers at O&M

4. Direction Setting: Did Beers have a good vision? • New direction: brand stewardship “To be the agency most valued by those who most value brands” • Two main tenets of brand stewardship • Companies can only compete in the long term by building strong brands • Role and value of advertising is to build brands by uncovering the rational and emotional significance of a product in users’ life • Strategy: how to get there? • Brand probe • Brand Audit • Brand Print Charlotte Beers at O&M

5. Direction Setting: Did Beers have a good vision? • Clarity: • Is it clear and specific enough to provide guidance, and at the same time vague enough to encourage initiatives and remain relevant under varied conditions? • Desirability: meets the needs of key stakeholders • Enthusiasm from clients • Account managers like it • Top creative people are on board • Resistance from local creative people: see it as constraining • Not much offer to the Direct Marketing division • Feasibility: • Provide the rationale to offer integrated services to clients • Leverage O&M’s worldwide presence and strong global network • Instrumental in reigning in local fiefdoms Charlotte Beers at O&M

6. Direction Setting: Did Beers have a good vision? • Originality: Is it original? How important is originality? • Not that original: similar to the one-bundle service strategy the firm tried to implement earlier • Most other major advertising agencies were focusing on brands as well • But this is not important: most effective visions are not original at all. Charlotte Beers at O&M

7. Assessment of the Direction Setting Process • Questions to think about in assessing the process: • Was it high involvement? Or was it mostly done by herself? • Did she involve the right number of people at each stage? • How effective was she in dealing with internal resistance? • How did she manage to maintain room for creativity while setting a direction? Charlotte Beers at O&M

8. Beers’ Direction Setting Process • Start with her own vision of brand-driven advertising agency model • Select a small group of managers (The Thirsty for Change) and have the idea debated among them • Involve a larger group of managers to further refine the vision and the strategy • More directive at the beginning (Vienna meeting), but more participative at a later stage (Westchester meeting) • Establish WCS: structurally prepare for the implementation of the vision Charlotte Beers at O&M

9. Communication of the vision • Why were there resistance? • Misunderstanding or lack of trust: e.g., some local creative people believe that the new vision is to impose constraints on them • Parochial self-interest: the fight over billings and fees between local offices and WCS • Different assessment: not everyone if the firm has the same degree of urgency • Low tolerance for change: e.g., some people view doing a brand audit on existing business as an indictment of what they have been doing Charlotte Beers at O&M

10. Communication of the vision • How to overcome resistance? • Education and communications • Participation • Negotiation • Explicit and implicit coercion • Structurally align the organization with the new mission (e.g., create WCS) Charlotte Beers at O&M

11. 2. Creating the Guiding Coalition • Putting together a group with enough power to lead the change • Getting the group to work together like a team • Establishing a Greater Sense of Urgency • Getting people to examine seriously the competitive realities • Identifying crises, potential crises or major opportunities • 3. Establishing a Transformational Vision and Strategy • Creating a vision to help direct the change effort • Developing strategies for achieving that vision • 4. Communicating the Change Vision • Using every vehicle possible to constantly communicate the vision and strategies • Role modeling needed behavior by the guiding coalition Process of Renewing and Transforming Organizations (Kotter Leading Change 1995) Charlotte Beers at O&M

12. 6. Creating Short-Term Wins • Planning for some visible performance improvements • Visibly recognizing and rewarding people who made the wins possible • 5. Empowering Others to Act • Getting rid of blockers • Change systems or structures that seriously undermine the change vision • Encouraging risk taking and nontraditional ideas, activities, and actions • 7. Consolidating Gains and Producing Even More Change • Using increased credibility to change all systems, structures and policies that don’t fit together or don’t fit the transformation vision • Hiring, promoting and developing people who can implement the change vision • Reinvigorating the process with new projects, themes, and change agents • 8. Institutionalizing New Approaches into the Org. Culture • Creating better performance through customer and productivity oriented behavior, more and better leadership, and more effective management • Articulating the connections between new behavior and firm success • Developing means to ensure leadership development and succession Process of Renewing and Transforming Organizations (Kotter Leading Change 1995) Charlotte Beers at O&M