Charlotte q Beers Problems facing the leader The leaders traits, knowledge and skills How the leader changed the organization Explain the leaders success or failure Ways to increase the leaders effectiveness Key learning principles q Charlotte Beers The case examines Charlotte Beers actions on assuming leadership of Ogilvy & Mather Worlwide, the sixth largest advertising agency in the world, during a period of rapid industry change and organizational crisis. q Charlotte Beers Case Objectives The case examines leadership and managing organizational change. Specifically it focuses on: q Charlotte Beers Problems facing the leader Ogilvy & Mather is in a leadership vacuum, desperate for someone to provide a new vision for the futuure the complex process of formulating a vision or new direction the need for communication to align employees to the new direction the need to align structures and systems to the new direction Situation confronting the leader Industry challenges q shift in expenditure away from mass media to targeted marketing channels q declining media expenditures q many firms inefficient in their internal operations Charlotte Beers q globalization fosters growth opportunities for those agencies which have developed international presence q as clients expand internationally, they expect great coordination across regions Personal challenges q fourth executive in 4 years q first outsider q first woman q no experience with international or multiple offices q needs to build credibility quickly as key Charlotte Beers Challenges at Ogilvy and Mather q success bred a strong arrogant culture q managers internally focussed q stifling initiative and innovation q slow to adapt to changing environment q in a leadership vacuum, unfilled since founder David Ogilvys retirement in 1975 q Kotter distinguishes between leadership, which creates new direction and change, and management, which produces order and efficiency q Ogilvy and Mather is lacking in both q Charlotte Beers Charlotte Beers traits, knowledge, and skills q research analyst for Mars Company q account executive for J. Walter Thompson 1969 q rose to senior VP of Client Services q COO of Tatham-Laird & Kudner 1979 q CEO 1982 and Chair of the Board 1986 q first woman Chairman of American Association of Advertising Agencies 1987 q once evaluated as fearless by a superior q proud, persuasive and forward looking q Charlotte Beers q five steps characterize successful turnarounds, John Gabarro, the Dynamics of Change q Charlotte Beers q Charlotte Beers 1993 strategy (Chewton Glen) addresses immediate concerns of winning back lost clients, producing higher quality work, and control tighter of financial resources major client wins from Jaguar and American Express were important, early and visible successes Beers spends her first 6 months talking with dozens of clients diagnosis of flagging confidence, lack of direction, removed from clients creates sense of urgency by communicating client feedback directly and bluntly; speaks incessantly of change; fires executive who resists her efforts articulates both a vision and strategy early move quickly to diagnose problems take initial corrective actions that deal with obvious problems, even before diagnosis or strategy is complete creating a sense of urgemcy which highlights problems and communicates urgency throughout the organization articulating a vision and shared purpose which mobilizes action create visible successes early in a turnaround q Development of the Brand Stewardship Vision: To be the agency most valued by those who value brands. Charlotte Beers q according Jon Kotter, effective visions have 3 characteristics: clear and specific enough to provide guidance, yet vague enough to remain relevant when conditions change q Charlotte Beers desirable in that it meets the needs of key stakeholders feasible in that a reasonable strategy exists for getting there considerable confusion existed internally over the meaning and implications of the vision the Brand Stewardship strategy resonates with clients case concludes as the implementation of the strategy is being shaped vision needs to be communicated and company strategies and practices made consistent with the vision Beers alternates between participative and directive leadership in guiding the development of the vision Charlotte Beers Vision Implementation q Communicating the vision once direction is established, the critical leadership challenge is sharing the vision and gaining alignment Beers and her team must make the vision real and motivating for employees by the end of 1993, conferences, handbooks, and training programs have been prepared Aligning structures and systems congruence is needed between strategy and the formal organization, including staffing, reporting relationships and compensation systems structure of reporting relationships between WCS and local offices is ambiguous Beers want to continue to cultivate the tension between local and centre flexible approach is not working: lack of financial controls and conflict over how to split fees and allocate costs subsequent events IBM account is won Worldwide Brand Director hired for the new IBM account executive compensation is linked more closely to performance and in support of WCS a COO is hired to focus on administration and operations