Charlotte Beers became Ogilvy & Mather's first outsider CEO after its acquisition by WPP Group Plc in 1991. According to her memo dated May 19th, Beers' objective was to "re-invent" the mega-agency, whose inertia and complacency had eroded its competitiveness since the 1980s. In fact, Beer's tenure at Ogilvy constituted a re-creation of the agency, redefining its aims, processes, people, and structure in reaction to the demands placed by the changing advertising industry. ANALYSIS
The main issue that confronted Beers was initiating and instituting organizational change at the core level. She assumed the leadership of Ogilvy at a time when the organization was internally bleeding. Charismatic founder David Ogilvy's resignation as CEO in 1975 had created a leadership vacuum which none of the succeeding leaders had been able to fill. In addition, the economic boom of the 80s had created a false sense of security that rendered the firm stagnant, unable to either anticipate or react to the changes taking place in the advertising industry. Most significantly, the absence of a strong leader caused the organization to devolve from "One Agency Indivisible" into individually ruled "fiefdoms." The firm's deficiencies came to the fore in 1989-91 when it lost more than $100M of advertising accounts from major firms that had grown tired of the highly politicized organizational environment at Ogilvy. NEED FOR CHANGE
Since Ogilvy's vision at the time was constrained to "just keep doing the same thing, better," the firm's re-creation was necessitated by external factors & events. For example, the central office had been unwilling to rein in its autonomous local offices' spending after the 1987 stock market crash even as it spent significantly towards centralization, resulting in high costs that precluded the firm from competing in a low-cost industry. Furthermore, Ogilvy's chronic failure to institute systems for managing collaboration across regions...
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