John Seifert, Worldwide Chairman & CEO, Ogilvy & Mather, talks of India as the fastest growing market in the network, his ‘Next Chapter’ strategy, target of a 50-50 gender balance in critical leadership ranks and journey from intern to CEO in his nearly 40 years with the company
BY SRABANA LAHIRI
In January 2017, four months after taking over as Worldwide Chairman & CEO at Ogilvy & Mather, John Seifert announced ‘Next Chapter’ - his transformation plan to consolidate all Ogilvy brands under one P&L and take the company back to being a single-branded, integrated enterprise. For someone who had grown from intern to CEO in the company, known it from close quarters and internalized the Ogilvy culture for nearly 40 years, it was a move signalling change demanded by the volatile world, while at the same time safeguarding the heritage value of the brand. Today, as Ogilvy’s ‘Next Chapter’ is in the process of being rolled out across markets – including India - Seifert is a happy man, confident about the outcome and the prospect of giving the best possible brand-building services to his clients. He gives India a prominent place in the entire exercise, and bets big on it as the network’s fastest growing market. “I draw great strength from the legacy of the Ogilvy India leadership, and I marvel at their ability to build brands in that market. I am also very excited about the next generation of leaders. We are going through the Next Chapter transformation in India right now and it will take us to a really great place,” he declares.
On the timeline for the transformation, he says, “India is in the same position as other top markets in the world; they need to be doing the things that will make us ready and running at full speed in 2018. So, 2017 I have called the messy year - we declared the changes, and are doing them as quickly as we can. We are organizing the business, putting our new leadership team in place. All of that takes time, but I am very confident that India is right on track to go full speed by the year-end.”
WHAT MAKES INDIA SO IMPORTANT FOR OGILVY
“India is probably one of the five most important markets in the world for Ogilvy for a number of reasons,” says Seifert. “It’s a market that has produced some of the best work in Ogilvy’s history consistently over time. David (Ogilvy) loved India. He loved Indian people and the rich diversity of Indian culture, and he spent a lot of time there. So, it’s always been important to me because I recognize the importance that India played in the network as a whole.” Seifert has spent eight years working in Asia, and for him, India has “always been a beacon within the Ogilvy network”. “India is the fastest growing market in the network right now. It’s dynamic, it’s changing rapidly. It’s not without its issues and challenges, but as one of the most populated countries in the world, it’s a country you cannot ignore. It will define our agenda for a long time to come. We need to pay special attention to India, and as long as I am around, it will be one of my biggest priorities,” he says.
Seifert admits that India is a challenging but complicated market. “We work with many of our top 50 clients and we have an extraordinary base of local clients in India. Our brand reputation in India is stronger than it is anywhere else in the world. We are famous in India which you don’t easily see in our business. We are moving quickly enough to build the capabilities, talent, tools, ways of working that are going to keep us as a leader in the market. But we are not growing as fast as we would like to, and principally because we are up against the issue of conflicts. We are struggling to figure out how to grow when we have so many client relationships, and conflict arising out of additional clients in that business. We are trying to figure out where the market is going to be, five or 10 years from now,” Seifert says.
THE PREMISE OF THE NEXT CHAPTER PLAN
“Clients are going through the most challenging period they have ever experienced in terms of business, whether it’s globalizing a business, or challenges from new companies,” says Seifert, asserting that Ogilvy would be at a disadvantage if it didn’t lead the way in figuring out how to work in new ways with clients. “People can now directly contact the owner of a home and stay there through something like Airbnb, or book transport through Uber which has disrupted mobility. Clients are feeling the pressure of all that innovation, because these companies can now scale up their offering globally faster than ever. On the other side, there is so much money on the sidelines for better returns that what we call ‘activist investors’ are challenging the legacy of a company’s cost structure - spending too much money on too many employees, not building efficient factories, or whatever. They are also saying that shareholders are not being served well, and putting pressure on companies to change. Together with slow economic growth, pressure is mounting because we serve clients in a very traditional way, disintegrated from other suppliers, or other business partners of a client who means us to work closer together,” he explains, adding that the world has changed radically with digital growth, social media, data on consumers, etc., and advertisers now need agencies to come together more than ever before.
So how have leaders within the company reacted to the plan? “In some cases, very enthusiastically, because they were frustrated themselves by being individually structured and we were making it harder for them to work with their colleagues, sometimes even just down the corridor. In other cases, they are a little apprehensive because we have had the current structure in place for 30 years. They know it. And they like the idea that if they graduate in the company, they become the President of ‘xyz’ business unit in ‘xyz’ country. So, it’s been a bit challenging for them to accept the fact that they are no longer running a separate entity, but are part of one enterprise,” Seifert says. He adds that too many senior people at Ogilvy were spending just 10% or 20% of their time on clients, which was not sustainable. “The only thing we own as assets in the firm are the talents of our people. We need to make our best people most accountable for serving clients.”
Right now, a small team is working on the new branding strategy which Seifert intends to share internally with all leaders globally in the late 3rd quarter or 4th quarter of the year. The focus is on redesigning the financial framework of the company as well as its business models.
In the US, where Next Chapter has been initially introduced, it has gone quite well. “We have gone through all the normal questions of what’s my role, how does it change, how do I shift my focus from managing a business to delivering the set of capabilities to clients, but we are right on pace with the timing that we had hoped for,” Seifert says. “It’s not easy work. It means a lot of financial re-engineering, changing some job descriptions, consolidating leadership in certain areas. But, the good news is that we probably have the most diverse leadership team in the history of the US business, so that’s really exciting.”
TARGET: A 50:50 GENDER BALANCE IN LEADERSHIP
We see very few women in the highest positions in the advertising agencies across the world. Seifert’s solution is to combat this with achieving gender parity at the critical leadership level within his organization. While Ogilvy did create mechanisms to be more gender balanced in terms of new people who came into the company, it was taking too long. “The average employee only stays somewhere around four to six years in the company. So, you lose too many people before you really attack the problem,” says Seifert. “Now, we are doing it bottom-up and top down. I have set an internal goal that in less than five years, the top three leadership ranks in the company will get to a minimum 50:50 gender balance.” In some places, the initiative is running ahead of schedule. While re-organizing the business in the USA, for example, Seifert deliberately zero-based the leadership team and re-evaluated each of the 24 leadership positions. “We tried to fill those positions with the agenda of not just gender parity but diversity, more broadly, be it ethnicity, skills, or whatever. And now we are 50:50 balanced. We did it in three months. We are going to go through the same process in every market that matters for us. In Asia, we are not at 50:50 in the top two levels right now, but if I showed you the pipeline of leadership, it’s more female than male. And they have plans to get to the 50:50 balance well ahead of our time and goal. If we see anywhere that we are not making fast enough progress on this, we will hold the leadership of the company accountable. If anybody in the company is not moving aggressively to meet those goals, we will even terminate them. I brought the top four leaders of the company together in Florida three months ago. We all signed a pact to say this is what we are going to accomplish,” he says.
DEEPER RELATIONSHIPS WITH FEWER CLIENTS
We ask Seifert where he sees Ogilvy in the year 2020. “Three years from now, we will have revolutionized the employee brand experience at Ogilvy, and gotten through all the changes and structure that we had been operating with for the last 30 years. I expect that employees are going to feel the dynamics of working together internally, that there is no brand marketing or communication problem that they aren’t well-equipped to solve. There will be a stronger sense of oneness, one community under the Ogilvy brand. I expect to be miles ahead in our ability to operate in the digital age with a workforce that is much more digital-centric than it is today. I expect that we will be gender-balanced at all the critical leadership levels. If you look at the total number of employees of the company today, we are already at 50:50 gender balance, but I mean the top three levels of all parts of leadership - management, account management and creative.” Seifert also expects to be working with fewer clients, because one of his concerns is that if an agency has a long tail of too many clients, it does not bring in enough recurring revenue, because those clients are coming and going in what he calls “too much of a transaction mode”. “I would like our client portfolio to be better balanced and better rationalized, so that we have deeper relationships with fewer clients,” he states.
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