Introduction
The Saatchi & Saatchi Company is an internationally known advertising agency with more than eighty branches across the globe. It was founded by two brothers, Charles and Lord Maurice Saatchi in London, UK. It started to operate in the early 1970s. With the passage of time, it emerged to be one of the world’s leading creative organizations. The company grew through mergers and acquisitions. The company was also characterized by creative excellence. The company was instrumental in keeping the Conservative Party in power in 1980s. This made the company become a legend in the UK (Fendley & Fendley, 1996).
However, in the mid 1990s, the company that was associated with billion dollars almost came to a halt, when bankruptcy became inevitable. This happened because of the local recession that made Saatchi and Saatchi lose much of its capital. This was also due to poor management of the company’s acquisitions. The departure of the two brothers, Charles and Maurice Saatchi, affected leadership and direction of the organization. The company found itself in a critical condition, and the only remedy was to improve the set goals and the company’s efficiency. The top officials were changed, and in 1995, Bob Seelert was appointed the chairman to replace the two brothers. Bob appointed Kevin Roberts to be the Chief Executive Officer. Saatchi and Saatchi desired a future that depended on laying supportive and aggressive financial goals. The two top officials came up with an approach with two perspectives: financial perspective and customer perspective (Greenhalgh, 2004).
The fiscal perspective focused on the quantifiable and three achievable goals for the company, a new vision for the company. The first goal was to raise the revenue at a faster rate than how the market did. The second one was to convert thirty percent of the raised revenue into operating profit. On the other hand, the last goal was to double the earnings per share (MyStrategicPlan, n.d.).
Analysis
With the new vision and financial goals set, the next step for the two top officials was to make the strategy real or practical. This led to the restructuring of the internal structure by introducing changes. The top management started to re-examine their investment strategies on business units. They started by creating agency categories, each with a different strategic charge. These agencies included drive, lead, and prosper. The prosper agency had less than 50 workers. It was given limits regarding its growth. However, it was charged with having very high margins (Averson, 1998).
The drive agency had 50 and 150 workers. The senior team gave the drive agency the goal of maintaining or slowly growing their revenue base and margins. The UK, New York, China and other large agencies were given lead status. This is the unit where fast growth and the allocation of considerable resources was expected. The financial success of Saatchi and Saatchi can be attributed to the company’s attentiveness to the agency’s core client base. Therefore, the management paid considerable focus to the lead agency (Niven, n.d.).
Saatch & Saatchi Company also embraced various strategies associated with the customer perspective. Seelert, Roberts and their senior team set a customer-facing organizational structure and strategy. With the help of customer perspective, the financial perspective goals were achieved. Saatchi succeeded by paying close attention and creating a good relationship with the core client bases. The senior team came up with a phrase “permanently infatuated clients” (PICs). The company wanted to make a strong impression on Wall Street and win customers. The analysis of the top management indicated that about 20-30 percent of the company’s customers were responsible for the 70-80 percent of the company’s revenue (Greenhalgh, 2004).
Communication was also an instrumental tool of customer perspective. In this case, all the business units of Saatchi received a message. The message read that one of the company’s ways of becoming a global organization was through putting considerable attention towards the clients that earned large revenue. The Saatchi employees, in their business units, were entrusted with generating BFS (big fabulous ideas) to win the favor of its clients. The (BSC) business scorecard played a number of roles in helping the company of Saatchi and Saatchi achieve success. This helped the company emerge from 1997 crisis and march towards attaining its goals. It helped the company accomplish the Wall Street objectives six months before the deadline. In addition, it helped Saatchi implement its strategies (Greenhalgh, 2004).
Conclusion
The financial strategies made sense for each given unit. With the help of the Business Scorecard, the company was able to make a financial checkup. The company was able to identify the business units were earning profits and which were not. It was also going to be easy to identify the units that will have the potential to make profits in the future and the ones that could not. With this knowledge, the Saatchi and Saatchi company was able to make a wise decision on choosing a business partner. The acquisition of by the Publicis Groupe SA did not affect the results of the Business Scorecard (BSc). It is because of the BSc that Saatchi & Saatchi Company pulled itself out of bankruptcy. The Publicis Groupe SA was very aware that the business scorecard was a proven tool that could correctly restructure a collapsing company. By paying 2.5 billion for the company, Publicis Groupe SA was fully convinced that the company (Saatchi and Saatchi) will have to succeed in the future. The positive results showed that the overall cost of Saatchi & Saatchi Company could be paid by its increased revenue year after year (Greenhalgh, 2004).
Evaluation
The two perspectives, financial and customer, worked in line with each other in reviving the Saatchi and Saatchi Company. There are very many scenarios in the story of this company where cases of the two perspectives work together. There was a lot of interdependence, and it is in rare cases where one perspective work on its own. The steps that the senior management took in planning for the whole strategy worked effectively (Sharma, n.d.). The new financial goals of the company helped in guiding its clients within the three units. For the financial goals to be attained, planning and implementing of the clients’ objectives should be looked at first. In creating the PICs, BFIs were created by the workers. They were also implemented as per the plans of the customers (Fendley & Fendley, 1996).
Mostly, the two perspectives work hand in hand, and in cases where a company employs one perspective, it can put itself in the un-resolvable situation. In addition, there is an issue regarding the perspective to be employed first. A competent management strategy is the only remedy in this case. For instance, a firm that chooses to employ the customer perspective first may get itself in trouble while budgeting for cash in order to satisfy a customer.
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