64
Balanced Scorecard Meets Lovemarks
Balanced Scorecard Meets Lovemarks
Who We Are…Clients such as:
and many others.We are positioned not as an advertising agency but an ideas company.
7000employees
of the world's leading creative organizations1
$7billion (USD) in annual billings
138offices in
84countries
Hello
An advertising agency, no! An ideas company that is always best in category, yes!
These goals would support the new Vision
"To be revered as the hothouse for world-changing creative ideas that transform our clients' businesses, brands and reputations.”
And with the help of the Balanced Scorecard (BSC) we would achieve it...
Our Inspirational DreamTo be revered as the hothouse for
world-changing ideas that create sustainablegrowth for our clients.
We Capture the Identity of an Ideas Company in 3 Statements
3
1
2
Our FocusTo fill the world with Lovemarks, which are super developed brands that inspire loyalty beyond reason. The relationship Lovemarks have is built on emotion first and function second.
Our SpiritNothing is Impossible,
One Team, One Dream
1. The business
2. The brand and
3. Their reputation
...And we give our employees the inspiration and the tools to make a difference...
Our Ideas Are Focused On Creating Transformation For Our Clients To Help Build:
Reel
But it Wasn’t Always this Good
Before We Became the Ideas Company and the Agency Lovemarks We Had Some Dark Days…
1980's -overextension
through acquisition
1990's -first half of the decade
brought severe financial pressures
brought on by a recession
1995 –debt was out of hand and the company was running on fumes…Enter Bob Seelert, a new CEO, to start plotting the course
1997 was a Watershed Year for Problems and Opportunity
The demerger from Cordiant Communications permitted Bates and S&S to go their separate ways
A burning need for organizational restructure & cost reduction is the opportunity;
Saatchi & Saatchi stock relists on the London and New York Stock Exchanges for 1£ per share
1997
The New Management Team in 1997 Had Its Work Cut Out for Them...
Bob Seelert, Chairman Kevin Roberts, WW CEO Bill Cochrane, WW CFO
We Need to Act Quickly With Goals that WouldAct as a Promise to the Markets…
1 We would grow our revenue base BETTER than market rate 3 We would
double our EPS
2 We would convert 30% of that incremental revenue to operating PROFIT
Great Work Was Getting Done BUT
45 globally dispersed offices presented logistical challenges
Each unit was working its own agenda
There was no commonality of purpose, cohesion or identity
Each office must do this brilliantly...
Traditional advertisingwith best in category creative
… before moving to this next level.
Ideas Company that transforms our clients’ businesses, brandsand reputations.
Implementing the Vision is a Two Step Process
1
2
We Needed a Management Tool that would Help us Get Things Done
A Management Tool that Would…
Monitor
Track
Provide feedback
Help us improve
And would address:
- The Client- Financials- Product and Process- People and Culture
Achieving our Vision – the Map
Double EPSReduce Costs
Build S&S BrandEquity
One Team, One Dream:
Financial
Product & Process
Client
GrowRevenues
Create PICS Permanently Infatuated Clients
Work SmarterAcross the Network
Excel at Account Management & Create Great Ads
Focus Business Development (New clients & assignments)
Identify and Implement Appropriate Communication Services
Win Global Fame for Our Idea Leadership
Financial Discipline(Eliminate Inefficiencies)
create a rewarding, stimulating environment where
nothing is impossible
People& Culture
The Results
• Acquisition by Publicis Groupe
• A price per share 5X the opening
• Converting 30% of our incremental revenue to operating profit
• Meeting our 3 objectives and exceeding them in under 3 years!
The Introduction of the BSC in EMEAWe reintroduced the Balanced Scorecard across the EMEA markets to achieve regional success
Winning with the Balanced Scorecard
Chief Executive Officer
Saatchi & Saatchi Germany in 2007
• Perceived as a traditional ad agency
• Business decline after loss of biggest client
• Our brand without clear identity and lack of appeal
• Yes, but – culture
• No new business
• Talents not being attracted
External Dynamics
• The consumer is boss
• New technology abounds
• Clients need answers
• Our value is under threat
Launch of Reinvention @ Saatchi & Saatchi Germany
1. Ideas Company Lovemarks Company
2. Classic Advertising Integrated Content Solution
3. Functional Structure Integrated Brand Teams
4. Service departments sisomoProductions
5. One location Several locations
6. Financial goals Balanced Scorecard
7. Full Service Eco system
8. Recruitment Human Resources
9. Greatness on special projects Greatness on client business
Our Vision
Saatchi & SaatchiFrankfurt
Saatchi & Saatchi Düsseldorf
Saatchi & Saatchi Berlin
All three locations lead to a consolidated
margin of 16% in 2012 and bring the new
purpose to life.
7.+8.11.07ReinventionAccelerator
9.11.07Reinvention
Announcementwith Plan
15.11.071. Audit
7.12.07Quali Session
and Results to MM team
13.12.07Presentation
of qual+quant results to agency
14.02.08Valentine‘s Day
PresentationNew Structure
08.02.08Update Agency
First Draft StructureFeedback Session
07.01.08Update Agency
Priorities of PurposeFocus Areas
Mgt PrinciplesQuick wins
17.12.07Nomination and Kick of
Change agents
04.03.08Follow upSession
Structure Details
17.04.0830 days later
Feedback Session
16.05.08Lovemarks Academyfor Creatives and Planners
9.-20.06.08Evaluation with 2nd wave of reinvention
17.03.08Moving Plan Execution – everyone changes
office and floor
15.01.08Focus of Change agents: Physical
environment, etc.
Reinvention Schedule
04.07.08Results Presentationto MM Team
22.07.08Results to agency
24.07.08Lovemarks Academy
It’s all About the Purpose
Fill the world with Lovemarks
Leading Productsand Services
CultureLeadership
DevelopmentApplication Economic
Social
Client Experience
Employee Experience
Clients and Employees Needed to Experience the New Approach
Internal Launch First
Introduction of a New Working Way: The Path to Love
The core principles of Lovemarks development are captured in The Path to Love, a framework that equips the Saatchi & Saatchi network with a shared process and with best practices from around the world.
The Path to Love is comprised of five core steps:
Discovery
Xploring
AttractionLovemarks Organizing
IdeaOIIC
Account ManagementMulti-Media-TrafficTeam Assistance
Idea Production
Strategic PlanningCreative
Interactive ProductionTV ProductionPrint ProductionArt BuyingIT
Idea Management
Idea Creation
Innovation Team
Connectors GridRASCIDiscovery
XploringTribesLovemarks Organising Idea
Idea VisualisationIdea ExecutionIdea Support
Human ResourcesFinancePublic RelationsNew Business Acquisation
Brand Team IO. Rosenthal + E. Kirchhoff + Th. Kanofsky
Clients: Emirates, Schott Solar,
Ariel,BAM+BAD, h&s, OoO, NB, Scout 24, Praktiaker, Horex
Sony Ericsson, Visa, neckermann.de,
Gauselmann,dm, Campari, NB
Brand Team IIW. Schlutter,
A.Petri+M. Henkel
Clients:T-Mobile, Volvo, Novartis
World of Warcraft, BelMesse Frankfurt, NB
Brand Team IIID. Hook + D. Neugebauer
Clients:Pampers, Kandoo,
NB
IDEAS
LOVEMARKS.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
A New Structure to Mirror the New Stragegy
Consolidation of all Production Services
TV Producer
TV Producer
TV Producer
Head of TV
Head of CreativeServices
Events
TV Department
Art-Buying
Online Production Illustration
Print Production
Traffic
Adcost Admin
Head of Art
Buying
Art Buyer
Art Buyer
Art Buyer
Head of
Print Prod.
Print Producer
PrintProducer
PrintProducer
Head of
Traffic
Traffic
Traffic
Interactive
OnlineProducer
OnlineProducer
Launch of German Edition of the Lovemarks - Effect Book
A New Credential to Introduce S&S Germany
We Celebrated Short Term Success
Need for a Management Tool to Guide the Strategy
The Framework
1. The Balanced Scorecard as our agency management tool and crosses all areas of the agency operations.
2. It can be applied by individual units to drive strategy and measure business results to advise peak performance.
3. It is actionable and driver focussed there by allowing each unit to customise it to reflect unique business situations.
4. While we focus on growth and winning new business our priority is to maintain our existing clients by providing value and greater efficiencies.
The EMEA Scorecard is Made Up of Four Equally Weighted Categories
• Path to Love (our work, awards)• Operational (client relationships, growth, scope of
service, working across the region)• Human Interest (headcount and talent)• Finance
The RASCI for the Balanced Scorecard:
R: Agency CEOA: Regional CEOS: Agency Management TeamC: EMEA TeamI: Your people
Section 1: The Path to Love
Path to Love TARGET TRACKING WGT SCORE
Ideas; Xploring
Number of Lovemarks Organizing Ideas
Number of Xploring projects won and charged for
Growth stories generated (cases with measurable business results)
Awards
Number of International Gold / Silver
Number of Regional Gold / Silver
Local Gold / Silver
Effie Gold / Silver
SUBTOTAL and Weight
R: MDs/CSDs; Planning Director; Creative Directors
Section 2: OperationalOperational TARGET TRACKING WGT SCORE
Value proposition
Scope of services / growth grid
% revenue growth from top 5 clients
Client relationship
Client Evaluation score (off evaluation forms)
Client Evaluation score - P&G
Cllient Evaluation score - ((other regional tbd))
New Business
No. of pitches / no of pitches won GLOBAL
No. of pitches / no of pitches won REGIONAL
No. of pitches / no of pitches won LOCAL
Working across the network
Number of days given to the network
Number of days taken from the network
SUBTOTAL and Weight
R: MDs/CSDs; NewBusiness Directors; FD/HI
Section 3: Human Interest
Human Interests TARGET TRACKING WGT SCORE
Headcount
Staff cost ratio 55.0% 55.0% 7.50%
Talent
Training spend per employee (as % of budget) 100% 100% 3.75%
% of completed PPDs (appraisals) 100% 100% 3.75%
Retaining talent (minimal regreted turnover) 15% 15% 5.00%
Employee Engagement
Net promoter score (internal perspective) -5 -5 5.00%
SUBTOTAL and Weight 25.0%
R: HI Directors / Finance Directors
Section 4: Finance
Finance TARGET TRACKING WGT SCORE
Margin
Growth (margin to achieve) 10.0% 10.0% 12.50%
Revenue
Growth 6% 6% 5.00%
Conversion 30% 30% 2.50%
TWCAP
Reduction in +90day overdues 15% 15% 2.50%
TWCAP reduction 10 10 2.50%
SUBTOTAL and Weight 25.0%
R: Finance Directors
Implementation of Balanced Scorecard
BalancedScorecardObjectives
HTP
PPDs
Bottom up
Top Down
Management
Brand Team
Leaders
Staff
Timeline
Sept. Oct. Nov. Jan.
HTPScorecardPPDs Committment
Sept. Oct. JanuaryJuneMayApril
Quarterly Review HTPHTP Quarterly
ReviewQuarterly Review
Dec. March
Scorecard Tracking
Scorecard Tracking
Qu
arte
rlyR
evie
ws
to T
rack
an
d
Mon
itor
Im
pro
vem
ents
Toyota
So Where Are We?
Financial Development of S&S Germany
Financial Development of S&S Germany
Strong Client Relationships
Country Score
Egypt +50 %
Germany +39 %
Hungary +33 %
Sweden +27 %
France +18 %
Italy +13 %
Denmark 0 %
Spain 0 %
Holland -17 %
Belgium -25 %
Poland -29 %
Individual Client Scores
Source: Absatzwirtschaft/Handelsblatt 12/09 (475 Top clients)
Creativity
Strategic Brand Leadership
Source: Absatzwirtschaft/Handelsblatt 12/09 (475 Top clients)
Digital
1.7 1.4 2.3 2.5 3.5 3.8 2.6
8.6 8.6 9.1 9.3 9.1 8.9 9.5
6.9 7.2 6.8 6.8 5.6 5.1 6.9
NPS PASTEmployer
Work & Services
-50
-42
NPS NOW-14
+11
Company PurposeHave 8.1 Live 6.4 Gap 1.7
Attractiveness Values
GAP
Want
Get
TOTAL GERMANY Employer
Work & Services
Culture Leadership Application Development Economic Social
Leading Product / Service
Key Success Factors
• Create a sense of urgency
• Create and communicate a purpose to access all touchpoints
• Define team and empower responsibilities
• Celebrate short term success
• Track and monitor improvements
• Ingrain new approach into culture
Spread the Word!
Q&A
