Balanced Scorecard Meets Lovem arks W ho W e Are Clients such as: - - PowerPoint PPT Presentation

Balanced Scorecard Meets Lovem arks

W ho W e Are…

Clients such as: and many others. We are positioned not as an advertising agency but an ideas com pany.

7 0 0 0 employees

• f the world's leading

creative organizations

1 $ 7 billion (USD) in annual billings 1 3 8 offices in 8 4 countries

Hello

An advertising agency, no! An ideas company that is always best in category, yes!

These goals w ould 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 I nspirational Dream

To be revered as the hothouse for world-changing ideas that create sustainable growth for our clients.

W e Capture the I dentity of an I deas Com pany in 3 Statem ents 3 1 2

Our Focus

To fill the world with Lovem arks, which are super developed brands that inspire loyalty beyond reason. The relationship Lovem arks have is built on emotion first and function second.

Our Spirit

Nothing 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 I deas Are Focused On Creating Transform ation For Our Clients To Help Build:

Reel

But it W asn’t Alw ays this Good

Before W e Becam e the I deas Com pany and the Agency Lovem arks W e Had Som e Dark Days…

1 9 8 0 's -

• verextension

through acquisition 1 9 9 0 's -first half

• f the decade

brought severe financial pressures brought on by a recession 1 9 9 5 –debt was

• ut of hand and

the company was running on fumes… Enter Bob Seelert, a new CEO, to start plotting the course

1 9 9 7 w as a W atershed Year for Problem s 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 1 9 9 7

The New Managem ent Team in 1 9 9 7 Had I ts W ork Cut Out for Them ...

Bob Seelert, Chairman Kevin Roberts, WW CEO Bill Cochrane, WW CFO

W e Need to Act Quickly W ith Goals that W ould Act as a Prom ise to the Markets…

1 We would grow

• ur revenue

base BETTER than market rate

3 We would

double

• ur EPS

2 We would

convert 30% of that incremental revenue to

• perating

PROFIT

Great W ork W as 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 advertising with best in category creative … before moving to this next level. Ideas Company that transforms our clients’ businesses, brands and reputations.

I m plem enting the Vision is a Tw o Step Process

1 2

W e Needed a Managem ent Tool that w ould Help us Get Things Done

A Managem ent Tool that W ould…

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 EPS Reduce Costs Build S&S Brand Equity One Team, One Dream:

Financial Product & Process Client

Grow Revenues Create PICS Permanently Infatuated Clients

Work Smarter Across 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 I ntroduction of the BSC in EMEA

We reintroduced the Balanced Scorecard across the EMEA markets to achieve regional success

W inning w ith the Balanced Scorecard

Chief Executive Officer

Saatchi & Saatchi Germ any in 2 0 0 7

• 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 Dynam ics

• The consumer is boss
• New technology abounds
• Clients need answers
• Our value is under threat

Launch of Reinvention @ Saatchi & Saatchi Germ any

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 & Saatchi Frankfurt 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.+ 8.11.07 Reinvention Accelerator 9.11 .0 7 Reinvention Announcement with Plan 15.1 1 .07

• 1. Audit

7.12 .0 7 Quali Session and Results to MM team 13.1 2 .07 Presentation

• f qual+ quant

results to agency 14.0 2 .08 Valentine‘s Day Presentation New Structure 08.0 2 .08 Update Agency First Draft Structure Feedback Session 07.0 1 .08 Update Agency Priorities of Purpose Focus Areas Mgt Principles Quick wins 17.1 2 .07 Nomination and Kick of Change agents 04.0 3 .08 Follow up Session Structure Details 17.0 4 .08 30 days later Feedback Session 16.0 5 .08 Lovemarks Academy for Creatives and Planners 9.-20.0 6 .08 Evaluation with 2nd wave of reinvention 17.0 3 .08 Moving Plan Execution – everyone changes

• ffice and floor

15.0 1 .08 Focus of Change agents: Physical environment, etc.

Reinvention Schedule

04.0 7 .08 Results Presentation to MM Team 22.0 7 .08 Results to agency 24.0 7 .08 Lovemarks Academy

I t’s all About the Purpose

Fill the world with Lovem arks

Leading Products and Services Culture Leadership Development Application Economic Social

Client Experience Em ployee Experience

Clients and Em ployees Needed to Experience the New Approach

I nternal Launch First

I ntroduction of a New W orking W ay: 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 Attraction Lovem arks Organizing I dea OI I C

Account Management Multi-Media-Traffic Team Assistance I dea Production Strategic Planning Creative Interactive Production TV Production Print Production Art Buying IT I dea Managem ent I dea Creation

I nnovation Team

Connectors Grid RASCI Discovery Xploring Tribes Lovem arks Organising I dea I dea Visualisation I dea Execution

I dea Support Human Resources Finance Public Relations New Business Acquisation Brand Team I

• O. Rosenthal + E. Kirchhoff + Th. Kanofsky

Clients: Em irates, Schott Solar, Ariel,BAM+ BAD, h&s, OoO, NB, Scout 2 4 , Praktiaker, Horex

Sony Ericsson, Visa, neckerm ann.de, Gauselm ann, dm , Cam pari, NB Brand Team I I

• W. Schlutter,

A.Petri+ M. Henkel Clients: T-Mobile, Volvo, Novartis W orld of W arcraft, Bel Messe Frankfurt, NB

Brand Team I I I

• D. Hook + D. Neugebauer

Clients: Pam pers, Kandoo, NB

I DEAS 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 Creative Services

Events TV Departm ent Art-Buying Online Production I llustration Print Production Traffic Adcost Adm in Head of Art Buying

Art Buyer Art Buyer Art Buyer

Head

• f

Print Prod.

Print Producer Print Producer Print Producer

Head

• f

Traffic

Traffic Traffic

I nteractive

Online Producer Online Producer

Launch of Germ an Edition of the Lovem arks - Effect Book

A New Credential to I ntroduce S&S Germ any

The Foundation W as Set

W e Celebrated Short Term Success

Need for a Managem ent Tool to Guide the Strategy

The Fram ew ork

1. The Balanced Scorecard as our agency management tool and crosses all areas

• f 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

• ur existing clients by providing value and greater efficiencies.

The EMEA Scorecard is Made Up of Four Equally W eighted 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 CEO A: Regional CEO S: Agency Management Team C: EMEA Team I: Your people

Section 1 : The Path to Love

Path to Love TARGET TRACKI NG W GT SCORE I deas; Xploring Number of Lovemarks Organizing I deas Number of Xploring projects won and charged for Growth stories generated (cases with measurable business results) Aw ards Number of I nternational Gold / Silver Number of Regional Gold / Silver Local Gold / Silver Effie Gold / Silver SUBTOTAL and W eight

R: MDs/ CSDs; Planning Director; Creative Directors

Section 2 : Operational

Operational TARGET TRACKI NG W GT 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 REGI ONAL
• No. of pitches / no of pitches won LOCAL

W orking across the netw ork Number of days given to the network Number of days taken from the network SUBTOTAL and W eight

R: MDs/ CSDs; New Business Directors; FD/ HI

Section 3 : Hum an I nterest

Hum an I nterests TARGET TRACKI NG W GT 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% Em ployee Engagem ent Net promoter score (internal perspective)

• 5
• 5

5.00% SUBTOTAL and W eight 2 5 .0 %

R: HI Directors / Finance Directors

Section 4 : Finance

Finance TARGET TRACKI NG W GT SCORE Margin Growth (margin to achieve) 10.0% 10.0% 12.50% Revenue Growth 6% 6% 5.00% Conversion 30% 30% 2.50% TW CAP Reduction in + 90day overdues 15% 15% 2.50% TWCAP reduction 10 10 2.50% SUBTOTAL and W eight 2 5 .0 %

R: Finance Directors

I m plem entation of Balanced Scorecard

Balanced Scorecard Objectives HTP PPDs

Bottom up Top Down

Management Brand Team Leaders Staff

Tim eline

Sept. Oct. Nov. Jan. HTP Scorecard PPDs Committment Sept. Oct. January June May April Quarterly Review HTP HTP Quarterly Review Quarterly Review Dec. March Scorecard Tracking Scorecard Tracking

QuarterlyReview s to Track and Monitor I m provem ents

Toyota

So W here Are W e?

Financial Developm ent of S&S Germ any

Financial Developm ent of S&S Germ any

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 %

I ndividual 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 PAST

Em ployer W ork & Services

• 5 0
• 4 2

NPS NOW

• 1 4

+ 1 1

Com pany Purpose

Have 8 .1 Live 6 .4 Gap 1.7

Attractiveness Values

GAP W ant Get

TOTAL GERMANY

Em ployer W ork & Services Culture Leadership Application Developm ent Econom ic 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 W ord!

Q&A