Charlotte Beers

1 Executive Summary

O&M is implementing an organizational transformation initiative through the Brand Stewardship strategy. The problem facing O&M is that the implementation of this organizational transformation initiative has not been successful. The root cause of the problem facing O&M is a flawed change management approach. In order to successfully implement the organizational transformation initiative, O&M should first define the future state in terms of the different organizational components so that there is a fit between all the components for achieving the strategic intent. O&M should subsequently define and execute a transition plan that overcomes all the four hurdles of Political Hurdle, Cognitive Hurdle, Resource Hurdle and Motivational Hurdle.

2 Problem Statement

O&M as an organization desires to effectively deliver and manage global, integrated communications campaigns for its clients across multiple markets around the world. To achieve this desired output as an organization, O&M is implementing an organizational transformation initiative through the Brand Stewardship strategy. The problem facing O&M is that the implementation of this organizational transformation initiative has not been successful.

The problem has manifested itself in different symptoms that are outlined in Appendix 1.

3 Strategy

In response to the external environment pressures of globalization and cost-driven shift from mass media to direct marketing, O&M has decided on implementing the Brand Stewardship strategy. The strategy, by itself, is brilliant and very relevant for O&M Ð'- it addresses all the five strategic elements of Customer Selection, Value Proposition, Value Capture, Strategic Control and Scope. (Please refer Appendix 2 for details of the analysis.)

O&M's strategic intent encompasses the following set of interlinked goals:

Ð'* Implement the Brand Stewardship initiative.

Ð'* Fulfill the client's need for brand building across global markets.

Ð'* Fulfill the client's need for integrated communications across global markets.

4 Congruence Analysis for Organizational Components

(Please refer Appendix 3 for a diagram of the Congruence Model including the Organizational Components.)

The congruence analysis shows us that there is a lack of fit between the different organizational components to achieve the strategic intent and desired output Ð'- the sections below outline the factors contributing towards the lack of fit.

4.1 People and Formal Organization

Ð'* The local offices around the world value creative pride and autonomy. However, the current Worldwide Client Services process diminishes the existing creative strengths of the local offices.

Ð'* The presidents of local offices, countries and regional chairmen have always enjoyed the greatest prestige and biggest bonuses, but now the Brand Stewardship initiative is moving power, prestige and control away from their hands into the hands of those managing large multi-national accounts.

4.2 People and Work

Ð'* Employees across the organization do not have the appropriate information and training on how to use the concept of Brand Stewardship in the day-to-day work they do for clients.

4.3 People and Informal Organization

Ð'* The organizational culture pervading O&M is acknowledged as one that rejects outsiders. Ms. Beers is a tremendously inspirational leader Ð'- however, her inspirational leadership tends to be effective only in person. For employees who have not met her or listened to her in person, they would be more inclined towards rejecting the Brand Stewardship initiative as an initiative imposed by an outsider.

Ð'* The lack of fit between Ms. Beers' confrontational style and the organizational culture of "conflict avoidance" at O&M has contributed to the result that the belief in the Brand Stewardship strategy has not extended to most of the employees across the organization. (Please refer Appendix 4 for details of the analysis.)

4.4 Work and Formal Organization

Ð'* Clients' needs for streamlining and integration of services require O&M to shift from a "light center and strong regions" to a "strong center and strong regions". The change needed from O&M is to centralize and integrate while building on the local offices' existing creative strengths. However, the current Worldwide Client Services process supports a "strong center and light regions" Ð'- it diminishes the existing creative strengths of the local offices.

Ð'* The successful implementation of the organizational transformation initiative hinges on the support of all the politically powerful stakeholders in the organization. The "thirsty for change" group assembled by Ms. Beers did not include two powerful stakeholders who wield significant power and influence over large sections of the O&M organization worldwide because of their position in the organization structure:

i. Mr. Jerome Pickholz, Chairman & CEO of O&M Direct, and

ii. Mr. Flavio Correa, President of Latin America.

Their lack of participation in the decision making, consensus building, and implementation stages has hindered the achievement of acceptance by the majority of employees.

Ð'* There is a lack of integration between the advertising and direct marketing disciplines at O&M (Please refer Appendix 5 for details of the analysis). As a result, the full impact of the Brand Stewardship strategy, which involves integrated advertising and direct marketing communications campaigns, has not come to fruition.

Ð'* The move to a brand-focused organization requires O&M to compensate appropriately the leaders of large multinational accounts and also compensate appropriately the local offices for the work and effort related to global brand campaigns. The absence of this compensation structure has resulted in dissatisfaction among employees and conflicts within the organization, and has led to an operating environment without the proper incentives for the success of the Brand Stewardship initiative.

4.5 Work