When John Seifert took over as CEO of the advertising agency Ogilvy & Mather in 2016, the company was a struggling success story. It was a success because turbulence in the ad industry had not prevented the company from growing into a global giant. Ogilvy & Mather had a well-respected name, more than 15,000 employees working in 450 offices in 120 countries, and a host of big clients buying a wide variety of services—advertising, public relations, direct marketing, branding programs, and much more. The agency continues to be known for famous ad campaigns such as Dove’s “Campaign for Real Beauty” and American Express’s “Don’t Leave Home without It.” But much of its growth came from acquiring smaller agencies, and the result was a hodgepodge of independently operating entities whose work was poorly coordinated. 

Seifert was determined to simplify operations. The effort started with Ogilvy’s U.S. operations. Lou Aversano, the CEO of U.S. operations, set up a USA Capabilities team, headed by a chief strategy officer and including members in charge of particular functions, such as data analysis and digital advertising. Management shrank the size of the top leadership team and the number of advertising groups serving different customers out of separate offices.

As the Ogilvy USA project began to show results, Seifert announced a global rollout, which included rebranding the firm as Ogilvy Group. The new structure is built on what Ogilvy’s strategists define as its six core capabilities. These are the areas of expertise in which Ogilvy offers services: brand strategy, advertising, customer engagement and commerce, public relations and influence, digital transformation, and partnerships. The orientation to “crafts” helps employees see that they all have something to contribute toward the broader objective of serving clients. 

An important objective of the restructuring was to promote coordination and efficiency—acting as a kind of global partnership, rather than a set of independent offices. Management began to shift away from offices being financially independent of one another and groups measure their financial performance on a shared statement. Managers had to shift to seeing the offices united in serving clients and carrying out Ogilvy’s mission of “making brands matter.” To enable the coordination, Ogilvy added information technology to make it easy for employees at any of its locations to share and look up knowledge online. Increased coordination is not just an end, but also a means to help the organization respond faster when a customer need arises.

The smoother operations should reduce expenses. But more than that, CEO Seifert hopes this reorganization will help existing and potential clients understand what Ogilvy is—a brand representing an agency that offers, above all, creativity.
 

Questions for Discussion

1. How well does Ogilvy’s restructuring fit the principles of the contingency theory of organizational design? Explain.

2. Where do you see examples of a functional structure and a divisional structure in the redesigned version of Ogilvy?

3. What was Ogilvy’s approach to coordinating functions and divisions in its restructured organization? What other methods of coordination might it use?