Saatchi and Saatchi

What led to the initial success of Saatchi? How did it manage to grow so well until 1988?

The initial success of Saatchi can be said to have been fuelled by the basic understanding of the founders of the company had concerning the advertising industry. The establishment of the organization had been set under a critical understanding of the basics of the advertising industry. By 1970 the advertising industry is one that had instrumentally grown to become an established industry. There were peculiar issues that customers were looking up to from the advertising organizations that they could hire. Some of the issues that they sought to observe were account planning, creative services, and media planning and purchasing (Deboo, Houlder & Jacobides, 2008, p2).  The starting of Saatchi in 1970 was already an established company that was backed by £25,000 in the capital. It was, therefore, an organization that performed quite well in the spheres that were being observed by customers such as account planning and media purchasing. It was also an organization that was established by Charles and Maurice who were two super creative brains that were revered in the UK. Strategic planning was eminent and the company acquired a reputable name in less than five years after establishment. 

Saatchi was able to establish itself and position itself as a reputable organization in the advertising field because it made a heavy investment in consistent creativity (Deboo, Houlder & Jacobides, 2008, p3). Consistency in creativity allowed the organization to make campaigns that grabbed the attention of customers in such an effective manner. The company was able to connect with thousands of consumers of their products among them being IBM, NP Nestle, and others.  The creativity of the company also attracted famous signature clients that traded the name of the organization even higher. Some of the signature clients that traded the organization are British Airways and the conservative party under Margaret Thatcher. More instrumentally, Saatchi grew out of having adequate publication. The very establishment of the company came with the development of a brand that could be rusted. The company expanded financially by having attracted many clients. The diversification of the company was yet another step that made the company to attract the customers of the smaller companies (Deboo, Houlder & Jacobides, 2008, p4). Until 1988 thus, Saatchi used a marketing approach that marketed the firm aggressively. Instrumental turnover for the first ten years was experienced which even gave the firm the ability to purchase smaller companies in the same line of trade.

What were the reasons for Saatchi’s demise? What led to the problems? And what accounts for the pace of the problems coming up?

Saatchi’s demise was as a result of poor coordination by the management. Once the organization looked like it had established itself, Charles and Maurice yearned for more success. They believed that growing bigger was the approach that could turn the organization into a multinational corporation. At this time, the organization was in a spree of success and was acquiring scores of other companies. The company made acquisitions of multiple companies that were concentrating on advertisements. The organization concentrated in making acquisitions across the world. It was critical that each acquisition had its own target market (Deboo, Houlder & Jacobides, 2008, p5). The acquisitions, therefore, looked like they were competing with each other, yet they belonged to the same mother company. The very reason for the failures that Saatchi witnessed was based on their lack of selective acquisitions.

The new acquisitions that were made by Saatchi made the control of the organization such a hard duty. There was a problem in the management because of conflicts of interests between the acquired companies. Saatchi had therefore undertaken a process that was not sustainable. A conflict of interests between acquisitions which were arch rivals could only make the organization drop into a path of failure (Deboo, Houlder & Jacobides, 2008, p29). It was a management issue that Saatchi could merely manage yet the company had used their finances on their new acquisitions. Divisions regarding the management of the acquisitions as well as the original company were evident in such an instrumental manner. 

The problems were however containable until some of the former senior workers at Saatchi disagreed on the management of the firm and set to establish other firms thereby increasing competition for Saatchi. The rise of WPP, for instance, was a big blow to Saatchi because given the weakened management at Saatchi; the influence of WPP was growing with minimal efforts to contain the rise. There was also increased division between the Saatchi brothers that mad each of them concentrate on building their own area of interested. Due to the divisions and mismanagement, coupled with politics and propaganda on how the organization was poorly performing, and personal concentration on personal affairs, Saatchi led a path of failure and lost significant clients. The culmination of the failure of Saatchi was when the two brothers left the board of management and established a rival company that stripped Saatchi off their final energies.  

What were Seelert’s priorities in turning the company around? Which were his main actions, and why do you think he chose the course of action he did?

Seelert was an experienced marketer who had such an instrumental ability to use his marketing capacity to influence the market towards his direction. The very priority that Seelert had was to prove his credibility. Proving his credibility was quintessential for the failing organization. Seelert had to prove his credibility because the workers, as well as former customers, had already lost trust in the leadership. He, therefore, had to establish an environment that was different from the one that had been previously set. He had to create a new environment where working was not based on the precepts that were previously set by the previous management using his new inspirational dream (Deboo, Houlder & Jacobides, 2008 p29). It was now a totally different approach based on honesty integrity and facing facts. He was; therefore, ready to introduce a new brand that the organization would depend on moving into the future.

The other issue that Seelert concentrated on is the creation of a vision for the facility. The creation of the brand for the facility was supposed to beat the earlier created brand. Seelert, therefore, avoided the media hyped that the Saatchi brothers had and concentrated on growing the business from within. He had to keep some of the principles that were priory used by the Saatchi brothers. He, however, had to change the budgeting approach where he had to make use of the bottom-up approach where managers had to develop annual targets which minimized the risk of failure (Deboo, Houlder & Jacobides, 2008 p8).

Competitor analysis was the other priority that Seelert made use of where he immensely evaluated competition, giving a glance at every particular competitor and analyzing their strengths and weaknesses. From the analysis, Seelert directed revenues towards defeating the competitors who could be beaten. He also concentrated on improving the financial power of the firm. The best applicable approach that he found worthy was through refinancing where he established a path of recovery. Refinancing would give the organization financial power to compete as well as regain the lost trust that was lost by the company. By undertaking these steps, Seelert had already set the organization on a flow towards success. 

References

Deboo, M., Houlder D., & Jacobides, M. (2008). Saatchi & Saatchi: The Rise, Fall and Rebirth of an Icon. 

Index Page

Exhibit 7: The ‘Inspirational Dream’

(Page 27)

Saatchi & Saatchi: The Rise, Fall and Rebirth of an Icon

Exhibit 9: Peak Performance

Kevin Roberts places little faith in MBA’s and management consultants, since he favours

practical learning over theory. To help him at Saatchi & Saatchi he enlisted the help of two of his

colleagues from the University of Waikato (where he holds a Professorship in Sustainable

Enterprise), Clive Gilson and Mike Pratt.

Their ideas, presented in the book Peak Performance (2001), are based on the idea that peak

performance in sport can teach us a great deal about peak performance in business, which is

defined as ‘continuously exceeding organizational best in the pursuit of the organization’s

purpose’22. The sporting parallel is contrasted with the ‘military’ metaphors of traditional

management-speak, and the sporting world is put forward as an ideal place in which to learn at

first-hand what enables people to achieve excellence. The authors explain that they ‘believe there

are general organizational ideas that enable people to work together enjoyably and effectively

toward the organization’s greatest imaginable challenge. Where better to search for these ideas

than in the teams and organizations of elite sports, the icons of the late twentieth century?’ The

book goes on to present accounts and analyses of the successes of twelve high-achieving sports

teams and organisations around the world (mainly in the US, Australia and New Zealand).

The closing chapter of the book presents Peak Performing Organisation (PPO) Theory:

There are four key principles: purpose, practice, potency and performance. Purpose

provides intent, meaning and direction for people within organizations [and includes the

‘inspirational dream’ and the ‘greatest imaginable challenge’]. Practice puts in place the

organizational content, environment and practices that provide the foundations for

sustained success. Potency relates to the processes that occur in consciousness – thoughts,

emotions, intuition, desire, will and memory – that provide the energy for sustained peak

performance. Performance explains the actions necessary for sustained success.

Beginning with inspirational players (such as Michael Jordan, who ‘personifies basketball’), these

ideas come together as follows:

Inspirational players provide a meaningful challenge for an organization and its players that

is both important and stretching and that becomes the focus of the organization’s actions

that are undertaken to live the dream, and in doing so a purpose to the organization is

established that must be nurtured for the future through the careful recruitment and

development of the individuals that make up the organization, together with a long-term

commitment to an effective infrastructure that allows the dream to be shared, which builds

an aura of association and sense of belonging and a feeling of family based on trusting

relationships, leading the participants to a sense of harmony with self and others, and

allowing a passionate commitment to the purpose of the organization that establishes an

environment with the potency for peak flow or optimal organizational experiences, leading

to catching the last detail and imagining game-breaking ideas that enable the continuous

exceeding of organizational best in the endless pursuit of the organization’s shared purpose

and ultimately to sustaining peak performance.

Linking Peak Performance ideas to his work at Saatchi & Saatchi, Kevin Roberts comments as

follows. ‘Saatchi & Saatchi was a famous brand, with some great people, but it was in dire straits.

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