Saatchi & Saatchi Balanced Scorecard



Saatchi & Saatchi Balanced Scorecard

Introduction

Saatchi and Saatchi has become a powerful advertising and communication agency through persistent efforts and continuous excellence over the past decades. In 1970, the ideas from the brilliant mind of two brothers helped create the company in London, UK. Throughout many mergers and acquisitions; the company, Saatchi & Saatchi has built a legendary status. However; during the mid of 1990s, the company was on the verge of bankruptcy. The local recession in the early 1990s caused Saatchi and Saatchi to lose much of its capital. The company changed its top officials to reformulate its strategy and structure. In 1995, when the Saatchi brothers left, Bob Seelert became the chairman. Seelert appointed Kevin Roberts as Chief Executive Officer. Both Seelert and Roberts became the masterminds in recreating a new turnaround strategy through a financial perspective.

The financial perspective of the plan consisted of creating a new vision for the company. The desired future of Saatchi & Saatchi relied on setting supportive and aggressive financial goals.

Such goals comprised of:

Achieve a revenue base, more than the market;

Converting thirty percent of that incremental revenue to operating profit; and

Doubling earnings per share. (Greenhalgh)

Since Seelert and Roberts held senior positions at Saatchi & Saatchi and occupied authority and prominence amongst top spending clients; they were able to accommodate a customer perspective within their financial strategy. After setting goals, Roberts travelled to each globally dispersed business units to make sure each manager was working on the same company agenda.

Analysis

Within the new financial goals of Saatchi & Saatchi, a certain strategy was implemented to ensure the plan would work out smoothly. The senior team “refocused and re-prioritized their investment plans for each of the business units.” (Greenhalgh) Three agency categories were created to separate strategic charges. A “prosper” agency had less than 50 employees and did not have the potential to become a giant agency. High margins were expected within the “prosper” group. Companies within “drive” agency were made up of fifty to one hundred and fifty employees. Their goals were to maintain or slowly grow their revenue and margins. The “lead” agencies consisted of large companies that were rapidly growing. (Greenhalgh)

Within each agency in the three categories, the important goal was to pay attention to the core client-base. Since twenty to thirty percent of Saatchi & Saatchi's client base makes up seventy to eight percent of ...