‘‘Analysis of how Saatchi & Saatchi implemented the balanced scorecard and its apparent effects’’
In every company it is very important to carry out a clear mission and vision because this will create strengh and solodification to build loyalty among the employees. Now let´s aim the assesment of the use of the balance scorecard in Saatchi & Saatchi, known as one of the premier advertising and “creative service” organizations (nevertheless they have had their ups and downs over the last ten years or so), and see how they implement it and the outcome of it.
Prior to the 1990s, Saatchi & Saatchi enjoyed phenomenal growth. However, as a result of the economic and financial crisis brought about by the Asian crisis in the 1990s this growth was suddenly stopped. Given the changes within the company’s macroeconomic environment, it reevaluated its existing vision, mission and strategies, which resulted to changes. These changes also resulted to the establishment of new financial goals that are aligned with the company’s new vision and strategies. The following are the goals that Saatchi & Saatchi’s new leadership established in terms of the financial perspective of the team’s approach to combat the effect of the economic recession in the 1990s:
1. A revenue growth rate higher than the market
2. A 30 per cent operating profit for the additional revenues
3. Earnings per share to be double
Nokia’s website explains the goal and mission of Nokia as ‘To be technology leader in a world where everybody and everything is connected’ The website also states Nokia reinvented which explains for the fact that the company is gearing up to face the changes in the market. Change as defined in online dictionary as transfer from one to another (dictionary.com, 2014). This transfer from one to ...
Given the above financial goals and its new vision and strategies, Saatchi & Saatchi also reorganized its organizational structure. The company created three agency categories, mainly led, drives and prospers. In lined with organizational restructuring, the company designed different strategic plans for each unit. The prosper business units are characterized by having less than 50 employees and have inherent limitation on their expansion that they might never become gigantic agencies. Hence, the prosper units’ strategy is to obtain high margins from their existing account more than the focus assigned to obtaining incremental revenues. The lead business units, on the other hand, are comprised of the largest agencies of Saatchi & Saatchi. Therefore the strategy drive for these units is rapid growth expansion and in support of this strategy the company will allocate a major portion of its investment budget to these business units. Lastly, the drive business units are comprised of agencies with 50 to 150 employees.
Being relatively small, their strategy is to either maintain their revenue base or grow it at a modest rate. Moreover, to achieve its financial goals, Saatchi & Saatchi also identified several strategies geared towards its core client base. These strategies were eventually referred to as the PICs or Permanently Infatuated Clients. One of these strategies is the excellent service to clients and the company’s value on a global basis regardless of the percentage of revenues from these clients compared to an agency’s overall revenue level. Another strategy is the creation of big fabulous ideas or BFIs groups within agencies that service the PICs. These groups are tasked with coming up with quality ideas.
Conclusion and Evaluation:
Indeed, the financial strategies make sense for each of the prosper business as lead, drive, and prosper business units. Their financial strategies were designed based on the prospect of the business units; hence these strategies are really something that these units can actually implement.
Procurement Strategy for Aboriginal Business PERFORMANCE REPORT FOR 2000 Procurement Strategy for Aboriginal Business PERFORMANCE REPORT FOR 2000 Published under the authority of the Minister of Indian Affairs and Northern Development Ottawa, 2002 www.inac-ainc.gc.ca QS-3639-000-BB-A1 Catalogue No. R1-13/2000 ISBN: 0-662-66753-0 © Minister of Public Works and Government Services Canada PERFORMANCE ...
I strongly believe the acquisition of the company by Publicis Groupe S.A. did not change the results of the BSC because after the acquisition, Saatchi & Saatchi and its different strategic business units can still operate independently. Furthermore, I believe that the two-pronged approaches – customer and financial perspectives – are actually complimentary of one another, as consequence they worked in synthesis. For example, in order for the prosper business units to achieve its revenue growth targets; it must deliver excellent services to their customers. Thus, I think that the customer perspective reinforces or conflicts with their financial strategies. Overall review, Saatchi & Saatchi implementation of its strategies was successful. This is supported by it achieving the goals identified for such strategies. Saatchi & Saatchi stated that by the middle of 2000 it has achieved the goals it promised Wall Street and its shareholders.
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