Seifert's Challenge


NEW YORK John Seifert, The Ogilvy Group's new North American chairman, has been given the job of steering the agency through the turbulent economic times ahead. But he faces a far more daunting challenge: rescuing the network's listing flagship, weighed down by what insiders describe as rock-bottom morale, political infighting and a lackluster new-business performance.

A venerable agency once the envy of competitors has become symbolic of the plight of big networks as they struggle for relevancy even as they reinvent themselves.

Seifert's appointment last week put an end to a regional co-CEO arrangement set up four years ago. He replaces regional co-CEOs Bill Gray and Carla Hendra. Gray, 56, is now relegated to a vice chairman role, while Hendra, 52, remains regional CEO, although she's now focused on the New York office, where she's chairman. Both now report to Seifert.

The shifts are the first big executive moves from Ogilvy Group worldwide CEO Miles Young, under pressure to replicate the success he had in his previous role running the company's fast-growing Asia-Pacific region. He acknowledged that the Seifert appointment ends "confusion" borne of a dual-leadership structure. (Read our Q&A with Miles Young.)

Young described North America as Ogilvy's "most-important region." It's also one of the company's most lackluster performers: Last year Ogilvy did not win or even reach the finals of new-business pitches representing nearly $275 million in major-media spending from Carnival Cruise Lines, Office Depot and Levi's. Its most significant win -- the $145 million Wachovia -- evaporated after the teetering bank was acquired by Wells Fargo. Ogilvy won global creative duties on both Thomson Reuters and Stolichnaya and U.S. CRM duties on Sears/Kmart, but key clients like IBM and American Express slashed spending, said sources. And the new business draught goes back even earlier.

The Ogilvy culture, traditionally one of the industry's strongest, has languished.

"Ogilvy really stood for something and now it doesn't, and it sort of feels like that's an indictment of the whole industry and, maybe, even big, global networks in general," said a former Ogilvy executive. Still, he was quick to point out the specifics of what he believes went wrong at this WPP shop, starting with a leadership void, turf battles over the integration of multiple divisions and a lack of creative firepower, especially in emerging technology.

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