This paper examines how Saatchi & Saatchi responded to client attrition and declining revenues by implementing a balanced scorecard framework developed in collaboration with Professors Kaplan and Norton of Harvard. The analysis covers the company's three-tier agency classification system — lead, drive, and prosper — and explores how financial objectives such as revenue growth and earnings-per-share targets were paired with customer-centered goals like Permanently Infatuated Clients (PIC) and Big Fabulous Ideas (BFIs). The paper evaluates how this integrated approach restored strategic focus, improved financial performance, and ultimately contributed to a high acquisition valuation by parent company Publicis Group SA.
The paper demonstrates applied framework analysis: it takes a well-established management tool (the Kaplan–Norton balanced scorecard) and systematically tests how each component of that framework maps onto a specific company's decisions and outcomes. Rather than describing the scorecard in the abstract, the author shows concretely how Saatchi & Saatchi's three-tiered agency structure and dual goal sets (financial and customer) instantiate the framework's logic.
The paper opens with a financial perspective section that diagnoses the problem and introduces the balanced scorecard solution. An analysis section then details the three business unit classifications and the customer-centered objectives introduced alongside them. A conclusion synthesizes how the combined scorecard aligned vision, mission, and values with measurable outcomes. A final evaluation section assesses implementation quality and links the scorecard work to the company's eventual acquisition valuation.
Despite having an exceptional pace of growth throughout its early years, Saatchi & Saatchi eventually faced client attrition and declining revenues. What had happened through the company's continual restructurings was that it lost track of its core vision, mission, and values. The distance between these three core attributes and financial performance had drifted so far apart that financial results were reflecting the increasingly disjointed nature of corporate culture (Greenhalgh, 2004). A reliance on a balanced scorecard to realign core vision, mission, and values with financial performance became necessary (Niven).
As a result of the continued deterioration of financial and customer performance, management at Saatchi & Saatchi put into place financial and customer-driven goals for the company. The financial objectives formed the foundation of the company's resurgence, including growing the revenue base faster than market rates, converting 30% of incremental revenue to operating profit, and doubling earnings per share (Greenhalgh, 2004). As client relationships are core to the company's long-term growth plans, the senior management team also set the goal of creating Permanently Infatuated Clients (PIC). This concept was meant to drive greater intensity of effort, passion, and focus on results for the many global clients who had begun replacing Saatchi & Saatchi through agency reviews — or simply letting them go entirely and shifting work to internal departments.
Saatchi & Saatchi had lost its edge, and this was evident at the structural level, in financial results, and in customer attrition. The long-held vision of transforming clients had been diffused by a lack of focus and accountability. The use of balanced scorecards was initiated after the senior management team met Professors Kaplan and Norton at Harvard, who are credited with creating the concept of linking corporate and customer performance to financial results (Greenhalgh, 2004).
As part of their restructuring efforts, Saatchi & Saatchi created three separate classifications of agencies, or business units: lead, drive, and prosper. The goals, objectives, and focus of each classification were predicated on how effectively they could meet and exceed customer expectations over time. Beginning with the lead-status agencies located in the UK, New York, and China, the company concentrated the majority of its investment in these locations to drive new business and retain existing clients in regions that are the world's most competitive in terms of advertising and marketing services (Greenhalgh, 2004).
The "drive" agencies were the next class of businesses. These units typically had between 50 and 150 employees and were given the objective of maintaining stability in mid-margin accounts while growing the revenue base significantly through new client development (Greenhalgh, 2004). The third classification, the "prosper" group, encompasses the majority of Saatchi & Saatchi locations and subsidiaries. These agencies have up to 50 employees and will most likely never become large-scale operations. Nevertheless, this classification was given the formidable objective of generating the majority of gross margin growth throughout the company (Greenhalgh, 2004).
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