NEW YORK—Even in these times of accelerated change, most companies are satisfied to reorganize or restructure. So the fact that John Seifert and his colleagues at Ogilvy are describing the transformation of their business as a "re-founding" demands that the changes be taken seriously. And also makes an implicit promise to the marketplace that the new Ogilvy Group will be radically different from what went before—and what is going on elsewhere in the sector.

That’s quite a commitment. First, because the Ogilvy & Mather name has an extraordinary heritage: it can trace its roots back to 1850, when Edmund Mather founded his pioneering London agency, and David Ogilvy, whose firm merged with Mather’s agency in 1964, is one of the giants of the 20th century advertising business. And second, because the advertising industry and adjacent sectors have been evolving at quite a pace in recent years, as they struggle to adapt to the changing media, technology, and societal landscape, so standing out is more difficult than ever.

A press release issued this morning seeks to balance the urgent need for something new with the desire to celebrate the agency’s legacy. “The digital revolution has fundamentally disrupted the marketing industry, impacting consumer behavior, the media landscape and competition. Ogilvy’s plans to respond to these changing dynamics will reinject the vision, values, and ways of thinking about brands that David Ogilvy built the agency on, reaffirming what Ogilvy stands for and believes in—that brands matter now more than ever.”

Seifert, who was named worldwide CEO of Ogilvy & Mather just two-and-a-half years ago, and will become chief executive of The Ogilvy Group as a result of the re-founding, saw a complete reinvention as an imperative, a response to a world in which “there are more opportunities than ever before to shape every aspect of a brand’s needs.”

“This has been an 18-month journey for our brand and the largest transformation in the history of our agency,” he said in the press release. “To meet the changing needs of our clients, we’re taking a bold step to redefine our company and build a new model for our industry, which we helped to create over 70 years ago.”

Talking with the Holmes Report, Seifert explains that today is both the culmination of a journey that began in January 2017—when he unveiled plans to restructure and hinted that the various Ogilvy sub-brands, including Ogilvy Public Relations, could be eliminated—and the beginning of a fresh 100-day initiative to activate the new identity and organizational structure internally and externally and provide the firm with “clarity of purpose,” Seifert says.

Not just a new identity

The re-founding involves a new name, “Ogilvy,” which means the elimination of the ad agency brand Ogilvy & Mather as well as the old Ogilvy Public Relations, customer engagement agency OgilvyOne, and a host of sub-brands. The new Ogilvy is defined as “a creative network” providing “design, communications, and experiences.” Its mission is “to make brands matter.”

“We did three things,” Seifert told the Holmes Report. “We pored over David Ogilvy’s writing, his speeches, his thought leadership, and the writings and ideas of previous CEOs. We tried to listen to what the people who make up the company told us about our strengths—what makes Ogilvy special—and areas of opportunity. And we partnered with Collins, [a brand consultancy led by O&M veteran Brian Collins, who was involved in the agency’s last rebranding] to make sure we were describing ourselves in a more modern context.”

All of which sounds like a pretty standard rebranding/restructuring exercise. Even more so when the firm introduces its new logo: “Using the common language of ligature, the new Ogilvy logo represents the agility, collaboration and connectedness that the brand is uniquely capable of delivering for its clients. The iconic Ogilvy red has been reintroduced in a brighter Pantone and a secondary palette of gray, pink, blue and yellow has been added to emphasize the company’s desire to modernize, while maintaining, its strong heritage. The Ogilvy fonts have also been recut and customized as Ogilvy Serif and Ogilvy Sans.”

What elevates the “re-founding” and makes it truly radical is what Seifert and chief strategy officer Ben Richards describe as a new “operating system.”

This includes a new organizational design, which takes brings together the various brands (O&M, OPR, OgilvyOne, etc.) into a single entity, replacing them with “six core capabilities”: brand strategy, advertising, customer engagement and commerce, PR and influence, digital transformation, and partnerships.

The firm will also launch a new consulting offer, building on the success of OgilvyRED, and its behavioral science group. The enterprise offering, Ogilvy Consulting, will specialize in digital transformation consulting, growth, business design and innovation, and will work horizontally across all of Ogilvy.

An expanded role for PR

The PR and influence capability will be led by Stuart Smith, who joined O&M seven years ago to run the corporate practice and the EMEA public relations operations. He became the CEO of Ogilvy Public Relations in 2014, and at the start of Seifert’s restructuring process was given additional responsibility for Ogilvy group operations on the west coast and in Washington, DC.

Smith and his leadership team are defining a number of products and areas of emphasis that will fall under the PR and influence capability. Brand protection is one, Seifert says, covering everything from “assuring clients that their employees are operating in ways that are consistent with the company’s purpose and values to examining whether high pressure sales goals are leading to some unintended consequences, to thinking about what happens if the company’s content shows up in a high-risk, controversial media environment.”

Other groups will focus on employee engagement, C-suite counseling, public affairs, and influencer strategy, Smith says.

Smith has also been leading workshops for CMOs and CCOs explaining how they need to adapt their branding and communications strategies to an “earned-first” world. “I have talked to more CMOs since I came here than at any time in my career,” he says. “They are more open to these ideas than ever before.”

As a result, public relations will also have a critical role in the “brand strategy” capability, which “starts with a point-of-view about brand in its most holistic context,” says Seifert. “The thing that is foundation is asking questions that define the client need. Every engagement needs to start with asking questions that identify their real business needs. We have to train the entire organization, to give people a mindset for ‘whole brand’ thinking.”

At the same time, he says, clients will need to learn that Ogilvy can think about business solutions and brand strategy in a way that is not bound by traditional definitions. Smith is one of 10 global strategists—the first of many—led by Richards. So while he no longer runs a PR-focused P&L, his new role is “to be a representative for public relations when it comes to brand strategy.”

As a result, he says, while a lot of good PR ideas are coming out of the old PR operation, a lot are coming out of the brand strategy work, for clients like British Airways and Burger King.

“When I joined, I didn’t want to be captain of my own frigate,” Smith says. “I wanted to have the keys to the aircraft carrier.” In other words, he believes he can do more to promote public relations solutions to clients’ business problems as part of an integrated leadership team that truly values PR thinking than he could running a dedicated PR agency.

An organization without borders

In addition to the six core capabilities, the firm has defined a dozen “crafts” that are critical to its success: creative, strategy, delivery, client service, data, finance, technology, talent, business development, marketing and communications, administrative, and production.

“We have taken a fresh look at the critical craft skills we need to succeed,” says Seifert. “To help our people start to think less about what department they are in and more about their areas of expertise in the context of those areas of what we do that we want to be extraordinary at. These are things we believe our people can relate to—they might relate to one or more of these things.”

In some cases, departments will still exist—although they will transcend traditional disciplines, or what Ogilvy now calls core capabilities.

“There will still be a creative department,” says Seifert. “But it will be a creative department that includes both advertising and PR” (a welcome departure for the tendency of ad agencies to rebrand themselves as creative agencies in a way that appears to exclude PR from that soubriquet) “and includes creative people who can come to a challenge from a multiplicity of angles.”

In fact, Smith recently returned from a meeting in Spain where he presented his thinking on “earned-first” ideas to 70 of the firm’s top creative people. “They want to be sure their ideas are optimized for this new world,” he says.

For that reason, he is confident that PR will have a healthy influence on Ogilvy’s thinking that is greater than the former Ogilvy PR’s contribution to the group.

“We had 2,500 people in Ogilvy PR. They won’t just be part of the PR and influence capability, they will also be part of these 12 crafts—creative and strategy and client service and production—and they will be bringing their earned first thinking to their roles in creative and strategy and account management.”

Just as important, Smith says, many of the people whose background is in advertising or digital have been developing earned-first ideas within their former agencies. “There will be very flexible borders,” he says. “There will be emigrants from PR, who want to expand their horizons, but we will welcome immigrants who want to put their own earned-first ideas into practice.”

Seifert agrees: “We want people to think about the roles across borders, across clients, across capabilities.”

The desire to see those six core capabilities and 12 crafts work seamlessly together is captured in a new statement of Ogilvy’s brand values, which along with divine discontent (“we are wary of being overly satisfied with ourselves or our performance”), relentless curiosity, pervasive creativity, and eternal craft, emphasize “adaptive connection.”

“We believe becoming ‘one agency indivisible’ around the world comes when people connect their unique backgrounds, skills, and viewpoints into a fluid team,” says the new agency. “We were founded by a creative person who was also a farmer, salesman, spy, and chef. He resisted compartments. Shouldn’t we?”

Avoiding the pitfalls of 'integration'

This, of course, is where previous efforts at creating a genuinely integrated agency (the problems with which we explored here; our preferred approach we described here) have broken down: all too often—particularly in agencies with an advertising heritage as strong as O&M’s—the ad side of the business dominates: even if CEOs believe in a more balanced approach, senior ad execs assume that creative and strategic leadership of the integrated team is their birthright.

Smith is convinced that won’t be the case at Ogilvy. “I joined Ogilvy originally because I wanted to work in a more integrated environment,” he says. “I could see the walls between disciplines beginning to crumble, even in the corporate realm where I was doing more and more work on corporate branding.

“And I could see that PR was going to have a more strategic and creative role, even though it wasn’t clear what that role would be. I could see that brands were creating massive amounts of forgettable content, and that CMOs were looking for ways to cut through all that and be more memorable. And I could see them coming to realize that we were living in an ‘earned-first’ world.”

He believes the understanding that the most powerful brand ideas have “earned” is shared by the agency as a whole. In recent years, Ogilvy in general has come to understand the power of earned media, and the value of putting cause at the heart of a brand platform: this was the agency that helped Unilever develop the “Real Women” campaign for Dove, seen by many as triggering the shift to more purpose-driven marketing.

And Seifert in particular has demonstrated that he not only values the power of PR, but understands that “earned-first” ideas are winning in the marketplace. “Fewer and fewer advertising briefs are about $200 million in paid media,” he says. “We are now seeing more clients looking to activate in earned media, accepting the idea of the authentic enterprise, or defining their brands in terms of social good.”

One reason Smith is convinced the new structure will work—and won’t sideline PR—is that it’s not entirely new. “Ogilvy has already been doing this,” Smith says. “In Asia, [regional leader, PR and influence] Scott Kronick has been working this way as part of an integrated leadership team, and it has been a striking success. The ideas we generate in Asia are all generated with the input of Scott and his team.

“And if you look at the UK, our resurgence there came about when we stopped asking people ‘would you like some PR with your ad campaign’ and started asking them ‘would you like to see your brand strategy activated in the earned environment.’ And eventually, we were able to bring an earned-first approach to creating the brand strategy.”

Since Seifert took over as CEO in January of 2017, there have been several promotions that reflect the idea that public relations will be an equal partner in the new Ogilvy. In the UK, former Ogilvy PR EMEA chief executive Michael Frohlich was named CEO of a 1,200 operation—the agency’s second largest—including advertising, marketing, CRM and digital. In Asia, EeRong Chong—former head of the Singapore PR operation—was named group managing director, Singapore. And in North America, Michelle Anderson—former head of PR in Chicago—was named one of nine new client group leads and in the new company will be US leader for PR and influence.

There have also been broader leadership roles for PR veterans Emine Cubukcu (CEO, Turkey) and Joanna Oosthuizen (chief operating officer, South Africa). “It’s fascinating how many Ogilvy PR people have grown into these new roles,” says Smith. “They have demonstrated the willingness and the ability to grasp other disciplines, to lead integrated teams, and to encourage others to adopt earned-first ideas.”

And of course Ogilvy PR veteran Jennifer Risi has been leading internal and external communications in the run-up to this announcement in her new role as worldwide chief communications officer for Ogilvy Group. She has been working alongside CMO Lauren Crampsie, who has been overseeing the introduction of the new corporate identity, a complete overhaul of the Ogilvy website, and the creation of a knowledge-sharing, professional development and customized community-networking tool called Connect, which will train the agency’s people and connect the right teams to best serve clients.    

Will everyone buy in?

Frohlich’s experience in particular is instructive, and provides a rebuttal to those who worry about the role of PR in the new operating system. Immediately before his appointment, he spent six months leading WPP’s pitch for British Airways’ International Airlines Group—a pitch that included advertising and more.

“It was a massive baptism of fire,” Frohlich says. “As a PR person, you work in and out of these disciplines all your career, but it’s very different to have to lead a team across all these disciplines and capabilities, even for someone who has a good track record in new business and who loves new challenges.”

But the success of that effort meant that when Frohlich stepped into the CEO role for the UK business, there was less resistance that there might have been a couple of years earlier.

“Everyone accepted that the world we are living in is one where PR is becoming more important,” he says. “If people hadn’t welcome a move like this, it would have been a little strategy. And then when I was in the job, the fact that I came from a PR background probably made it easier for me to change things. Any time someone told me ‘that’s not how we do it in the advertising world,’ I could tell them, ‘I don’t really care. This is how we are going to do it from now on.’ And I had permission from the top to do that, because John has been clear that there are no sacred cows.”

In fact, Seifert says that resistance to change is less common than the feeling that the change has not come fast enough.

“If you ask me, the people I feel the most dependent on as a team of leaders for this company and driving the next chapter for Ogilvy, those people are completely aligned with what we are trying to do,” Seifert says. “And when I think about the others, I am more concerned about those who have left because we weren’t moving fast enough, because the transformation did not come quickly enough, than I am about those who don’t buy into where we are going.”

Expanding on the need for change, Seifert can sound a little harsh—a tone that reflects his deep conviction that the change is mission critical for Ogilvy’s future.

“We have 15,000 people worldwide. There will be some people—it might be 0.05% or it may be 10%, I don’t know—who struggle to adapt to a new environment that is about disrupting the old ways of doing things. I am not worried about them. The sooner they go, the more money I have freed up to bring in the new kinds of talent we need to make this work.”

Says Frohlich: “In the UK, the changes have made it easier to recruit good people. People are really interested in this approach.”

That’s particularly true for the next generation. “Our youngest people in particular feel they were being siloed,” says Seifert. “They want to feel connected.” Adds Frohlich: “Younger people just don’t see the same differences we do. They want to work across everything. They their skills beyond just advertising and PR.”

From 'sell' to 'solve'

There has been encouragement from clients too, Frohlich says, as the agency has shifted its focus “from sell to solve.”

“In the past, we have been in a culture where we sold things to clients,” he explains. “The idea was, you sold them more and more services.” (That’s why, for many agencies, integration meant selling PR as an add-on to an existing ad campaign.) “What we need to do now is listen to what the client actually needs and offer them solutions that fit their needs, that help them solve their business problems.”

That sounds obvious, but that doesn’t make it easy. Previous attempts at integration have faltered because—among other problems—there has always been an incentive for agencies to sell bigger budget services (like advertising) even if smaller budget services (like PR) could solve a problem more cost-effectively.

Frohlich says the answer to that problem is both structural and philosophical.

Structurally, the new Ogilvy will have a single, consolidated new business team, which means that even if a client comes in the door looking for an ad campaign or a PR campaign, the new business team will have both the knowledge and the permission to look at the problem and offer a different solution if it’s appropriate to do so.

“If there’s a PR brief, we will come at from a perspective of what is the best way to solve the problem,” Frohlich says. “It might be a PR solution. But we may think there’s a better solution, and if that’s the case, we will push back.

And philosophically, the agency will need to take a long view of client relationships.

“What’s best for us in the long term is to find the right solutions for our client’s problems, because that’s what will help is built trust, build a long-term relationship.” That means that if the solution is a “nudge” of the kind provided by the UK’s behavioral science team, rather than a multi-million dollar ad campaign, Ogilvy will offer that solution—even at a fraction of the billing. That's the aspiration, at least.

And ultimately, the new Ogilvy will ask clients to judge effectiveness on results.

“Where we are trying to go with clients, if they work with us they can make us much more accountable for market outcomes,” Seifert says. “A big audacious ambition for all of this is that we will be evaluated based on market outcomes.”