​Changing Lanes: Ogilvy vs McKinsey

Written by Martin Lucas

This is an eight-lap revenue race, start your engines!

The changing world of traditional revenue streams are our lanes.

In lane 1, we have Ogilvy representing the world of advertising and marketing.

In lane 2, we have McKinsey representing the world of consulting.

In the pits for Ogilvy are McCann, M&C Saatchi, & Sir Martin Sorrell (don’t worry, we are watching him closely so he doesn’t ‘borrow’ their hubcaps).

In the pits for McKinsey are Accenture, Deloitte and PWC.

The changing world is our race track, let's explore it and see where positive change is actually coming from, how it’s going to affect these lanes and ultimately give you all the info you’ll need to decide for yourself which lane you think is the winner’s route.

Before we wave the starter flag, let's begin by understanding how we got to this point.

Capitalism, rebranding & change

Capitalism demands that we keep evolving and always, always, always grow. Capitalism began in Holland as a method of mitigating risk where you could invest in explorers by spreading the investment across multiple ships with other investors. This need creates shareholders and fast forward a few hundred years and we use buzzwords like ‘shareholder value’ to point us toward profit and growth (and more profit and more growth or sometimes just to mitigate loss in other areas).

21st century society is dominated by capitalist behaviours; we believe that to find success we need to achieve growth. What happens when our traditional revenue streams decline or the usual revenue streams have been pumped dry?

We have to seek new revenue streams.

Ogilvy has rebranded and is going through change; this brings its own kind of internal pressures, meanwhile external factors are also playing their part:

“S4 Capital is a company that aims to build a multinational communication services business focused on growth. There are significant opportunities for development in technology, data and content. I look forward to making this happen.”

Sir Martin Sorrell

In a classic Mad Men episode plot Sir Sorrell left WPP (Ogilvy parent) with no golden handshake. ‘I’ll retire for sure’ feels about right for what he would have said. Then six weeks later we have that activity. Like Mad Men, it’s the agency game of the ages in motion, someone leaves and starts a new rival and round and round it goes.

What happens when change occurs?

The world of advertising is in a constant state of flux; it’s the closest to this you can be:

Heraclitus said this in approximately 500 B.C. and he is still right; we humans are always in a race to DO new, to FIND new and to never accept the status quo. We are always striving forward in our pursuit of happiness (Find out if Happiness is a chemical release or a state of mind here).

When we seek change, there is always a more progressive design behind the scenes. In Ogilvy’s case, if you analyse the language inside their rebrand, you see a growing focus on Science, Psychology and Change which is manifesting itself in Culture, in Health, in Neuromarketing and in the buzzwords of Behaviour, Digital and Data.

I call them buzzwords not because Ogilvy doesn’t have a strong offering in each, it’s more that EVERYONE has an offering for these buzzwords; it’s a game of perception.

This is where our lanes start to mix. McKinsey is in a state of change too and for the exact same reasons: they want to grow. The consulting companies have been a fear for the advertising and marketing industry for quite some time, stuff like Accenture making many Marketing acquisitions in 2017 alone such as Rothco. If you analyse McKinsey’s keywords, you will see Sales, Marketing, Growth, Culture, a hint of Science and certainly lots of Psychology with an even deeper focus on the Digital economy. Both industries are hunting for the same types of new services and thus new revenue streams.

Keywords are how the mind creates a point of focus; if we stand for change then we better use the word ‘change’ in what we do. A word has a  deeper meaning and when companies change, that deeper meaning is a reorg, new job titles and lots of new services. We adapt, we change language and we say we want new and we then measure our people and their performance accordingly.

When this occurs in two different industries then we have a changing lanes play going down; it’s a race to validate and thus win new revenue.

Who will win the race?

As the outcome is worth billions of global currency, for the best chance of predicting the winner, we need a deep dive into the runners and riders that are emerging in an ever-changing world. The race is eight laps and at the end of each lap just jot down who you think won that lap to keep score - best of eight wins the race.

Lap 1: Mindset

Every company has its own collective mindset, which is layers of behaviours that creates the culture that its employees follow. We humans are built to fit in and to accomplish this we consciously and unconsciously change to fit in with those around us.

Consider when you change companies. You want to fit in, so you find out how they do things and you follow suit. If Ogilvy wants to land more consulting business, more behaviour change and more culture work then what should they be aware of?

Internally, their mindset is everything David Ogilvy wanted it to be:

They sell; they do it well and they do this because they have a creative heartbeat. For lap one, they will need to be conscious of the buyer’s mindset and how it varies based on the service you want to position (more on the science of decision-making later), so their sales process has to adapt with this.

The McKinsey mindset is more anchored on consulting, but as with Ogilvy sales, there is a layer below this. For Ogilvy, this was creative; for McKinsey, we can find answers from a Ted talker, best-selling author and renowned Psychologist, Angela Duckworth who wrote Grit. Angela worked at McKinsey and she really, really, really, really drops a LOT of seeds in the book that she didn’t enjoy her time there. I had already written the Angela part of this article when this landed in my inbox: Ogilvy dropping an article about the same person and concept in June. An interesting moment where it’s clear the lanes are already crossing.

Angela’s main issue with McKinsey was what they sold wasn’t what they delivered; this was due to the age - and thus experience - of those doing the delivery. It’s not a new challenge per se; The Big Four are going through similar issues and indeed trust challenges because of their financial mistakes. For our purposes, what Angela’s book showed was that McKinsey has a process heartbeat. For lap one, this is a positive negative; process is great but not without free thinking. You risk losing freedom and creativity of thought when process is your number one cultural behaviour. With too much process and not enough freedom to think, you thin slice out what is essentially creative.

Most corporate cultures have pros and cons, the main point is that no matter which type of talent you bring into your company, the existing culture will seep into the minds of those new people. Sometimes we assume that those that deliver culture change eat their own lunch...

Your prediction for who wins? Make a note and let’s get on with the race!

Lap 2. Customer Engagement

Customer engagement is becoming its own lane. It is beginning to converge via a number of disciplines - see McKinsey talking about Creativity combined with Analytics; this is not what you might assume McKinsey does. And here we see a converse example of Ogilvy talking about health, stress and culture, including this:

'Speaking to Chris Graves, President of Behavioral Science, he explained “Marketing and communications in this area can be far more effective if we understand people from the inside out instead of the outside in. That means understanding human personality traits, cultural cognition and deep-seated mindsets instead of sorting people by demographic only.'

Do you see the changing lanes emerging? McKinsey is more renowned for creating change within companies (improving culture, consulting, process), while Ogilvy is more known for creating impact outside of companies (advertising, promotions, engagement with new customers). 

Consider that internal communications (done well) are like world-class PR; it’s all about the audience, just like a campaign in the media. 

The winner of this lap will be the one that blurs the lines and uses marketing theory combined with psychology and applies it across all aspects of engagement. Now is becoming the time where ‘internal customers’ (aka employees) are invested in and treated in the same way as external customer acquisition. Customer Engagement - Employee Engagement - It’s all ‘same same’ in terms of how you can positively influence people and the methods you can use to do so. Both companies know how to do it, they just need to pivot the techniques to the new types of business they want to win.

Who do you think won this lap?

Lap 3. Automatic vs Reflective system

There is a lot of science being used in both lanes but do they truly understand and anticipate the truth of human decision-making? Let’s play a game to illustrate an example:

When shopping for a polo shirt or a summer dress, what do you think about? Write down the answers; I’ll give you 30 seconds, ready? Go!

Ok, likely you will have thought about brand, logo, size, fit, colour, material, pattern, price and quality to run your own judgment of what ‘cool’ is. This thinking is known as the reflective system, which happens in your conscious mind. It’s the stuff you are aware of thinking about.

The conscious mind is the layer that marketing currently targets. This includes nudge theory per the Nobel Prize-winning Economist Richard Thaler:

A nudge, as we will use the term, is any aspect of the choice architecture that alters people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting fruit at eye level counts as a nudge. Banning junk food does not.

To help us sell polo shirts and summer dresses, social proof is a common nudge and is used a lot with eCommerce. An example of a social proof nudge is putting a review or a picture of another customer talking about / wearing the item. This is also why you see eCommerce sites display social proof metrics - eg. ‘57  people bought this item’ or ‘booked 5 times in the last 24 hours’. This works because humans don’t want to look foolish; seeing evidence that others have bought and like something gives you further permission to buy it.

Nudges exist to influence your decision-making but if we leverage only the reflective system then we end up with common activities that everyone can copy like social nudges, which are everywhere. The huge opportunity here will be for those who also include the automatic component of how we make decisions. Using the same example, here is what your unconscious mind does and how it thinks about your previous experiences when evaluating a polo shirt or a  summer dress:

  • Avoid the brand your partner made fun of you for wearing that brand.
  • Looking for a good cut and matches your favourite jacket.
  • That time your friends thought you looked super cool, look for similar.
  • Only a small logo, previous experience was big logo's aren't for you.
  • Try not to buy for the sake of it.
  • That magazine article that said the next big thing is the patterned collar.
  • The Instagram fashion guru you love to follow said to get that one.
  • That time a random person gave you a funny look and you thought it was because of your polo shirt. Avoid that type of polo shirt.

The unconscious mind makes up 98% of your brain power; it’s the most efficient data processor known to humankind. What I shared above is just a snapshot of the hundreds of experiences your mind thinks about when making even a single decision. For buying a polo shirt / summer dress, your unconscious mind runs all the data you have and only sends forward the outcome of the sum, e.g. ‘get that one as it's cool and you look good in blue’. Later, your friend asks why you chose that one and now you have a conscious explanation: ‘Because I look good in blue and it’s cool’. That is the Why behind your decision to buy that particular item of clothing.

The science behind how you made that decision is true for everything you do; there is always a data evaluation based on the experiences, habits, preferences and bias that exist inside your brain and the influences on your thinking. In turn, this creates your behaviours - the pattern of what you do - in this case, buying an item of clothing. What we are exploring is WHY that behavior happened.

It’s as true for marketing as it is for culture as it is for any change involving humans. It’s all for this reason:

Those who master the matrix will win this lap.

Who’s taking the lead after lap 3?

VROOOOOOOOOM > Part 2 of the race starting with ‘Is Data the new bullshit?