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BW Businessworld

‘Too Much Turf And Ego’

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The five BW next generation advertising leaders had an exclusive session with Martin Sorrell.

Anshumani Khanna: Craig Davis, the former Worldwide Creative Director (WCD) of JWT once said, "the suits sold us out". Would you agree with that?
Martin Sorrell: The quality of any comment depends on the person who makes it. I would violently disagree with Craig. He lost his way and the quality of that comment he made possibly exhibits that he did lose his way. The trouble with Craig is that he is immensely superficial. When he was the WCD of JWT he had a disarming and engaging manner about him. I remember that in order to evaluate creative work, he came up with a system where people would sit and watch advertising and put down their ranks on a scorecard. I think it was lacking in wisdom and a bit superficial.

The greatest strength of JWT is its institutional strength which is not something that everybody around this table values very highly, but as you get older you will begin to see value in it. I'm not trying to lecture or hector but in our business there is the new and the tried and tested. Anybody with common sense looks for a balance between the two.

When JWT changed its name from J Walter Thompson to JWT, they hired a boat near the Gateway of India and a coffin of J Walter Thompson was immersed in the sea. It was a bit metaphorical like throwing the baby out with the bathwater. It's something like what Craig Davis did. JWT is a 150 year old institution. That does not make it any right than what was started 150 minutes ago. But there's a value in its strategic thinking. That gets lost in comments like "the suits sold us out".

 When I was in Saatchi & Saatchi, Maurice Saatchi tried to make Jeremy Bullmore, the former chairman of JWT to become the chairman of Saatchi. Maurice understood that you can have a creative boutique but you need to have the strength of the institution too. J Walter Thompson had people like Stephen King, one of the pillars of the strategic planning function.  
I think people tend to lose the value of the group they work for. The writings of David Ogilvy, or the small book by James Webb Young is the greatest book on creativity. It's fashionable to decry the old and that comment (suits sold us out) is part of that. And what do you do after that. You end up in Australia, in oblivion as a result. Harsh, but true.

Yudhishthir Agrawal: With so many employees spread across a diverse set of organisations, how do you manage their varied expectations?
MS: You have co-ordination problems with two people. Imagine if you have 1,45,000 employees like WPP. The perception, which may be the reality, but is not the truth is that, the bigger you are, the worse you get. This is a view I don't agree with. It is no longer the Alfred P Sloan General Motors model with a militaristic command and control, but a messy network structure that's continuously moving and shifting. The more fragmented it is, the better it is. We have grown by acquisitions, because I wanted to create something big in my lifetime, not four-five generations later. A multi-brand model that grows by acquisitions is extremely difficult to manage as opposed to a unibranded model that grows organically, but the trouble is it takes too long.
Goldman Sachs and McKinsey both unibranded organizations, acquired companies, but the acquired companies disappeared pretty fast. Unibranded companies are a bit like an ameoba that rejects foreign bodies. No doubt, organic growth is much stronger than acquisition led growth -- you might find that strange coming from me.

But our model is of different horses for different courses. Our tentacles reach in a large number of directions. We are building a complex network of not just purely traditional advertising services. Only $ 6.5 billion of our $ 16 billion turnover is from creative and media agency businesses. We are not an ad agency in the classic sense that people like Craig Davis have been talking about. These people forget that the answer to that question is not who sold who out. Nobody sold anyone out. It's the 30-second or 60-second television commercial does not work in the way it used to. So we are trying to develop solutions is terms of size, scale, scope and focus in different situations.

For us, it's not about managing expectations of people, but to deliver different services and to get them to work together. So the basic objective is to get any of the 1,45,000 employees to know the remaining 1,44,499. If you ask me what keeps me awake at night, the biggest problem is to get people to work together. The problem with our business is that there is too much turf, too much territory and too much ego. What our clients want is the best people to work in their business. They don't care where they come from. So if you can orchestrate the combination of the resources, small, big, advertising, digital, media and so on.

Venkat Raman: How much are you involved with the creative product?
MS: I have never written an ad in my life. But financial people (Sorrell's a finance guy) can be creative, like in the case of IPG -- rival advertising network Interpublic Group -- some years back, they were too creative. In some ways they are still creative. Having said that someone like Craig would define creativity -- he's symptomatic of the problems the industry faces -- in a narrow manner. It's defined in a narrow manner by the CDs sitting in London and New York. If the CD believes in traditional advertising, he'll not embrace creating an application, product placement and so on. The wheel in the media department split from the creative agency because creative people lost the plot. Media often appeared at the end of the pitch and there was not enough time. It was the failure of the creative department who had a lock to the corner office, Ferrari, incentives and share options. Now the medium has become more important than the message and the medium determines what the message is going to be.

Venkat Raman: Ad Age once ran an article featuring you with the title,"the man who would be king". Have you now become king?
MS: That was when we launched a hostile takeover bid of JWT in 1987. I am not king. I am just a humble guy. The greatest satisfaction was when we became the largest advertising network. Maurice Saatchi said "when you are the best, you naturally become the biggest". People get the 'biggest' thing out of proportion. You naturally get there when you are good.

Arvind Krishnan: In Singapore, most WPP agency offices are in a single building. If the individuality of agency culture is important and an identity comes from the place you are in, how does it pan out in this case?
MS: Who is this culture important to? Whether we are doing good or bad work, it's the client who's paying the freight. What is important for clients is the best people to work in their business. Do they want agency culture? We can argue that agency culture develops good people, produces good work. But fundamentally do clients want agency culture? They want the best people to work on their brands and they don't care if these people work for JWT or Grey. If we were advising a client on what they should do, we would advise that they start with the consumer and then work backwards.
How do we get the best out of our people?
Any WPP company should offer benefits of membership. One of them could be in the area of human resources. We had a session in Austin, Texas with the Advertising Agencies Association of America. I was in violent agreement with John D Wren (chairman Omnicom group) that the biggest problem in our industry is that we don't believe in training, educating, developing and encouraging our talent. The reason why McKinsey or Goldman Sachs do well is because come rain or shine, they invest in their people. We don't groom talent, we steal it. To this Michael J Roth (IPG's chief) said "we don't pay lip service to our talent. We have a chief strategy officer…." Their guy is not a chief strategy officer, but a PR guy who goes around the world like a professional recruiter.

As a minuscule experiment, we started the WPP fellowship that gives participants for three years, an insight into three disciplines across three geographies. We try. But we don't do 360-degree evaluations. Many times people join our organizations without knowing their own expected outcomes from the job. If they know it, they are not consistently evaluated.

On the contrary, if somebody walks into Goldman Sachs at 20 years of age, and I have a direct personal experience, they are evaluated by their peers and they develop a spirit of co-operation.

Our network is a complex thing. We have to keep it continuously moving. It's never fixed and the moment you think it's fixed, trouble begins. To get back to Singapore, what we are trying to do there is to get a common pipework. In an inflationary environment we have to live with less pricing power. So we have a common back office, but let the culture flower in the front. The HR teams create the cultural difference between different agency brands. We have to classically manage that difference otherwise we would all collapse into one brand. We would not want to fall into the Publicis trap or the Saatchi trap, which is where you have a parent company that has the same name as one of the agencies. Parents do not have a favourite son or daughter - at least they should not. So when a network shares the name with one of the agencies in its group, there's always a suspicion that the agency brand carrying the network's name has a Most Favoured Nation status. This is disastrous in the long run. But yes, culture is important but only from our people side and not from the client's side.

Arvind Krishnan: Did Enfatico (the agency created by pooling talent from several WPP agencies to service one client Dell) fail because of the lack of cultural integration?
MS: Nothing of that sort. If somebody started Enfatico from scratch and it failed, people would have said, "oh, what a pity". Building an agency with existing resources for a single client with a specific objective is wonderful.
We have now taken about 1,200 people from six agencies to create Blue Hive offices to serve the  Ford account. What we have done there is that our group agencies - JWT, Wunderman, Ogilvy, Landor, Y&R -  have shares in Blue Hive. The lack of success of Enfatico - and I deliberately refrain from using the word failure - is a tragedy. It's the way our business should go. We are trying to build teams across WPP where the verticals get horizontally integrated. Here in India, we have a country manager trying to weave together the right team.

Anto Noval: Should there be a CTO in the ad agency set up as agencies work towards owning technology platforms?
MS: There are CTOs inside ad agencies. We own 40 per cent of Iconmobile that creates mobile platforms. But there are people who believe that given the huge costs involved in developing platforms, agencies should not invest in them. We have not developed a CTO or CIO strategy for WPP as a whole.

Anto Noval: Do you see a business for an application factory, where agencies can pick and pay for the applications they want?
MS: There are people who are already doing it. It's a question of monetizing it in an effective way. Our industry does not naturally lend itself into application of technology and building server farms. We are not prepared to put ourselves in a position where we pay commissions to new media owners who are masquerading as technology companies. Google is a bit like a Murdoch. If Murdoch went to clients and said, just use these four properties, that's a bit like Google.

The role we play as middle men is going to get increasingly important. The reason we call Google a "frenemy" is that there may be clients who want an independent assessor. Since we take decisions on billions of client dollars, we have a great position and an opportunity to assess.

Anshumani Khanna: Do creative people make good leaders? 
MS:  Creative people make better leaders, because, clients believe in them more than the others. Going back to your suit question, suits have less credibility.

(This story was published in Businessworld Issue Dated 03-10-2011)