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As the CEO of the world’s largest marketing and advertising holding company abruptly steps down, the industry reflects on what’s next for WPP and for advertising itself
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At 73, Martin Sorrell was in no hurry to bid adieu to the most powerful position in the advertising and marketing industry — the chief of WPP, a position he occupied, and grew in stature, for over 33 years. Earlier this month, however, the unthinkable happened. Sorrell is no longer the WPP boss, and the holding company was confronted with the harsh reality that it had no succession plan in place.
Knighted by the Queen in the year 2000, Sorrell, has been celebrated for his contribution to British business, making WPP an influential leader on the global stage. The board of WPP had appointed independent counsel to conduct an investigation in response to an allegation of personal misconduct against Sorrell, also stating that the allegations did not involve amounts that were material to WPP.
Sorrell had unreservedly denied all allegations initially, but as the investigation reached its natural conclusion, on 14 April, 2018, he decided to step down with immediate effect. Roberto Quarta, chairman of WPP, was named executive chairman until the appointment of a new chief executive officer.
WPP supported this with a joint chief operating officer (COO) structure, naming Mark Read, CEO of Wunderman and WPP Digital, and Andrew Scott, WPP corporate development director and chief operating officer, Europe, as the joint COOs of WPP.
Even as Sorrell will be available for the transition period, it would not involve him in the choice of the successor CEO of WPP — a position that is right on top of the world of advertising.
In a comment on his exit, Sorrell said, “Obviously I am sad to leave WPP after 33 years. It has been a passion, focus and source of energy for so long. However, I believe it is in the best interests of the business if I step down now. I leave the company in very good hands, as the board knows. Mark and Andrew and the management team at all levels have the knowledge and abilities to take WPP to even greater heights and capitalise on the geographic and functional opportunities. I will particularly miss the daily interactions with everyone across the world and want to thank them and their families for all they have done, and will do, for WPP.”
Sorrell’s rise and his rule have been nothing short of remarkable, making an exit of this nature, that much more disgraceful.
The industry, however has shown its kinder side to Sorrell. “In many ways, I have a great deal of respect for Martin. I have competed against him for the last 25 years and very honourably,” says John Wren, chairman and CEO of Omnicom, one of WPP’s largest rivals.
In Sorrell’s absence, and without a clear succession plan in place, several doubts have been raised on the future of WPP, and whether the holding company will be able to retain its place of dominance.
“The impact of Martin Sorrell quitting on WPP is going to be huge because of the kind of dominant market share that his agencies enjoy in India, and also because of the kind of person he was. Martin is aggressive, persistent, agile, maintaining close contact with global leaders at clients end and he knew bosses of many Indian conglomerates,” says Sam Balsara, chairman of Madison World Group.
Media reports have indicated that WPP may consider breaking down its asset portfolio and selling its businesses in research led by Kantar. Much of this has been gathered from analyst reading, given that the holding company is not only expected to make a decision that would benefit its shareholders but also one that would keep it future ready.
In the midst of uncertainties, WPP leaders reached out to employees and external stakeholders to assure that the holding company would continue to deliver on its promise.
In an internal WPP memo, Mark Read wrote: “There’s universal admiration for Martin’s achievements, and sadness about his departure. At the same time, there’s a huge amount of support and goodwill for the company, and no shortage of confidence about the future. That confidence is well founded. The companies and client teams that make up WPP are exceptionally good at what they do. They are major organisations in their own right, with their own strong leaders. The clients I’ve spoken to have all been clear: they value their partner agencies and teams, they expect them to continue to deliver, and they have no doubt that they will.”
WPP is among the only holding companies of its size that had appointed country heads. In India, this position is held by C. V. L. Srinivas, who is also the CEO of GroupM South Asia.
All eyes are now on WPP on whether it is able to find its successor soon, and whether it would in fact undergo changes to be better structured to deal with the pressures that the advertising business itself is going through.
Only One Sorrell
Leaders in India feel that Sorrell is not an easy position to replace. “There can be only one Sorrell,” comments Pratap Bose, founding partner and chairman of The Social Street. He worked with WPP during his stint at Ogilvy & Mather India as its CEO. WPP may be a company forged in the characteristics of its founder and erstwhile CEO but, Bose points out that WPP is larger than Sorrell.
“It is a company that has systems and processes in place. It is a global organisation with the largest footprint, and it will continue. The advertising industry itself is in a place of reinvention but so is every industry around — that is the pace of change, but the best-placed company in the advertising industry to lead this change is WPP,” adds Bose.
Time for Change
If there is anything consistent in all conversations and discussions that have surfaced since Sorrell’s exit, it is that that it is time for the advertising business to change. Marketers and industry change agents are asking holding companies to revisit their structure. But there is no clear indication of what that change should be. In his internal memo, Read refuted the idea of breaking down the holding company, stating, “There’s been speculation about breaking up the group. We don’t believe this makes sense. In a world where clients need faster, more agile, integrated solutions, we need to get closer together, not further apart.”
Perhaps the one takeaway from his statement that ad land should pay attention to is about working closer together. Sorrell’s exit is a reminder that this industry will always be about the change, and the only way for a company or an industry to grow is as a collaborative, ecosystem weaved together, and not as an individual unit.