Martin Sorrell’s step down, should be good news for WPP clients….only it won’t be.
The FTSE’s highest paid CEO was the founder and driving force of the most formidable and competitive holding company.
His intellect, edge and energy created a coherence and control that allowed WPP to often out compete the other big networks…often through going to CEO to CEO.
This top down approach allowed WPP to power play their way to big wins and vice-like contractual influence over clients business.
If often enabled WPP to paper over the cracks of their agency mix….
Agencies are not factories…bought on mass from the spread sheet.
They are people based businesses and therefore always open to the variability and idiosyncrasies of human nature.
So forcing clients to accept weaker agencies off the back of the stronger ones can only work for a while.
But what now?
Like with the fall of any great dictatorship…don’t expect this to be an easy or straight forward transition.
Expect a period of quiet as the internal factions build confidence. But don’t be too surprised to hear of internal tensions, conflict, confusion…
Martin Sorrel deserves incredible respect for building WPP into the business he has. As a ‘small time’ global entrepreneur, I can relate to the pressure, the sacrifice, the travel…but he has done what no one else could do…and will be irreplaceable.
So now he’s suddenly stepping down in the face of the internal pressures making him do so, don’t expect the share price to bounce back any time soon…don’t expect WPP to continue to be acquiring talented agencies with the same level of focus and competitiveness….and don’t expect the WPP world order to automatically have the authority and the relationships needed to retain the competitive edge.
Rumours of private equity preparing bids to buy up chunks of WPP I think are premature if not far fetched…but when Sir Martin was talking about the ‘perfect storm’ affecting the overall performance of WPP…I don’t think even he could see the break up of the empire as an even remotely credible outcome.
Accenture acquired MXM last week (from Meredith in the US). This wasn’t talked about much outside the US….but this is a BIG deal!
While they are still confidently writing cheques it’ll be interesting to see how the new opportunities for genuine disruption in the industry start to open up.
It’s going to be exciting…and painful….but don’t expect it to be of much benefit to the clients, who are often forgotten in the seduction of the power and the money. Afterall, it is their careers, share prices and budgets that make it all possible in the first place.
Ian Millner is the global chief executive of Iris Worldwide