Over the weekend, the industry was shaken by the news of the most powerful ad man, WPP CEO Sir Martin Sorrell, stepping down.
WPP said that in accordance with his at-will employment agreement, “Sir Martin Sorrell will be treated as having retired”. The move came after a widely reported investigation emerged, looking into allegations of personal misconduct against Sorrell.
The 73-year-old was the longest serving chief executive at the firm and was infamously known to be the highest paid. In fact, in 2016, chairman Roberto Quarta (who will now be stepping in as executive chairman until a new CEO is appointed) said, “While the value of Sir Martin Sorrell’s (£70 million pay package) award is very large, it was the result of an outstanding set of returns to share owners.”
While, there is no doubt, that the former finance director of Saatchi founded and built WPP as an ad land conglomerate we see today, as with other conglomerates, questions have arisen as to whether or not he left behind a capable successor. Addressing the issue, Quarta said in the 2017 WPP annual report that a succession planning process was underway, and the network has become even more focused and detailed over the past year.
He added, “Whether it happens in the near or distant future, when Sir Martin Sorrell leaves his role as chief executive, we will have an exceptional team of potential candidates on the bench.”
While the hunt for a new CEO is surely underway, CEO of Wunderman and WPP Digital, Mark Read, as well as WPP corporate development director and COO of Europe, Andrew Scott, have been appointed as joint COOs of WPP, in the interim. Of course, the biggest challenges for the new leadership will be to retain the confidence of shareholders and drive value, while juggling client and talent retention and keeping hostile takeovers at bay from rival agency groups through the choppy waters.
Kevin Huang, managing director APAC at DaVinci11 said that fortunately, the appointment of Scott and Read are steps in the right direction. “They are the right moves to make in the evolving digital landscape,” he said. Huang added that given both spent over 20 years at WPP, they will clearly continue on Sorrell's transformation of WPP, simplifying its structure (merging of several business/brands into one), horizontality, emerging markets and digital.
“The new CEO of course will have to accelerate this process and put digital at the heart of all things WPP does in the future,” Huang said. Moreover, there is a strong need to get into the "consultancy" space where WPP's business has been under threat by the consultancies of the world in recent years.
Before his departure, Sorrell had openly admitted that 2017 “was not a pretty year” following the release of WPP's financial results, as like-for-like top line growth was flat against original expectations of 2% growth. The industry as a whole was facing new challenges from consultants such as Accenture and Deloitte, and of course the likes of Amazon, Google and Facebook. Sorrell in a bid to stay on top of the game, was seen to be taking some tough steps, with news of mergers and integrations within the network becoming more common.
Meanwhile, former president of IPG Mediabrands World Markets Asia’s Prashant Kumar, who had been with the network for almost 13 years, said that the new WPP needs to now be a more decentralised, “to be able to attract more entrepreneurial talent, refresh the top leadership, bring bolder shifts in its operating model, and should overall be more agile.”
"Sorrell, as we all know, has been a force in the industry with his indomitable energy, his passion for the business, and his highly engaged leadership - which made WPP the biggest phenomenon in our industry," he said
WPP is a bellwether stock in our industry. I would like it to succeed overall.
Kumar who has since moved on to start up his own agency, said that to succeed in the new era, you need to talk about tech and integration, while ensuring all key leaders, investments, tools, workflow and culture live and breathe that language.
Nick Waters, CEO of Dentsu Aegis Network APAC added that it is currently impossible to speculate what WPP may look like in the future, but like many incumbent businesses in many industry sectors, it needs to change to remain relevant.
“The disruption to the marketing services industry requires all players to transition their business,” he said. “We are focused on executing our own strategy to ensure we continue to add value to our customers’ brands and businesses.”
As of now, the reason for Sir Martin's "retirement" from WPP is not known to the wider public. The general public has only been told that the investigation was conducted of which the conclusion and findings have not been shared.
In a statement to the press, regarding his departure, 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."
He said that he leaves the company in “very good hands”, with Read, Scott and the management team at all levels having the knowledge and abilities to take WPP to “even greater heights, as well as 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.