Businessweek published the discussion below with WPP Grand Poobah Martin Sorrell. A brief MultiCultClassics commentary immediately follows.
Hard Choices: WPP CEO Martin Sorrell
Advertising juggernaut WPP’s founder and chief on building his business, firing employees, and uniting the company after acquisitions
As told to Diane Brady
In 1985, I left Saatchi and invested in a small public company called WPP, eventually becoming chief executive officer. You might say my decision to leave was a form of male menopause. At 40, I hadn’t started my own business so this felt like the last chance. About 18 months later, we purchased J. Walter Thompson, an advertising company 13 times our size. It was a hostile takeover. We paid $525 million. It was a no-brainer: I didn’t have much, so I had nothing to lose.
As I’ve grown WPP, the toughest choices for me always come down to people. The hardest thing is letting them go. It’s horrible. You hesitate to do it, and there are cases where I know I’ve waited too long. It’s hard to get everybody to play in the same sandbox. After an acquisition, some people don’t want to be where they ended up. We have acquired companies that used to be competitors—Ogilvy, Grey, and Y&R—and it’s difficult for rivals to come together. The mindset shifts with the second generation, but until then it’s a challenge. We can’t be a collection of businesses. Clients expect us to connect the dots. The task is to get every one of the 140,000 people here to know what the other 139,999 are doing.
When we buy a company, we always think of it as buying the team. Advertising and communications is a people business. Of course, people are cyclical, and partners in a business can change—especially when they become wealthy. We spend about $9 billion annually on people, but we don’t spend enough time evaluating that investment. The conventional wisdom in our business is if you need people, you poach them. The industry will not survive long term unless we change this attitude.
A founder has a different business perspective. WPP is highly personal to me. I’ve watched the bricks being put in the wall. Whoever does my job in the future will not do it the same way. I’m not saying they’ll do it worse, but they won’t have the same emotional attachment I’ve had.
It’s always interesting to hear from a holding company overlord, as these men tend to display complete cluelessness about the business structures they’ve erected. And Sir Martin Sorrell certainly exposes ignorance when pontificating on his erections.
Not sure what Sorrell meant when stating, “It’s hard to get everybody to play in the same sandbox.” Has any holding company ever offered clear direction to the troops when merging agencies? It appears that executives like Sorrell simply dump all the people and resources into a new sandbox and hope some form of natural evolution occurs. Survival of the fittest ensues—where fittest is defined by cutthroat cunning and client connections. Actually, on Madison Avenue, it could be renamed survival of the shittest.
Sorrell coughed up another peculiar statement: “The task is to get every one of the 140,000 people here to know what the other 139,999 are doing.” Has any holding company ever created a communications device or process to enlighten the troops? The typical global email featuring worldwide press releases is usually ignored, as employees view it as corporate spam. The truth is, most people don’t want to know what their 139,999 coworkers are doing—we’ve got enough on our personal professional plates to worry about. Hey, does Sorrell really want to know what every one of the 140,000 people here is doing? They’re updating their résumés and desperately seeking to jump ship.
Sorrell also declared, “We spend about $9 billion annually on people, but we don’t spend enough time evaluating that investment. The conventional wisdom in our business is if you need people, you poach them. The industry will not survive long term unless we change this attitude.” Yo, Sorrell’s business model is based on poaching, where acquisition trumps organic growth. If Sir Martin desires something—whether it’s a human being or digital design firm—he goes out and buys it. Sorrell doesn’t evaluate his investments. More importantly, he doesn’t invest in the investments. This $9 billion statement really goes to the heart of the problem: Sorrell sees people as dollar figures. The man is a bean counter with 140,000 beans.
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