Strategic Thought Transformation - The IIPM Think Tank

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In 1985, Martin Sorrell, quit his position
as the finance director of Saatchi
and Saatchi to start out on his own in
a one room office. He bought shares in
London based Wire and Plastic Products
(WWP) and used it as a vehicle to buy other
advertising agencies. Today, twenty years
later WPP has 91,000 employees in 106
countries with over 2200 offices. It was
with Sorrell that the advertising world
started giving due respect to the non-creative
people involved with the industry
and a lot of credit goes to him for driving
consolidation in the industry.
While referring to the importance of
WPP in his life Sorrell is said to have remarked,
“It’s not a matter of life and death,
it’s more important than that.” While Sorrell
might have plagiarized the legendary
football coach Bill Shankly’s quote, he
could not have found a better way to express
his passion for WPP.
The only son of a highly successful
radio and TV retailer, Sorrell was born
on St. Valentine’s Day in February 1945.
Growing up in a middle class household
in north London, Sorrell developed a keen
interest in business. After his schooling at
Haberdashers’ Aske’s School he went on
to Christ’s College and then graduated
in economics from Cambridge. His keen
interest in business finally drove him to
acquire an MBA from Harvard. During his
decade long stint at Saatchi and Saatchi
he was the financial wizard behind the rise
of the firm.
Interestingly, Sorrell’s kids inherited
the same financial streak but are not involved
in the advertising industry. His
three sons are investment bankers. Last
year Sorrell divorced Sandra, his wife of
almost 33 years. The divorce proceedings
were highly publicised and the settlement
was supposedly one of the highest ever in
UK. In spite of being high profile Sorrell
is not the page three celebrity one could
expect an advertising wizard to be. Sorrell
is known to be passionate about work
and has confessed to have little interest in
anything apart from work.
After buying shares in the basket manufacturing
Wire and Plastic Products, Sorrell
went on a path breaking acquisition rampage
all over the world and became one of
THE MAKING OF AN ADVERTISING BEHEMOTH
• 1985 — Sorrell quits Saatchi & Saatchi
• 1986 — Takes over WPP to use it as an entity to build a marketing services
company through acquisitions
• 1987 — Puts up a bid of $566 million for JWT Group, including Hill and
Knowlton, the world’s largest public-relations company as well as market
research network MRB Group.
• 1989 — Ogilvy Group acquired for $864 million
• Research firms Millward Brown and Research International also join in
• 1992 — WPP faces a tough time as acquisition costs pile up
• Sorrell goes about refi nancing the company to bring it back from the brink
of collapse to create a world-leading advertising business.
• 1998 — WPP joins the London Stock Exchange’s FT-SE 100 index
• 2000 — Acquires Young & Rubicam Group for $4.7 billion and more than
35 other acquisitions including Spafax and Premier Group.
• 2001 — Tempus Group taken over for £434m million
• 2002 — Takes stakes in Chinese and Taiwanese advertising and public
relation companies. Starts taking active interest in emerging markets.
• 2003 — Acquires Cordiant Communications
• 2005 — Grey Global joins WPP for $1.3 billion
the most feared, hated and admired strategists
whose acquisition maneuvers have
become part of corporate folklore. David
Ogilvy is said to have called him “that odious
piece of shit” soon after he lost to the
takeover bid of Ogilvy and Mather (O&M).
Sorrell’s known to be hands-on, aggressive
and slightly arrogant when it comes to controlling
WPP operations spread across the
world. The 61-year-old has such a strong
hold over the company that his personality
seems to have overshadowed the publicly
held company. This has got many analysts
worried, more so because there seems to be
no succession plan in place. Some of them
have started questioning if he is making
too many deals and is too big a figure for
the good of a public company. Sorrell is
has been accused of getting too personally
involved and the board has lately started
questioning him to a greater degree about
his decisions as the corporate is growing at
a breakneck speed. But then Sorrell is quite
candid about his passionate involvement
with the company. He has even publically
admitted that he feels like a parent who
has given birth to the company.
WPP had a market capitalisation of
£6.8bn and reported billings of £19.6
billion in 2004. The conglomerate today
includes companies in advertising, media
investment management, Public relations,
Healthcare communications, Direct promotions
& relationship marketing, branding
and identity and specialist communication.
In 2005, like-for-like revenues in
India grew at 15 percent and China at 23
percent compared to the relatively weaker
growth of North America at 6 percent and
UK at 2 percent. The focus of WPP in terms
of investments and growth will clearly be
in the emerging markets.
Martin Sorrell has been the Chief Executive
of the company for over twenty
years now. He was the one who spotted the
importance of emerging markets early on
and went ahead with spreading the group
all over the world. Today, his greatest challenge
besides the obvious need for focusing
on organic growth is handling cultural differences
and maintaining corporate cohesiveness
in a sprawling conglomerate.
While analysts might keep on speculating
over how many more years does Sorrell
have at the helm of the WPP group, his
name has entered the annals of corporate
history as the man who broke all previous
moulds by establishing his name in
an industry that was believed to be ruled
by only creative geniuses.
An IIPM Intelligence Unit Publication STRATEGIC INNOVATORS 93