April 19, 2018

Who Will Succeed Sorrell?

That's the question of the day in adland. But speaking with a very smart person recently who has deep roots inside WPP, he feels that isn't the key question. He says the key question is this: what does an agency holding company do?

He believes there is a continuum along which holding companies can operate. On one end, the holding company is basically a financial instrument that invests in businesses and manages the corporation's relationships with investors and regulators. The operations of the constituent companies are left to the talents of the individual company managers. The exemplar of this is Berkshire Hathaway.

At the other end, a holding company can be more of an operating company that is a brand in its own right and works directly with customers. This is, to a significant degree, how WPP seems to have operated.

To find a proper CEO, the board of WPP first has to decide where it plans to sit on this continuum. The proper person for option one may be a completely different type of person than is needed for option two.

It's my belief that the agency holding companies are operating more like brands and less like traditional holding companies.

I believe they have moved toward greater centralization and are often operating as business units themselves, especially when it comes to pitching large global accounts.

Sorrell invented the "team" new business scheme -- in which the best of breed resources from different agencies within the WPP portfolio were supposedly going to be brought together to handle a new prospect's account as a custom-made agency. This idea has been adopted from time to time by all the holding companies and is now standard operating nonsense.

(Right. The holding company is going to risk taking its very best people off 5 or 6 key accounts and put them on yours. Only a Global CMO could be stupid enough to buy this horseshit.)

I have a hard time believing that WPP will adopt a de-centralized Berkshire Hathaway model. The only way I see that is if they plan to break it up and sell off some pieces.

I expect the board of WPP to go with what has worked and look for a sales-oriented, operations-focused, customer-centric CEO in the Sorrell mold. There are two problems with this. First, Sorrell was unique in that he was both a financial whiz and a salesman. Second is that times have changed and the holding companies have the "faint aroma of performing seals"* about them.

Replicating the Sorrell act in the current environment is not going to be easy. Whatever you think of Sorrell, thus far the world has produced only one. Good luck finding another.

*"I Wish I Were In Love Again," Richard Rodgers and Lorenz Hart 

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