Sorrell stayed too long as WPP chief executive

Some observers have compared Sorrell’s demise to that of Arsenal manager Arsène Wenger, whose 22-year reign ended last week after he failed to match his first, triumphant decade in charge.

But when WPP began to falter last year, I saw parallels with Usain Bolt, who won gold at three Olympics but resisted retirement for one more season.

The ageing Bolt missed out on gold in the 100m at the world athletics championships and then pulled up with a hamstrung injury during the relay in his last race.

Sorrell, 73, did the financial equivalent of pull a hamstring when WPP’s revenue growth came to a sudden halt.

He cut forecasts three times in March, August and October 2017 and the share price tumbled 40% from its peak at the start of the year.

Sorrell, who had been chief executive since 1986, cited a mind-boggling 22 macro- and micro-trends that were affecting the “market environment” in his presentation to investors last summer.

But ask him about the key issues — advertisers demanding greater transparency in media-buying or marketers being able to buy directly from Google and Facebook or brands bringing creative in-house or Accenture and Deloitte offering a broader, “end-to-end” business solution for clients — and his answer was invariably the same.

It’s not happening or they can’t do it properly, he would say.

Sorrell was in denial.

The man who had turned WPP into the world’s biggest ad agency group found himself unable to adapt to what clients wanted in a nimbler age of e-commerce and connected digital marketing.

His mantra was horizontality — getting multiple agencies to work together for one client.

But it was fraught with problems because the agencies had their own P&Ls.

Even when WPP removed agency silos and set up a single client team, it created new client silos.

WPP won some “horizontal” pieces of business that combined media and creative such as British Airways and Walgreens Boots Alliance.

However, Sorrell failed to convey a sense that these clients were buying into a vision, rather than just getting cheap prices.

Sorrell, who had spent a decade pushing WPP to become more digital and is famed for his ability to respond to emails in a flash, appeared paralysed in the face of change.

His biggest move last year was to merge agencies in a drive for simplification, but he was playing catch-up and there was no coherent narrative.

When news leaked in June 2017 that WPP was merging under-performing MEC and Maxus, the group took three months to come up with a new name, Wavemaker, and another three months to launch it in January 2018.

Other mergers were announced in haphazard fashion.

Wunderman absorbed Salmon and then Possible over the summer.

Then five branding and design agencies became part of a single group in September. It took four months to come up with a name, Superunion.

At no point did Sorrell give an explanation about how a new-look WPP could be structured.

To outsiders, it looked as if there were no over-arching plan.

Sorrell might deride Publicis Groupe’s “Power of One” strategy or Accenture Interactive’s “experience agency of record” proposition that but at least they offered a clear story.

There were other signs that Sorrell was losing his touch.

The appointments of a new UK chief executive for Group M and a first UK country manager for WPP took six months as Sorrell vacillated.

He paid for a table at the President’s Club, a notorious male-only dinner with female hostesses in London.

WPP also spent two years in a legal battle with Erin Johnson, the JWT chief communications officer who sued over alleged sexist and racist comments made by the agency’s boss, Gustavo Martinez.

And, all the while, WPP’s share price kept sliding from £19 in March 2017 to £11 a year later.

WPP’s agency leaders and investors, who had marvelled at Sorrell’s all-conquering abilities, began to doubt him.

“Everyone is shocked” about Sorrell’s failure to respond to the changing market, one agency leader told me in March, noting that some long-serving staff were having to defer retirement plans because of the fall in WPP’s stock.

All of which shows that Sorrell’s position as chief executive was under serious pressure before news broke on 3 April that the board was investigating allegations of personal misconduct.

That investigation led to Sorrell departing on 14 April, although he denied the allegations “unreservedly”.

Those close to the board insist they were not looking for a pretext to oust him and there was no rift.

Sorrell will reflect that it didn’t have to be this way.

He could have begun a succession process in 2016 after posting record results, capping a remarkable, 30-year run as chief executive.

That’s what Maurice Levy, his rival for three decades at Publicis Groupe, did.

Levy reorganised the group, launched a search for a new CEO and handed over to his favoured candidate, Arthur Sadoun. Levy has stayed on as chairman of the supervisory board and remains influential with clients.

John Wren, the chief executive of Omnicom since 1997, looks to be doing something similar as he quietly added the role of chairman this month.

Four years ago, Sorrell was crowing as Publicis and Omnicom aborted their plan to merge and create a larger rival to WPP.

But one WPP agency chief thinks it may have marked the start of Sorrell’s decline.

While Levy and Wren re-examined the way their companies were organised, Sorrell stuck with the status quo — until it was too late.

He memorably said that he would only leave WPP when the company wanted to cart him off to the glue factory.

Now he has ended up fulfilling his own prophecy.

Time will tell if WPP can survive in its current form without its founder.

WPP insiders say Sorrell’s departure has already unleashed a wave of energy and optimism because they know that change will finally happen.

Sentiment could improve quickly — if a new leader can offer a new narrative for WPP, re-organise the group accordingly and win business.

The agency model is not dead. It just needs reinvention.

We have not heard the last of Sorrell, who made his first outing this week since leaving WPP when he attended a Thirty Club ad industry dinner in London.

But as every sports fan knows, even the best star performer cannot resist the march of time indefinitely.

A handover to a new generation was overdue at WPP.