Of all the ways Sir Martin Sorrell might have left WPP – effecting a spectacular sale, smoothly handing over to a well-groomed successor, carried out in a coffin (always considered the most likely option, according to those that know him best) – resigning after being investigated for "personal misconduct" is surely the bleakest.
In a statement issued to staff late on Saturday evening, Sorrell said "the current disruption we are experiencing is simply putting too much unnecessary pressure on the business, our over 200,000 people and their 500,000 or so dependents, and the clients we serve in 112 countries. That is why I have decided that in your interest, in the interest of our clients, in the interest of all shareowners, both big and small, and in the interest of all our other stakeholders, it is best for me to step aside."
Those who know Sorrell assumed he’d dig in and fight to the death. In the end he quit. So it's unlikely we'll be told officially now what the allegation did involve and what the investigation found. A WPP statement confirmed "the previously announced investigation into an allegation of misconduct against Sir Martin has concluded. The allegation did not involve amounts that are material."
But whatever your view of Sorrell – and he’s become such a public figure that plenty of people who’ve never worked for or against him have a view – over the last three decades he’s proved himself a phenomenal businessman.
He built WPP from nothing into a £15bn world-leading British company and won himself a reputation with the City and the wider business community that has elevated our whole industry. Whether you admire him for his business nous, loathe him for ripping the heart out of our industry, or do both, Sorrell has earned respect. At least in the absence of any detail about that alleged "personal misconduct".
To anyone rubbing their hands at the downfall of our industry’s biggest titan, I say "be careful what you wish for". The sorry Sorrell saga certainly won't do anything for the standing of our industry among clients already questioning the value we add. But a weaker WPP wouldn’t do much for the status of British advertising in what is now a global agency marketplace. And unless clients and analysts turn against the holding-company model altogether, a strong WPP led by a strong chief is surely desirable.
Yet it’s not easy to imagine anyone else running the labyrinthine WPP as brilliantly as Sorrell, who built it deal by deal. Of the rumoured successors, none has his understanding of the business coupled with his undoubted charisma and impressive skills on the global business stage. Will the company be as ruthlessly competitive without his hyper-personal commitment? And if not, will it be better sold or broken up, absorbed by one of the management consultancies or run by venture capitalists? Or streamlined and reduced to leaner bones (the sale of Kantar has already been speculated on)? None of these scenarios suggests a brighter future for some of our industry’s biggest agency brands such as Ogilvy or MediaCom.
As for successors, Mark Read, the Wunderman chief executive who has now been appointed joint chief operating officer alongside Andrew Scott, is the best internal candidate. But in his new COO role he’ll be associated with clearing up the immediate post-Sorrell mess; does this make him a less likely candidate for the top job? Some say the board will look for a fresh candidate to signal a clear new beginning, the start of a post-Sorrell era.
And whoever the board does pick to replace Sorrell, there’s no doubt the new boss will have to get stuck in to making some significant changes to WPP. In the vacuum of detail about the alleged misconduct, much of the narrative around the Sorrell story centred on the WPP model. With big clients taking more of the advertising pie in-house whilst continuing to drive for further cost-cutting and a reduction in the number of agency partners they use, companies like WPP are under significant pressure. Is the complex marcoms behemoth – of which WPP has been the shining example – still fit for purpose?
It’s a model where growth is driven largely by acquisition (with the value of acquired companies often dwindling as they are absorbed into the machine and the founders move on) and it looks leaden and unwieldy in the current climate. It’s also arguably a model that has contributed to the commoditisation of the advertising industry and the devaluation of creativity, smothering individual entrepreneurialism and making this a volume business rather than an ideas business.
When the markets open tomorrow (Monday) we’ll find out what analysts think. WPP’s share price has been on the slide for the past year, from a peak of £19 in March 2017 to below £11 when news of the board investigation leaked. Sorrell’s departure ends the recent turmoil, but the City will be looking for much more change from WPP over the coming months. One thing's for certain, the company, and our industry, will never be the same again.
Claire Beale is the global editor-in-chief of Campaign.