Even Sorrell needs succession planning

A new year and a new bathtub metaphor from Sir Martin Sorrell. However, his most recent – and rather sobering – prognosis for the marketing industry was somewhat eclipsed by a mini-shareholder revolt at WPP over corporate governance.

Last week two of WPP's board directors told a Sunday newspaper of their disquiet over Sorrell's lack of visible succession and the board's need for more financial information on major deals.

It seems churlish to question Sorrell's management style, given his achievements (there's a reason why the entire marketing and advertising industry waits with bated breath for WPP results). But it isn't the first time that shareholders have questioned his succession planning, or apparent lack of it.

However, it is pretty hard to imagine who could succeed Sorrell.  The business model of WPP is very much his own. It's a bit like trying to imagine Virgin without Sir Richard Branson. Over the years stories, apocryphal or otherwise, have circulated about  Sorrell, such as the time when WPP won Samsung  because he flew to South Korea about eight times in three weeks. He personifies the integration potential of WPP's various marketing disciplines, and can see and sell to clients' synergies and cost-efficiencies across his empire.

But how many times can you replicate this personal service across WPP's global client base? What is needed is a new business model – sustainable without the energy of the entrepreneur extraordinaire, but which can systemically continue to make the sum of WPP add up to more than its parts.

Sorrell is certainly not the only business leader with this dilemma. Despite their differences, most advertising and PR agencies are built by strong, charismatic entrepreneurs. And succession planning, or lack of it, is a problem that tends to afflict agencies at a time of rapid growth, which is exactly when an entrepreneurial leader is having the time of his or her life and least likely to be thinking about an exit strategy.

Examples abound within the PR industry, although some of its brightest stars – such as Lord Bell, who once said he would have to be carried out of the office in a coffin – have come to recognise the need for thorough future planning.

Pessimism and objective analysis of worst-case scenarios are generally hard-wired into the corporate governance of plcs, but even smaller companies with energetic founder-owners should perhaps be asking how well they would cope if said leader fell under a bus.

kate.nicholas@haynet.com

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