My breakfast with Sir Martin Sorrell, co-founder and CEO of WPP, the world’s largest advertising group – think of it as a tech-infused Mad Men in 111 countries – left me dizzy. I had trouble absorbing the tidal wave of information and numbers that he spewed forth like an automaton. But I was also impressed.
China? Without consulting notes, he knew the growth rates in the country’s various five-year plans (the penultimate one, the 11th edition, was 7.5 per cent). He knew how many employees WPP has in Canada (it’s almost 3,000). He knew that the CIA’s World Factbook lists Egypt’s population at 83 million while the Egyptian government itself puts the figure at about 90 million. He knows the average tenure of a chief executive officer in the United States (six years) and how that’s twice as long as the life cycle of the average chief marketing officer.
I checked some of these figures after our chat and they were amazingly accurate.
His mind works so fast that he has a rather maddening habit of not finishing his sentences before he flies off onto another tangent. He also likes to finish your questions.
I started to ask: “If you were a private company … ”
At which point he jumped in and said “ … what would we do differently?”
Well, yes, in fact.
I met Sir Martin in a rather small, bland meeting room in Berger House, a WPP building facing Berkeley Square, one of the poshest bits of real estate on the planet, in west London. When he bolted into the room a few minutes late, iPhone in hand, I was astonished that he was alone. Today, almost no CEO, certainly no CEO of an FTSE-100 or Dow Jones industrial average company, would dare to meet a media grub without a PR minder in tow (I once interviewed a Ukrainian oligarch who invaded the interview room with a PR man, a lawyer, his assistant and an armed guard.)
Silly me. Within seconds, I realized that Sir Martin doesn’t need a PR man because he is his own PR man, and he plays the role well. He is not afraid of the press or public appearances; he courts them both. He is confident, outspoken, opinionated and has a phenomenal memory for facts and figures.
And, like a good PR man, he gets back to you quickly. Equipped with an iPhone and two BlackBerrys, he is a phenomenal e-mailer and is famous for returning e-mails to anyone and everyone – and quickly. He did for me. A week after our meeting, I sent him a few follow-up questions and he responded within a couple of hours – he was in Egypt at the time.
In a sense, WPP and Sir Martin Sorrell are one and the same. He started the company 30 years ago, when WPP stood for Wire & Plastic Products, and built it into an advertising, media, public relations and digital colossus whose businesses include J. Walter Thompson, Ogilvy & Mather, Grey, Burson-Marsteller, Hill & Knowlton, GroupM, Kantar, Xaxis and Canada’s John St., Taxi and Twist Image.
Which raises the question: Since Sir Martin is the public face of WPP – the brand on top of the brand, in effect – what will WPP do when he goes?
To which he responded that he has no intention of going, even though he’s 70. “I’ll carry on as long as they’ll have me,” he said. “My son told a Financial Times reporter that I will never retire, that I’ll be found [dead] on seat 1A on the BA flight from London to Beijing. That may not be far from the truth.”
Sir Martin looks a good 10 years younger than his age, for which he gives credit to “my Italian wife,” referring to Cristiana Falcone, his second wife, whom he met at the World Economic Forum in Davos, Switzerland, and married in 2008. His hair is barely grey. He is short – very short – and trim, though not slight. He looks like he could thump a man half his age.
Breakfast was simple. Bowls of strawberries, raspberries and blueberries and a plate of croissants and muffins – enough for four or five people – covered the side table. Apparently, real-man CEOs don’t eat bacon and eggs any more. Sir Martin poured himself a tea and I went for the typically unpleasant British coffee. To my surprise, his fork went untouched and he used his fingers to pluck the berries from the bowls.
Sir Martin and WPP have had a good year, in spite of slowing growth in the developing world. The company’s shares once again outperformed the broader market and the media and consumer subindexes, as they have for five years. In the past year, the shares have gained 27 per cent, giving WPP a market value of £20.5-billion ($38.4-billion). The company’s total shareholder return between 2010 and 2014 came to 154 per cent, outpacing rivals Omnicom of New York and Publicis of Paris.
Sir Martin himself has been lavishly rewarded for WPP’s above-par performance. He is the highest-paid FTSE-100 boss, ensuring he routinely becomes the focus of shareholder revolts that began three years ago in the “Shareholder Spring.” WPP’s so-called leadership equity acquisition plan alone gave him a £36-million stock award and his total pay for 2014 will likely exceed £40-million (the precise figure will be published in late April, when WPP’s annual report comes out). In 2013, he hauled in £30-million.
He is a staunch defender of his pay. In an article in the Financial Times in 2012, when he was swamped by a wave of shareholder ire, he wrote: “The compensation debate in the U.K. now seems to have shifted from undeserving bankers paid for failure and from payment for performance to what is fair pay. WPP is not a public utility. If Britain wants world champions in the private sector, we have to pay competitively. … If the government or institutions believe pay is excessive, tax it.”
Sir Martin is a proper tycoon, one of the last of his breed. In the Western world, the list of men who created global businesses more or less from scratch and still run them well past normal retirement age is largely limited to him, Rupert Murdoch of News Corp. and Sumner Redstone of CBS and Viacom. Sir Martin may not be as rich as the others, because he owns only about 1.5 per cent of WPP, but there is no doubt WPP is his baby, even if the board of directors can fire him at will.
Born in London, Sir Martin is the son of a Jewish immigrant whose family came from what is now Ukraine. His father, Jack, ran a chain of electrical shops and was an enormous influence on young Martin’s life, acting as adviser, confidant and sort of spiritual adviser. “My dad used to quote the Talmud verbatim just like Shakespeare,” Sir Martin said. “It’s the book I would like to explore but have never done.”
He was educated at Cambridge and Harvard, where he earned an MBA, then, like his father, delved into business. But he didn’t strike out onto his own until the relatively advanced age of 40, when he decided to turn WPP, a lowly maker of wire shopping baskets, into a global advertising business.
In 1985, Sir Martin borrowed £250,000 to buy about 15 per cent of WPP. He was no ad-guy neophyte. From 1978 to 1984, he had been the finance boss of Saatchi & Saatchi, the once phenomenally successful agency run by brothers Maurice and Charles Saatchi (the company is now owned by Publicis).
At Saatchi & Saatchi, Sir Martin was responsible for a flurry of acquisitions that made it the best-known name in the business. At WPP, he applied the same formula: Buy big, buy often and buy everywhere. His sheer aggression won him some enemies. In 1989, when WPP launched a bid for Madison Avenue’s Ogilvy Group, David Ogilvy, known as the “father of advertising,” called Sir Martin “an odious little jerk.” The insult didn’t seem to bother him one bit.
At WPP, not only did Sir Martin buy big, he bought diversity. WPP was not just a creative ad agency in the Mad Men mould. In came media-investment management, data-investment management, public affairs, branding, health-care communications, digital promotion and advertising, sports marketing and programmatics – the automated, real-time purchase of online advertising. The market array is so vast that some of the WPP companies inevitably compete with one another.
“Our industry is creative, but not in the narrow sense of Don Draper in Mad Men,” he said. “We certainly need creative types, but we also need the suits who can manage accounts, and great planners. We need data scientists, programmers and software engineers. Today, 75 per cent of our revenue is beyond what Don Draper did.”
Given its size – WPP has 188,000 employees – and global reach, the company is evolving to some degree into a proxy for global growth. And therein lies the problem – growth, especially in China, isn’t what it used to be. While 2014 was another record year for WPP, the company noted that net sales growth in the past quarter was only 2 per cent.
That’s not all. Austerity is alive and well, not just in the struggling euro zone countries but in the world’s biggest companies. Sir Martin says the spreadsheet mentality, also known as the bean-counter mindset, persists. Companies don’t want to spend on growth; they want to boost profit by cutting costs. Unless corporations undergo a culture change and start to spend again, WPP and its competitors will see their growth constrained.
“I think the Lehman collapse actually had more impact on corporations than consumers because they were staring into the abyss in September, 2008,” he said. “The world almost came to an end, which has made corporations very conservative, which is why they’re sitting on $4-trillion [U.S.] of net cash. Companies don’t want to take risks. They’re very much focused on costs, not the top line. So what we have to do is shift the conversation from how companies can become more efficient to how they can become more effective and efficient.”
Sir Martin is constantly on the move, forever jet lagged and booked every day to the minute. Yet, after 30 years of building and managing WPP, he insists he has lost none of his enthusiasm for the job. “There’s no such thing as stress if you’re having fun,” he said.
I ask him what big projects he’s involved in. One of them, through a WPP agency called Richard Attias & Associates, is no less than the “repositioning” of Egypt’s image to make it more attractive to investors and tourists.
How about that? From overhauling a wire products maker to overhauling an entire country. Mad Men indeed.
Book: The Talmud (‘It's the book I’d like to explore but never have.’)
Movie: Raging Bull
Music: The Beatles
TV program: The Wire
Holiday destination: Uruguay
Car: Land Rover
Collection: Works by the British artist Bill JackmanReport Typo/Error