Sir Martin Sorrell - 'Losing something still gets to me'
By Matthew Gwyther Monday, 03 December 2012
The MT Interview: Martin Sorrell built advertising giant WPP from scratch, and has just been voted MT's Britain's Most Admired Leader for the first time. With a painful divorce behind him, at 67 he's showing no sign of slowing down.
To say that Sir Martin Sorrell is pleased as Punch to be the UK's Most Admired Leader for 2012 is an understatement. It was necessary to tip him off about his success and, in his normal fashion, an email was returned within minutes from the pint-sized dynamo with the busiest BlackBerry on the planet.
Sorrell loves accolades and awards. He has always relished the prestige that comes with his position, being listened to and appreciated. In his element being interviewed for Channel 4 News in the falling snow at Davos, Sorrell also loved doing Radio 4's Desert Island Discs - a rare appearance of a business person on this venerable show - and he acquitted himself rather well. (Favourite tune: Chet Baker's My Funny Valentine. Favourite book: The Talmud. Luxury item: cricket bat, ball and stumps.) Being one of our national treasures along with Stonehenge and Constable's The Hay Wain suits him fine.
But he's certainly no relic. He may now be 67, with 27 years at WPP under his belt - during which time it's grown to become the world's pre-eminent marcomms businesses - but Sorrell has lost none of that old competitive edge. He watched as the MT Leader's award was scooped year after year in the noughties by Sir Terry Leahy. And he recalled that the winner way back in 2002 was Lord Browne. He follows such things assiduously.
It's a Monday and he has just flown in from Germany to the desk he has occupied for donkey's years in Farm Street, in London's Mayfair. He is beaming when we meet - and why shouldn't he be? The man who is the longest-standing FTSE 100 CEO, the father of the blue-chip house, is still in there day-in, day-out, battling. The restless Sorrell is the world's most unrepentant micro-manager - a term he takes as a compliment.
'WPP is always a work in progress,' he says. 'I got up this morning and found out we'd won a piece of business, then I heard this afternoon that we'd lost one. Losing something still gets to me, because with this one I felt I found out about it too late. If I'd known earlier there was a problem I might have been able to make a difference.'
But what about the chain of command? He can't get stuck into everything. 'Of course there are proper hierarchies and of course people shouldn't go behind backs ...
It's not that I want to control, I just want to help. There are very few people in our organisation who can connect A to B - work out how something that happens in Mumbai connects to something else in Sao Paulo. You can codify these things but there's still an important human dimension.' WPP, you should remember, is a company with 162,000 people that now operates from 3,000 offices in 110 countries. If he had his way, he'd visit every office each week to keep an eye on things.
MT last profiled him nearly 10 years back, when the outlook was almost as uncertain as it is today. Plenty has occurred in the interim: by far the worst of the three recessions he has experienced since WPP's birth, and the departure to Dublin of WPP for tax reasons, followed by its return to London. His personal life has also had its trauma - the divorce from his then wife, Sandra, in 2005 was uncomfortably high profile, being splashed all over the pages of the Daily Mail. The largest-ever UK divorce settlement at the time cost him £23m in cash, a Georgian townhouse and two parking slots at Harrods. He has since remarried to Cristiana Falcone, an Italian 30 years his junior who is a director of the World Economic Forum. He looks spruce in a cool suit and even has a trendy cotton string bracelet on his wrist.
'They always say that the three most stressful life events are the death of a parent, moving house and divorce. Divorce was the worst for me. It was totally my fault and I took responsibility. I didn't successfully balance career and family. The whole thing was a deeply unpleasant experience in which the lawyers benefit, not the principals. It was a bit like M&A and how lawyers and investment bankers deal with such transactions: you're the dish of the day being picked over. My kids were older but that didn't mean they weren't affected by it. It was a 32-year marriage.'
He's clearly very proud of his three boys, Robert, Jonathan and Mark, all of whom went to Cambridge (like their father), then went on to Goldman Sachs, although two have now left the Vampire Squid, one to establish his own hedge fund, the other to become FD of the troubled Man Group.
The subject of his heirs brings us to the vexed question of succession and when he might hand over control of his corporate baby. Not that he's leaving any time soon. Could another Sorrell be running WPP one day?
'No. Well, if I owned 40% and had the voting rights it might be different,' he grins. 'But probably not. It's funny, I always wanted to work with my father and we tried in 1972-73. It didn't work and I was really upset about it. He never listened to me and vice versa.
'My sons have made their own way and they're fine, despite me telling them to go to business school - which they ignored. They don't owe me anything. Mind you, I'm not in the Warren Buffett school of no inheritance for offspring.'
Sorrell has an interesting attitude to material wealth. 'I have a nice life but I don't do big gardens, collect paintings or classic cars.' His fortune of at least £140m is almost exclusively bound up in WPP shares - which, as he notes, is not regarded as an especially wise or safe way to conduct investment matters. Hence, perhaps, his frequent battles with shareholders over his remuneration. The last unsightly episode came earlier this year, when he sought a total package of £13m, which included a 30% rise in his basic salary to £1.3m - the first increase for 10 years. Sixty per cent of the vote went against him but it wasn't binding. (Interestingly, 98% of the shareholders wanted to re-elect him as boss.)
He went on the offensive, penning an article for the FT with the cheeky headline 'Mea culpa - I act like the owner I am'. (He actually owns only 2% of WPP's shares.) When things cut up rough on the executive pay front, most CEOs keep schtum, hiding behind whoever chairs the remuneration committee. Not Sorrell. He loves a scrap and came out with fists flying, leading one major shareholder to wish upon the street-fighting CEO a bloody nose. But he is unrepentant. 'I am an owner, not the owner. I don't treat it as my own personal fiefdom or empire, but my ownership concentrates my mind. Every time that share price moves 10p one way or the other it means millions to me.'
He has a point and it's reasonably argued, but in this age of austerity he is perhaps not as sensitive to the realities of a Shareholder Spring as he might be.
One thing that makes him especially cross is what he perceives as the inconsistent judgements made by proxy organisations like ISS when condemning corporate governance among listed companies. He cannot resist a dig at his deadly enemy Omnicom: 'They've got an 83-year-old chairman who used to be CEO, directors with an average age of 60 and length of service of 14 years and they just get a (governance) tick!'
Although he clearly finds some of the requirements of public listing irksome and must envy the behind-the-scenes freedom of private equity owners, he acknowledges that WPP could not have been built without access to the public markets and the money they provided for acquisition. (He says, though, that it's better to grow organically, noting with admiration the success of the home-grown McKinsey and Goldman. When they did decide to make acquisitions, they usually fluffed it.) 'Warren Buffett said at the Microsoft conference that for public companies these concerns about compensation and social issues will continue to press while the economy is still under pressure. And if this recession lasts 10 years, they won't be going away any time soon.'
Over the years, Sorrell has made plenty of enemies in his industry. David Ogilvy famously dismissed him as 'an odious little sh*t'. And Alain de Pouzilhac, the chairman of Havas, his French rival, said of Sorrell: 'Normally, it is the French who are arrogant, but I have found one guy who is more arrogant than our whole nation put together. He must have a bit of French in him. You have good guys and bad guys in life, and I think Sorrell is in the second category.'
Few British entrepreneurs build companies to the size of WPP - most bail out before their creation becomes big and international in its reach. Some may object to his style, but the UK needs more Sorrells, with his long-term empire-building persistence and determination. Although he has his detractors, he has staunch, loyal supporters too who admire his considerable strengths.
'Martin hasn't changed. He's got even more so,' notes a colleague who has worked with him for years. 'He was never a classic ad man. In fact, he's not remotely an ad man, and there has always been this love/hate thing with the industry. He is unsentimental and entirely flexible, never letting strategy get in the way of tactics. You'll never understand him fully if you don't grasp the importance of the fact that he's the founder of the business. This makes him unlike other CEOs. In his mind, WPP is still his. One of the reasons the succession is a non-issue for him is that he doesn't like sharing anything much: prestige, power, authority.'
Another long-term colleague says: 'He's more relaxed in himself. The divorce was awful, but he took it head-on. His new wife keeps him grounded, although he still works like a maniac. Nobody could do the job in the way he does it, and nor would it be right for them to do so. Whoever eventually replaces him, it will not be a like-for-like. One of the things for which he rarely receives credit is his great skill at judging talent. He's very intuitive about where the real talent is in a business.'
So what of Sorrell the oracle? His gnomic pronouncements about what the future holds for us have become legendary with the broadcasting of such notions as bath-shaped recessions. His latest was the advent of 'grey swans'.
And what does he feel about Europe's prospects? 'I remain very bullish on the Germany/Poland/Russia axis, which is an unfortunate term and may cause political problems, but it's strong. But in western Europe we may just be halfway through a lost decade. France is a big worry. We've got really good people in excellent companies there who are asking to go to Brazil or India. Our people in Spain and Italy are depressed by the stubborn lack of growth.'
And what of his appetite for the fight? Surely, after all these years he must experience a degree of ennui, a touch of groundhog day with yet another analysts' presentation or tense annual budget negotiation?
'Not at all. How could I get bored with this? Yes, the intensity is considerable but I get more out of it now than ever. It's intellectually hugely interesting because what we do is so much more complex geographically and technologically, not to mention the addition to the mix of the whole CSR and sustainability agenda.
'Look at Myanmar, which has just opened up - 66 million people with the potential for huge consumer growth. We've piled in and have already got an office of 60 (staff) in Rangoon. Of course, I'm drained at the end of a week and collapse in a heap, but the only problem I have is the scheduling and working out how to cram it all in.'
And so, with his photograph taken, he scuttles off to address a meeting of Chinese executives who have come to visit. Then over the next 10 days, onwards to Washington and India. He never stops. MT will no doubt be back in 10 years' time to see how he's doing. But we don't expect to find him with his feet up in front of the communal telly in an old folk's home.
SORRELL IN A MINUTE
|1945:||Born 14 February in London, the day after his close friend Simon Schama|
|1956:||Haberdashers' Aske's School, Christ's College, Cambridge, then a Harvard MBA|
|1970:||VP, Mark McCormack Organisation|
|1975:||Director, James Gulliver Associates|
|1977:||Group FD, Saatchi & Saatchi|
|1986:||Joins WPP as director and becomes chief executive|