From conglomerate overlord to start-up entrepreneur
A wealth of experience in empire-building
When Sir Martin Sorrell, founder and Chairman of WPP, left the company a few months ago, his farewell note to employees around the world included the phrase ‘back to the future’. Few could have foreseen how quickly the return of the future would come around.
Little more than a month later, Sorrell delivered on that promise, announcing the takeover of a small company called Derriston Capital – which is to be renamed S4 Capital in honour of four generations of the Sorrell family. There are distinct echoes here of the purchase back in 1985 of a small UK-based maker of wire baskets, Wire and Plastic Products, which would eventually become the world’s largest communications conglomerate.
Sorrell spent 33 years building the WPP empire and left it under something of a cloud in mid-April this year, after it was revealed that the company was carrying out investigations into his personal conduct. From its humble beginnings, he left it as a global communications powerhouse worth more than $20bn, with offices in 113 markets. If anyone assumed that, at the age of 73, he would glide quietly into well-earned retirement, they were mistaken – thanks in no small part to the glaring omission of a no-compete clause in his final contract.
Sorrell is proving himself to be the classic restless entrepreneur, constantly seeking out the next challenge and viewing a quieter existence with a mixture of scorn and horror. He’s invested over $50m of his own money in S4, a communications company focused on driving growth for clients, exploiting the opportunities for development in technology, data and content. So far, so normal – many (if not all) communications companies would claim to do the same, in almost those precise words. So what’s the point?
A better way than the holding company model?
S4’s chances of succeeding in this space are very good thanks to Sorrell’s unparalleled address book, bursting with the contact details of the CEOs of every major company in the world, teamed with his experience in building an industry-leading company from scratch. What’s more, S4 will undoubtedly exploit its ability to be agile compared to the lumbering weight of the global holding companies, which he was so vociferously defending until a few months ago. He now appears to be saying there’s a better way – the S4 way – and he is probably right. Just last week S4 acquired Dutch digital production company MediaMonks, seeing off competition from several rivals, including – you guessed it – WPP; the takeover marks the true start of Sorrell’s renaissance.
A headache for the holding companies
Should WPP and the other holding companies be concerned? Yes, they should, especially if S4 and Sir Martin Sorrell attract the right thinkers and doers, who listen to and focus on the needs of clients and harness technology, unhindered by the vast structures so inherent to the model of the communications giants.
WPP is in good hands and, while they are determined to prevent their former boss getting his exit package as they believe he has breached confidentiality clauses, it seems to be business as usual. However, Sorrell’s activities are happening against a backdrop of uncertainty for media agencies, who are struggling to find their place in a new world where technology and data reign supreme. With Sorrell throwing his hat into the ring anew, things might change a little faster.
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