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25 Years on

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					                                                                                    THE WIRE • April 2010



         A quarter of a century after the Group
 VIEWPOINT


was founded, Joseph L. Bower of Harvard
Business School offers an independent appraisal
of what WPP has achieved along the way


25 years on
REVIEWING the history of WPP, I am struck by         encouraged to expand. By the opening of the
three recurring themes: it has been guided by a      new century, WPP found itself pitching and
consistent vision of how the marketing services      winning multi-billion dollar mandates for
industry would evolve to serve the changing          global marketers such as Vodafone, HSBC and
needs of clients; it has paid careful attention to   BP. Achieving collaboration across cultures,
the importance of financial as well as creative      geographies, disciplines and brands is rare.
performance; and its brilliant creative and             But if the strategy was a consistent part
financial success has been driven by a number of     of the vision, so also was the organizational
truly outstanding leaders, not least its founder     philosophy. The Group ensured that back-of-the-
and CEO, Sir Martin Sorrell.                         house disciplines were strong and transparent.
    Sorrell had left the job of Saatchi & Saatchi    Treasury was strengthened. Budgeting was
CFO in 1985 in order to pursue the idea              robust. Real estate and purchasing were
of assembling a stable of “below the line”           centralized. The HR group was strengthened
marketing service firms that would somehow           so that recruiting, training and performance
develop the ability to provide a relatively full     evaluation were professionalized. These services
line of marketing services economically delivered    were made available to the smaller groups. But
to multinational clients. The strategy exploited     except where it made sense for local specialists to
two basic trends: non-media marketing services       join those in other countries to form regional or
are growing faster than media advertising, and       global firms, a central tenet was that companies
marketing services are growing faster outside the    based on creative talent worked best when
US than inside.                                      independent-minded, creative spirits are left to
    The opportunity existed to use acquisitions      “breathe freely”. The flags of the great brands
to consolidate a fragmented industry. Hundreds       remained flying high over the headquarters of
of acquisitions followed. And as the Group was       each tribe.
assembled, heavy investments were made in Asia
where markets were growing fastest. WPP had                  WPP was early to
its first main Board meeting in China in 1989.               recognize the challenge
    Those two basic ideas were played out
                                                             to conventional marketing
repeatedly over the next two-and-a-half decades
with two important modifications to the                      communication and
strategy. The opportunity arose to buy J. Walter             invested heavily in the firms
Thompson, the icon of the media marketing                    that would provide the
industry. Its acquisition and turn around were               new means for reaching
a wonderful success, providing the confidence
                                                             web-based consumers
and financial support for the next move, the
acquisition of Ogilvy & Mather which nearly
took down the young firm. Neither of these              And this is the third theme. Burt Manning
moves fit the original strategy in that they were    did a truly remarkable job turning around J.
“above the line” businesses, but it quickly          Walter Thompson. Charlotte Beers saved Ogilvy
became apparent that with the financial markets’     from the brink and Shelly Lazarus drove two
appreciation of WPP’s performance reflected in       decades of growth including award-winning
the stock price, there would be opportunities to     work on a global mandate from IBM. Howard
use stock as currency to acquire the wonderful       Paster built a public relations powerhouse
resources of a series of major advertising groups.   from an assemblage of great names. And then
Young & Rubicam, Grey, Cordiant, 24/7 Real           there is Jeremy Bullmore, sage of Farm Street,
Media and TNS followed the first two into the        whose insight, vision and superb understanding
fold along with hundreds of leading marketing        of marketing communications has shaped the
services companies.                                  Group’s thinking for two decades.
    The second modification came with the               The financial success of WPP is remarkable.
digital revolution. WPP was early to recognize       But what impresses me most is the reputation
the challenge to conventional marketing              of its leaders. When I am outside Harvard, I
communication and invested heavily in the firms      am mostly in the world of the Group’s clients.
that would provide the new means for reaching        There it is clear that these individuals and their
web-based consumers.                                 colleagues have earned the respect of business
    Over the 1990s and the 2000s the small           leaders who think of them as highly professional
Group strategy unit led by Eric Salama, and then     and creative advisors.
by Mark Read, worked to grow by leveraging
the power of WPP’s diverse disciplines at the
                                                       Joseph L. Bower is Baker Foundation Professor of
same time that the individual pieces were              Business Administration at Harvard Business School

				
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