Incoming WPP CEO Cindy Rose has an enormous job forward when she steps into the function in September.
Because the Microsoft exec takes the reins from Mark Learn, who’s departing after seven years on the helm, she inherits a enterprise in decline that’s struggling to maintain tempo with an business in flux.
Along with addressing WPP’s structural and monetary issues—it issued a shock revenue warning and downgraded its 2025 development forecast final week—Rose should stave off continued shopper losses and switch round morale at its companies.
Trade leaders agree that Rose has the AI and expertise experience wanted to carry WPP into the long run. However what’s most important is that she develops a transparent imaginative and prescient for a enterprise that’s lacked one for a while.
“Hopefully the WPP board are clear about what its new technique is, as the present one has not delivered,” stated Ajaz Ahmed, founding father of Studio.One and former CEO of WPP company AKQA.
1. Reviving WPP’s inventory
Because the chief of a public firm, Rose should deal with shareholders impatient for WPP’s inventory to bounce again from historic lows. This will probably be tough in a sector that’s “dealing with actual strain,” stated Ahmed.
“Rates of interest are nonetheless excessive. Budgets are tight. Platforms like Meta, TikTok, and Google provide more and more subtle advert instruments that bypass companies,” he stated. “Consulting companies and unbiased companies are profitable share with a extra engaging worth proposition.”
In that strain cooker, Rose’s strategic choices will, largely, be dictated by the board’s finish sport: Does it need to create an actual technique for WPP’s future, or wouldn’t it be higher off promoting the corporate for components?
“There’s the monetary engineering facet—what is going to produce essentially the most worth for shareholders unbiased of the best technique?” stated Brian Wieser, principal at Madison and Wall. “As a result of the inventory is so, so very low, it might very properly be that the board would quite see some rapid advantages.”
Martin Sorrell, CEO of S4 Capital and former CEO of WPP for 3 a long time, stated it comes down as to if the enterprise “could be higher off being dismembered into its nonetheless standing constituent components or consolidated elsewhere.”
“Firms that had been as soon as a part of WPP, comparable to Kantar, VCCP, FGS, and Globant have thrived as unbiased corporations,” Ahmed identified. “The query is, might WPP notice the worth in a few of its property earlier than it’s too late, or does it need to merge and consolidate its companies additional internally?”
2. Creating a transparent technique
If the board does need to pursue a future for WPP on this present state, Rose wants a transparent technique and standpoint for the enterprise—one thing observers agree has been missing.
“The large concern for shareholders and staff isn’t simply the construction; it’s the absence of a transparent, credible plan,” Ahmed stated. “For some time now, it’s felt like WPP has been making it up because it goes alongside.”
For Wieser, that problem will get to the center of an existential business challenge: “how do you set up a contemporary company group, and what ought to the company companies business appear like?”
Whereas Learn merged companies below WPP to streamline its unwieldy operations, he hasn’t gone so far as his friends in working the corporate as a single model. As a substitute, he’s touted the significance of company manufacturers as levers for attracting shoppers and expertise, Wieser stated.
However that method has drawbacks for WPP, together with including “layers of non-billable overhead each on the central degree and inside the companies,” in addition to “great duplication of companies,” Ahmed stated. “Ogilvy has turn out to be a holding firm inside a holding firm, which isn’t precisely simplification.”
Wieser agreed that company mergers weren’t an actual technique. “That was desperation,” he stated. “There’s a recognition these will probably be loss-making entities on their very own, so let’s do the naked minimal.”
Coming in as an business outsider, Rose should rapidly develop a standpoint on the function of company manufacturers and determine the best construction to take WPP into the long run.
“Being each a holding firm and a client-facing model concurrently managing dozens of company manufacturers with their particular person cultures, management groups, and operations is complicated, and this mannequin hasn’t labored for WPP,” Ahmed stated.
3. Making WPP Open repay
Below Learn, WPP invested hundreds of thousands of {dollars} into WPP Open, its inside AI platform. Will probably be Rose’s job to make that guess repay—and set WPP up for an AI-powered future.
“The numerous funding into WPP Open hasn’t yielded the expansion that was hyped a few years in the past,” Ahmed stated.
Based on Jay Pattisall, principal analyst at Forrester, WPP selected a tech govt with an AI background for precisely that cause: “The choice of Rose is designed, partly, to additional commercialize WPP Open,” he stated.
Ahmed agreed that Rose’s expertise at Microsoft, which “hasn’t precisely been shy about reinventing themselves over time,” will probably be helpful in pushing WPP to adapt to automation.
However whether or not that’s sufficient to remodel the legacy holding firm’s enterprise mannequin stays to be seen.
“WPP is a companies firm, not a software program firm,” Pattisall agreed. “Modernizing WPP itself, because it reconciles with automation and alter, will probably be no small process.”
“I’m not satisfied that companies can construct a SaaS-type enterprise in competitors with software program corporations like Adobe,” Sorrell added.
4. Boosting morale
Rose is taking up a enterprise the place morale is low and shopper relationships are tenuous.
WPP has misplaced a number of main shoppers this yr, together with Mars and Coca-Cola. In the meantime, ongoing layoffs and a botched return-to-work mandate have led to discontent and nervousness amongst employees.
Sorrell pointed to what he views as a misguided simplification technique below Learn, which collapsed manufacturers like J. Walter Thompson, Younger & Rubicam, and Wunderman, as the rationale WPP has misplaced “not solely many gifted leaders, however shoppers because of this too.”
Nick Emery, CEO of company Jellyfish and a former WPP Media exec, believes Rose’s greatest problem will probably be to “battle for, shield, and champion the numerous sensible individuals who’ve given their all to the corporate—and to craft a technique that makes them happier, drives development for shoppers, and absolutely embraces the function of AI to meet the promise of expertise.”
Rose’s consideration right here should be “24/7, laser-focused on the USA,” in accordance with Sorrell, which is “undoubtedly the middle of the shopper world and the place WPP individuals are in all probability most demoralized.”
“It’s a must to hope—when you’re hoping for good issues for WPP—that she’s a wonderful supervisor,” Wieser added. “That’s in all probability the only most necessary challenge.”
5. Her outsider standing
Rose’s business outsider standing could possibly be a problem or profit, relying who you ask.
Ahmed described her as “a secure pair of arms” as “an inside candidate with an exterior vantage level.” Sorrell stated she suits WPP board chairman Philip Jansen’s standards as a expertise and AI-forward govt.
However Wieser identified that along with this being her first CEO gig, her solely advert business expertise has been by the vantage level of sitting on WPP’s board.
“You actually haven’t really lived and breathed the business,” he stated of Rose. “It’s believable that your views on the business is likely to be incomplete.”
Nonetheless, he added, “it could actually additionally imply contemporary eyes, which isn’t a nasty factor in any respect,” pointing to Michael Roth’s profitable tenure at IPG.
What’s essential is that Rose surrounds herself with executives which have “readability of imaginative and prescient.”
“It’s going to come back right down to good administration,” he stated.
