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Last Updated: Monday, 17 October 2005, 17:00 GMT 18:00 UK
Poster Boy for a New World Order

Analysis
By Peter Day
Presenter, BBC Radio 4 and BBC World Service

WPP chief executive Sir Martin Sorrell
Sir Martin Sorrell: "a jumped up little bean counter"?

In 2000 Sir Martin Sorrell made a speech explaining why his clients are in trouble.

They still are, but I'm not sure they have realised it yet.

Despite their "creativity", advertising people are not renowned for their thinking.

But of course as an accountant Sir Martin is not really an adman even though he runs one of the biggest groups of advertising companies in the world.

New trends

The legendary David Ogilvy called Martin Sorrell "a jumped up little bean counter", but he made up with the affronted Ogilvy with the neat step of appointing him chairman of the company, and Sir Martin now remembers the encounter with affection.

Anyway there were six bullet points in his New York speech to the slightly fearsome Trilateral Commission in 2000, and they're worth considering because they are still happening.

He called them stimuli, but they may be more alarming than that.

The world facing corporate leaders as the century turned, he said, included six things which coming together produced real problems for established organisations.

These were low population growth, stable economic growth and low inflation, free trade and improving communications; then there was technology transfer, growing consumer power and the emergence of new competitive categories.

In particular technology trends were making it impossible to maintain any significant or tangible difference in products or services for any length of time; continued innovation now gives a company only a temporary advantage, of six months or so, over its competitors. (The life of a domestic computer printer is said to be about four months).

Americanisation

Growing retail power (of Wal-Mart, for example) was an increasingly difficult factor for WPP's main clients, the big advertisers, to deal with.

Wal-Mart shopper
Advertisers cannot ignore the voices of consumers

And competition was coming from all over, as retailers go into financial services and Richard Branson tries to Virginise everything (that last example now looking a bit dated).

In 2000, Sir Martin Sorrell's answer to these pressure points was in part a marketing solution: to tell his clients to differentiate their products and services in a seriously effective way.

The second was to expand the market by going global.

And he said that so far globalisation meant, essentially, Americanisation. ("The world has not been globalised," he said rather boldly.)

Move over

Global business is in fact effectively controlled from a very narrow corridor in the north-east of the USA by people who think American.

The other day, five years after the speech, I asked Sir Martin to look back at those points in the context of the predictions about the rise of BRICs - Brazil (perhaps) Russia (perhaps), India and China - a rise to take their proper places in the global industrial landscape by the year 2050, a thesis propounded by a clever team at Goldman Sachs.

As a leader of marketers, Sir Martin takes the BRICs thesis seriously; people with things to sell have to take seriously the emergence of new consuming populations.

He sees it more as a return to the status quo of 250 years ago when both India and China had relatively much larger shares of the global economy than they so far have today.

But it's all very well to see things about to happen; how, I asked, are American industrialists going to take the arrival of giant new Chinese consumer producers firm on their doorsteps. Do they realise how much they will have to move over ?

Not really he said, and for good reason.

Not on our watch

Because of age and the narrow career pyramid, American companies are run by people with a time horizon of not much more than five years.

The eclipse of America (and Europe) will not happen on our watch.

All we need to do is to invest in overseas production capacity and distribution, so that we keep pace with the developing world market place step by step.

Long term, though, the Indians and the Chinese (and maybe the Russians and the Brazilians) are going to come and eat our lunch.

It will happen after Sir Martin eventually retires from WPP.

But not after our children and grandchildren seek employment from the shuttered facilities of the Western world.

Work in Progress is the title of this exploration of the big trends upheaving the world of work as we steam further into the twenty-first century; and it is a work in progress, influenced and defined by my encounters as I report on trends in business and organisations all over the world.


PETER DAY: WORK IN PROGRESS

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