Pundits are already predicting the break up of WPP in the wake of Sir Martin’s resignation, however the group has plenty of talent and the next generation has both the experience and contemporary thinking to step up.
What the events of the last week illustrate is that any Board, and in particular the Non Execs, must insist and guide proper and meaningful succession planning. This process needs to be public as well as internal so all stakeholders understand and can input on the plans.
Succession is as much about culture and values as it is about the risk of a surprise event forcing a resignation. At WPP the concern over CEO pay and succession has been well reported. The Board will no doubt reflect on whether they paid enough attention to stakeholders’ feedback – but from the outside, and the views expressed by WPP staff, it appears not.
However, Sir Martin’s “retirement” provides a real opportunity for the Board to appoint fresh talent (hopefully taking the opportunity to address other questions such as diversity) that can reenergise the Group.
Strange and unfortunate as the circumstances are, this forced succession might make it easier for new management to make the big changes to the Group's operating model that are required to succeed in a rapidly evolving sector. Sir Martin’s relentless doctrine of ‘bigger is better’ has run its course. A clean break at the top should allow faster and more fundamental change than might otherwise have been possible under a gradual transition of power.
These are exciting times - a moment that could see the rejuvenation of WPP, which to Sir Martin’s credit, has led the industry for a generation. WPP’s peers, however, are perhaps in far weaker positions. So, will this moment in time trigger their Boards to grasp the nettle and rejuvenate their leadership and so ensure effective succession, or will they sit on their hands until crisis hits?