5 Challenges Facing New WPP CEO Cindy Rose

Incoming WPP CEO Cindy Rose has a giant job forward when she steps into the position 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 trade 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 know-how experience wanted to convey 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 stockAs the chief of a public firm, Rose should take care of shareholders impatient for WPP’s inventory to bounce again from historic lows. This shall be troublesome 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 supply more and more subtle advert instruments that bypass companies,” he stated. “Consulting corporations and unbiased companies are profitable share with a extra enticing worth proposition.”In that strain cooker, Rose’s strategic selections will, largely, be dictated by the board’s finish sport: Does it wish to create an actual technique for WPP’s future, or wouldn’t it be higher off promoting the corporate for elements?  “There’s the monetary engineering aspect—what’s going to produce essentially the most worth for shareholders unbiased of the appropriate technique?” stated Brian Wieser, principal at Madison and Wall. “As a result of the inventory is so, so very low, it might very effectively be that the board would fairly see some quick advantages.”Martin Sorrell, CEO of S4 Capital and former CEO of WPP for 3 many years, stated it comes down as to whether the enterprise “could be higher off being dismembered into its nonetheless standing constituent elements or consolidated elsewhere.”“Corporations that have been as soon as a part of WPP, resembling Kantar, VCCP, FGS, and Globant have thrived as unbiased corporations,” Ahmed identified. “The query is, might WPP understand the worth in a few of its belongings earlier than it’s too late, or does it wish to merge and consolidate its companies additional internally?”2. Growing a transparent technique If the board does wish 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 workers 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 trade situation: “how do you arrange a contemporary company group, and what ought to the company providers trade appear to be?”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 an alternative, he’s touted the significance of company manufacturers as levers for attracting purchasers and expertise, Wieser stated.However that method has drawbacks for WPP, together with including “layers of non-billable overhead each on the central stage and inside the companies,” in addition to “super duplication of providers,” Ahmed stated. “Ogilvy has change into 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 shall be loss-making entities on their very own, so let’s do the naked minimal.” Coming in as an trade outsider, Rose should rapidly develop a standpoint on the position of company manufacturers and establish the appropriate construction to take WPP into the long run.“Being each a holding firm and a client-facing model similtaneously 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 pay offUnder Learn, WPP invested tens of millions of {dollars} into WPP Open, its inner AI platform. Will probably be Rose’s job to make that wager 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. In response to Jay Pattisall, principal analyst at Forrester, WPP selected a tech govt with an AI background for precisely that purpose: “The collection 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 through the years,” shall 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 providers firm, not a software program firm,” Pattisall agreed. “Modernizing WPP itself, because it reconciles with automation and alter, shall 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 purchasers 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 explanation WPP has misplaced “not solely many proficient leaders, however purchasers because of this too.”Nick Emery, CEO of company Jellyfish and a former WPP Media exec, believes Rose’s largest problem shall 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 purchasers, and totally embraces the position of AI to satisfy the promise of know-how.”Rose’s consideration right here should be “24/7, laser-focused on the USA,” based on Sorrell, which is “undoubtedly the middle of the shopper world and the place WPP persons are in all probability most demoralized.” “You must hope—when you’re hoping for good issues for WPP—that she’s a superb supervisor,” Wieser added. “That’s in all probability the only most necessary situation.”5. Her outsider standing Rose’s trade outsider standing may very well be a problem or profit, relying who you ask. Ahmed described her as “a protected pair of fingers” as “an inner candidate with an exterior vantage level.” Sorrell stated she suits WPP board chairman Philip Jansen’s standards as a know-how and AI-forward govt.However Wieser identified that along with this being her first CEO gig, her solely advert trade expertise has been by the vantage level of sitting on WPP’s board. “You actually haven’t really lived and breathed the trade,” he stated of Rose. “It’s believable that your views on the trade is likely to be incomplete.”Nevertheless, he added, “it may additionally imply recent eyes, which isn’t a foul 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 all the way down to good administration,” he stated.