Speaking at Unbound London 2019, the WPP chief made the comparison while noting that his firm is a confederation of small companies with around 4,000 P&Ls. Though he conceded they are necessary to assess performance, he said there are “probably too many”.
Since taking over the business last September, Read has jettisoned more than 30 subsidiary companies, most recently selling a 60% stake in research firm Kantar to Bain Capital, a deal expected to complete next year.
But he remains committed to a strong degree of diversity in the company, highlighting his preferred exemplars of multi-brand growth.
“I’d like WPP to be in our industry what LVMH is in luxury, or Disney in the entertainment business” – really strong brands but a common cultural thread, as well as their ability to work together.
The last point is crucial, he said – co-operation is an area he believes any large company in WPP’s vein must become comfortable with. “We pay people to co-operate,” he added.
Both Disney and LVMH have wildly different interests: the former runs a movie business, retail operations and theme parks; the latter’s interests stretch from luxury leather goods to fine champagnes and brandies.
Both are leaders in diverse fields. Disney, with its recent acquisition of 20th Century Fox and the forthcoming launch of Disney+ is set to rule Hollywood. Meanwhile, LVMH chief Bernard Arnault recently overtook Bill Gates as the world’s second richest person.
For WPP, however, there are distinct challenges. Not least, finding growth in the large-scale US market as well as being able to make in-roads in the complex new Chinese market. Though WPP was an early entrant into China, that has required a pivot of the business away from the TV-centricity that spurred the holding company’s early growth and towards the mobile-first reality that China presents.
For now, the company and its shareholders remain supportive of Read’s strategy – his interlocutor at Unbound, Yossi Vardi, congratulated him on Fidel Castro levels of approval – but the road ahead will involve the strategy turning into an execution that will win the company business.
Sourced from WARC