(VIDEO) Martin Sorrell's 'Near-Death Experience' And Bouncing Back From Mistakes

When Martin Sorrell bought in to WPP in 1985, it was the start of a journey that would end up making the world's largest advertising holding group. What most people probably don't know, however, is that, along the way, Sorrell nearly made a very costly mistake.
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When Martin Sorrell bought in to WPP in 1985, it was the start of a journey that would end up making the world's largest advertising holding group.

What most people probably don't know, however, is that, along the way, Sorrell nearly made a very costly mistake.

Asked by Beet.TV in this video interview to regale his biggest career setback, Sorrell says: "It was the near-death experience... in '91/'92, when I over-leveraged the company after the acquisition of Ogilvy. We thought the world's economy was going to be stronger in '91 and '92 and that we would ride through it.

"The actual technical mistake I made was that we had a convertible preferred stock, which converted in to equity if the share price rose. Of course, in a recession, share prices fall. It was very expensive debt - 11% gross - which was phenomenally expensive."

Sorrell understands why some people may think his eyes were bigger than his belly in attempting the deal in 1989. At the time, Ogilvy was many times larger than his own WPP. But the $864m deal was one of two pivotal buys, together with WPP's acquisition of J. Walter Thompson two years earlier, that would kickstart WPP on a trajectory to real industry heft.

It is telling that Sorrell pulled off the Ogilvy acquisition shortly after the loss of his father, who had been a compass to Martin, both personally and professionally.

"My dad would be my mentor," Sorrell tells Beet.TV. "He died in 1989, just after we did the Ogilvy acquisition. He saw the two biggest things we've done - JWT and Ogilvy.

"I used to speak to him three, four, five times a day, irrespective... about the business. That was the days before mobile phones. He only had my agenda at heart, not anybody else's."

Mentors are crucial to any entrepreneur, says Sorrell. But, whilst many a founder would cite a business contact as their mentor, Sorrell continues to credit his dad.

"It's very important to have that, to be able to talk to somebody who is dispassionate about what you're talking about," he adds. "My father was not knowledgable about the business, so was even more neutral. My father was my closest friend ever."

This article is from Beet.TV's "Media Revolutionaries", a 50-part series of interviews with key innovators and leaders in the media, technology and advertising industries, sponsored by Xaxis and Microsoft. Xaxis is a unit of WPP.

Sorrell was interviewed for Beet.TV by David J. Moore, Chairman of Xaxis and President of WPP Digital. The interview took place in January at the Bellagio Hotel in Las Vegas during the Consumer Electronics Show.

You can find this post on Beet.TV.

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