In conversation with media prior to the announcement of several initiatives, WPP CEO Sir Martin Sorrell voiced his views on the Indian prime minister Narendra Modi, whom he met as part of a business delegation at Silicon Valley recently.
“We had a couple of hours with the PM – explained who we are and asked him a couple of questions. He told us what he wants to do in the context of India and it was a useful meeting for both sides,” he said.
Sorrell added, “I think Modi has a very strong powerful vision for the country and has made an incredibly strong start. I’m pressed to think of any other world leader who has the same or better popularity in 12 to 15 months (from starting off). Usually these honeymoon periods are pretty short and the realities of power make it difficult. The question is about implementation. It’s a bit like running a business. If you’re a CEO of a business that’s been successful or unsuccessful – you come in and lay a vision for the company and then you have to implement it. A few years ago there was a debate in business schools whether strategy was more important than implementation. Some professors thought strategy was key and implementation was less important. Some said forget about strategy it’s only about implementation. The truth is it’s a mixture of the two and the two are equally important. I’d say strategy is a little more important than implementation but not by much – they’re probably the same. Included in implementation is structure – so having the right team and bench strength is also important. But, individuals are the key in making change – whether it is political change or commercial change.”
He touched upon the BRICS and underlined the bullish outlook on India. “In the BRICS – India is now the clear number one. There are question marks over China and its growth. But, even if it’s growing by four or five per cent, that makes it a strong number two. Third is Brazil – a country that has its medium-term problems. It’ll be boosted by the Olympic Games next year. And then lastly there’s Russia – where there are serious issues surrounding Ukraine and what’s happening in Syria now,” said Sorrell.
He added, “I remain an unabashed bull of all four countries. I’m more bullish about India now then I was when I came here last, which was about a year or so ago."
Pointing to cycles, the WPP founder cited that 200 years ago, India and China accounted for 40 percent of the global GDP, adding that they would get back there (in a span of '10-15-20-25-30 years').
"It took America a 100 years to become the world’s leading economic nation. In those 100 years we had things like the great depression in 1929. Things don’t always go up in a straight line. So the secular trend for China, India, Brazil and Russia is an upward one," he said.
"The disruption is the shift of power to the East. If New York is the centre of the business world, power is shifting to the East (India and China), South (Latin America), Africa and the Middle East,” he explained.
On WPP’s growth in India, Sorrell said it was growing as per expectations and the business in India is working on ‘most’ if not ‘all cylinders’. Lending a global perspective, he explained, “We see growth continuing to tighten at tepid growth rates globally. If you start at 2015, you’d be looking for GDP growth of about 5 to 5.5 nominal (not accounting for factors like inflation) to 3 or 3.5 real. That’s come down to 3.1 per cent real. It was 3.3 per cent in July. So the world economy is tightening. If you said to me what’s the thing that keeps me awake – not geopolitical issues, it’s the failure of companies to invest for the long term. Your central bank (RBI) governor was on television saying exactly the same thing."
He added that WPP is targeted to grow this year on net sales by over three percent, and on revenues by 5 per cent, globally.
Specific to India, Sorrell said, “Our business here will be just under 600 million dollars in revenue. Our business here is functioning on most if not all cylinders. We are sort of very aggressive in terms of growth. We’re growing here at about 10 per cent in revenues. It’s a strong picture and our businesses are doing pretty well across the board. So, I have no complaints and as we look forward – for 2016, I’d be very unhappy if it wasn’t the same next year. Obviously, the bigger you get it’s more difficult to maintain it. People ask about acquisitions and we do a lot of them. It’s difficult for us in India – when you’re growing at 10 per cent and your revenues are 600 million, that gives you 60 million dollars to acquire. You can’t find acquisitions in India at that price. So, organic growth will continue to be a principle for growth in India. Having said that we just acquired a firm in PR (Six Degress PR)."