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Sir Martin Sorrell's top ten themes for today's business leaders

Chief Executive of WPP discusses the factors influencing businesses today.

Delivering a stimulating keynote speech at Cass Business School's Building Business Relationships conference yesterday, Sir Martin Sorrell, Chief Executive of WPP, discussed the top 10 factors influencing businesses today.

He started with geography and the shift of balance of power from West to East and South East, discussing the economies of Brazil ("overcooked"), South Africa ("repositioned by the world cup") and referencing the BRICs and the 'N-11' (Next Eleven economies -- Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam).

He moved on to overcapacity in the manufacturing sector coupled with a shortage of human capital - a growing issue in a time of ageing population and falling birthrates. He praised Goldman Sachs for maintaining its position by recruiting the best talent.

The web was the next theme. According to Sir Martin, the web has broken the tyranny of distance and geography but companies like Google will inevitably disintermediate businesses.

Retail and the huge power of Walmart, Tesco and Carrefour and the tension between manufacturers and retailers was also on the list. This tension will continue to grow as the global retailers exercise ever greater leverage.

Sir Martin acknowledged internal communications as one of the biggest challenges for today's business leaders. How can they disseminate strategic and cultural change, especially when a company like WPP has grown by acquisition rather than organically? There were some smiles in the audience when he stated that different business cultures don't exist, the concept existing as a polite way to say 'I don't want to do what you want me to do'.

Global and local was the next theme. As companies become more global the pendulum has swung towards centralisation with a squeeze on 'regional' working, partly driven by technology advancements. At WPP, there is now a team leader for the top 30 accounts, such as Ford, who work across the company's multiple brands and they are putting managers in place for each country, again working across the WPP companies.

There is 'too much power in the hands of finance and procurement' according to Sir Martin. Post financial crisis, 'fear rules'. He referenced a Fortune 500 CNBC company survey, which found that in 2010 profits went up by 80% but headcount only rose by 1.3%. He warns that there is a finite limit to what you can do to cut costs.

Returning to the topic of the ageing population, healthcare was the next theme. Most companies seek to improve consumer welfare in some way and healthcare is always a factor. If the UK wants to be productive and compete with economies like the Chinese, a population which retires at 50 isn't an option.

'Government interference won't stop' was the next message. Governments put 12 trillion into the world's economies and the 'government as client' is growing ever more important. Businesses need to think of the government as both investor and client.

Sir Martin ended his list of ten with Corporate Social Responsibility (CSR). He said that 10-15 years ago this was 'greenwash'. However today's CEOs are fully committed to the idea that 'doing good is good business'. If you are in a business for the long term rather than for short term gain then CSR makes sense.

Sir Martin was speaking as part of Building Business Relationships - a one-day programme of activities designed to bring together Cass alumni, corporate partners, students, friends and staff to create, renew and strengthen acquaintances.

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