:00:11. > :00:14.On BBC News it is time for The Bottom Line.
:00:14. > :00:20.What do Chief Executives do? Make decisions, right? We have three,
:00:20. > :00:24.but as usual we are going to droll down to the process of decision
:00:24. > :00:30.making, using our own example and a topic perhaps related, we are going
:00:30. > :00:34.to talk about breath. Each week inspirational spwiz
:00:34. > :00:44.leaders gather to talk on The Bottom Line. Now you can see it as
:00:44. > :00:49.
:00:49. > :00:58.well as hear it. As always we start by spending a
:00:58. > :01:04.few minutes meeting my three guests. manager, chairman of a new venture,
:01:04. > :01:07.been on the movies soon? We've been doing that for a number of years
:01:07. > :01:11.now. I think people were sceptical, how can you make money in film,
:01:11. > :01:16.it's generally an area that people think you can only lose money but
:01:16. > :01:19.it's a huge industry. There were 1.3 billion cinema tickets sold in
:01:19. > :01:23.the US alone last year T idea you can't make money is nonsense. We
:01:23. > :01:27.found a way to do it. It's a classic industry where you would
:01:27. > :01:32.expect to lose small amounts on quite a lot of investments and then
:01:32. > :01:34.score very big on a few? Not the way we're doing. What we are doing
:01:34. > :01:44.is helping mainstream producers, so people with a very good track
:01:44. > :01:47.develop their movie projects. If you work with the top producers who
:01:47. > :01:52.know how to get their films financed, the success rate is very
:01:52. > :01:56.high. At the moment we have eight films and at the moment they're all
:01:56. > :02:00.looking good, I think they will all get made. Thank you for that. Also
:02:00. > :02:04.with us, Martin Sorrel, Chief Executive of the world's biggest
:02:05. > :02:11.advertising and media group, WPP. You've had a good year? Yes, across
:02:11. > :02:16.the world, pretty much any criterion you get to, revenues,
:02:16. > :02:20.revenue growth, profitability margins and increased margins by
:02:20. > :02:24.40%, to graish yait ourselves with our shareholders. It was very good.
:02:25. > :02:28.But it comes over from three things. It comes from the new market and it
:02:28. > :02:32.comes from new immediate yarbgs digital and lastly from consumer
:02:32. > :02:36.insiebgt. And then maybe the fourth thing is increasely is not a good
:02:36. > :02:40.work but horizontalty in our business, that is getting the
:02:40. > :02:44.various parts of our business to work effectively to deliver to
:02:44. > :02:47.clients. We have 180,000 people now in 109 countries. We have a lot of
:02:48. > :02:53.talent, but it is making sure all that talent is engaged and
:02:53. > :02:57.available. Also sitting at the table with us is David Jones, the
:02:57. > :03:00.Global Chief Executive of Havas, the huge French-based advertising
:03:00. > :03:03.group. Have you had a profitable year, too? I think it was a
:03:03. > :03:10.terrific year overall for the industry. I think what's happened
:03:10. > :03:15.with the digital and social changed. I think the importance our
:03:15. > :03:20.our business to our clients, pretty much everyone worked out the rules
:03:20. > :03:24.in the old game, how to make a 30TV commercial. I think today they're
:03:24. > :03:27.working out how to use the up side and down side of social media, we
:03:27. > :03:32.know consumers want bisz to be more socially responsible; how do we
:03:32. > :03:36.head down that path. I think it's one of the reasons that haul the
:03:36. > :03:40.companies in our sector had a good year last year, is because they've
:03:40. > :03:44.become more important and relevant to the world's largest advertising
:03:44. > :03:47.marketeers. Now, decision-making. We asked you to come armed with
:03:48. > :03:51.some recent decisions, not a ground breaking one, not a life-changing
:03:51. > :03:56.one, just an everyday business decision, so we can examine it
:03:56. > :04:01.closely to see what you get up to. Martin, you're smirking. I think
:04:01. > :04:05.I'm going to suggest we go to David first. A recent decision, David?
:04:05. > :04:09.really recent one and it's so recent I can't name the company, I
:04:09. > :04:13.recently took the decision to acquire a company that directly
:04:13. > :04:18.challenges everything our industry is about and very simply what it
:04:19. > :04:22.does is it uses technology to crowd source ideas. So instead of having
:04:22. > :04:25.a creative department, which has been the lifeblood of our industry
:04:25. > :04:28.it reaches out to people around the world in general and uses
:04:28. > :04:33.technology to use them as the generator of the ideas and I
:04:33. > :04:36.brought the company to one of the board meetings to present, and I
:04:36. > :04:41.would say the reaction of a third of the people in the room was
:04:41. > :04:44.heresy, get them out of here. So it was an interesting thing to look at,
:04:44. > :04:47.should we acquire that company, or should we position ourselves as
:04:47. > :04:51.trying to kill that company because they stand for everything that you
:04:51. > :04:58.know is what we're not about. you decided to acquire it? I did.
:04:58. > :05:02.And give us a rough idea of the sort of scale we're talking about -
:05:02. > :05:08.�1 million, �10 million? It's above the bottom two numbers but not at
:05:08. > :05:12.the top one. Martin is trying to work it out. I think we're aware of
:05:12. > :05:16.it. We requireed a company, Spot Runner the same ten years ago T
:05:16. > :05:19.company went out of business. It was a crowd sourceing company today.
:05:19. > :05:22.The interesting thing about them is their client list, they're working
:05:22. > :05:27.with ten of the largest advertisers in the world and clients are
:05:28. > :05:30.running after what it is they have on offer. So I think, my view was
:05:30. > :05:36.the single biggest challenge facing my business in our industry is
:05:36. > :05:40.legacy. You know, having bigger and big legacy businesses doesn't
:05:40. > :05:43.necessarily help you succeed in the future. So my reason for doing it
:05:43. > :05:48.was, like when the Australians started making wine t French said
:05:48. > :05:51.we can either ignore it or just buy it. So Jacobs Creek and brands like
:05:51. > :05:54.that are owned by a French company. I think my view is similar: we have
:05:54. > :05:58.to change, we have to change fast and it's better to bring that in
:05:58. > :06:01.and it's part of us than it's on the outside. We should explain
:06:01. > :06:04.crowd sourceing. Not everyone will know what we're talking about?
:06:04. > :06:07.use technology which allows, you can have hundreds of thousands of
:06:07. > :06:10.people around the world contribute ideas to you. The thing that makes
:06:10. > :06:14.this work is the technology that they have in place that allows you
:06:14. > :06:18.to manage that process. But basically things like, I did the
:06:19. > :06:22.tick, tick, tick campaign and the whole was to make it an open source
:06:22. > :06:26.campaign where we said if we try to do a campaign centrally, there's no
:06:26. > :06:29.way we will be able to get the cut- through, but if wu turn it open to
:06:29. > :06:34.the world and say, do what you will, we ended up with 18 million people
:06:34. > :06:39.being part of the campaign. But the idea came, you'd been keen on it -
:06:39. > :06:42.but who said this company is the company? I meet a lot of, our
:06:42. > :06:45.business is still enormously about talent. I think in the future it
:06:45. > :06:50.will be about talent in technology, but I meet a lot of interesting
:06:50. > :06:54.people in companies in this space, and it was something who I thought
:06:54. > :06:59.had a fantastic combination of talent and technology. And it's a
:06:59. > :07:02.risk. Your appreciate it's a risk? Well, Martin's point, it is a brand
:07:02. > :07:05.new model business, so there's no guarantee that in five years time I
:07:06. > :07:08.won't be sitting here saying it's kpwon out of business. My view is I
:07:08. > :07:11.don't think it will, because I think there's a legal of interest
:07:11. > :07:15.in the world's biggest advertisers which says there's something
:07:15. > :07:21.powerful in it. But that is a risk. There's a risk that client also go,
:07:21. > :07:24.version of what you offer, so we will have that thank you and we
:07:24. > :07:29.will reduce the fee we're paying you. That is another risk. Let's
:07:29. > :07:33.look to Nicola. Tell us about a decision you made. If we focus for
:07:33. > :07:37.a moment on our business and how we select a project, we have to look
:07:37. > :07:40.at the producer who is bringing us the project, and how likely is this
:07:40. > :07:44.film to be made. And not particularly interested in the
:07:44. > :07:48.genre. It's actually quite helpful if it is something like horror or a
:07:48. > :07:53.thriller because the cast is not so important. So thaes helps to get it
:07:53. > :07:56.made, that you don't need to get big stars. So there's all sorts of
:07:56. > :07:59.consideration and we have to question them intensely about how
:07:59. > :08:03.you are going to finance this movie T movie industry has changed
:08:03. > :08:07.dramatically N the old days the studios yueszed to make everything.
:08:07. > :08:11.Now they only make 20% of the films and in terms of what they
:08:11. > :08:14.completely finance themselves, it's literally a handful. There are
:08:14. > :08:18.1,000 English-speaking films made every year and only 50 are
:08:18. > :08:23.completely financed by the studios and they're all the Supermans. The
:08:23. > :08:27.blockbusters. You make an investment decision every day. I
:08:27. > :08:31.thaulgt you would probably have people doing that for you. I mean,
:08:31. > :08:34.you literally, you're the person t founder the Chief Executive of the
:08:34. > :08:38.company, you said thrbgs is good, this one's not good? We have a team
:08:38. > :08:42.of people. I have found over the years, having been in investment
:08:42. > :08:47.management for 29 years, that better decisions are made by small
:08:47. > :08:50.groups, you can't have a class of thousands, other wise you get poor
:08:50. > :08:54.decision making. But if you have a small group of people and they have
:08:54. > :08:59.to be unanimous decisions, that's the best way of doing it. Small,
:08:59. > :09:03.people are involved in the investment committee for this
:09:03. > :09:06.particular project. They will have foun this project, they will have a
:09:06. > :09:09.written the paper about it, will present it to the rest of the team,
:09:10. > :09:13.be the advocate for that project. And will have asked all the right
:09:13. > :09:16.questions and the rest of us have to then question the person who's
:09:16. > :09:19.putting it forward to make sure they haven't forgotten something
:09:19. > :09:24.and all the stones have been unturned. That's almost like a
:09:24. > :09:29.pitch. It is a pitch. One of the team pitches it to the rest of you.
:09:29. > :09:31.That's right. If it's unanimous, we all have a right of veto. So
:09:32. > :09:36.interestingly nothing has been vetoed by anyone so far. We've got
:09:36. > :09:40.nine film projects that we've approved; eight in the first
:09:40. > :09:44.vehicle and one going into the second vehicle and all have been
:09:44. > :09:49.unanimous decisions. And being nice to people at the start? We believe
:09:49. > :09:54.these are good films. Can you make good analytical, we will come to
:09:54. > :09:57.Martin's decision, but can you make good an litcally-based decisions,
:09:57. > :10:01.if you are expected to do it quickly and you want to be so
:10:01. > :10:06.precise? I tecise? I te got to be really careful. As I explained, it
:10:06. > :10:11.take twos or three weeks to do the analysis: if we had a meeting with
:10:11. > :10:14.the producer and they I got this and that lined up and we took it on
:10:14. > :10:18.trust, we will make bad decisions because we haven't done the due
:10:18. > :10:21.diligence, checked it out. Can Rockpool, we're looking at
:10:21. > :10:24.companies. Things are changing because the Government is going to
:10:24. > :10:28.allow people to put more money into these businesses with tax relief,
:10:28. > :10:32.so you are going to have some larger businesses coming into this
:10:32. > :10:36.arena now. A lot of due diligence will have to take place. That will
:10:36. > :10:40.be accountants going in and legal, due diligence on contracts and so
:10:40. > :10:44.on. That can take two or three months. So yes, it's important to
:10:44. > :10:50.take quick decisions, but you can't be so quick that you're going to
:10:50. > :10:52.jeopardise your investors' money. Martin? I think all good decision
:10:52. > :10:57.making is, that's tactical, decisions are tactical. What you
:10:57. > :11:01.need is a good plan. I was thinking about, whether it was big decisions
:11:01. > :11:06.or smaum dough -- small decisions that I'm asked to contribute to or
:11:06. > :11:11.make, and a lot of the most important ones, I never get to make,
:11:11. > :11:14.because they never bring it to me. If I say go left, they go right.
:11:14. > :11:20.But everything really should be in line with the plan. What do you two
:11:20. > :11:26.think of that? You go first? Presumably you do refine the plan.
:11:26. > :11:32.I mean, the great thing... I have a small mind. The thing about
:11:32. > :11:37.business is it has to be dynamic F you look at the constituents of the
:11:37. > :11:41.FD 30 industrial average, it used to be called, 30-40 years ago, they
:11:41. > :11:44.are completely different. The top companies today. That's because
:11:44. > :11:47.companies are dynamic. I think there are fundamental things
:11:47. > :11:52.happening, like the shift in pow tore the east t south-east etc,
:11:52. > :11:55.which is fundamental. The shift in technology. The importance of data,
:11:55. > :12:02.the application of technology. I'm just talking about our industry.
:12:02. > :12:06.These are things which... Over periods of time - I was in Vietnam.
:12:06. > :12:10.85 million people, wonderful country, I mean, terrible history,
:12:10. > :12:15.in many respects but a wonderful country and then the neighbouring
:12:15. > :12:19.country, 6 million people, which is on the cusp, I get off the plane
:12:20. > :12:23.this morning and the Government are putting in a five-year tax holiday
:12:23. > :12:28.investment plan and you can't get a hotel room or an airline
:12:28. > :12:32.reservation in Durangoon apparently. That is a tkhaipbg. And you have to
:12:32. > :12:38.change your -- change, and you have to change your attention. We will
:12:38. > :12:43.expand our business aggressively in Myanmar. But that's totally in line
:12:43. > :12:53.with new markets. In a way Martin you're saying the CEO's job is not
:12:53. > :12:53.
:12:53. > :13:38.Apology for the loss of subtitles for 44 seconds
:13:38. > :13:42.When you make decisions or go in directions outside that. Or you
:13:42. > :13:46.have no plan whatsoever. Before we move on, we thought we may like to,
:13:46. > :13:56.as always, get a little bit of comat over a top call issue.
:13:56. > :14:02.
:14:02. > :14:09.Many people suggest that this is a taste of something more permanent.
:14:09. > :14:16.What do you think about Sunday trading opening for six hours?
:14:16. > :14:25.think it's not good. I'm against it. I don't think Sunday is the day. It
:14:25. > :14:32.is a family day. You should take your dog for a walk. All the people
:14:32. > :14:36.would be trying to go shopping. What it you are going to see your
:14:36. > :14:46.mother? It would be a nightmare. It's not warn about shopping.
:14:46. > :14:48.
:14:48. > :14:53.Atkinson may have lost its charm about family him. It would be good
:14:53. > :14:59.for the Olympics to get the foreign money in. I have a pulse in France.
:14:59. > :15:06.I live in New York. Everything there is open 24 hours. France is
:15:06. > :15:13.like a ghost town. I prefer a happy medium. There is something quite
:15:13. > :15:20.nice about France. There's a few days every year. The bakery is open
:15:20. > :15:27.on Sunday. He is nice to go out on Saturday. We don't have much land.
:15:27. > :15:36.Nothing is wasted. We may be in danger of becoming fat and lazy.
:15:36. > :15:42.Look at the French. They have gone back to late 35-hour week and that
:15:42. > :15:46.they want to retire at 60 years old. It may be that you are right that
:15:46. > :15:52.the French a happy. In the end, somebody has to pay the price. The
:15:52. > :16:00.Saint is used that we are facing. We have all been debating about
:16:00. > :16:09.this. Do we need the economy to move away from financial services
:16:09. > :16:19.and retailing. But does have kept the company and that country going.
:16:19. > :16:27.
:16:27. > :16:32.Quite often in Germany everything consumption. It's about service and
:16:32. > :16:40.socialising. We need to save more money and invest more money.
:16:40. > :16:46.last time I was in China, the smile was so bad it was actually bad it
:16:46. > :16:53.inside my terminal and I could not see my suitcase. They have taken
:16:53. > :17:00.400 million people out of poverty. No-one is knocking them. When they
:17:00. > :17:09.reach an income of $35,000 each year they will start to become like
:17:09. > :17:14.us with all the same issues. This it sustainable? Look at Japan. 20
:17:14. > :17:19.years ago it was all about those decisions. China needs to make the
:17:19. > :17:25.right decisions to supersede the US. The reason they did not do as well
:17:25. > :17:29.in Japan is because they were very good at copying and not in a native
:17:29. > :17:33.and that's why the US is fundamentally strong because it in
:17:33. > :17:40.abates. It will be interesting to see it China can start to innovate.
:17:40. > :17:50.Maybe it's something about the oriental mind. What about when I
:17:50. > :17:50.
:17:50. > :17:54.was in China a few days ago. I came across two countries -- companies.
:17:54. > :18:04.A woman could not find clothing volatile so she started her own
:18:04. > :18:09.company. She built the business a
:18:09. > :18:13.smart phone brand which the Chinese have developed. These are two very
:18:13. > :18:20.good examples of companies that been built up from scratch in a
:18:20. > :18:30.short time. Do not underestimate the innovation there. The same in
:18:30. > :18:36.
:18:36. > :18:42.India. Its complacency. They are in a very different place to us.
:18:42. > :18:48.are like the new VC-driven companies. When they become like a
:18:48. > :18:57.legacy, the rules changed. It can be very painful in the meantime.
:18:57. > :19:02.What a great discussion. Let's talk about stress. As human beings we
:19:02. > :19:12.have evolved. It must have some positive benefits but it can be
:19:12. > :19:13.
:19:14. > :19:20.paralysing. Have you all suffered stress? Not massively. From a work
:19:20. > :19:27.perspective, what is important but it's not my life. Personally with
:19:27. > :19:32.children, that his life and stress. Things in the workplace, what is
:19:32. > :19:38.the worst thing? You can get a job somewhere else. I don't let that
:19:38. > :19:45.caused me any stress. Ronald Reagan said that hard work would never
:19:46. > :19:51.kill anybody but why take the risk. I keep a distance from my work. I
:19:51. > :19:59.watched my father worked for 30 years as a CEO and then in her
:19:59. > :20:05.merger coup, never forget the one day that someone will stay put you
:20:05. > :20:14.out. You need a meaning to your life. We run businesses. She has a
:20:15. > :20:20.mother. We combine a lot. Luckily I'm a very lm a very lm a very lt
:20:20. > :20:26.people have a lot of things thrown high that Buckley I'm good with
:20:26. > :20:34.dealing with that. I was just made that way and I remain calm. Dealing
:20:34. > :20:43.with teenagers is very stressful. Far harder than a business decision.
:20:43. > :20:48.Teenage girls, mainly. I'm very good at keeping my head went
:20:48. > :20:53.everybody else loses themselves. There is no such thing as stress.
:20:54. > :21:01.You need to have fun. That's all it is. You need to do what you enjoy
:21:01. > :21:05.it and then it will not be stressful. Put yourself in the mind
:21:06. > :21:11.of somebody who have someone above them shouting at them. They will
:21:11. > :21:17.try to please them but they are red genuine person. They want to
:21:17. > :21:21.realise that they are not doing it correctly. The FAA under mental
:21:21. > :21:31.difference for stress is technology. The used to be big separation
:21:31. > :21:39.
:21:39. > :21:44.between your life and your work. email and the computer. Some things
:21:44. > :21:48.can reduce the stress by spreading your work. When I had very young
:21:48. > :21:52.children can we had a nanotechnology I needed to do
:21:52. > :21:57.everything in the Office before going home. As technology now
:21:57. > :22:03.allows you to go home and do a little bit more work. Put yourself
:22:03. > :22:09.in the mind of somebody below you. What should you do or do nothing to
:22:09. > :22:17.manage stress? Tell you that your staff below you. There are people
:22:17. > :22:22.well. You need to try to assist them. If it's insurmountable maybe
:22:22. > :22:26.they need to simply get another job. Some people are not suited to
:22:26. > :22:32.stress. Certainly in the city over the years I have had to do with
:22:32. > :22:39.some people who could not take the pressure. When you manage huge sums
:22:39. > :22:43.of money for individuals you are being measured by the minute. There
:22:43. > :22:48.are programs on the screen to tell you how you were doing every moment
:22:48. > :22:54.and that is very stressful and some people cannot cope with that. They
:22:54. > :23:04.should not be doing their job. people can improve with stress from
:23:04. > :23:04.
:23:04. > :23:10.examples of that. Many others it will paralyse them. It makes them
:23:10. > :23:17.very fearful. There is her difference between the long-term
:23:17. > :23:23.and short-term. I don't think it's the same kind of thing if you wake
:23:23. > :23:29.up every morning thinking you have to go into the Office. Many high-
:23:29. > :23:35.achievers have rapid feedback. Rapid feedback is the key and
:23:35. > :23:40.that's what you get. If you do not like it you should not do it.
:23:40. > :23:44.Teenagers need to have a mixture of personalities. If they are all very
:23:44. > :23:51.highly strung it will not work but it you have many laid-back people
:23:51. > :23:56.it will not work you need a mix to play off each other. Does a laid-
:23:56. > :24:04.back person at school, I ate used to work very hard but never got
:24:04. > :24:08.anywhere. There were people that did no work at all. But they were