Traditional companies are going to have to fight to hang onto their staff in the face of internet start-ups, warned Martin Sorrell, chief executive officer of WPP Group.
Sorrell was speaking at the New Statesman UK web summit in London yesterday, which was sponsored by WPP and NTL, in a session devoted to how traditional companies should react to the web.
Offering staff annual stock options and introducing new structures were two of the ideas that Sorrell cited as the way that WPP was reinventing itself.
He pointed to reflect.com, the interactive beauty company launched by Procter & Gamble in September as one of the ways forward for traditional companies meeting the challenge of the internet.
Reflect.com broke new ground for an FMCG company moving onto the web by giving a third of the company's equity to its employees. The other two thirds of the company are owned by P&G and venture capital firm, Institutional Venture partners.
But whatever traditional companies do he urged them to move quickly. "The new millennium is not for tidy minds. It will be chaotic. The web is democratic, but it is chaotic as well. If there are mores in the technological sense then there is one in the generational sense also, and that is speed."
He outlined two strategies for meeting the internet: "You have to stimulate your traditional channels but they'll never move fast enough because there is an in-built inertia in any traditional approach. So you have to create your own new companies that will enable you to be as fast-footed as you possibly can," he said.