Dominic Barton, Global Managing Director, McKinsey & Company – Wharton Leadership Lecture

first question for you would be for for everyone to understand what the 29 years have looked like at McKinsey for you so in one minute what is the arc of your career so you started in 1986 where did you start in what were your key stepping stones and then we'll dive into a couple of those that's right well first of all I just I want to say what an honor it is to be with all of you guys this is a as Jay said and Pallas said this is a incredibly important source of talent for McKinsey and company and has been so I hope we can convince as many of you as possible to join just to be open with you that's that's why I'm here and and again some of the very best friends in the firm including a Vic will Holt rivairy best friends on the firm but in the world are working grads I don't know how you let him in by the way I don't know what standards were going on at that particularly a long time ago that's right yeah yeah but anyhow so it's wonderful to be here I in terms of the career you got to keep me focused because I can lather on for a while here I don't think it was an arc actually I think it was a valley at times is an ice way to look at it it's murder - hi I went low and it was a but um I started in 1986 in Toronto I didn't I really joined McKinsey to be honest with you because I didn't really know what I wanted to do and I was I was doing more on academic path I was doing economics I was doing an MPhil and economics and Oxford I was gonna do my PhD and I kind of figured that I wasn't interested industrial economics and I everything I was doing was mathematics and I figured it I don't think there's many CEOs that probably sit and write equations to figure out but I didn't really know and I thought why don't I come to McKinsey I'll come for two years get as much experience as I can and then go back to the academic world that was kind of my thinking and and then I was told you know McKinsey serves you know we serve we do serve CEOs and so forth I had this kind of idea that when you joined you immediately begin serving a CEO and you know my first study was actually to figure out how many pieces of Kentucky Fried Chicken should go in a lunchbox so I thought you know you you guys McKenzie tell me working on the biggest problems on earth and trying to figure out whether it's four pieces or three right I sort of know the answer so that was a it was four took about six months to figure that out that's what yeah yeah yeah right but anyhow so that was the start and then it's really been a you know it's truly been a journey in the sense of I I love the work I just I love the I love the fact that you know the work is interesting it was the variety there was times where it was very painful but it would be you have mentors you have people that help you out friends that are critical and basically I started in Toronto and the more I worked in the firm the more curious in a sense I got and that's what led me eventually to different stages again I want to bore you with the details - I went then decided I wanted to go to Asia for a bunch of different reasons I just wanted to learn and see more and Keaton one thing I like about McKinsey and I think by the way other firms do this too but we pushes you're always learning just as soon as you get comfortable with something you go to the next level and I love that and even in my role now I just feel I'm I'm always learning and that just keeps you alive you know my view I was saying if you're not growing you're dying and we envy you growing you're learning so that's kind of being the philosophy and then in you work so you're hired into Toronto you spent how many years in Toronto about eight years eight years and then you moved to Sydney - I actually when I was a project manager I moved to Sydney sort of after three years because I was - getting told Mackenzie's about mobility one of my best friends happen to live in Sydney that was the reason I decided to go to Sydney no other reason and that we made up some reason about how Canada in Australia quite similar in industry structure but that frankly was the reason why I went and and that and that and so I was there for a year and then came back to Canada and then and and there I noticed you'd already got it I did a lot of work actually in North America actually Vic and I work together as associates in Hartford Connecticut and we by the way we were led by at that time by Betty vandenBosch who is this a woman project manager who was probably the best project manager leader of actually ever worked with we literally did nine till five we did not start before nine we didn't finish and we were actually had nothing to do we took up rowing together in the Hartford River we service Lee and it was a the oddest thing and but anyhow so but but when you travel to different regions you see the variety the different type of work and then Australia when I that was very pivotal for me because there were two pieces of work that I did there that that taught me a lot one was we worked with Paul Keating who was the treasurer at the time them sort of Minister of Finance or Treasury secretary equivalent and he this guy was an unbelievably bold wild thinker about what he wanted to do and he was we would have these dinners with him we check see had nothing to do with the project who are trying to simplify the tax system I'll never forget the first dinner he said to me if you have half a brain lose six of us and he goes I doubt you do but if you have half a brain you should move to Asia because that's where the future is I mean this was in 1989 over the time when while this is a second dinner he thought he said his idea which we're all talking about was we should merge Canada Ireland and Australia into one country which is because you get the Euro and a member at the time I was so excited by this idea the managing director time as a guy named Fred Glock who's all about he was about knowledge and ideas he loved that he was from Bell Labs as a background he built a lot of our practices and pushed us so I called him up it was about 11 o'clock at night was about you know nine o'clock in the morning New York time I said I've got this big idea for you in ameri he said well who you again a sort of stoning bard and he said well what's your idea and I said I think we should merge these three countries and there was in silence and they say could you tell me that again because I'm still early in the morning here I said what's what merge he goes he says Dominic that's your name I was thinking about giving a friend of mine that way he said if you're excited by the idea I'd suggest that you leave the firm and pursue it and then he hung up oh my god this is you know whatever I did anyhow but I and I also in Australia I actually was another time when I thought I was being demoted or wasn't you know doing very well I worked for a guy named John Prescott who is the new CEO of bhp and he'd gone from running a hundred million dollar shipping company to running a twenty five billion dollar business literally overnight and the problem is he was running a twenty five billion dollar company like he ran a hundred million and so things were going crazy his daughter wasn't speaking to him anymore people were getting ticked off because he wanted to sign off every letter and this is before email I'm afraid to say how old I am so I saw all his mail and it was just me that I worked basically with his secretary for three months and I learned so much about what a CEOs job is like what you know because I saw everything absolutely everything he did and that was at the time I thought what you know I didn't have a team I was a project manager you're supposed to have a team I didn't have a team I was working with the executive assistant not you know the CEO he wasn't there that very much I didn't meet with him but I learned so much about leadership from watching John who's still a close friend to this day work through this learned it learnt leadership because you want you you see it you see the stuff that's coming in and the issues anyhow so those are when you move that happens when you see things if you think back to your first ten years McKinsey helped us understand one of the toughest moments for you the toughest moments are obviously failure it's probably a tautology or something but you know you many people that are joining McKinsey and I'd argue any people getting into the school here you've obviously done well or you wouldn't be here you're sort of you've done well through life and so to be told at times that you're not actually doing that well can be a bit of a shock to the system in where you are and so what I'd say one of the things that I found tough about the periods is when you do have setbacks and sometimes you know what you learn to is life's not fair may not be and not but that's that's normal what CEOs have to deal with that leaders have to deal with it but that's easier said than done and that's something with one of the setbacks that you've been public about is that it took you three tries yeah to be elected partner yeah you share a little bit about what were your mind yeah I mean the formerly after you know somewhere between five to seven years your you know the people you work with other partners it's very much a real global partnership so people have to be elected globally so your your your wherever you're working whether it may be the infrastructure practice or or a region or a function will say we think you know Dominic's ready and I went the first time I went forward the the feedback came back from the committee that's just you know we think you're you've got a lot of intrinsic capability but there's a lot of things that you need to show that you haven't shown you know you know we're not sure about your the depth of your client relationships we don't think you're we don't think you're very straight at it you kind of go right you know you're you you're conflict avoider you don't kind of go straight you got to be tough you got to go at it so what was meant to be kind of we'll do a look for you and then and then it probably wouldn't happen but it would happen six months later became we better wait 18 months time sort of the delay so it came back saying well you got you got to rework on some things and then but everyone was sort of keen and the second time was more embarrassing in a sense because it's it was quite public and ascent people knew I've been around I've been of what was a senior Engagement Manager for quite some time at that point and I came back and that was a message that came back there was we've looked at you and we're just not actually sure you do have the intrinsic so we don't think you're a good problem solver which is kind of like telling someone in the church that you're a evil bastard type of a sister it's not it's not a it's not a very nice thing to have set right and so and that taught that time it actually personal because my father-in-law the time sort of came to my respect deeply sort said you know I'm not sure business may not be your thing right like maybe you should just face up to you being told twice I mean you sure and my wife that I basically went to see the office manager without telling me it had a breakfast and said listen Dom you're gonna realize as a stubborn son of a he won't take no just tell me and I'll I'll sort them so just you but you got to tell me because we can't really put up with us and then the third time it happened but I think I had a lot of what they say splinters in my back as I want to the bar I think I sort of scrape to but you just saw it was not a department and it was another very close sort of mine Steve bear who joined me or after I joined but I remember so I was he wanted me to sort of celebrate his election when I hadn't been elected again this is a minor thing but you and you're that close and people people I could tell when they're looking we're going when it's kind of awkward isn't that disguised and it was but then you realize that that's like things don't work in straight lines and you work through it I'm a little more comfortable in retrospect than I was going through it and what happened in that period was I decided after that time I'm not gonna I got quite stressed because you do i you know normally when I tried things that had worked out this one wasn't working I was working hard to try and make it work and I finally realized you know what I'm gonna set my own bar and I'm gonna make it higher than what McKinsey I don't care I'm gonna do what I think and decide and that it was more um I have to have my own I keep why am I keep trying to jump through hoops but other people say I'm gonna decide what I want to do and if it works it's great if it doesn't I'm going to go somewhere else that was a bit of a breakthrough point because in my life I'd been very much I wouldn't say a box ticker and hoop jumper but I did kind of get focused on what how do you get an A right and I don't think that's any probably more information than you wanted but that's alone if we were to fast forward to 2009 you were elected managing director globally of McKinsey we don't have a CEO we have we have a managing director almost immediately you were thrown into the Galleon scandal so that involved Rajat Gupta someone who sat in your chair prior was a member of Goldman Sachs board help us understand what was going through your mind at the time I was going through the firm's mind and what was your leadership lesson in those formative hours yep it was a pretty 2009 I'm a bourbon single Vic we were just all coming into our roles that a new team and it was probably July 1 of that year I took on the role and it was actually a very tough time as you know in the economy so you know we get affected too when the economy's not going well the idea that consulting does well when things are right a really good or really bad there is some linkage to how how the world so we also were having to take our own medicine on that front which is something that I'm not known for do but we had to do it and that was with the team Vick guy named Tom Barkin others we were doing this and then it was October that this occurred and I can tell you is the biggest shock you just can't imagine it was actually before rajat happened we had another person just to be with Neal Kumar who was the first person again a senior person that it would be one thing if it was a new or junior person these were 25 year plus people that had an insider trading right that you know we were McKinsey companies about trust right at the end of the day people don't trust us we can't work and so I can't think of a more challenged so that that was a very big deal issue and I remember Vic you remember when we when we first heard that for example when Anil got arrested I didn't know we didn't know what it was for whether it was for terrorism or for insider we just couldn't figure out which it was and then it sort of came out this way and that just put us into you know shock and I would say there are alumni were the most angry at first they were really angry I mean just like what the hell is going on here what are the values this is our and it taught me a number of things I won't bore you through all the detail not also with Roger what you know I think one is when is you better you know you have to expect the unexpected everyone says but I think the other part is you just have to be completed don't hide anything just be completely open and I that's what I so I'd had advice you know you better don't say very much we wait till you find out my view is I'm just gonna say how would I feel how it because it's honest if you know what I mean and I've never gone through this before and if you're honest and authentic without trying to be out that you just be people pick it up and then know that you're serious about it and so I actually communicated much more about it whenever I had a chance to then try to hide it so we in remember doing recruiting a couple things I remember I'll never that so that was Tober when Anil was arrested I was living in London and I just moved to London and we had it was a first meeting I was going to go to at number 10 Downing Street Gordon Brown was the Prime Minister and I'll never forget it was another breakthrough point I was waiting out you go through a gate to get into the place where number 10 is and it was raining and look you know we it's managing director not CEO Ian Davis Subscribe isn't kind of a transition where Ian would introduce me to someone you're just all of a sudden you're it so I didn't know the place that well I was going in and all all over the Financial Times all of the newspaper McKinsey and company you know insider tray it was just everywhere and I remember standing there in the rain going should I go in you know like is this is probably not the best time shouldn't L sooner just go I think I'll just go back home and have a hot chocolate I just didn't I remember I said you know god damn it I'm going in I just I went in and people were very warm in that you know clients they were very hit they were I said because they said you know some of the really going how's your day be and I said well I've had a pretty tough day actually and there it was then people would tell me what things they'd gone through and they're advising you they're advising they were advising me but so I think part of it is you just have to in a these think volatility occurs you got to be very open I think the other thing is you better spend time understanding of what really happened and that's what we spend a lot of time doing I think the other thing we realize is McKinsey and company is a human firm we would have human beings we have people that do bad things we're not and what we got to do is make sure we help each other try not to do that we get reinforce it with each other we I also learned a lot about trust and verify we have a very values based we put in now system so that we can you know expense systems that we look at to check if someone's gone if someone's more than two standard deviations off with a peer group they get audited it's just automatic things to check because we did a lot of close file review so it was learning a lot too about that if you will a human condition and what happens to people and an unquestionably a crucible moment you also had you stated quite publicly when you became managing director that you wanted to meet two global leaders every day that you are at work so a public sector global leader a private-sector global leader a social sector global leader it's not been six years yeah have you been able to live up to that ambition and yeah what have you learned from that it's a habit I mean one as you said before I'm a sort of student of leadership so I like to it's an amazing opportunity in this role I said I could be a monkey with a webcam it doesn't it's not about me it's about but you you get to meet incredible people you know I join McKinsey as I said at the very beginning to do external I was interested in the work and having an impact making it all that stuff that's what drives me I didn't want to be doing internal work I would say to our guys do you want to do you want to be the treasurer of the ski club or do you want to ski but I actually like skiing you know did it and so as part of the rule was I wasn't to global it was to CEOs or or or government leaders a day and that means by the way if I can't meet them physically i phone them right if I and so I've done that every day for the last six years and you learn it's a you learned so much I ask a lot of questions you know what are the top three things you worry about what do you wish you learn now about leadership that you wished you'd had at the beginning of your career who do you admire or didn't consistent themes that cut across lots yeah but very consistent across regions across industries across functions if you will you know one of the biggest for CEOs if I asked them you know what do they wish they'd known earlier would they or they wish they'd done earlier always I've never I've not heard a single leader not say this those they're toward the end of the career they would have moved faster on people they would have taken people out faster they would have moved people up faster they would have spent more time on people people is a big one the other one that's interesting is ambition they would have been more ambitious for their organisation and I I realized that too because it takes it actually takes you a couple of years to get used to being in the role because when you're in it people are you don't really have legitimacy in my view I think that's even for CEOs particularly I'd say for CEOs that are just appointed yeah and and so you're always you know if I think about it there were people when I was taking on the role that were on that partner election committee that didn't elect me for probably very good reason probably going mmm I wonder how this is going to turn out you know because it's a and you have to it takes a while but if you don't get moving your time's up yeah and so being ambitious for your organization dealing with people communicating another one is another theme I've heard is compartmentalization which is how you know you get so many issues coming at you and some of them are can paralyze you and one of them I remember was from a Liberty Mutual Insurance Company in the CEO there told me he said you know if I did it over again I didn't know how to compartmentalize he goes in my first three weeks of my job I would have kicked you out of my office if I was seeing you and I said that's good feedback to have to come in and he said it's nothing to do with you it's I'd been told by my general counsel we're being sued for six billion dollars and he goes everything I saw was six was that plate sort of going six billion I couldn't you know water six billion dollars to quote six billion he goes now I'm talking to you and he goes I have six of those like plates but I'm focused on you so the ability to be able to got a big issue in a parka it'll work but I'm gonna focus that's a that's a skill that you need to it's a skill you need to learn in leadership but you don't learn from books right you learn from experiences so those are some of the things who have you drawn inspiration from Allah so many people and I have mentors I'm a huge probably have thirty mentors half of them are McKinsey people half of them are clients but then there's leader as you meet I mean I you know Alex Gorsky who's at J&J I don't pretend I know him really well but I look at how he look at how open he is to ideas and to challenge and but he has a view about where he's do you know where he's going the size of the scale of what he's doing Herman graph at spare Bank and Russia as a view about business but also society you know he's I've seen him I've seen him with with President Putin telling him what he thinks should happen and not happen and so for taking risks Lubner Oh Leon who's a you guys probably not have heard of her but she's a Saudi woman who's part of a family that's running one of the largest investment firms in the world probably about thirty five billion dollars incredibly courageous tough a warm but and you see her in different situation so there's a lot of these leaders that you don't hear there aren't written a lot about but you get a lot of you be a watch and you learn or you try to as we finish this section of the discussion can you articulate how the firm has changed over your six years and where you want to take it over the next three years I mean I've had learning from these CEOs if you will about being wanting to be ambitious early on I put forward several themes that I'm still keen on one was relevance because I would like McKinsey to be a preeminent firm I don't mean that in an arrogant way but I think we should be there's many preeminent institutions but we're hiring extraordinarily good talent that we therefore that talent deserves that we're working on the most important issues globally and locally so relevance was a big theme and I'll come back to that a second innovation or modernization was another one I mean I think we're very good at telling our clients what they should do and here's the medicine you should take we don't like taking it ourselves but sort of what you know we don't you should change we don't need to change you know it's kind of a we need to innovate how we do our client service which we've done a lot of you talk a lot about that and then on our people side of it too we one of the things I'm what there's two measures I look at I obsess about if it is one is the offer accept rate if we make an offer to someone what percent accept what about eighty six percent which is about a twenty year all right so please if we make you an offer please join us together but that I care because that's a signal it's ninety percent here okay let's say larger people and then and then the other number I look at is what do people do when they leave McKinsey and we we have about 438 people of our alumni today that are running billion dollar-plus companies you can add up the next 10 organizations in eg and they don't it doesn't add up some if sometimes I say I'm the oldest one around here I'd say the really good guys go I are good women go I'm still here but that but that but I really it's very important that we're developing leaders right that we and that same with in government roles we have about 50 in cabinet roles so those are areas on we have to keep doing our people model the same way we've done it for the last ten years that we have to change it so it's relevant modernization and then it's really our partnership because we're now a 1600 person partnership this gets to values it gets to you mentioned something that's very important to be upfront you know I'm I'm not a CEO I'm a it's a managing partner because we have sixteen hundred people who believe they're the CEOs which is one hand it's a pain in the ass because it's hard to get things you can't you don't tell people what to do if you do your you'll be in serious trouble but it creates is an incredible leadership bench because then you've got people out there deciding what they want to do what type of clients they want to serve what type of practice they want to build how we hire people it gives you incredible strength that way but we have to work it is it if we don't work on that how partners work together what makes us feel good about being in one place our values we want those are the three areas and so I'd say we've been on the reach and relevance it's our view is in our hundred and eight locations for example my views if we don't know that fifty people that matter that doesn't just mean business people it's government academics media analysts and by knowing people it doesn't mean hi how are you it's that one of those fifty people has a McKinsey person's number on speed dial that's a relationship in my view that's kind of the bird so we've got to be relevant that means we're doing things in society we don't just do work we help we play a broader role that's been a big push and I think we're making some progress I mean you'll have to decide on how far we are innovation has been a very big one we've just been hammering on the innovation side and not because we need to because but I think we I think I've learned and from enough through seeing other companies and organizations go through if you don't challenge yourself you you will get challenged in a big way so we are just hammering the innovation fees at risk providing software for clients you know dedicating people to organizations to do turnarounds there's a range of different things and we've we're investing in technology companies we're building technology companies we're partnering with people we never would have partnered before so those are that's an area we just have to hammer it that's about 12% of our fee activity now I'd like it to be 40 and I think we're on a track to do that in the next three years so those are areas final question for you so we have students in this room that are anywhere from 18 to probably 35 and they're thinking about their careers if you were to offer your advice from your position what is the advice that you would give to the folks sitting here well this probably sounds to motherhood and apple pie but you know one of the things I would say is a bit like with the CEO is I'd be very ambitious I don't mean that in a sharp elbowed way about it's about me or you know to you but be ambitious about what you want to do if I if I think back on my time I was quite insecure not because of anything that McKinsey did or by the way any firm did it was just you're nervous about are my ideas legitimate do I have to wait a little while longer part of the reason I want to join McKinsey I didn't want to wait till I was this old to make decisions I wanted to get moving early but I would be I would be quite ambitious about what you want to achieve what you know what how do you want to distort the earth hopefully in a positive way really think about that it's like an egg polished that egg but don't make a big deal about and say I want to be this or that but work it so I think being ambitious is very important I think the second one and this is again where I get to is take risk and that's easy for me to say you know it but take risk and I'll just shut up on this one but the one we did some work looking at mckinsey people and we looked at cohorts of McKinsey people over a 40-year period so people have joined we looked at what they did over that time frame and there were a more fulfilled group or you could say successful group then less successful it doesn't mean they thought anything was wrong it was just they were more successful and they and we looked at that and we looked at all sorts of variables what school did they go - what was the actually their parents said you get we win it we did so much analysis it wasn't funny what sort of frog studies did they do the one single differentiating factor the one in all of that was the more fulfilled people had more bad luck than the less fulfilled which kind of sounds counterintuitive right like how could that be the case it did more successful hey more bad they took more they had more at-bats they tried things and the important thing is you got to pick yourself back up you have to be resilient that's part of life but many people are afraid you know even in the cake we sort of I would have this about moving to a different country too though if you do that it's going to delay your career you're not sure what's going to have we do all sorts of crazy stuff to each other right on even I often find sometimes it's your friends that are the most conservative we should be careful what do you do that that might not happen and I think it's so take risk and and talk to people about the risk you're taking to you know get get views on it but then go for it and if you're not if you're not pushing yourself so it's a little bit you're you're just like wool that's a then I don't think you're you're fulfilling your potential because you would not be here if you don't have massive potential and so I that's those are two things I'd say you

Channel: Wharton School

Views: 116,565

Keywords: Wharton, The Wharton School, McKinsey, Consulting, Firm, Leadership, Management, Talent, Relevance, Innovation, managing, director, Dominic Barton, interview, lecture, business, UPenn, Penn, University of Pennsylvania

Id: hG-1fppLjdY

Length: 31min 3sec (1863 seconds)

Published: Fri Apr 17 2015