George Soros took on the Bank of England. A single entrepreneur with a hedge fund beat a renowned central bank. They had to back off, and that was kind of the message. I don’t care what your politics are. If you don’t obey the capital markets, God be with you.


I think it’s a very different world now, and I think many, many business people have to worry about geopolitics. I heard some economic historians at a business conference saying ‘you business people like to think of everything in a nice probability curve. If the rand goes off or goes pear-shaped, you just move down the curve a bit, but you don’t realise that history shows you it’s one or zero. It’s not smooth. It’s one or zero and are you prepared for a zero scenario and where do you go?’


So this is a very important topic that we need to think about. It’s affecting multinational companies. For example think about McKinsey, we have a very large Russian practice, we have a very large Ukrainian practice, we have a very large Chinese practice. We happen to run our Ukrainian practice out of Moscow, probably not a very sophisticated approach to things. We’re a global firm and we don’t like to think of ourselves as being national, but it is a fact that when all of a sudden you have sanctions, we would like to do work in Iran but we’re a US incorporated firm; so even though our German clients are screaming at us to do things in Iran, we can’t. Other firms that are domiciled in other places can and so people ask, what’s the role of a multinational in a world where you have more geopolitics? One of the fastest growing advisory services for CEOs is on the geopolitical advice side. It’s not something we think we’re too naïve to do. It’s an important area to get help on.


When you package all those forces together, those four forces, particularly the first two, one of the implications is that the speed of the world is going up, the metabolic rate, and one way we try to measure it is what’s the average lifetime of a company?


One way to look at it specifically is to say if you were on the S&P 500 in 1935, what was your average lifetime? And it turned out to be 90 years. 1935 was not exactly a great time in the world from an economic point of view, but 90 years was the timeframe. 2011 is the last time we’ve done it. It’s 18 years right, so the churn rate has gone up.


The challenge of change has become fundamental for leaders. This all has implications for what we as leaders need to do, and I think a lot of emphasis on leadership has been on what leaders do, and how you align an organisation. What are the right KPIs


to put in place? How do I structure an organisation properly? Where do I find the talent that I need? How do you develop a marketing programme? What strategy do we adopt?


These are all important; what is not seen as much as it should be is actually who the leaders are? What is their character? And this is the biggest take-away from that last set of questions when I ask CEOs or government leaders, what do you wish you knew in the beginning of your time as a leader that you now know?


One question is around purpose and resilience and, it’s a bit of a buzzword, organisations saying they have to have a purpose and that’s to attract millennials. I think the more fundamental thing is if you don’t have a compass or a pole star or something that you’re driving towards, you can very easily be taken off-course with all the changes and the volatility that’s going on. You need to have an ambition and a purpose but what you are willing to change is almost everything else to be able to achieve it, and so you’re tight on the purpose but you’re loose on how you deliver it.


A lot of people are tight on how they work and what they do, and they refine it and tighten it, and so thinking about purpose is important. And purpose is a muscle. I don’t think it’s something you just have. It’s something you have to think about and refine and work. It’s a direction. THFJ


BIOGRAPHY


Dominic Barton is the global managing director of McKinsey. Based in London, he leads the firm’s focus on the future of capitalism and the role business leadership can play in creating long term social and economic value.


Before becoming global managing director, he served as chairman of McKinsey’s in Asia from 2004 to 2009. He also headed the office in Korea from 2000 to 2004. He is a participant in the World Economic Forum, the Asia Business Council, the China Development Forum and many other international organisations; an advisor to the Singapore Economic Development Board; a trustee of the Brookings Institution; a Rhodes trustee; and an adjunct professor at Tsinghua University in Beijing.


He is the author of two books - Dangerous Markets: Managing in Financial Crises and China Vignettes: An Inside Look at China. Born in Uganda, he graduated from the University of British Columbia and studied at Brasenose College, Oxford.


“Purpose is important. And purpose is a muscle. I don’t think it’s something you just have. It’s something you have to think about and refine.”


57


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73