Dominic Barton: An observer of leadership

As global managing partner of McKinsey & Company, the world’s premier management consultancy, Dominic Barton, BA’84, LLD’12, is uniquely positioned to identify the qualities that make a great leader.

 

I was in England at the time I got a letter from McKinsey, who I’d never heard of. They offered a drinks party, so I thought that made it worthwhile to go to the session to find out what was happening. My first impression was not very good, because it was a presentation as usual with lots of slides, and people stood up like they were Moonies or in a cult: “I joined McKinsey three years ago and it is the best thing that’s happened!” And I was thinking: “Oh God.”

I was more on an academic path. I wanted to be an economist, which I found was becoming much more mathematics than anything else. I wasn’t sure that CEOs actually made decisions by running equations, and I thought it might be good to get a couple of years’ experience and then go back to academia, because I liked industrial economics.

When I did the interviews at McKinsey, I thought I didn’t get the job. I flew back to England after I didn’t hear anything. About two months later, a woman called me and said, “So are you going to take the offer or not? It is kind of rude you didn’t reply.” I said, “What are you talking about? I didn’t even get it.” She said, “No, you did. In fact, right that afternoon we called, and you had apparently fallen asleep before your flight, and so we told your mom.” I called my mom. “Mom, did you [take the call]?” “Yeah, I did,” she said, “but I didn’t think that was something you wanted to do.” I still tease her.

It was the first time McKinsey was hiring non-MBAs, as an experiment. There were a lot of people watching: Can this person add? Do they dress weird? I am not sure we can leave them alone with clients. And so I got a lot of mentoring, and it wasn’t just from McKinsey people, it was from clients. I learned a lot from clients. I found that mentoring was an important part of development, and it was like being in a candy store, because you met so many different people and could ask questions. They often gave me advice -- tough advice at times -- but that was a real growth period.

At about the five year mark, I couldn’t figure out [where to specialize], because I liked everything. I liked retail, I liked banking, I liked oil and gas, I liked all functions. My mentor at the time said “You’ve got to pick. Go home on the weekend and write down all the projects you are on, and the things you liked and didn’t like, and we are going to look at it and decide that way.” After the weekend, he asked “What have you decided?” I said, “I’m even more confused.” He said, “That’s it, I’ve had it. You are going to be an organization guy.” And I said, “Okay, sounds good, I’ll do that.”

I had many failures. It took me three times to get elected a partner.

I had many failures. It took me three times to get elected a partner. It was a very personally unpleasant time, because when you work hard good things are supposed to happen. And they weren’t. The third time I barely went through -- I still have splinters in my back from going over the bar -- but I think that experience, in retrospect, was good, because it makes you a little more resilient. And I found that every time there’s been a setback -- and I’ve had many -- in a strange way (but not at the time) it does help you. It makes you more resilient.

After I got elected, things were going very well from a career point of view. People were saying they were going to move [me] faster though the system. But I actually felt that I was plaining. I didn’t feel like I was growing. Then there was this big opportunity in Korea, because basically no one wanted to go to Korea.

I said this will really test me, because if you don’t know anyone you’re going to have to figure out how to build a professional network. And if you don’t know the language you are going to have to figure out how to work in a different culture, because I knew I would never be able to learn the language. The more people told me I shouldn’t go, the more excited I got. I’d say the Korea move [was my biggest career challenge]. It literally was like I had the bags and I showed up. And the translation for “McKinsey” in Korea at that time sounded like “Kentucky Fried Chicken.” So people thought: you are trying to sell us chicken?

It was six months before the Asian financial crisis, and all of a sudden we were in a role to help restructure the financial system in Korea. I loved being in Korea. The drive, the ambition, the energy. I got to know Asia and I loved the growth and the vibrancy and the culture.

In 2009 I got elected into this [global partner] role. So that is when [my family] made London [our base], which is a great hub from a time zone point of view. I spent about six years there and now I’m in Manhattan.

I’m an observer of leadership, if you will. I see two leaders a day, typically two CEOs, no matter what, every day. And I always ask those leaders two questions: What are the three things that you’re excited about or worried about? And what are the three things that you would tell yourself as a new leader that you now know being an experienced leader?

I think the fundamental differentiator between an outstanding leader and a regular leader is character. And what I mean by character is there is a strong sense of purpose. It is not about making money, it’s much broader. They are trying to make something happen that is going to benefit a particular group of people (and, by the way, they are going to make money as a result of that). It is not a charity, but there is a strong sense of purpose.

[The second characteristic is] resilience -- the ability to deal with shocks and set-backs. The third, which I think is really undervalued, is selflessness. [Some leaders] say: “I did this, I did that.” Is it “I” or “we”? It is not false modesty, but selflessness. And then there’s judgement. Because often CEOs are dealing with the toughest decisions, and often those decisions are right versus right decisions. I love my economics, but I wish I’d taken more philosophy.

One of our large clients was doing succession planning. I asked the CEO “How do you decide on a successor?” This guy is a really studious person, and he said, “I decided to go to the US army, because I wanted to know how they would select the five-star general from the four-star. They said it was really simple -- just look for two things: selflessness and judgement. The track record we can see. We know if they can do the “what” and the “how,” but it’s the character.”

Leadership is a team sport and all leaders are really really good at some things and really really bad at others. The great leaders know which is which and they build people around them that can deal with the things that they are not very good at.

I think Angela Merkel is outstanding

I think Angela Merkel is outstanding. [Because of her] guts, and for doing the right thing. [A true leader] doesn’t follow opinion polls to figure out [the right decision]. She is just the essence of that and she’s also a human being; it is not as though she is a tough-ass. It hurts her, it affects her, and you can feel it. She is someone that I have a huge amount of respect for.

Gender equality is one of my top three priorities. It’s not driven by any kind of moral or social responsibility, but actually it’s a business issue. One of the key parts of [McKinsey’s] mission statement is we want to attract and retain the best talent, and, if only 25 per cent of that talent are women, then by definition we’ve failed. So we have to change it. And what I have learned through doing it is that it is not a straightforward process. There are a lot of implicit biases. In recent work we found that women, at least in the United States, have a 30 per cent less likelihood of being promoted into the first level. It’s not as though we’re looking back -- it’s happening now, even with this awareness. So it is a big issue and I think it has to be a priority. That is one of the things I love about the current government with half the cabinet being women, and the signal that that sent to different parts of the world. I think role models are very important.

[Another priority] for me is what I call relevance. We are not politicians [at McKinsey]. We won’t be able to help with North Korea, or anything like that, but we better be working on the important issues that are going on in the world. Where is our practice? What are the types of clients that we have in Malaysia, in Pakistan or in Uzbekistan? Are we working on the most important issues or are we working on some sidecar? We are just trying to influence in whatever way we can.

[Another] area for me is innovation. The world is moving so fast. It’s very hard to measure that as a leader. There’s no speedometer. McKinsey is 90 years old this year. The average lifetime of an S&P 500 company in 1935 was 90 years, now it’s 15. That means you have to innovate, and it’s my job to push the innovation level.

It is very interesting that the Pope has actually convened an artificial intelligence council on ethics.

I think we are in a new age with this artificial intelligence that we are just beginning to see glimpses of. We are in the early period. I think we need innovation in public policy. This is a really important role for the public service. The strategic importance of that I think can’t be understated -- the innovation we are going to need to deal with job dislocation, how you influence people to do things differently. The whole area of skills and retraining is going to be very important.

I’m an optimist, but it’s going to be an incredible period of disruption, even [involving] ethics. It is very interesting that the Pope has actually convened an artificial intelligence council on ethics. I think all of us in our own way are going to have to deal with it because I think it’s a very transformative period. The thing is, how do we keep up? How do we figure out what that is going to do to our own day-to-day life? What’s it going to do to our work?

[In terms of Canada’s transformation from a resource to a knowledge economy], in a sense we are trying to do a growth strategy. How do we jolt the GDP per capita growth in an inclusive way, and not just for the top quintile? How do we do that? And I think you start with: What are our endowments? Then you look at the trends, then you make bold moves. That is the basic formula.

I think our endowments are pretty good. We have a world class education system. The innovation we do, the ideas we come up with -- we punch way above our weight. We are not that good at commercializing them or scaling them, but that to me is an easier problem then actually coming up with the insights. So we have that set of ingredients.

Aging is very much a headwind for us, but we have immigration.

I think our diversity and culture is an incredible advantage. The only thing is, we better use it like a muscle. Don’t assume it’s [always going to be] there, because look at what happened to the UK and other places. And we have these natural resources, and I think commodity prices are going to go back up again over time. I think we have huge potential. We are very fortunate to be part of NAFTA, and we are close to Asia.

We’ve actually got the ingredients to go for it, and the trends, for the most part (except for the aging population) are in our favour. Aging is very much a headwind for us, but we have immigration.

The way I look at it for Canada is we need to be ambitious, bold and focused. Let’s pick a few areas to drive things as we move forward, and have an objective function in terms of how we want to raise the growth rate.

We should be investing a huge amount in infrastructure -- not just the government, but private sector money. We should figure out how to scale up our innovation. I think health care is an amazing opportunity for Canada. It shouldn’t be seen as a cost. We have the data to be able to transform things. So how can we unleash more innovation in that area? Ag-food is going to be one of the most important industries in the world. We should be a dominant player. Let’s unleash it. And we should be leaders on the clean-tech side, given our industries and the imperative to do it.

I’m not so much a fan on having a Silicon Valley North, because I don’t think we can do it. I think Silicon Valley is a unique place with a unique history, and the landscape of the world is littered with carcasses of countries and cities that tried to do this.

But we can do our own thing.