As a CEO you need to be thick-skinned, says McKinsey's Global MD Dominic Barton
Of
the 52 weeks in a year, McKinsey and Company Global Managing Director
Dominic Barton globe trots for 42 weeks. In the past five years, he
has helmed McKinsey through a crushing slowdown, a shakeout in
consulting and the Rajat Gupta scandal.
In a freewheeling chat with Corporate Dossier, Barton talks about how McKinsey works on its leadership factory and what keeps him going. Edited Excerpts:
How does a leader prepare his/her organisation for the Volatile, Uncertain, Complex and Ambiguous (VUCA) world?
De-layering is one of the biggest trends right now. How do I de-layer and reduce? How do I simplify and flatten? Because a flatter organization moves faster and we need more speed but that is hard if you have 18 levels. The other element is how you give more responsibility and accountability in a decentralised way.
Apple is a classic example. If you ask Tim Cook how he runs his company, he does not look at boxes and lines and say I report to you and you report to me. Who he interacts with varies on a three to six month basis based on the products or important projects that Apple will be launching. Most companies run on a very old model.
One of things McKinsey does really well is create global managers and global leaders. What works for McKinsey?
We look at some metrics to assess how we are doing on that front. One measure I look at is our offer acceptance rates, how many people we make an offer to join us. The other one is how many people that leave us, go on to lead big organizations.
Right now, the number of McKinsey people running companies is 354, and these are figures for people who are running billion dollar plus companies. You can add up the next ten companies that lead in creating industry leaders including GE and others, they don't reach our number.
Another important factor is giving people multiple experiences in a very condensed period. For four months you develope a marketing program for a company, then the next four months you rip costs out of an organisation, the next four months you do international growth strategy, the next one is you de-layer a company. So the variety of experiences you get in a very intense period helps leaders grow.
For McKinsey, the concept of mentorship is very important. I have known KV Kamath since 1999 and I have learnt a lot from him. I have learnt more from him than I certainly have ever told him...just the way he thinks, what he does. When you are going to school from day one with CEOs, you have to be an idiot not to learn something.
You run a global company that is sure to have some crisis somewhere. How do you manage to keep inner calm when so much action is taking place?
In a freewheeling chat with Corporate Dossier, Barton talks about how McKinsey works on its leadership factory and what keeps him going. Edited Excerpts:
How does a leader prepare his/her organisation for the Volatile, Uncertain, Complex and Ambiguous (VUCA) world?
De-layering is one of the biggest trends right now. How do I de-layer and reduce? How do I simplify and flatten? Because a flatter organization moves faster and we need more speed but that is hard if you have 18 levels. The other element is how you give more responsibility and accountability in a decentralised way.
Apple is a classic example. If you ask Tim Cook how he runs his company, he does not look at boxes and lines and say I report to you and you report to me. Who he interacts with varies on a three to six month basis based on the products or important projects that Apple will be launching. Most companies run on a very old model.
One of things McKinsey does really well is create global managers and global leaders. What works for McKinsey?
We look at some metrics to assess how we are doing on that front. One measure I look at is our offer acceptance rates, how many people we make an offer to join us. The other one is how many people that leave us, go on to lead big organizations.
Right now, the number of McKinsey people running companies is 354, and these are figures for people who are running billion dollar plus companies. You can add up the next ten companies that lead in creating industry leaders including GE and others, they don't reach our number.
Another important factor is giving people multiple experiences in a very condensed period. For four months you develope a marketing program for a company, then the next four months you rip costs out of an organisation, the next four months you do international growth strategy, the next one is you de-layer a company. So the variety of experiences you get in a very intense period helps leaders grow.
For McKinsey, the concept of mentorship is very important. I have known KV Kamath since 1999 and I have learnt a lot from him. I have learnt more from him than I certainly have ever told him...just the way he thinks, what he does. When you are going to school from day one with CEOs, you have to be an idiot not to learn something.
You run a global company that is sure to have some crisis somewhere. How do you manage to keep inner calm when so much action is taking place?
First,
you have to know yourself. It sounds like an obvious thing but you
have to know when it is good for you to make decisions and when it is
not. For me, I have to make sure that I am not exhausted. If I am
exhausted, I will make bad decisions. You have to be disciplined
about your energy and your time. So, one thing I do is I run. I run
every other day. Marine Drive is one of my favourite runs. It is like
meditation.
As a CEO, you just have to start getting a thick skin. When I wake up in the morning, I know that there two crises have occurred somewhere; someone has done something stupid or some crazy thing. I know now that life will go on. So first of all, I do not worry about that.
The other part is to compartmentalise, which means do not get distracted, because sometimes there are big things going on and that can just make you obsessed. Learn how to take an issue and just put it on the shelf for a bit. You may be processing it but don't let it i distract you.
What kind of new thinking can we expect from McKinsey Leadership Institute?
We used to focus a lot on what leaders do, how you align an organisation, where you spend your time, how to select people but there is much more focus now on who leaders are. How do you handle stress? How do you stay calm in the eye of a hurricane? How do you have a long view and a short view at the same time? How do you pick yourself back up when you fail? You cannot analyze your way out of that.
There are interesting things on family owned businesses that the Leadership Institute is doing as well, which I think is very relevant for India. How do you make the transition from a founder-promoter to the next generation? How do you institutionalise a very fast growing company that does not have a systematic culture?
For leaders, how important is to have a socialist side for strategy?
As a CEO, you just have to start getting a thick skin. When I wake up in the morning, I know that there two crises have occurred somewhere; someone has done something stupid or some crazy thing. I know now that life will go on. So first of all, I do not worry about that.
The other part is to compartmentalise, which means do not get distracted, because sometimes there are big things going on and that can just make you obsessed. Learn how to take an issue and just put it on the shelf for a bit. You may be processing it but don't let it i distract you.
What kind of new thinking can we expect from McKinsey Leadership Institute?
We used to focus a lot on what leaders do, how you align an organisation, where you spend your time, how to select people but there is much more focus now on who leaders are. How do you handle stress? How do you stay calm in the eye of a hurricane? How do you have a long view and a short view at the same time? How do you pick yourself back up when you fail? You cannot analyze your way out of that.
There are interesting things on family owned businesses that the Leadership Institute is doing as well, which I think is very relevant for India. How do you make the transition from a founder-promoter to the next generation? How do you institutionalise a very fast growing company that does not have a systematic culture?
For leaders, how important is to have a socialist side for strategy?
Capitalism,
especially in the West, has become more short term, more narrow. If
we do not change, it is going to get disrupted. Adam Smith said, it
is the duty of the entrepreneur to take care of the society in which
they operate. If you do not have trust within the community you are
operating, you will not be able to make money and I think that is a
big push for business people, including myself.
ByVinod
Mahanta, ETCD 5 Dec, 2014
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