Lessons in Leadership with Dominic Barton

JANE MILLER: Good afternoon. Thank you. (CHUCKLES) And a very warm welcome to
Lessons in Leadership. In conversation with Dominic
Barton and Doctor Andy Cooper. Before we start, I would like to
acknowledge the Gadigal people who are the traditional owners
of this land. And pay my respects to their
elders past and present, as well as extend my respect to
any Aboriginal and Torres Strait Islanders who
are here with us today. And now it is my very great
pleasure to welcome to the stage UNSW
Chancellor, Mr David Gonski AC. (APPLAUSE) DAVID GONSKI: Thank you, Jane,
ladies and gentlemen. It is the sign of a great
university, or indeed I think, a very great
alumni of the university, that we can attract two great speakers
like we’ve got here today. And not just speakers of our own society,
but indeed world speakers. Speakers who are doing things
all over the world. And I’m pretty proud of it, and I’ve been
looking forward to this. So I welcome each and every one
of you here, and if I may, let me tell you a
bit about the speakers today. Firstly, Doctor Andrew Kuper. Andy is a multi-award winning
entrepreneur and investor, whose philosophy of profit with
purpose has shaped various industries
and countries. He founded LeapFrog in 2007. And today, LeapFrog companies
reach 178,000,000 people. There’s no decimal point wrong
there. 178,000,000 with health care or
financial services. Over 146,000,000 are low income
emerging consumers. And their often accessing essential services
for the first time thanks to the investments of
LeapFrog. In 2017, LeapFrog was named by
‘Fortune’ as one of the top five companies
to change the world, alongside little companies like
Apple and Novartis. Portfolio companies of LeapFrog
operate across 35 countries, and they’ve grown close to 40% per year and
now employ 128,000 people. Recently, Leapfrog announced a
new Australian dollar 1,000,000,000
private equity fund, backed by several of the world’s
leading institution investors focused on acquiring and growing
companies in emerging markets in Asia and
in Africa. Andy’s been recognised by the
economist group for demonstrating how to change
the way we invest as individuals, institutions and
societies. He’s been recognised by EY’s
Entrepreneur of the Year, and by the AFR as one of
Australia’s 20 true leaders. He holds a PhD from Cambridge, is the author of two books on
governance of democracy and the co-author or multiple publications with
diverse leaders. But I’ve left the one great
thing out. His wife, who is absolutely
wonderful, is a member of our teaching
group at the law school of the University of New South
Wales. I thought if I just said that, I
didn’t need to say the rest. (LAUGHTER) He will be talking to Dominic
Barton. Dom kick-started a fruitful career at McKinsey
& Company in 1986. He had notable positions in the 2000s, heading their offices in Asia
and Korea. And as you know, McKinsey’s is a
well-known and trusted adviser to many of the world’s most
influential businesses. Having served maximum term as McKinsey’s Global Managing
Partner until 2018, Dom has successfully led the
firm’s pivotal focus on the future of capitalism and the role
business leadership can play in creating long-term social and
economic value. He is based in London with his
family, but retains significant
positions all over the world, including chair of the Canadian Minister of
Finances Advisory Council on Economic Growth, and this one
I love, being the Chancellor of the
University of Waterloo, a university that has a lot of
similarity to our own. He’s also a trustee of the Brookings Institution,
a Rhodes trustee and an adjunct professor of
Tsinghua University in Beijing. He’s also a board member of FCLT
Global, which focuses on capital
investment on the long term. He’s helped done all sorts of
things. He was born in Uganda, he’s a
Canadian, and above all, having listened
to him this morning, he’s absolutely bloody
marvellous. Ladies and gentlemen, it gives
me enormous pleasure to invite Andy and Dom to the
stage. (APPLAUSE) DR ANDY KUPER: Well, thank
you David. It’s gonna be hard not to
disappoint after that. (LAUGHTER) Welcome everybody, today. We’re going to be having very much a
stimulating conversation, I hope, on some of the major themes that confront
business and society today. It’s a privilege to be here with
Dom, who has been such a leader and a thinker in
this space for a long time. Author of things like ‘Re-Imagining
Capitalism’, and someone who, during his tenure at McKinsey,
is to speak to a CEO, or a non-profit leader or a
government leader twice, two of them everyday for those
nine years. So there’s arguably no one who
has larger N, a larger sample of what leaders are thinking
about than Dom. And, what I asked Dom to do
right at the beginning, was just to talk to us, give us
the big picture of how he thinks this world, both societies and
economies, are being reframed by the major forces out there
currently. And I thought we should start there and then
go into the Q and A. So with that Dom, over to you. DOMINIC BARTON: Sure. Well, thank you very much, Andy,
and thank you David for having me here, it’s
wonderful to be with this group. I apologise, as a McKinsey person, I can’t
speak without slides. I’m trying to get off the detox, but you’re gonna have to see a
couple of slides. So I apologise there. Andy has done his best to stop
me, but I did want to just…I did have thee, max, I
just wanted to show. But it’s more just to set scene,
if you will. And I think these are probably
pretty well-known, but just the context as we think
about the times we’re in and why I think we need to be
rethinking a lot of things about our systems, capitalism,
democracy and so forth. And the reason I share this, because I think there are four
really gravitational forces that are underway that we all
need to be aware of. One is this sort of shift in
economic power, which were, I’d say, in the
early middle stages of, between a movement from the west
to the east. And for the last 3,000 years, most of the
global economy was in Asia. If you put the centre of the
Earth on a flat piece of paper to find
balance, then it would be around Islamabad in Pakistan
in the year zero. Over 2,000 years, it went to Iceland, as
Europe and North America moved. What’s gonna happen is, in 75
years, what took us 2,000 years to go
to Iceland, 75 years, we’re going right back just a little bit
north of Islamabad, just in terms of the weight of the economic of
the Earth, if you will, the GDP. So this shift is massive. I think we underestimate how big it is, and
particularly in McKinsey, where we like to advise people
in what to do, we never really take our own
advise, which is a shame. When I look at it, I look at
what we look like. It’s an institution in terms of
our partnership. Do we reflect what the world
looks like today and what it’s going to look
like? We don’t. And we need to move quicker. There’s gonna be 1.6 billion new
middle-class consumers coming into the system in the
world over the next 20 years. The bulk of those individuals will be in the
Asia/Africa region very much where LeapFrog is
focused. And again, to just to put in
terms that I can understand. In North Asia, what that means
in the next ten years, is we’ll need 76 Unilevers to be
created just to meet the needs, the consumer needs,
of that group. So this is a massive growth
opportunity. It also has very, very significant implications
for climate change. We’re already in deep trouble,
in my view, on that front. I don’t think we factored in the
1.6 billion like we should have, that want to live, and work and
consume like we do. And that is coming out us at speed, and it’s
driven by urbanisation. So that’s one force, which in
and of itself, I think would make this next
20-30 years historic from a 500 year time frame, just the scale of that move. The second force is technology, which I think we’re all very
familiar with. I know that this university and
the university that either you’re a part of or
you’ve come from is a leader on that side of
things, on the technology side. But we’re in the very early
innings or stages of that. Larry Summers would say we’re in
chapter one a 100 chapter book. But what technology is doing,
particularly computing power, connectedness of people and things and data
is transforming everything. In my view, it’s transforming science and how
we think about science. There are…DeepMind in London is
challenging the periodic table. They’re not taking the orthodoxies of the
periodic table as given, which is a pretty radical thing
to be thinking, I thought those were fixed. So this change is affecting every single
organisation on the planet. One of the challenges, and we
talked a bit about this morning, is that the software of
philosophy is not keeping up with the
technology. To begin with we don’t talk about our
clients, one I’ll mention which you may be inspired or
concerned about is we serve the Pope and the
Catholic Church. And we clearly don’t serve them
on religious matters because we’re not qualified. It’s on the ethics of AI. And again, as a son of a preacher, I didn’t
read the bible well enough, but I don’t think there was
anything in the bible about artificial intelligence. But if you’re the leader of a large religious
institution at 2000, you better have a point of view
and perspective on that. But I think we’re all yearning
for philosophy to go with that, with the ethics to go with that,
how we think about the data. And the challenge we face, this technology
just keeps racing ahead, it’s not gonna wait for that as
we go through it. So, this in itself is leading to
some profound changes at the sort of the philosophical
level, but also hit the very practical
job level. The reskilling that’s gonna be
required for all of us. In Canada, in 2030, 10,000,000 of the
18,000,000 person workforce will not have the job that they have, that job
will be automated. That’s the estimates we made
with a lot of academics and business leaders. The average age of that group
that will need to be reskilled is 45 years old. They’re not gonna be able to go
back to university. We’re gonna have to think
about… And that displacement will be
existential, if we don’t figure out now how
to deal with it. 2030 is not that far away. So that’s technology. I’m blabbering to long up here. Demographics is another factor. We’re gonna be the oldest Earth,
we being as humans in the next ten years. More people over the age of 65
and under the age of 15. There in China today, 260,000,000 people
over the age of 60. That you just think about what
that means for a traditional GDP per capita
growth models, what it means for health care
costs and how we do things. As I get older, I think it’s nice that we have
older people in the system, but we tend to cost more as we
get older, and we tend to produce a little
less. Hopefully, we’ll change the
thinking, but that’s an issue. And then we have, in the regions that Andy’s very
much more familiar than me, you’ll an incredibly young
demographic in Africa and in the southern parts of
Asia. Where I grew up, as David said, in Uganda, 70% of the population
is under the age of 30. And that represents its own set
of challenges. And the final force is this, which I think is affected by
first three forces, this yearning, and yearning is
probably too…it’s less, they’ll need more emphasis than
that on it, a screaming for a better
societal deal. There are middle-classes around
the world, excuse my language as I say it, I’m quoting
someone, they’re pissed off. They are not seeing democracy,
capitalism as a way for them to be able to move ahead. And we’re seeing the effects of
that. My view, it could get a lot
worse before it gets better, given these trends we’re seeing and what that
does for displacement. And the challenge is, there is
no constituents so your stakeholder, you could look to,
to say, “Are you working on that?” All of us think someone’s
working on it. Well, the unfortunate thing is,
there is no one working on it, it’s us that has to work on it. And that’s why I think business has a broader
role to play in society. All you think about is making
money and focusing on doing what you
do with your consumers and you don’t think about the impact that you
have on your society. Which is, by the way, what Adam Smith wrote about in
his very first book, in ‘The Theory of Moral Sentiments’, it’s the
duty of the entrepreneur to take care of the society in
which they operate. Quite a socialist thing for Adam
Smith to have said, but I think we’d all do well to
remind ourselves of that. Because if we don’t work on the system, then
the system will collapse. And I’m worried, I’m an optimist, but I’m
worried about that. So that’s the stage. I think I’m gonna skip the… I have a video. Sometime, if you can actually
find it on YouTube, that’s not my video on YouTube,
you can find it. It just shows the speed of change of race cars
in Indianapolis 500 versus Formula 1. I’m not gonna, I think for the
sake of time, go through it. But it just…what people thought was fast is
very, very slow. And I think all of us, in
organisations and society, are gonna have to speed up our decision
making and our approach. That doesn’t mean thinking short-term, we
need to be long-term, but we need to be faster in what
we’re doing. So I’m gonna skip that. COMMENTATOR:
But Holland comes in for a pit stop. Time to refuel and change tyres. Lou Moore himself changes the
tyres. Only four crew members,
including the driver, are allowed to work on the car. It’s a tense time. Holland stays in his seat,
anxious to get away. Let’s watch. (RACE CAR ENGINE ROARS) (RACE CAR ENGINE ROARS) The tyres are changed at last. A crewman polishes the
windshield as Holland moves away just 67
seconds after he stopped. (RACE CAR ENGINE ROARING) (RACE CAR ENGINE REVVING) DOMINIC BARTON: The final page
to say is, some of the implications are,
I think, we need to set much bolder
aspirations. If I may, I’m a student and
learning about Australia, so I don’t think I have any
right to make comments, but I think there are a lot of
similarities with Canada. If you think your market is
Australia or you think your market is
Canada, you are gonna be very, very
disappointed. You need to think about your market as a
400-500 million person market. And there are many of those
markets, it’s not just China, it’s ASEAN, it’s East Africa,
it’s MENA. But boldness of ambition is
critical. And with technology, there’s
actually opportunity for coming from a relatively small place to play
a bigger role, as in the example of LeapFrog. Challenging orthodoxies, I think
everyone has to step back and look at the beliefs you have in terms of how your
organisation works. And I would argue, everything except your
values, you should challenge. Reallocating resources, this is
capital and people. The data analytics side. Thinking about the businesses of
tomorrow, not coming from your traditional
competitors, from outside of your industry is
probably where you’re gonna find a more fulfilling set of
examples. And the importance of talent. The last is the one I wanted to
focus on, which is your externality is no
longer your externality. I think we have to be thinking much more
holistically about what we do. There, in my view, there is no
trade-off between stakeholders and
shareholders. You will not be a sustainable
shareholder-value creating company if you don’t think about maximising value from
stakeholders. It could be tricky. I’m not saying it’s
straightforward. But there is not a trade-off of
I have a purpose and I’d make less money. These things actually go together, and that’s
why I have been and am such a huge fan of
LeapFrog. This is an organisation that is
making a huge difference in the world, it’s a very noble and inspiring
purpose. But, by the way, they also make a lot, I hope I
don’t embarrass you, they make a lot of money. They do well, and there’s
nothing wrong with that. But we need to have more capital
being applied that way. So, I’ve talked for too long. But that’s just the sort of the
scene setter, if you will. You probably already know this, of some of the changes that are
underway. DR ANDY KUPER: That’s a
fantastic panoptic view of what’s going on in a very
short space of time. Dom, let me just start with that
different conception of the customer base and
opportunity in our world. So, here we are in Australia, as
you say, 25,000,000 people on the doorstep of
4,000,000,000, rising. When I started LeapFrog in
January 2007, it was the month that Steve Jobs
launched the iPhone, and our shtick was there gonna a
billion or two people added to the economy. And of course, it ended up being
billions, the number of customers in the
world doubled. The cost of reaching them went
down a hundredfold. And now, in the next few years, there are gonna be 3.5 billion
smartphones added. So you’re gonna get a multiplier of 100 on the
quality of interaction with those customers. So, the scale and the depth and
intensity of it is far beyond what the Steve
Jobs and others conceived of at that
time. And I guess what it needs me to
ask is, we hear that we need to move
fast, we hear that companies need to be more
digital, and adopt digital tools and move quickly to engage with
this broader world, but do you have examples where
you say, “Ah, these kinds of companies
have really jumped on this, they’ve seized this, they’ve
moved fast enough. They’re understanding these
customers quickly and then addressing them in
unique and new ways.”, that you think are good examples
for us to think about? DOMINIC BARTON:
There are a number and it’s not just the start-ups,
if you will. I think there’s many examples,
people that we all know. The ones that come to mind, one
is Ping An in China. I don’t know if people have
heard of Ping An, it started as an insurance company, it’s now in
health care. I’ll just give you one example. The Chairman, Peter Ma, is about
68 years old. He might as well be a 19, he’s got more
energy than most 19-year-olds, so that I know. And his mantra, if you will, is
urgency and speed. Just the example I’ll give you
about this. He was a very successful
insurance company, he decided he was gonna go into
health care. This is about 3-4 years ago, I remember, I’ve
known him for a long time. And usually, when I go to him, I’m usually
telling him not do so. He went from insurance to banking, I said,
“You’re not allowed to it. He said, “Watch me.” And he moved to Beijing and
worked with the regulators. He said, “My idea now is I’m
going to health care.” I said, “First of all, you don’t
have a licence to do that. But I know you’re gonna try and
figure out how to get it. Because second, health care is
very different than financial, you could kill people if you
don’t.”, I sort of went. And he said, “That’s
interesting, Dom.” He always said, “Watch me.” So, he proceeded shortly after
that, a very productive counselling
session, to hire 1,000, he’s hired 1,000 doctors. He put them in the equivalent of
a call centre, I might say a very nice call centre, but put
them into a call centre. And his product, he didn’t need
McKinsey’s help for this at all, was, you can call the call
centre, anyone in China can call the
call centre 12 times a year for the equivalent of 100 US
dollars in renminbi. That was the product, nothing else, not gonna
say how long it is, that’s the product. He, today, has 232,000,000 customers that
have signed up on that, that pay money. It’s a very, very significant… he started one of the largest health care
companies in the world. But what’s more interesting is,
the data he now has on what’s ailing the average
Chinese person, so he’s built all sorts of research centres,
cancer research. I’m involved with Sloan Kettering,
I’m on the board in New York, which is the leading cancer
centre. I’m saying if you want to be
relevant in the next ten years, you’re gonna have to have some sort of a joint
venture with Ping An, you have to. So I’m just saying that he’s 68, a lot of people would be telling
him to be retiring, playing golf. He’s just very frustrated he didn’t by DiDi,
the Uber equivalent (LAUGHTER) and so forth, that’s one of his… So you see organisation…another one
I mentioned briefly this morning, Inditex, this is from Spain. It’s the company that owns Zara. It’s the, in my view, the
fastest moving supply chain of any organisation I know of on
the planet. And it’s got a very unusual
structure, basically two levels. Senior level of executives and then a very
large group of people. And I, still to this day, can’t figure out how
they’re organised. I don’t, thank goodness they
don’t rely on McKinsey to do what they’re doing, but
I… It’s very difficult that they
make decisions very quickly, it’s an old school, it’s from Madrid, it’s not
from the Silicon Valley, and yet it’s a global leader in
terms of how it works. So those would be two that come
to mind. DR ANDY KUPER: We’ve also
seen orthodoxies around how industry verticals
are organised, collapsing. So your case makes me think of a
group we own in East Africa called Goodlife, which has
started out as a pharmacy chain, but essentially discovered that
50% of people first get their health care
interaction at the pharmacy because there aren’t that many
doctors. So they then created little stalls
that had teledoctor services. So you’re going to sit down at
the computer, talk to a doctor in Nairobi. Then they thought, “Ha, well, we
need to be able to take the blood.” So they introduced the path lab
in the… and they created a health hub,
essentially. And now, they’re linking in insurance,
where you can walk in, you’re miles out, you’re in the
middle of East Africa, get your drugs prescribed, the pharmacist
gives you the right thing, normally you got 1/3 of medications are the
wrong medications in Kenya, and now you get the right one,
the insurance instantly pays. You have a much better experience
than you have here in Sydney where I get my piece of paper
from my doctor, walk over to my pharmacy,
try to call my insurer, go through this very ineffective
process. And, I think what it shows is, I mean, that’s health care and financial
services coming together, but it also shows how poorly our
current enterprises are designed, because they’re designed for what works
from the enterprise perspective. If not designed from the
customer perspective, and the customer perspective, you want this
seamless interaction, you don’t care whether it comes from health
care or financial services. And, as I look at the Go-Jeks in
Indonesia or a number of the other players that are
disrupting these markers, they do seem to be providing
those panoply of services rather than thinking in a much narrow way,
in the way he admires. DOMINIC BARTON: I definitely… I mean, there’s some overused
terms right now that probably irritate people,
including myself, but, you know, agile and
ecosystem. But, at the risk of irritating
you, if I think it was this ecosystem
notion, I totally agree. I think we tend to think of
ourselves as B to C, if you will, and this sounds very obvious. And I remember listening to Jack
Ma, who’s on this Singapore Economic
Development Board, so it gets together once a year,
and there was sort of 10 CEOs there, and he started to talk, he said,
“I want to tell you guys, the world is shifting from B to
C, to C to B. I was predicting off this like.
wow that’s an ins…that’s Jack Ma. And he said, “You’re not
listening. It’s going from B to C, to C to B.” And this is just to say were
beginning to go into financial services. And there was some bankers on
there and he said, “By the way, I’m lending
anywhere between $10,000 to $100 to our customers. People said, “Well, you’re not a
bank.” And he said, “No kidding, I’m
not a bank.” And he said, “Why, we have more
data than you. I know what shampoo you are
using, I know how many kids, I know blah, blah. So I have
much better data than your risk people do.” Anyhow. He just…and he said, “By the
way, I don’t think people wake up in
the morning saying, I want to go to a bank.” And I hope I’m not
insulting…banking’s great, David. I don’t want to… It’s kind of like…remember
this, I used to work a lot of gas
station companies, and there was this obsession
that all people think about every day is the price of gas, and get it
going to a gas station. It’s kind of…that’s and
irritant, actually. But you’ve now got people
thinking about those systems, whether it be in health care,
whether it be in mobility, whether it be in educa… There are these broader systems. And I do think one needs to
think about how you place yourself. And that means that you’re…you
have to think about competitors in a very different way. That one thing I’d say too is,
one part of the world where I found… people are…there’s China, and
we can talk about that, and Silicon Valley, that surprises me, not a change
towards these ecosystems, it’s Chile. I think it’s because it’s such
an open system, they don’t have any terrorists, but it’s incredible to see what
banks, oil and gas retailers, retailers are doing. And they’re moving, maybe not as
fast as the Kenyan, but they’re moving, incumbents
are moving that way. So I think that is gonna be more
of our future. DR ANDY KUPER: And I’m just
gonna ask one question and then I’ll open the audience. But it is about Australia’s
place in the world. You say we should be thinking
not about the 25,000,000 here but the 500,000,000 in Asia. We are on a similar time zone,
we are close. But people have had some mixed
experiences, and some, a lot of large
institutions have been punished by analysts who have a much more
short-term orientation for making, having adventurous
forays into Asia. How do we begin to shift this
mindset? I know you’re part of the
focusing capital on the long-term. How do we begin to move away
from the cauter-itis that is afflicting our societies and our investment decisions,
currently, and towards a more long-termist
notion? Because, clearly, in those
terms, you do have to seize this
historic opportunity as Australian companies and
Australian society. DOMINIC BARTON: Yeah. Yeah, and I think you’ve framed
the challenge very well. I think, in some ways, it’s
obvious that the markets and the opportunity are in Asia, and I would argue
in Africa, I’m very bullish on Africa, and I know that there can be… many people have been bullish
over the years, but I am. And maybe it’s I drank the
Kool-Aid, so I’m probably totally biased. But then there’s a difference,
“OK, how do you get there?”, and I think you do need patient,
they can still be demanding, patient capital, to be able to
drive it. And it is interesting, when you
look at some of the, what I call more long-term
oriented companies, many of them are families that
there are…they’re the time frames. One example I would give you is
the Olayan Group. It’s run by, you know, it’s a
second generation family, originally out of Saudi Arabia,
but long time, lap there in New York and
London. Their time frame is 50 years. And when you see…and they
invest a lot of capital. And when you see how they look
at the world, and where the trends are and
where they shifts are, they can put up with the ups and
downs. Africa will not be a smooth
ride. Also, Asia won’t be a smooth
ride. But you need people who are
willing to stick with you. The only thing I would say, and
again, I don’t have any right to do
this, being a Canadian here in
Australia, but I really would urge this
notion of, you have 25,000,000, that’s a small city in China, if
I might say. I would say that…what I said
to the Canadians all the time is, we’d say, “We need to shift our
focus from the United States, where the bulk of our activity
is, towards Asia. Everyone is talking about big
free trade agreements and towards it. How about this? How about we just develop a
relationship with the City of Chongqing? Chongqing has 35,000,000 people,
that’s the size of Canada. We’ll double our market with
just a relationship with them. How about the Mayor of
Chongqing. So there are so many cities out
there that we can be linked with. And I think universities play a
big role. One, because universities
attract talent from those parts of the world. I don’t know what the mix is at
this university. But it’s also, I think, really
important for students and people here to spend time in
these parts of the world. All it takes is a, in my view, a
two month trip to see something and go, “I can operate in this
environment.” I’ll bet you the alumni network
here, that’s already I see is that huge, but, the link. And the last, last thing, I
just… I have to… one of the reasons I got
interested in Asia was actually because of an
experience I had here in, I don’t know if I’ve told you
this before already, in Australia. As a young associate, I spent a
year in Australia. Mainly because my best friend
was Australian, so I wanted to just spend time
with him. And the very first project we
did was, it was actually for the Federal
Government, it was to simplify the tax
system. You can see how effective we
were in that… (LAUGHTER) But the more important thing
was, the client was actually, it was
Paul Keating. It was Greg Smith but Paul
Keating… And we had two dinners with Paul
Keating, that was the interaction we had. And I hadn’t met this person,
I’ve seen him, I’ve heard about him. The first dinner, we were
drinking a lot of wine and he said, “The big idea at the table was we should merge Canada,
Australia and Ireland into one country.” And I was so excited, I actually…
it was 11:00 at night, I probably drank a little too… I called the managing partner at the time
at McKinsey, Fred Gluck, who liked ideas, and said, “I need to talk
to Fred, I got a big idea.” He said, “Who’s this?” I said, “It’s Dominic Barton.” He said, “Oh, you’re in
Australia.”, it’s late at night. I’ve got a big idea I want to
tell, I said, “I think we should merge
Australia, Canada.” (LAUGHTER) And there was silence for a bit, and he said, “What’s your name
again?” (LAUGHTER) At which point I gave my best
friends name. (LAUGHTER) And he said to me, he goes, “I
have a suggestion for you, Dom.” He said, “First of all, I
suggest you leave the firm, and then, you pursue the idea.” (LAUGHTER) But the second dinner, I just
wanted to get to was, we had this dinner and I
remember there’s Paul Keating and I remember this amazing
suit. He looked at me and he kind of
his head talking, he said to me, I can’t do it his accent, but I
remember this vividly, he said, “If you have half a
brain, and I’m not sure you do, (LAUGHTER) you would do well to move to
Asia.” And I remember going, it was
1989, I said, “You said, like what? Is that feedback that we’re not
doing very well?” And he said, “That’s the future,
that’s where it is. And someone of your age, if you
want to do…you should go and…” And I didn’t move to Asia, but
that seed sort of sank into my skull, and this notion. So we’ve been talking about this
for a long time. And there’s not a…we better
get moving is all I’d say, because we can see it happening,
and it’s not rocket science to figure out how to be able to
get there. So I feel very, very strongly
about it. I’m the Canadian side, but the
university that I’m involved, I’m just… I said, “We have to have a
programme that every student that wants to be able to spend
time, not in Germany, sorry, not in Vienna, that’s nice, if
you want to do that you can do it, in Asia. I don’t care where you
want to go, we should figure out a way for
them to be able to get that experience. And the benefit will be in 10-15
years.” DR ANDY KUPER:
And eventually, you are running McKinsey China
and McKinsey Asia. So there you go. Amazing… DOMINIC BARTON: No one wanted to
go. DR ANDY KUPER: (LAUGHS) I’m gonna open up, and I think,
just in interest of efficiency, we’ll take three questions. There are mics, so if people
could just wait until the mic reaches your
mouth, before you ask your question. So, let me look. There’s one over there. I’ll say there’s one there. And…I’m looking for another
one. And one over there. MICHAEL COLLINS: Thank you very
much. I’m Michael Collins, I graduated
at AGSM in UNSW. Fascinating conversation. One thing that struck me was
your recommendation to hold fast on your values. I was wondering how that might
translate, given that values aren’t necessarily
homogeneous across all countries, and certainly not between Asia
and the rest of the world, but not even within Asia. DOMINIC BARTON: Can I borrow a
piece of paper. (CROSSTALK) DR ANDY KUPER: Who did I
point out as the second now. Yup, there we go. MAN: Can I ask the question now? DR ANDY KUPER:
Yeah, go ahead. MAN: My name is Jordan Lee. I have a question for Dom,
please. Since you’ve travelled the
world, have important positions. My focus is around younger
people, they are the future. How do you compare the education
for school students and university students? I know it’s a big question, but
just in general. DOMINIC BARTON: Around the
world? MAN: Australia in comparison
with the rest of the world. DR ANDY KUPER: And I know
Dom is very passionate about education, so that’s a great tea up. And I had one over there. This man over here. Sorry. MICHAEL TAN: My name is Michael Tan,
I graduated in 1980. My question is about China and
the political system there, and what is currently happening
in Hong Kong. Because, we can talk about how
we need to look to Asia, but the politics of the
Communist Party certainly leaves me much room to…
for anxiety. (LAUGHTER) DR ANDY KUPER: There you go,
very small questions there, Dom. (LAUGHTER) DOMINIC BARTON: What do you
think? DR ANDY KUPER: Future of
education, future of China. (LAUGHTER) Over to you. DOMINIC BARTON: Wow, those are
great questions. I think, just on the values one,
it’s a great point. I think it’s a hard…it’s hard
to say that there’s a universal set. What I was more focused on was
any organisation has a set of values they don’t
have. And what I was saying is, those
are things that I would hold dear. They may be around the purpose,
they may be on how you operate, the principles of how you
operate. Those are the things I was
saying I would hold fast to. But everything else, I would put
on the table. I remember this from Samsung,
and you could argue, it’s a great example, not a
great example, when the chairman of Samsung
was… they were going through a major
change programme in 1998. They were, first of all, not
seen as a consumer goods company, they were a manufacturer, sort
of a low cost manufacturer. Their products, you might find
them in a Walmart, you wouldn’t find them in any of
the high-end stores. It was a massive transformation. The way he went in there, he
went to all the employees, 200,000 and he said, “I expect you to change
everything except your spouse.” That was kind of…and that
was… you’re just like, “Wow, that’s a
pretty serious message.” So to me, it’s the values of a
company. Because I think those are
enduring. And I think, by the way, I do
think there are more in common than we may think, across the
system that we should look at. But that’s more what I was
talking about as… You really have to challenge it,
because the fact of the matter is, someone is gonna be challenging
you and where you are. That’s what I meant on that. On education. I’m not saying this to be nice, but I think the Australian
education system is fantastic, especially in some dimensions. If I might point out two, and
this very much coming from my lens. One is economics. I remember that when I came here
in 1989. You’d find taxi drivers talking about the weighted
average cost of capital. I couldn’t believe this. (LAUGHTER) Literally, and it was the… And for McKinsey…McKinsey was
started here by Rod Carnegie. And it was started because, he
decided… It was 1963, Australia was not
in the strategy of McKinsey, I believe, at the time, to go
from New York to Melbourne. But he was a very talented
person, Marvin Bower didn’t want him to
leave. So he said, “OK, you’re not
gonna leave, you’re gonna do the work.” And what I would say is that
ever since that period of time, and it’s not about Rod Carnegie,
it’s about the education system, the centre of excellence for
strategy and economic thinking, and it is to this day, has been
Australia. It’s just all of our frameworks,
all of our…the courses. So I’m just giving you a
visceral, that’s the sense. The second is technology, the
innovation that goes on. And I know this because we
studied it from Canada. What is it about Australia? What I would argue is, you are
extremely good at coming up with ideas. You’re not necessarily as good
at commercialising them, I don’t know if it’s because of
a lack of growth capital. But, God, you come up with
ideas. Many of them get…that’s sort
of my sense of where it is. The only thing I…where I think
the challenges are, I don’t think you’re a very
global society, if I might say, it’s not a worldy… That doesn’t mean not
sophisticated. It’s sophisticated, but not as
global in terms of where people are. That’s just my give me, my gut
ball view on it. On China. That’s the whole conversation,
and I’m probably being taped… (LAUGHTER) ..what I say. My name is Andy Kuper. (LAUGHTER) Just in case there’s any issues
going on. I think that…the commentary,
I’ve actually moved to Hong Kong. So I now live in, Hong Kong is
my base, so I’m seeing it fairly frequently, some of the
challenges and so forth. But it’s my view that, I think there’s many things that
we can learn from China, and we should, in terms of, for
example, long-term thinking, what they’ve done with
infrastructure, how they’ve actually enabled
companies like Peter Ma to be allowed to grow, and
blossom, and do things. But I don’t think we should
assume that that system is gonna be like it is today,
it’s gonna have to evolve as you have a larger
middle-class. And I think one of the biggest
challenges that that leadership group has is how do you think about a
transition that’s done in an orderly manner. I’m not a politician, I’m not a
student of politics, but I think we should recognise
that there is a left and right in the Chinese leadership. There’s politics in China, it’s
not any different. We don’t read about it or see
it, so there’s tensions. And I do think that there’s
gonna be… there is a clash of different
values on that side. Is it economic growth? China has lifted more people out
of poverty than any other country has in
the world. We should acknowledge that and
be supportive. (APPLAUSE) But I think that there comes a
point too, when a population has come out. How are people gonna…
and that’s gonna be a challenge. So I just…I don’t think
anything is fixed. What I found interesting about
Hong Kong, at least on the first day of the
protest, I wasn’t actually out there
protesting, I was actually trying to get to
a meeting, but I couldn’t drive anywhere. So I was really wor…I though
they were probably filming me. I’m going, “I’m not going to the
protest.” But the thing I noticed, which
was wonderful, it was families, it was quiet. And it was boiling, the humidity
is unbelievable. But it tells you something about
a group of people that believe in a certain way. I was deeply impressed with
that. And so, again, I’m not
really…I guess I’m blabbering here, I’m not really saying much. The point I would make is I
don’t see things as black and white. I think things are gonna evolve. I think things will evolve
there. They ultimately have a system
that has to have support. And the one last thing I’d just
say on it. It was 2009, I was in Shanghai,
we were ordered by the NDRC to help with the stimulation. They put a massive stimulation
programme. Because, literally, nine months
before they put the brakes on the economy because it was
growing too quickly. And unfortunately, the brakes
hit in October of when Lehman Brothers
went…so the brakes hit. They put this programme and
McKinsey was ordered, I was, well, excited. The project we were ordered to
do was, how can you sell more
televisions in tier three and tier four cities? We’re not talking about
meta-strategy stuff. And the precise question was, do you cut the price of the
television by 25% or do you keep the price the
same and you get a 25% refund from
the mayor’s office? That literally was the… And I said, “Well, McKinsey, I
need to see the big picture.” They said, “No, it’s none of
your business. Do the wor…” I said, “No. We’re taught, if we
don’t see the whole picture…” They said, “How about you do the
work and then come back?” So I did. I spent a lot of time in places
like Kaifeng and others. It turns up, by the way, you sell more TVs if you get a
refund from the mayor’s office. So I was really proud, came
back. I said, “Now, I’d like to see
the big picture.” And this guy said, “Why should I
tell you? It’s none of your business.” I said, “Well, we did this.” And then, you can tell he was
getting very frustrated with me, he goes, “You obviously…” And I said, “Because I care
deeply about China and how it’s moving.” And he looked at me, probably a
bit like Paul Keating. And he said, “If you really care
about this country, the thing that you’d be worried
about is food price inflation.” I went, “What the hell does that
have to do with the price of TV in China?” And he said, “If food price
inflation goes over 14%, it’s over.” And I didn’t get it. So he said, “Because when people
protest and they’re starving, no weapons will hold them back.
Nothing can hold people back. Do you understand the dynamic
of…” And that’s…I became very
interested in ag/food after that discussion. But the point is, I think
that… don’t estimate how people are
gonna have to respond to changes. And I just think we shouldn’t
paint it into black and white, because it’s a system that needs
to evolve, there are different views people
have in different parts of the country. The thing I worry about, you
know more than I do, one thing I’m concerned about is
how little in the west we understand of China. The western system is really
coming out of the treaty of Westphalia. That is like a blip in the
5,000… and yet we think that’s how the
system works. So I think we also have to… I’m not saying that was a
communist system back then, but we need to also have a
deeper understanding of how the world works from a historical perspective. I’ll shut up. (LAUGHTER) DR ANDY KUPER: Dom, I guess
that notion of humility as a prime business virtue is an
important one. When the world is speeded up so
much, when the scale of change is so
enormous, when it dwarfs the Industrial
Revolution, what we’re through now by 1,000
or 3,000-fold, I think is the McKinsey
estimate, you’ve got to think very hard about how little you know, and
how much you use, either network or partnership
systems, to try and incorporate information and how
much you need to beta test and recalibrate constantly. And certainly, that has been a
part of the success of the Chinese companies, but
also, we see it in Indonesia, and
Thailand, and Nigeria and so on, where we invest. But what it also makes me think
is, humans can be a bit slow to
recalibrate. And some of the technologies
currently, the sheer scale of data and AI are allowing for very, very
rapid iteration that hopefully works well with
humans, ultimately, but rarely doing that. I heard you say this morning that Henry Kissinger’s now going
to develop, at 96, the philosophy of AI. Because he thinks it’s the next
big thing. DOMINIC BARTON: Yeah. DR ANDY KUPER: I wondered if
you could… We spoke about young people, but
just tell us, looking now, if you’re talking
to some… if you’re the poor Keating
character, and you’re talking to someone
today, who’s a relatively young person
saying, “Where am I going to focus in
this world?” I mean, maybe you’ll tell them
to still go to China, or Indonesia or East Africa. But in terms of the kinds of
areas that you will think, you think will be most
interesting and transformative, where would you focus that
person who asked you, “Where should I go?” DOMINIC BARTON: Well, that’s a
great question. The way I’d sort of look at it
is, first thing I’d do is I, and I learned this from a job
interview that I didn’t get the job at, and it was actually GE, and is
to think about your skills in terms of soft skills and hard
skills. Over time, you’re building both. And I would have, literally,
like an inventory of that. And hard skills, if you’re in
business, you need to know something about
marketing, you need to know how to take
cost that of an organisation, you know how to design, there’s
a whole bunch of things. Soft skills are, I would argue,
even more important. There’s things like, can you give negative feedback
to someone and inspire them? How do you influence someone
without power? These are…and I would actually
think about an inventory that you’re
building, that’s what you’re gonna need, and I would talk to mentors, it
depends on what… there are people that you may
admire. I would look and try…try and
look at that and see where it is. So that’s one dimension. The second dimension, I think,
is that it’s about… it’s getting experiences. And I think, sometimes we focus
too much on… I would focus too much, I want
to go to China, or Korea or Indonesia. In my view, it doesn’t matter. Just go to one of those places. It’s getting that experience for
a period of time, it’s gonna change you. At a personal levels, I’ve
looked back at my life so far, I’ve grown the most when I’ve
been thrown into a swimming pool without knowing how to swim. It’s very uncomfortable, at the
time I’d go, “Why am I doing this? Like what drugs were I taking
when I decided to be here?” But it’s those places where you
feel like you’re learning all the time, you’re being challenged. So I would look for…I do think
Asia and Africa, but I literally would not try
and pick a… go to where there happens to be
an opportunity and go in, commit. And it doesn’t have to be for a
long time. And I would think about doing
that on regular basis. Because, I think, with our ageing population,
and all of the medicine, and the technology and so forth,
I think today, once you’d think about having a,
if you want, you don’t have… but having a productive career
for 80-90 years. As we said, Henry Kissinger at
96, I found it a bit shocking. I’m thinking about my next
chapter i.e. it’s though it’s not my last chapter,
it’s my next chapter is what I’m doing, and studying,
and researching and so forth. So I always think, “What are the
S curves that you’re moving on?” But being uncomfortable, putting
yourself in an uncomfortable place, I think, is really important for
personal growth. So that’s…I don’t know if that
makes any sense. DR ANDY KUPER: And I think
questioning, you spoke earlier about
questioning orthodoxies. It’s interesting that, for
instance, much of the investment industry was founded by people who had
absolutely nothing, modern investment industry, by people who had absolutely no
training in finance. They were trained typically in
philosophy. And the one thing that
philosophy does differently from other disciplines is it leads you
to question all the assumptions. I remember my first year
philosophy paper said, “Is there a table in front of
you.” Was the first question. And there is something about throwing
yourself into the unknown, but also being prepared to question things
that have gone unquestioned that I think prepares you very
well. DOMINIC BARTON: One other thing
just as you are… Two quick things. You know MOOCs right, that are
those online, what is it… You know what I mean by them. CEOs actually do a lot of MOOCs. And you know what the most
popular MOOC course is for CEOs? Philosophy. Most of them don’t complete it,
by the way. (LAUGHTER) But it’s interesting, to your point. I totally forgot what I was gonna… DR ANDY KUPER: Well, it’s
just as well, because we’re out of time. But I wanted to thank you, Dom. It is just extraordinary to
listen to the breath, not only of your experience,
but of your thinking. And I think there are a lot lessons for folks
living in Australia about technology, about the
shift to the east and the south. I think we are in a very
different position in the world to seize a, really, a historic
moment of opportunity. As you said, it’s gonna stand
out in the 500 year picture as a moment of enormous
opportunity. And I think at those moments, as I’ve learned from sitting at
David Gonski’s feet occasionally, and from you, those moments are
profound opportunities, and the younger you are, the
greater the opportunity, that I think we’re lucky enough
to be able to seize. And having a guide, like you and
like David, to thinking about, that is really a profound thing,
and I think all of us should thank you. (APPLAUSE) JANE MILLER: Please join me in
thanking, first Dominic and Andy for that absolutely fascinating
conversation. (APPLAUSE) Finally, I would like to thank
all of you for being here with us today. I’d like to remind you to keep
your contact details updated with us, then you don’t miss anything. Stay connected via UNSW’s social
channels, and sign up to Alumni Connect which is our new peer-to-peer,
global alumni mentoring platform. Have a wonderful afternoon. (APPLAUSE) (‘I BELONG HERE’ BY SET MO

  1. Thank you to everyone who was involved in making this talk happen! I was there in person and found the speaker and interviewer to be informative, engaging and inspiring. As someone who has just finished her doctorate at UNSW and is starting out in the job market, events like this are really helpful. Thanks so much!

  2. There are many insurance products available to protect companies against supply chain disruption outside standard Property and Business Interruption cover.


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