Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. I'm Jason
Speaker 1: Kelly and I'm Carol Masser. Welcome to the Bloomberg Business
Speaker 1: Week Extra. It's our weekly podcast bringing you in depth
Speaker 1: interviews you will not hear anywhere else. So we shipped
Speaker 1: you off to London as if you weren't working hard
Speaker 1: enough for traveling enough, and you were there to participate
Speaker 1: in the Bloomberg Breakaway Conference. Sort of your deal. Do
Speaker 1: you do it in New York, you do it in London.
Speaker 1: You catch up with some incredible CEOs, fast growing companies,
Speaker 1: and it's really a community of CEOs all sort of
Speaker 1: learning from each other. I love the vibe. That's exactly
Speaker 1: what it's all about. And I've got to say the
Speaker 1: conversations we had were incredible. It was a variety of industries,
Speaker 1: including a conversation with the CEO of h G. We're
Speaker 1: talking about Intercontinental Hotel. These guys are enormous, so we
Speaker 1: got a view on the hospitality industry, what they're doing
Speaker 1: and also what's the role of a CEO. We talked
Speaker 1: with Keith Barr, who's the CEO of h G. And
Speaker 1: what's interesting, Jason, something that you and I have been
Speaker 1: talking a lot about is what's the role what's the
Speaker 1: role of a company and a CEO in some of
Speaker 1: those bigger, broader issues that are out there, whether it's
Speaker 1: on trade, whether it's on the Hong Kong protests, whether
Speaker 1: it's women on boards. We talked about a lot of things.
Speaker 1: I want to talk about a bunch of things. But
Speaker 1: I know, burn just in a pole and I know
Speaker 1: we missed it, but let's um, I don't know if
Speaker 1: we can bring that back up. About what percentage are
Speaker 1: you expecting to grow your business over the next year?
Speaker 1: And I was curious what the findings are. This was
Speaker 1: the pole we just did, Keith so flat to down.
Speaker 1: So most people are looking for wow, fifty or higher.
Speaker 1: I'd like to be in those businesses. What kind of
Speaker 1: growth right are you looking for? Are you surprised whether
Speaker 1: I mean these are mid you know, mid cap sized companies. No,
Speaker 1: I mean I think if you have mid cap company
Speaker 1: and you have the right business model and the right
Speaker 1: markets is huge potential. I think one of the challenges
Speaker 1: the big multinational space now in the current economic environment
Speaker 1: is how do you continue to grow at the pace
Speaker 1: when your business as big as it is. I mean
Speaker 1: today where eight hundred and fifty thousand hotel rooms open
Speaker 1: around the world, another two development, and on top of
Speaker 1: that base, we're expected to grow and accelerate growth every
Speaker 1: year in a bigger denominator. Not is it in with
Speaker 1: a needle? What kind of visibility do you feel like
Speaker 1: you have on growth right now around the world? We
Speaker 1: have it market by market, and then when you try
Speaker 1: to aggregate it all up, it's confusing, you know, because
Speaker 1: you can sit there and go half full and half empty,
Speaker 1: because you look at things like record low unemployment in
Speaker 1: many markets, continue to see positive GDP growth rising, middle
Speaker 1: class urbanization rising, all these real positives, and then you
Speaker 1: get your head spinning on you know, brexit US China, trade,
Speaker 1: Hong Kong, Germany going potentially into recession, political uncertainty in Mexico.
Speaker 1: And so literally any given week I go, things should
Speaker 1: be either really good or really bad, depending upon which
Speaker 1: news I look at. It really is that voltal in
Speaker 1: this current day and age, and so I think, well,
Speaker 1: you have to think about what your long term growth
Speaker 1: strategy to grow in an ever more increasingly volatile environment.
Speaker 1: I wanted to take us back um two years ago
Speaker 1: when you first became CEO, and you had mentioned to
Speaker 1: me on our prep phone call that your industry was
Speaker 1: bifurcating big getting bigger and the smaller companies struggling, and
Speaker 1: you had to make some decisions fast. Tell us little
Speaker 1: bit about what what you had to go through. Yeah,
Speaker 1: I mean, we have been one of the most successful
Speaker 1: um lodging companies in the hotel industry. So phenomenal total
Speaker 1: shareholder return over a decade. Uh, you know, were on
Speaker 1: public thirteen years fourteen years ago four pounds fifty Today
Speaker 1: we're trading at forty seven pounds. Returned thirteen point six
Speaker 1: billion dollars in cash to shareholders along the way, so
Speaker 1: great returns um. The challenges is the industry is splitting.
Speaker 1: The top five hotel companies today have twenty five percent
Speaker 1: of existing room supply but fifty eight percent of the pipeline.
Speaker 1: So the industry is clearly moving to consolidate amongst the
Speaker 1: biggest players, and we don't want to get left behind,
Speaker 1: and so how do we effectively double our pace of
Speaker 1: growth over on the mid term. And it was really
Speaker 1: coming into saying we've been incredibly successful. We've created a
Speaker 1: lot of shareholder value. The biggest players are moving at
Speaker 1: pace to grow faster. What do we need to do
Speaker 1: to grow at that pace going forward? And we had
Speaker 1: to really transform the company of the last two years
Speaker 1: to be able to do that well. And I want
Speaker 1: to get into what you did, because you really challenged
Speaker 1: your team, right, Yeah, what did you say? Like? Because
Speaker 1: what you guys have to figure out what it was
Speaker 1: really And it was a difficult one because again, the
Speaker 1: narrative had been rightfully so we've been incredibly successful, but
Speaker 1: things had changed, uh, And so effectively, I took my
Speaker 1: senior team and they didn't know about it, but I
Speaker 1: walked them into a room with board after board after
Speaker 1: board of content about what analysts were saying about us,
Speaker 1: what are people were saying about us, what was happening
Speaker 1: with the competition? And it was a stark wake up call,
Speaker 1: which was good company, great potential. What are they gonna
Speaker 1: be able to compete going forward? Can we be agile enough?
Speaker 1: Can we move fast enough? Our colleagues saying, you know,
Speaker 1: can we really compete? What's it going to take? And
Speaker 1: so it was that kind of in your face wake
Speaker 1: up call because it's quite easy for me to sit
Speaker 1: there and say, hey, we've been successful and keep doing
Speaker 1: what we're doing. And yeah, we'll keep growing margin and
Speaker 1: we'll keep growing cash and we're gonna be a good company, right,
Speaker 1: But really to be competitive, we were going to have
Speaker 1: to change. And I had to wake him up to that.
Speaker 1: M and A was a part of it. And I
Speaker 1: want to talk to you about that. I want to
Speaker 1: ask our breakaway members. Pull out your phone once again,
Speaker 1: got a pulling what you believe is the best way
Speaker 1: to grow your company, and your choices are by my
Speaker 1: way there, organic, all the way, investments, technology, and as
Speaker 1: that pole comes in, um, I want to ask you, Keith,
Speaker 1: because I know M and A was a big part
Speaker 1: of your strategy. Technology, organic, Okay, interesting, M and A
Speaker 1: was the way for you guys, and organic it was yeah, both.
Speaker 1: And so I came out two years ago to our
Speaker 1: shareholders and said, I'm going to restructure the company. I'm
Speaker 1: gonna take a bunch of costs out of this business,
Speaker 1: about a hundred and twenty five million dollars of costs down.
Speaker 1: I'm not going to give any of it back to
Speaker 1: my shareholders and invest at all for growth. And that
Speaker 1: growth is going to underpin effectively our ability to acquire
Speaker 1: a couple of companies and then launch three brands organically
Speaker 1: because um, you know, in our business model, organic launches
Speaker 1: phenomenal returns on capital right, almost infinite because we don't
Speaker 1: have to spend that much, and so those are incredibly creative.
Speaker 1: But we can't do everything organically, and so we recognize
Speaker 1: in the luxury space in particular, we were going to
Speaker 1: have to do M and A, and so we had
Speaker 1: acquired Kimpton Hotels and Restaurants in the US, the leading
Speaker 1: boutique company. We then went out inquired Regent, and then
Speaker 1: we went out inquired Six Senses. So again uber luxury brands,
Speaker 1: luxury brands, lifestyle boutique ones that have taken decades to build,
Speaker 1: and so I was acquiring that I P. I was
Speaker 1: acquiring that brand equity, um, because it would take me
Speaker 1: a long time to build in a lot of capital.
Speaker 1: But then I went out and launched a few brands
Speaker 1: where I could build those quickly, get them out there,
Speaker 1: and again sell those and just grow the business accelerated
Speaker 1: that way. So a combination of the two. Growth also
Speaker 1: sometimes means taking the underperforming, non performing assets out as well. Right,
Speaker 1: you were shutting properties as well. Yeah, it's that's probably
Speaker 1: one of the hardest things in this job. Why because
Speaker 1: you can really convince yourself to keep bad hotels because
Speaker 1: they're paying you money. And when you're under pressure to perform,
Speaker 1: to show growth, to show revenue cash generation, to think
Speaker 1: should I really take these hotels out? But you have
Speaker 1: to remind yourself and these rules in particular, you are
Speaker 1: the stewards of this business for the long term. And
Speaker 1: it takes a long time to screw up a brand,
Speaker 1: but once you've done it, it takes a long time
Speaker 1: to fix it. And so we're consciously taking out about
Speaker 1: two and a half percent of our system globally every
Speaker 1: single year and just culling out poor quality reevaluating every year.
Speaker 1: Every year, we're taking out about two to three percent
Speaker 1: of our hotels, and that's just saying, you know what,
Speaker 1: it's a poor quality asset, wrong location. And to keep
Speaker 1: moving quality up and moving customer perception up, you have
Speaker 1: to do it. And when companies don't, they're more profitable
Speaker 1: in the short term, they pay for it in the
Speaker 1: long term because effectively, customers begin to lose faith and
Speaker 1: trust in you. What about an investment that you make
Speaker 1: our new property you open up, how much time is
Speaker 1: a fair amount of time to give it to make
Speaker 1: to give it a go, and are you willing to say, wait,
Speaker 1: I made a mistake, this isn't working. It varies by brand,
Speaker 1: you know, and things like that. I mean, most of
Speaker 1: our deals are long term deals. So you've got ten
Speaker 1: year deals, so most of the removals are happening at
Speaker 1: the latter portion of the life cycle of a hotel.
Speaker 1: And read the question there is do we renew it
Speaker 1: for another ten years, another twenty years, or do we
Speaker 1: take it out? Or if we have a hotel that's
Speaker 1: coming near the end but isn't performing well, do we
Speaker 1: take a legal route and say, you know what, you're
Speaker 1: not meeting our standards and and it's time to take
Speaker 1: you out of the system. We always try to work
Speaker 1: with our owners, because again we're UM an eleven billion,
Speaker 1: almost told billion market cap company where asset light though,
Speaker 1: so out of five thousand, seven hundred hotels around the
Speaker 1: world today, we only have an owned and least stake
Speaker 1: in twenty one hotels. Now that's changed dramatically of the
Speaker 1: last decade. We used to own hundreds and hundreds of hotels.
Speaker 1: The last hotel we sold was the Intercontinental in Hong
Speaker 1: Kong for ninety five million dollars to give you context,
Speaker 1: So we had lots of big boxes, lots of real estate.
Speaker 1: We're now down to where we say we grow with
Speaker 1: other people's money because we partner with real estate investors
Speaker 1: around the world to open hotels, and so I always
Speaker 1: want to work with them to make sure we're a
Speaker 1: good business partner. But if they're not going to be
Speaker 1: good stewards of our brands, fund a man that I
Speaker 1: have taken out makes sense. Where are you seeing growth
Speaker 1: the most? When you look around the world, what are
Speaker 1: some of the markets that you find? Things are just
Speaker 1: kind of falling into place and there's a lot of demand.
Speaker 1: So I am I'm originally from the States, been been
Speaker 1: overseas for the the last fourteen years, lived in Australia, China
Speaker 1: and the UK for the last seven. I built our
Speaker 1: China strategy and that is a third of our company's growth.
Speaker 1: You're in China for a while, yeah, almost five years, Uh,
Speaker 1: and it's an extraordinary market and so uh today it's
Speaker 1: about a third of our company's growth and growing kind
Speaker 1: of probably three x four x the rest of the
Speaker 1: world on big numbers too, and So when you think
Speaker 1: about on a global basis, lets US, for example, supply
Speaker 1: growth in the US is around two percent. The supply
Speaker 1: growth in China excluding the economy segment will be between
Speaker 1: eight and ten percent. So it's it's growing massively and
Speaker 1: it's the level of infrastructure investment. So China is huge
Speaker 1: for US from a growth perspective. We're accelerate our growth
Speaker 1: in the US, but it's our biggest market. But then
Speaker 1: you've got other exciting markets like Japan is continuing accelerating growth,
Speaker 1: Vietnam is continuing to accelerate growth, and you've got pockets
Speaker 1: also in Europe. Now coming out of that kind of
Speaker 1: the duldrooms after the fential crisis are beginning to see
Speaker 1: growth as well. Where aren't you seeing growth? Where aren't
Speaker 1: we seeing growth? Where seeing kind of the weakness you
Speaker 1: know what I mean? Places that we think that should
Speaker 1: grow that aren't. Like Mexico is a good example. Mexico
Speaker 1: has great potential, but with the political instability there, you're
Speaker 1: not seeing You're seeing growth, but not the growth to
Speaker 1: the potential of that market. Overall, UH and you are
Speaker 1: seeing some slowing and some of the more with tool markets. Now,
Speaker 1: UK is a good example where there's not a lot
Speaker 1: of new growth happening here. London is doing fantastic, but
Speaker 1: the provinces are struggling here in the UK because of
Speaker 1: the impact of brexit. UM Germany is beginning to slow
Speaker 1: down a bit too, getting close to being in intercession
Speaker 1: as well. The nice thing about our model though, is
Speaker 1: we're in a hundred countries around the world, so you
Speaker 1: know it's a bit of Some markets are down, some
Speaker 1: markets are up, and we continue to grow you over year.
Speaker 1: I want to ask everybody, since you mentioned brexit, UM,
Speaker 1: got another question for you, what external factor is hindering
Speaker 1: your company's growth the most? And our choices are Brexit,
Speaker 1: trade tensions, that's all one, disruptive technology, lack of qualified talent,
Speaker 1: access to capital, over regulation, and others. So as those
Speaker 1: come in, we'll pull them into our conversation. But I'm
Speaker 1: curious what external factor is hindering your company's growth the most.
Speaker 1: I'll think what frustrates me the most because we're growing
Speaker 1: quite well. We're actually doubling our pace of growth right now,
Speaker 1: so it's hard for me to say is governments don't
Speaker 1: really understand the value value of tourism and hospitality. On
Speaker 1: the economic cycle of the world. Um so when in
Speaker 1: ten jobs today it exists as related to travel, on
Speaker 1: hospitality and tourism about to inten close to is that
Speaker 1: what's being created. It's it's a huge part of the
Speaker 1: global economy. It's a huge part of giving people skills
Speaker 1: where they can start entry level and work their way up.
Speaker 1: And it's a huge part of value creation and cross
Speaker 1: real estate. Most governments really take this industry for granted
Speaker 1: and just assume it's going to happen, and so governments
Speaker 1: that really understand the value of tourism and infrastructure benefit
Speaker 1: from it. But I'll give you an example one country
Speaker 1: I used to live in where the tourism portfolio got
Speaker 1: lumped with the resources portfolio Australia. Imagine how much how
Speaker 1: much focused tourism got when the minister was also worrying
Speaker 1: about resources, which is the single biggest thing drive in
Speaker 1: the Australian economy. Yeah, and so, and it's sitting down
Speaker 1: with with people think about labor. You know, immigration policy.
Speaker 1: You know, I've been pushed aggressively. I've had multiple meetings
Speaker 1: here in number ten. You're saying you've got to rethink
Speaker 1: your immigration policy because you don't understand what the impact
Speaker 1: of what you're suggesting are you know, and and and
Speaker 1: that that's what frustrates me when governments really take for
Speaker 1: granted an industry and don't understand that how much value
Speaker 1: can do about accelerating growth and driving prosperity for for
Speaker 1: countries and creating jobs. Do you find it interesting? I
Speaker 1: just want to look at their responses, what what external
Speaker 1: factor is hindering your growth? And most they say access
Speaker 1: to capital? And I think if you're a startup, I
Speaker 1: could you know and understand? I can understand it. Um,
Speaker 1: what's strange? In my kind of an easy money environment?
Speaker 1: There's so much such a way to capital. I mean
Speaker 1: right now, I mean we're in an environment where we
Speaker 1: have never seen more access to capital private, public market,
Speaker 1: especially private markets incredible amounts. I mean, yeah, does that
Speaker 1: surprise you? Did? It did surprise me in that, you know,
Speaker 1: because I mean even like I was, I was, I
Speaker 1: was just in a meeting now in a real estate
Speaker 1: development group, and you know, people are constantly saying, I've
Speaker 1: got two billion dollars of capital to deploy. Where can
Speaker 1: I put this? Because Johan's somebody wants to that. Anybody
Speaker 1: needs some some hotel real estate, and there's I mean,
Speaker 1: that's one of the real challenges in today's age. Right,
Speaker 1: You've got historically low cost of debt, huge amount of
Speaker 1: capital sitting on the sideline need to be put to work.
Speaker 1: Where does it find the right returns? And that's driven
Speaker 1: some interesting behaviors in the public markets. Have you've seen recently, Absolutely,
Speaker 1: we work anyone. Yeah. Um, future growth. I do wonder about,
Speaker 1: like you talked about China. I want to dig a
Speaker 1: little bit deeper into that because I have this little
Speaker 1: tricky times and strange bedfellows growth into a politics, and
Speaker 1: I think about China specifically Hong Kong. There was some
Speaker 1: impact on your earnings. Others in the hospitality industry, in
Speaker 1: the luxury industry are certainly feeling the result of those
Speaker 1: Hong Kong protests. Um. I think about the n b
Speaker 1: A getting whips ode after one of their coaches made
Speaker 1: some comments in support of the protesters, and then quickly
Speaker 1: the NBA saying wait, wait, wait, wait, you know we
Speaker 1: love you China. I do wonder about, you know, what
Speaker 1: is your responsibility and role as the head of a
Speaker 1: publicly health company, as a leader that has looked to
Speaker 1: when there are injustices around the world, and yet you
Speaker 1: still want to make sure the door is open for business.
Speaker 1: How do you how do you reconcile this? Yeah, it's one.
Speaker 1: It's one of the tensions in leading global companies of
Speaker 1: understanding what level of drive for change and advocacy do
Speaker 1: you have to take and what's your role in society overall?
Speaker 1: I think in this day and age um there is
Speaker 1: more of an expectations of global chief executives state more
Speaker 1: of a leadership role on big issues, whether that's you
Speaker 1: know I talked about like sustainability is a big thing
Speaker 1: that we're focused on. We come back to diversing inclusions
Speaker 1: nothing because in general, people see governments failing in those
Speaker 1: spaces and customers and colleagues look to us as saying,
Speaker 1: what are you going to do about it? Right now?
Speaker 1: When it comes to some of the broader issues of
Speaker 1: where you're gonna work, you know, we've been in place.
Speaker 1: We've been in China for thirty five years. We're at
Speaker 1: the foundation of that industry and so you know we're
Speaker 1: we're can closely across China. Thing. How do we work
Speaker 1: with universities and schools to develop talent and help people
Speaker 1: to come into centery and build, build prosperity, and build careers.
Speaker 1: And so, you know, we talked about our core purposes
Speaker 1: true hospitality for everyone, and that means in the communities
Speaker 1: who work, and so we helped build schools in China.
Speaker 1: We partner with universities, we train and develop. We have
Speaker 1: thousands of students in our academies UM because we really
Speaker 1: fundamentally believe that as people travel the world more and
Speaker 1: stay connected, that the world is a better place. And
Speaker 1: that makes me see the results of that in terms
Speaker 1: of being involved in a place. And you have said, no,
Speaker 1: I know, we talked about a Russian deal and you
Speaker 1: guys were like, Nope, they're not going to get involved.
Speaker 1: But during China for a long time, you're in Saudi Arabia,
Speaker 1: you're in the Middle East. Yeah, you know, it's being
Speaker 1: an advocacy for changing and we talked about for example,
Speaker 1: UH in Australia last year, the team came to me
Speaker 1: and said, we want to publicly come out and support
Speaker 1: UM gay marriage, and I said, absolutely, We'll get behind it.
Speaker 1: Change your logo, we change our logo for pride UH
Speaker 1: and now we can do that there. Now in some markets,
Speaker 1: I wouldn't do that because effectively, I know that it
Speaker 1: goes against government policy or the laws, But how can
Speaker 1: we advocate for other change trying to make things better?
Speaker 1: And so you know, you mentioned Saudi is an example
Speaker 1: of where there's been transformational change for for for in
Speaker 1: the positive in terms of the Saudi ization of the workforce,
Speaker 1: the role of women um in the workforce. Now the
Speaker 1: opening up of Saudi too now fifty one countries, visa
Speaker 1: and arrivals. So lots of positive there now that without question.
Speaker 1: They've been challenges in the past though, and things that
Speaker 1: aren't right right and so but if you're in there,
Speaker 1: you're in the dialogue. You can help shape things for
Speaker 1: the better, for the future and help continue to build
Speaker 1: out that industry. And the more that you know, more
Speaker 1: the country's open up, we believe it's better for the world.
Speaker 1: And you do see the fruture effort. I'm going to
Speaker 1: purse a little bit because I do think after Jamals,
Speaker 1: I think we just the world couldn't believe it right,
Speaker 1: and I think everyone thought okay, and the world did
Speaker 1: take a step back um roughly a year later or so.
Speaker 1: Saudia Ramco certainly see the financial community everybody wants a piece.
Speaker 1: I'm not making a judgment call, but I do wonder
Speaker 1: when is it that you know companies have to put
Speaker 1: their foot down and say this is not okay. Yeah,
Speaker 1: I mean, and again I understand there's cultural differences, but
Speaker 1: then there's something that was horrible and it was wrong.
Speaker 1: What happened? You have a choice. They saying this is
Speaker 1: a country that is going to continue to open up,
Speaker 1: wants to drive for international tourism, wants to be more
Speaker 1: open to business, wants to open up to more cultures.
Speaker 1: Do you participate in that and help that happen or
Speaker 1: do you sit back and say, no, we don't want
Speaker 1: that to happen at all. And so, you know, generally
Speaker 1: are like I think when I go back to China,
Speaker 1: go the positive influence we've had in shape in their
Speaker 1: telustry in China is great, and we can do that
Speaker 1: in so many different countries in the world. You see
Speaker 1: an impact by being there, Well, I see it in
Speaker 1: the people that we've helped in their careers. So I
Speaker 1: look at so my team when I moved to China
Speaker 1: was in the general managers. There were principally foreigners. I
Speaker 1: would go into room like this and running my Chinese business.
Speaker 1: We're basically expats, and we made a commitment when I
Speaker 1: was there eleven years ago saying, you know, we have
Speaker 1: to localize our workforce because that's the right thing for
Speaker 1: to do this industry long term. And today I walk
Speaker 1: into our our leadership team meeting there like Chinese now,
Speaker 1: these teams have worked for us sometimes for ten and
Speaker 1: fifteen years, and so we've given We've enabled their careers
Speaker 1: to develop and grow. And so that's the good that
Speaker 1: we can do is as an industry to help grow
Speaker 1: people's careers and give them access and then help people
Speaker 1: work internationally as well too. So so when you think
Speaker 1: about some of the inequalities in this world, that is
Speaker 1: certainly a big issue right now right and certainly impacting
Speaker 1: elections around the world. Uh and many would say rightfully. So, um,
Speaker 1: you find that by being in a market you can
Speaker 1: maybe help. I mean there's some markets we don't go into,
Speaker 1: and there's some things, some people deals we want to do.
Speaker 1: We mentioned there was a deal the other day that
Speaker 1: came up and we looked at it and going as
Speaker 1: far as we can tell, there's somebody involved here who's
Speaker 1: basically on the no list, and it was going to
Speaker 1: be a great hotel and a great location. I said,
Speaker 1: we're not going to do so would have made money
Speaker 1: for you guys? Would money would have been a lot
Speaker 1: of money for us. But again, fundamentally, when you're running,
Speaker 1: whether you're running a public company or private company, the
Speaker 1: decisions you make to find who you are culturally. And
Speaker 1: you know, I always say to my team, people will
Speaker 1: hear what I say, but they will see what I do.
Speaker 1: So I can say all these great things about who
Speaker 1: we are culturally, but if they see me go over
Speaker 1: there and do that deal, they're saying, he's in just
Speaker 1: for the money, doesn't mean it. Diversity, women, people of
Speaker 1: all backgrounds, inclusion. And I love it that this is
Speaker 1: what came out of this group rather than diversity inclusion.
Speaker 1: How do you work that in and how does that
Speaker 1: help you in terms of growth at the company? You know,
Speaker 1: it's UM. It's a huge priority for me personally, and
Speaker 1: so I created a diversity inclusion board for the group,
Speaker 1: which I chair when I took over as chief executive.
Speaker 1: UM right away, yeah, right away? Yeah? Did you walk
Speaker 1: in and be like, are you guys kidding me? It
Speaker 1: was just a realization of where we had to change.
Speaker 1: We're very traditional British company and pretty buttoned up, like
Speaker 1: we wouldn't have changed the logo to the Pride flag
Speaker 1: a year a few years ago, and I keep out
Speaker 1: of being simple math. We need great talent. There's not
Speaker 1: enough out there and we have to be a better
Speaker 1: company to work for. And so you can do it
Speaker 1: say we're gonna be focused on diversity and inclusion because
Speaker 1: is the right thing to do. There's a business priorities.
Speaker 1: I can't attract enough high quality talent out there around
Speaker 1: the world today, and so we have to head down
Speaker 1: that path of making sure that everyone, irrespective of you know,
Speaker 1: preferences or ethnicity or whatever it might be, whose talent
Speaker 1: feels welcome to work in our company and has a
Speaker 1: great opportunity to grow. And that's been it's been fantastic
Speaker 1: to see and you know, it's it's empowering to your
Speaker 1: organization when they see you actually making a difference and
Speaker 1: when people come in and want to talk to you
Speaker 1: about it. Is there one you talk about this board
Speaker 1: that you've created, So is it entry level all the
Speaker 1: way through your board in terms of treating diversity, And
Speaker 1: it's all the way through but um, but it's both operationally.
Speaker 1: One thing that we're challenged with is getting women into
Speaker 1: senior operational roles. We are really gender balanced to a
Speaker 1: point and then it becomes male apart. We've been trying
Speaker 1: to pick that apart. And really we've been around for
Speaker 1: a long time. I know you for well in two issues.
Speaker 1: One was and I mentioned walking in there was clearly
Speaker 1: a historic bias against women in commercial roles. And then
Speaker 1: again there was a bias against women in commercial roles.
Speaker 1: It was your great and a functional role. It gonna
Speaker 1: be great head of HR, You're gonna be a great
Speaker 1: marketing director. But you know what, you know, you don't
Speaker 1: really maybe have the sharp enough elbows and the hard
Speaker 1: enough drive to be in that commercial role. It's bullocks, honestly,
Speaker 1: And but it was the perception out there for a
Speaker 1: long period of time and or that you have to
Speaker 1: it's his act and look and be like a man
Speaker 1: to be successful one of these shops. And we have
Speaker 1: to dispel that myth. And so I mean I promoted
Speaker 1: now three women in the last probably eighteen months into
Speaker 1: m D roles and there's some of my top forms
Speaker 1: the entire company, but two of them previously they were said,
Speaker 1: we're told directly they don't have what it takes to
Speaker 1: be in these shops point blank. I mean we're actually
Speaker 1: told recently, not so long ago, not so long ago,
Speaker 1: and so you know it's but what did you take
Speaker 1: in leadership proactive talent management? I mean, I sit down
Speaker 1: with my C. H. R. Oh and we're mapping out
Speaker 1: any time between twelve and twenty four months of moves
Speaker 1: for people to make sure that they have the skills.
Speaker 1: Because the biggest promises you haven't asked. You haven't you
Speaker 1: have an aspiration to do the job. We haven't given
Speaker 1: you the experience. The job comes open, what happens we
Speaker 1: sit there and tell you don't have the experience. We
Speaker 1: fundamentally are now managing the talent saying what are the
Speaker 1: experiences you have to have to be ready for that
Speaker 1: job in eighteen to twenty four months. And now by
Speaker 1: doing that, we're setting ourselves up with much more optionality
Speaker 1: than we have previously. Because it's not easy to fund
Speaker 1: workers anymore. It's not and you don't want to lose them.
Speaker 1: That's expensive for the company. No, No, And the thing
Speaker 1: is everybody's trying to recruit and fishing the same pond.
Speaker 1: You just can't keep doing it. So I have to
Speaker 1: ask you, why isn't your boyf D fifty men and women.
Speaker 1: It's been a challenge where where we get awards for it,
Speaker 1: but we're not. Um. I'll be born with you. And
Speaker 1: you know I talked about there's not enough women who
Speaker 1: have been in the senior management roles and companies. So
Speaker 1: we're really struggling to find enough of that talent out there.
Speaker 1: And that's where I'm pushing, you know, more and more
Speaker 1: of getting more women's CEOs, more women's CFOs, more people
Speaker 1: in the c suite and senior management, so there's more
Speaker 1: people have had some of those experiences to get ready
Speaker 1: for boards. I did push them though, because I said, okay,
Speaker 1: wait a minute, there have been a lot of boards
Speaker 1: that have been predominantly men for a long time. And
Speaker 1: let's see, we had the financial crisis, We've had accounting scandals,
Speaker 1: so even though we had people who had the skills
Speaker 1: in place, we had a lot of problems. I'm just saying,
Speaker 1: 've been a good sport. I do want to We
Speaker 1: only have a couple of minutes for questions, as anybody
Speaker 1: have a question for Keith, really there, do we have
Speaker 1: the microphone? Do you have the Okay, we'll get we'll
Speaker 1: get a mic too. Good question, excellent question. So, Um,
Speaker 1: for every analyst meeting I had and those of you
Speaker 1: that you know we're being a public company, is like
Speaker 1: they're constantly hounding you on you know, anything that could
Speaker 1: threaten your business. They were convinced for four years the
Speaker 1: Airbnb was the existential threat to this industry. We finally
Speaker 1: have convinced them that's not the case because home sharing
Speaker 1: has been around as long as hotels and in general,
Speaker 1: what digital has done, whether it's the Ubers of the world,
Speaker 1: of the Airbnb's of the world, as they have removed
Speaker 1: friction in the path to purchase in previous industries and
Speaker 1: effectively been able to consolidate. And so Airbnb basically has
Speaker 1: put out a lot of other businesses out of business. Um,
Speaker 1: it's brought a little bit of supply in, but it's
Speaker 1: had just a nomenal effect on our industry overall. Um.
Speaker 1: But it was it was one of the hardest things
Speaker 1: to be in the public eye. People going, they're gonna
Speaker 1: kill the hotel companies and we're like, no, they're not.
Speaker 1: And here's why do you have another question? Oh, oh,
Speaker 1: I'm sorry. Uh, let's go to Mike and we'll come
Speaker 1: back to you. I promise we'll try and be quick
Speaker 1: so we can get a few more question said, Go ahead, please, Hi.
Speaker 1: It's a question about you know, equality, inclusion, everything, and
Speaker 1: you know women being one of UM factors. You know,
Speaker 1: because people can be diversed on ethnicity, on origin and
Speaker 1: many many things. How in your experience, UM, you define
Speaker 1: the most effective way to deal with certain things that
Speaker 1: are not spoken within teams. Western versis non Western person,
Speaker 1: you know, different backgrounds, different universities, degrees. Just for clarity,
Speaker 1: I'm not complaining about my case, but observation. You know,
Speaker 1: when you see this hidden attitudes of superiority, inferiority, you know,
Speaker 1: bias against bias against people you know, and if you observed,
Speaker 1: for example, I come from big investment, being right, then
Speaker 1: I run my own company, or you go to different places,
Speaker 1: it's it's I think, a common problem globally. That's my observation,
Speaker 1: without question. Uh. The breakfast meeting I was at this morning,
Speaker 1: we were talking about so we're running right now a
Speaker 1: global program about conscious inclusion and unconscious bias, and we
Speaker 1: were talking about we often think about its men versus women,
Speaker 1: but there's so many other unconscious biases that are out
Speaker 1: there and um and not because you were speaking about
Speaker 1: when I highlight regularly and I learned was non native
Speaker 1: English speakers in our company, we didn't realize there was
Speaker 1: an unconscious bias against them because effectively in the hospitality
Speaker 1: she were about executive presence and ability to present and
Speaker 1: so forth. And so it was amazing, right, so our
Speaker 1: talents in in Asia, who speak sometimes three, four or
Speaker 1: five languages and English isn't there first, were some of
Speaker 1: their views were being discounted because they weren't a native
Speaker 1: English speaker in the And so what we've had to
Speaker 1: work through is really understanding of how do we help
Speaker 1: facilitate much more structured conversations in those environments to get
Speaker 1: the best and brightest out of all of our people.
Speaker 1: And it was an humment with me and I hadn't
Speaker 1: realized it, and actually came from our China team because
Speaker 1: one of our most intelligent leaders in China presented and
Speaker 1: people were kind of really not engaging, and I'm like,
Speaker 1: this is one of the smartest people in this entire company.
Speaker 1: But because he's not perfectly articulate in English. People were
Speaker 1: kind of discounting what he was saying and not being
Speaker 1: able to get across. So it's a it's a it's
Speaker 1: a clear point of so what did you do in
Speaker 1: that case or just in general to like get the
Speaker 1: company a thing differently? Well? With him? Actually, you know,
Speaker 1: I coached him. I worked with him one on one
Speaker 1: because he was going through because we were doing a
Speaker 1: practice session for him before presentation. I realized I'm going
Speaker 1: to have to work with him and help him do this,
Speaker 1: but also making sure that we cued the team up
Speaker 1: on what were the critical things we were trying to
Speaker 1: get out of this, and that they knew how to
Speaker 1: engage with him and not just be expecting to be
Speaker 1: spoon fedded. But it's it's a tough one and I
Speaker 1: think that in particularly global companies, multinationals, you could be
Speaker 1: really concut ways of working in style too. I mean,
Speaker 1: my team in China used to joke with me, you know,
Speaker 1: I'm you know, I grew up in the US and
Speaker 1: a pretty linear point at a point B, straight line,
Speaker 1: get things done, um, And if you work in China,
Speaker 1: you'll know that there's nothing straight line about working in China.
Speaker 1: And so the team asked me, said if I would
Speaker 1: put a little bit more wave in my line, they
Speaker 1: would try to straighten there's out a little bit. And
Speaker 1: and we worked through that and because and you have
Speaker 1: to think through who you're trying to lead. And then
Speaker 1: when I was writing our China business and strategy, you know,
Speaker 1: my favorite quote was one time one of my top
Speaker 1: team walked into me and said, Keith, it's really hard
Speaker 1: to draw elephants if you've never seen one, and you're
Speaker 1: asking me to do that every single day. Super intelligent
Speaker 1: had never worked in a scale business, never been outside
Speaker 1: of China, and so I'm asking this person to do
Speaker 1: stuff without contextualizing it for him and helping. And I
Speaker 1: was like, wow, very humbling moment, because I was frustrated
Speaker 1: that he wasn't performing, and it was actually on me
Speaker 1: why he wasn't performing. That's Keith bar He's the CEO
Speaker 1: of I h G. So that's a big, established company.
Speaker 1: And then we went a little bit smaller. Julie Dean,
Speaker 1: she created the company. She's the CEO and founder of
Speaker 1: the Cambridge Satchel Company. So we talked about what it
Speaker 1: was like to really start something in your kitchen. So
Speaker 1: we're gonna talk a little bit about markets, if that's
Speaker 1: okay with you. That's what I thought we were talking about.
Speaker 1: It's a good long way. First of all. Two, when
Speaker 1: you started your company with your mom, Yeah, it was
Speaker 1: just me and my mom because my mom's the only
Speaker 1: person that I didn't have to pay. So it worked
Speaker 1: out really well. It did write really well. Yeah, she's
Speaker 1: doing okay. She's brilliant. She is one, um the most stylish, optimistic,
Speaker 1: fun to be with person of anyone that I know.
Speaker 1: Um and and just perfect, perfect taste. She criticizes a lot,
Speaker 1: but I mean it goes with the territory, so it's fine,
Speaker 1: yea to right. Her favorite saying at the moment is Julie,
Speaker 1: your life is passing you by. That's our next Bloomberg breakaway.
Speaker 1: But my mom had come to that woman. So let's
Speaker 1: go back to two thousand eight. Nice timing, financial crisis,
Speaker 1: no factory, no suppliers. Yet you have an idea, an urgency.
Speaker 1: You even need to pay your kids private schooling, no investors.
Speaker 1: Just six hundred pounds you and your mom. Six hundred
Speaker 1: pounds is not nothing. That's that's true. That's true. Six
Speaker 1: hundred pounds is not nothing, right, I know that you
Speaker 1: know in the word and forgive me and the world's inequality.
Speaker 1: I shouldn't be insensitive. No, you're right, it's not insensitive
Speaker 1: that six hundred pounds. Yeah, and you created a company
Speaker 1: take us back there. Yeah. Um, so it was it
Speaker 1: wasn't really that I had my eye on global markets
Speaker 1: to do with timing. It was more that, um, my
Speaker 1: daughter was getting bullied at school and had all these
Speaker 1: bruises on her arm, so needed to get her to
Speaker 1: a different school. The urgency, Yeah, thats surgency. M So
Speaker 1: it was seeing her going through such awful time, seeing
Speaker 1: her literally kicked on the floor at one point that
Speaker 1: it was the end of the summer term, and um
Speaker 1: I said to her, don't worry, you're not coming back here.
Speaker 1: So that's when you have urgency, because you can't say
Speaker 1: to your daughter, you're not coming back here and then
Speaker 1: I hope that she's forgotten and take her back. She
Speaker 1: was eight, She was eight, and her brother was six. Um,
Speaker 1: and so yeah, there was a sense of urgency. It
Speaker 1: meant that I had the school summer holidays and six
Speaker 1: hundred pounds to create something that would sustain a twelve
Speaker 1: thousand pounds a year school bill for two people, because
Speaker 1: you can't not send the brother because then he'd hate
Speaker 1: her forever. It's not health. Fee's healthy. It's not healthy.
Speaker 1: So um yeah, and and school fees that's after tax.
Speaker 1: You know, that's some money you take home after tax,
Speaker 1: so you have to learn earn a lot more. So
Speaker 1: you have this idea. Yeah, Well no, I didn't actually
Speaker 1: have an idea. I just had a need. I think, okay,
Speaker 1: I think that's the thing, And so I had to
Speaker 1: go home and um, sit at the computer and create
Speaker 1: an Excel spreadsheet called Things I Can Do to make
Speaker 1: school fees dot xls were the other ideas. So I
Speaker 1: just came up with a list of ten because ten's
Speaker 1: always a good number for lists where we're bag settles. Well,
Speaker 1: it was, they were all. The positioning wasn't important at
Speaker 1: that time. It was all in the sort of the
Speaker 1: ranking of the columns sustainability. Can you start it with
Speaker 1: six hundred pounds? Would you get enough money fast enough
Speaker 1: to meet school fees? If I died in the process,
Speaker 1: would it be something that would be ongoing? Because I
Speaker 1: didn't want them to lose their mother and go back
Speaker 1: to a bad school, so it's quite logical. Oh my god,
Speaker 1: I need a therapist right now. No, it's not. It's
Speaker 1: just you know what happens, isn't it. You just got
Speaker 1: a crack on. You just do, which is such a
Speaker 1: sensibility that I got in reading about you and your conversation.
Speaker 1: We'll get into that, but you really do. Logic has
Speaker 1: guided you in creating your business. It's all about logic,
Speaker 1: otherwise I don't really understand it. So when you think
Speaker 1: about markets, this is what this keynote is about, did
Speaker 1: you do any kind of research about that and trying
Speaker 1: to understand? Because I didn't have masses of time, and
Speaker 1: I knew that I needed to have on my list
Speaker 1: of ten things because I gave myself half an hour.
Speaker 1: I'm very time compulsive, so it was like fifteen minutes
Speaker 1: to create a logo, ten minutes to come up with
Speaker 1: a brand name, half an hour for a list of
Speaker 1: ten things. So, um, because it's good to be efficient,
Speaker 1: right yeah, nothing like an amateurnalist, nothing like a deadline.
Speaker 1: I love it. Yet things done exactly and um, So
Speaker 1: satchels were on there because I was just sick of
Speaker 1: having to buy bags that didn't last, and they weren't
Speaker 1: sustainable or you couldn't clean them, and they looked awful,
Speaker 1: And then you were back at sports Direct buying some
Speaker 1: cheap thing with a nasty zip that wouldn't work for
Speaker 1: very long and had high school musical on it, and
Speaker 1: then they wouldn't like it a month later, so you'd
Speaker 1: be back getting another one, you know. And then so
Speaker 1: I just didn't want to keep buying, right, And I
Speaker 1: had a school Sachel, and I had it right the
Speaker 1: way through school, and it it sort of looked better
Speaker 1: at the end than it did at the beginning, and
Speaker 1: I just thought, there are some things worth thinking about.
Speaker 1: Your school bag isn't one of them, all right, So
Speaker 1: then you finally do don't quote me on that one,
Speaker 1: because my business is like based now on Sachels so
Speaker 1: more exactly, so the school bag is actually definitely worth
Speaker 1: thinking about. So you decided to move forward with this.
Speaker 1: I mean, you did everything. You coded your for a website.
Speaker 1: You know how to code, right, you learned, I learned.
Speaker 1: You learned. It's nice because it's quite logical and you
Speaker 1: figured it out. It's fine. Factory manufacturing, Like, what did
Speaker 1: you do that? That was a trickier one that was
Speaker 1: a trickier one. So we actually got persistent right in
Speaker 1: finding your first kind of You found a shot that
Speaker 1: you like, I was really irritating, is what you're getting?
Speaker 1: And I think that that's probably but it works. You
Speaker 1: found a shot that yeah, And I think the thing
Speaker 1: with manufacturers, well, it's the thing with me that I've
Speaker 1: realized over the last ten years is I'm actually really
Speaker 1: poor at communicating certain things. So I think that everyone
Speaker 1: sees things the way that I see things, and then
Speaker 1: I'm irritated when they come up with something different. And
Speaker 1: it's because I haven't explained it took a long time
Speaker 1: to get to that point. Um, And so in my
Speaker 1: head I was thinking school satchel. Everybody knows what that
Speaker 1: looks like, so why are people being so would and
Speaker 1: and not? And so in the end I was so
Speaker 1: frustrated that sort of made this. See now you come
Speaker 1: into this kind of world and you know there's names
Speaker 1: for things. So it's prototype. I made a prototype. It
Speaker 1: was two cereal boxes covered in brown paper with sort
Speaker 1: of like buckles grow done with a sharpie on the front,
Speaker 1: and it's like, I want one of these, and you'd
Speaker 1: go around and you've got used to things like if
Speaker 1: they said they were artists, and it meant it was
Speaker 1: going to cost too much and I wouldn't be able
Speaker 1: to sell it. And so I went around. But I
Speaker 1: needed to find someone really who who properly made them,
Speaker 1: not as one offs. Um. And so I googled school
Speaker 1: Satchel and it wasn't on the first like I went
Speaker 1: so far back in these pages, further than you know
Speaker 1: I've I've ever been a rabbit hole. Oh my gosh. Um.
Speaker 1: And then in the end I found this school in
Speaker 1: Scotland that that mentioned school Sachel in their uniform. I thought, yes,
Speaker 1: this is what I want to score. And so I
Speaker 1: phoned them up and asked for their outfitters name. They
Speaker 1: gave it, and and I phoned them up and I said, um,
Speaker 1: I need Satchell's. Can you supply me with Satchel's And
Speaker 1: he said, um, no, I only have twenty four year
Speaker 1: that the concept of scaling wasn't big on his mind.
Speaker 1: I say, and um, And I said, well, can you
Speaker 1: tell me where you get them from then, because I
Speaker 1: really need to sell a lot of these to make
Speaker 1: school fees. And he said, no, I'm not telling you
Speaker 1: who my manufacturer is and that's really smart. I mean,
Speaker 1: why would you do that? But there's there's kind of
Speaker 1: like this rule of the person who wins in this
Speaker 1: circumstances is the person it means the most too. And
Speaker 1: on this it was like I get to send my
Speaker 1: daughter to school where she doesn't get bruises, and um,
Speaker 1: he just doesn't want to tell me the name of
Speaker 1: his manufacturers. So this was never going to win on
Speaker 1: his side, and he could have saved himself a couple
Speaker 1: of really miserable days. But if he just realized what
Speaker 1: your method was, you just kept calling relentless and so
Speaker 1: it is it's a school outfitter and um, so he's
Speaker 1: got this shop in Scotland and so from the moment
Speaker 1: he opened, I would call him like every twenty two
Speaker 1: minutes with a different question, and I'd be so disruptive,
Speaker 1: and so it would I'd phone him and say, so, um,
Speaker 1: what color are the settels? And he said, I I
Speaker 1: sell brown And I said, um, is that dark brown
Speaker 1: or like brown? And and it was just to disrupt him,
Speaker 1: and he said it's just light brown. It's like a
Speaker 1: chestnut brown, chesnut brown. Put the phone down and then
Speaker 1: I'd phone him next and say yeah, and I have
Speaker 1: my time. It's like, how would you describe chestnut brown?
Speaker 1: You know? Because I and then turning two minutes later,
Speaker 1: it's like do you do black? You know? And then
Speaker 1: do you do red? And the whole day, the whole
Speaker 1: whole day, and I was like deeply annoying. And then
Speaker 1: the next day I phoned up and straight in there
Speaker 1: with what sizes are set? I'm thinking maybe certein would
Speaker 1: be a bit better, because voting can be a little overpowering.
Speaker 1: And then I'd phoned him back and he lasted about
Speaker 1: three hours into that day and then he just said
Speaker 1: how long are you going to do this for? And
Speaker 1: they said, It's a really strange thing is that in
Speaker 1: my heart, I know I have thousands of questions, um,
Speaker 1: but when I phone you, I can only ever seem
Speaker 1: to think of one at a time. And then he
Speaker 1: just gave me the name of this manufacturer and he
Speaker 1: was quite ungracious. Actually he said, here, God make his
Speaker 1: life a misery, which I didn't think. It was really
Speaker 1: sort of nice, but probably manufacturer. I got what I wanted,
Speaker 1: So tell me about expansion. I know I'm jumping ahead
Speaker 1: a little bit. I do because at one point you
Speaker 1: did have to expand only manufacturer, but then you found
Speaker 1: out that manufacturer. It was hard because I had the
Speaker 1: first manufacturer, and and there was something to do around
Speaker 1: health and safety because I had four UK manufacturers that
Speaker 1: were quite small. Each one of them would not go.
Speaker 1: They couldn't really make more than about a hundred and
Speaker 1: fifty bags a week. And um I had come up
Speaker 1: with this idea of sending fluorescent bags to New York
Speaker 1: Fashion Week on bloggers so that when the lights went
Speaker 1: down and they sort of took the photo of the
Speaker 1: bank would pop out from everywhere. And then the New
Speaker 1: York Times said we were the street style of New
Speaker 1: York Fashion Week and I had sixteen thousand orders on
Speaker 1: the website that and I had four manufacturers and they
Speaker 1: could all do a hundred and fifty bags a week.
Speaker 1: So I'm going back to the math that and talked
Speaker 1: about that doesn't work that we had. That was a
Speaker 1: challenge that one um so I talked to the Department
Speaker 1: of Trade and they put me in touch with a
Speaker 1: company that were having real problems. They were about to
Speaker 1: go out of business, but they worked in leather and footwear,
Speaker 1: and so they had a lot of the same machines,
Speaker 1: the post machines, and some of the same machines that
Speaker 1: they need. Um they started and they really wanted to
Speaker 1: ramp up. So this was good, the one fifty a
Speaker 1: week thing. This was really good. And they knew that
Speaker 1: I had sixty thousand bag backlog and so they were
Speaker 1: really on board. They could see the potential for that.
Speaker 1: Within three months of I was buying everything I was
Speaker 1: buying because they had no money and knew about to
Speaker 1: go under. So I had to pay for the bags
Speaker 1: as soon as they arrived, and I bought all the
Speaker 1: raw materials and they just paid the stuff. Within three
Speaker 1: months I found out they were taking a large percentage
Speaker 1: of the leather. I was buying, making bags with my
Speaker 1: knives to the patterns and hiding them in a lock
Speaker 1: up across the road and then trying to launch. And
Speaker 1: that was all based on a brand. So that was
Speaker 1: an unforeseen circumstance. Talk about learning on the job. Yeah,
Speaker 1: that manufacturer you mentioned to me when you went after him,
Speaker 1: and I know there's litigation involved. He said, you've got
Speaker 1: no other choice. You're just as right. I know. That
Speaker 1: really irritated factor. That irritated me when I was seventeen.
Speaker 1: I'm not stupid, so um that yeah, that really he
Speaker 1: pushed my buttons on that one. And I think that
Speaker 1: as soon as I knew he was doing that, I
Speaker 1: just can't deal with people that I can't trust. You know.
Speaker 1: That's a huge, massive, massive thing, and so I had
Speaker 1: to go down and get all the leather out of
Speaker 1: there and then deal with kind of the issue of
Speaker 1: where am I going to take it? Where's the manufacturer
Speaker 1: going to come from that's going to deal with this
Speaker 1: massive backlog of orders that I've got. There's something amazing.
Speaker 1: In three weeks you opened up your own factory. I
Speaker 1: did because he said I didn't have a choice, and
Speaker 1: I disagreed with him on that. So I took all
Speaker 1: but two of his workforce and set up a factory.
Speaker 1: Well done, Well, he was wrong, because our factory now
Speaker 1: does ten thousand. We can make about ten thousand bags
Speaker 1: a month and that makes us the biggest bag manufacturer
Speaker 1: in the UK. And so I think that you do
Speaker 1: always have a choice. It's a great lesson, tell me,
Speaker 1: um for our group here scaling up. You know, what's
Speaker 1: your advice about scaling up? Sometimes you can plan it,
Speaker 1: sometimes it just happens. And I think in the fashion
Speaker 1: business you can often go from not well known to
Speaker 1: all of a sudden you're known overnight and you have
Speaker 1: to scale you know, how do you any advice? Yeah?
Speaker 1: I didn't do scale up well at all? Okay, I
Speaker 1: mean didn't start up. I did well. Start up. I
Speaker 1: was just going with my instincts and it worked and
Speaker 1: I did that really well. Scale up I didn't do well.
Speaker 1: So um, I was lucky. I got investment from really
Speaker 1: really good UM play it's really good vc UM. But
Speaker 1: what I didn't do well was at that point, I
Speaker 1: think in going through the investment process, I lost my
Speaker 1: self belief, I lost my sort of self confidence, and
Speaker 1: I thought, now I need to pass this to people
Speaker 1: who know how to scale up, whereas I know how
Speaker 1: to start up. You separated them from start up? Did Yeah?
Speaker 1: I did? And I just, um, I just sort of
Speaker 1: felt that as a founder, I need now to trust
Speaker 1: people who have done it before. And and that was
Speaker 1: that was my mistake, because that's you know, it's not
Speaker 1: right because they might know how to scale it before,
Speaker 1: or maybe they don't know how to scale it before.
Speaker 1: Maybe they just worked at places that were really big
Speaker 1: and had a big turnover and big teams and huge
Speaker 1: budgets and brought in loads of overhead, which wasn't my intention,
Speaker 1: but was the effect. It's was something you said to me.
Speaker 1: It struck me in terms of bringing in this outside investor.
Speaker 1: It was five years after you started, you said, after
Speaker 1: a Vivian Westward collaboration, which which was you know, as
Speaker 1: part of the start up rather than the scale up.
Speaker 1: You said, because it was at the size that I
Speaker 1: didn't want to be the only person that it came
Speaker 1: down to needed support strength on my side of the table. Yeah,
Speaker 1: And that's stupid when I look back on it. When
Speaker 1: I look back at like, at the worst point, our
Speaker 1: backlog was over thirty thousand bags and I was starting
Speaker 1: a factory from nothing. Why did I think that I then,
Speaker 1: you know, didn't know what I was doing. It's interesting,
Speaker 1: It is interesting, and I think that there is a
Speaker 1: thing of I'm I'm really hopeful when final stages of
Speaker 1: getting another investment at the moment, but this time I
Speaker 1: sort of feel like I know what I'm doing and
Speaker 1: I'm an integral part of the journey for this next part,
Speaker 1: and I'm not willing to trust any thing too much.
Speaker 1: And just stepped back too much. Even if somebody has
Speaker 1: done huge things at netaporty or whatever, you know, it's
Speaker 1: just different budgets. And I think as well, and I
Speaker 1: know that I started came such was six pounds and
Speaker 1: we never had debt ever, never had debt. And for
Speaker 1: five years we had no investment. We didn't even have
Speaker 1: an overdraft. We had nothing, and grew into a company
Speaker 1: that was worth forty million, you know, and and no debt.
Speaker 1: And I think that I know now that I don't
Speaker 1: I don't like debt. I can't be a company that
Speaker 1: focuses just on growing turnover, even if it means discounting
Speaker 1: and then just having loss making and thinking you're successful.
Speaker 1: I can't do that, you know, because that's not It
Speaker 1: doesn't make sense. It's not And I thought it was
Speaker 1: interesting what you said about you've learned that in many
Speaker 1: ways you're the advantage of not having been part of
Speaker 1: an established brand in industry, to not come from that background,
Speaker 1: because it made it so easy for you to say,
Speaker 1: why would I do that? It's not largical, which is
Speaker 1: really refreshing. Yeah, which is you know, And this is
Speaker 1: the thing when you have people at a very very
Speaker 1: experience in their areas um and they come in and
Speaker 1: say this is the way it's done. You know that
Speaker 1: you can it can be a bit It's like, oh,
Speaker 1: that's the way it's done. Okay, that's why I've got
Speaker 1: this person. But that's the way it's done. And then
Speaker 1: going to a catering place where they come out with
Speaker 1: all these things for party, a launch party that I
Speaker 1: didn't know. I didn't know you were supposed to pay
Speaker 1: guests to come to your party in the past years.
Speaker 1: Who just would Sophia and Lusbecter did all our records
Speaker 1: you she didn't ask for any payment for the goodie bags,
Speaker 1: goodie bags that you're supposed to pay people to come
Speaker 1: to your party. Give them a goodie bag filled with
Speaker 1: so much stuff of such value to these people who
Speaker 1: already have more money than than you know, most of
Speaker 1: your customers, and then pay for a car to take
Speaker 1: them to their next party. It's like, why is that? Okay,
Speaker 1: that's not normal, you know it's not It's not normal
Speaker 1: to have catering where they think that you need a
Speaker 1: theme and a fruit sculptor. When did fruit sculptors even
Speaker 1: become a thing? You know, I know that I'm from
Speaker 1: South Wales, so it's the bar is different. It's London
Speaker 1: and you get away with stuff. But I mean either no,
Speaker 1: but a man making penguins out of grapes isn't normal? Yeah,
Speaker 1: you know, and this is still the value of my
Speaker 1: mother can run things pastor and just so you'll say
Speaker 1: that's not normal. Is my favorite quote of the day already. Um,
Speaker 1: I do want to open up for questions, but I
Speaker 1: do also want to ask you before we do that,
Speaker 1: just quickly, you have dealt China is a large market
Speaker 1: for you love Chinese people, and I do think and
Speaker 1: there's so many of them, all right? Second? Great, all right,
Speaker 1: second favorite quote. But I do think, especially from the US,
Speaker 1: we keep these trade wars and we do wonder are
Speaker 1: we going through decoupling where the world's going to be
Speaker 1: US and associate with its allies and China associate with
Speaker 1: as allies. What is it about the Chinese market that
Speaker 1: you think companies people run you know, if we're in Europe,
Speaker 1: not in Europe, whether they're in China or here, they
Speaker 1: still need a bag. Isn't irrefutable logic? But you also
Speaker 1: I thought what was fascinating is you talked to people
Speaker 1: on the street. Yeah, you talked about a mission you
Speaker 1: went on on with Prime Minister Cameron. Yes, And but
Speaker 1: you were talking to there's a high level networking. Things
Speaker 1: pretty shy, right, But you were talking to the woman
Speaker 1: in the cloak room downstairs because I wanted to know
Speaker 1: if she was going to buy a bag that looked
Speaker 1: like and I showed her my bag. If you wanted
Speaker 1: this bag, where would you go to find it? Because
Speaker 1: I wanted to know is it? Is it j D?
Speaker 1: Is it tea mall? Is it by? Where are they going?
Speaker 1: Understand it? Because I wanted to understand what normal people
Speaker 1: that people that don't know about food sculptors, normal people,
Speaker 1: where they would go to look for the bag, because
Speaker 1: that's where we need to be. And and the people
Speaker 1: at the reception weren't necessarily going to be the people
Speaker 1: that they told you, And she told you yes, and
Speaker 1: then all the people behind the reception desk in the
Speaker 1: hotel said the same thing. So I knew I was right,
Speaker 1: And so that's really helpful. That's super super helpful. I mean,
Speaker 1: going on something like a retail safari, that's another stupid
Speaker 1: thing they call it. We'll go in a retail safari.
Speaker 1: It's when you get dragged aroun shops like you've never
Speaker 1: seen a shop before. Stey logic. It makes no sense,
Speaker 1: makes no sense. And do you want to open a scepter? Questions? Um?
Speaker 1: Does anybody have a question for Julie Um doing the mics?
Speaker 1: I don't know where they are? Oh, please take them
Speaker 1: back perfect just quickly say your name and why I'm sorry?
Speaker 1: And Sofia Cook, I am chief exectly of food food manufacturing. Um,
Speaker 1: hearing of a lot of very similar things that I'm
Speaker 1: going through. How do you recruit now, given that you've
Speaker 1: learned a lot in your journey, I really and recruiting
Speaker 1: is the most important thing, most important thing, And I
Speaker 1: recruit now the way I recruited right in the beginning.
Speaker 1: So Um. The first thing that you'll see on any
Speaker 1: Cambridge sexual job advert is must like dogs, you know,
Speaker 1: absolutely must, because I take my dog to work and
Speaker 1: if they don't like dogs, it's never gonna work. That's
Speaker 1: where there was a man in the bathroom. He said
Speaker 1: he liked dogs. Clearly he didn't because he was scared
Speaker 1: to come out of the bathroom. Because Rupert was lying
Speaker 1: on the floor in front of the bathroom. So it's
Speaker 1: just exactly just leave him in there and he can
Speaker 1: think about what it means to lie. Um. And and
Speaker 1: there is this sort of thing of you want people
Speaker 1: who aren't going to say, ever, that's not my job
Speaker 1: because I have embossed initials on bags for ten o'clock
Speaker 1: at night or three in the morning, because I didn't
Speaker 1: want anybody else to take that shift, you know. And
Speaker 1: and so if I'm willing to do that, I don't
Speaker 1: want someone who says that's not my job. You know,
Speaker 1: that's not my niche or whatever. Um, somebody who really
Speaker 1: really roll their their sleeves up and not to find
Speaker 1: that out though, well I think you can. You can
Speaker 1: when you talk to people about even how they got
Speaker 1: to the interview. Then often you'll you know, if if
Speaker 1: tiny little things really get to them and irritate them,
Speaker 1: just say this isn't gonna work, or this isn't gonna
Speaker 1: work as you're boring or you're miserable, or because you're
Speaker 1: not gonna want them around. You know, we have the
Speaker 1: tightest team, I would say, the camera sexual team. And
Speaker 1: Becket is over there, so she's got to say yes now,
Speaker 1: but it's um, it's the people that you would want
Speaker 1: to spend time with because they're going to be your
Speaker 1: team and you're gonna spend a lot of time with them,
Speaker 1: So you can't all just put up with people. Your
Speaker 1: team is the most most important thing. And do you
Speaker 1: have a list do people? Do you have a large
Speaker 1: list to choose from of people? What? When when we
Speaker 1: advertise things? Yes? Yeah, the difference no, But I think
Speaker 1: that you don't need a large list because you only
Speaker 1: need one. You know, you need the one brand fit.
Speaker 1: And when when Becca Becca got hired for a job,
Speaker 1: she didn't even interview for I mean, she loved the
Speaker 1: brand so much that she interviewed for a job that
Speaker 1: really was clearly not your No, it wasn't your thing,
Speaker 1: but you know, she just wanted to be seen. And
Speaker 1: I think that that that's the really important thing when
Speaker 1: you find those are the people that you want and
Speaker 1: you think that is just spot on. I need that person.
Speaker 1: I'll figure out where, they'll figure out what they do.
Speaker 1: It's great, that's great. Ut come here first to the box.
Speaker 1: I gotta throw it. Yes, what's the box about the thing?
Speaker 1: It's like, oh, okay, Hi, I'm Charlene Chen, co founder
Speaker 1: of a fintech company called as a Finance. Thank you
Speaker 1: so much for sharing your story. It's incredibly inspirational. So
Speaker 1: I find that as co founders and CEOs I'm a
Speaker 1: CEO UM one of the challenges that we find is
Speaker 1: how to prioritize your time and energy as a founder
Speaker 1: and as a leader and as a company. So, you know,
Speaker 1: we're faced with crossroads where we could expand into a
Speaker 1: new market or a new customer segment, or just double
Speaker 1: down and you know, penetrate an existing market. What were
Speaker 1: some of the hardest crossroads you face and how did
Speaker 1: you decide where to prioritize your energy. So it's a
Speaker 1: really good question. I think that UM. I remember when
Speaker 1: we had the the awful experience of sacking the manufacturer,
Speaker 1: having the eighteen thousand sort of sixteen thousand, it went
Speaker 1: up to backlog, UM trying to start a factory, trying
Speaker 1: to pick my children up from school and read the
Speaker 1: Golden keybook God um and and customers constantly emailing in
Speaker 1: to say where's my bag? Where's my bag? Because not
Speaker 1: once did it even occur to me to shut the
Speaker 1: website down, which, looking back on it was interesting. UM
Speaker 1: And And there were so many polls. You know, there
Speaker 1: were so so many polls. I think that for me, um,
Speaker 1: my children will always come first. So you know, I
Speaker 1: had to be there to pick them up from school.
Speaker 1: And I don't care if I work through the night,
Speaker 1: but I need to pick them up from school and
Speaker 1: give them fish fingers or whatever. Um and and then
Speaker 1: I can walk through the night because it keeps me
Speaker 1: grounded and stops me becoming a weird person. And um
Speaker 1: and and then it was I need to somehow, even
Speaker 1: if it's like a blanket email, just say and just
Speaker 1: be totally honest and say, I'm really trying to get
Speaker 1: to this, but I'm focusing on the one thing that
Speaker 1: will get your bag. And just be really clear that
Speaker 1: the only way to make all these horrible problems go
Speaker 1: away is to start a factory to make bags. Otherwise,
Speaker 1: because it's it's scary, right, You've already spent the money
Speaker 1: that these people have given you on their bags on
Speaker 1: renting sewing machines, so you've got to make the bags
Speaker 1: and get them done. And then once you've sort of
Speaker 1: sat logically and thought this is the plan, this is
Speaker 1: what I'm doing, to just not give it another second
Speaker 1: thought and to put blinkers on, and if that means
Speaker 1: turning your phone off or whatever and just not looking
Speaker 1: at email or whatever, just blinkers on and just focus
Speaker 1: on it in such a clear and determined way, because
Speaker 1: you'll know that there's one thing that would would make
Speaker 1: more of a difference than anything else. I And then
Speaker 1: it becomes are you willing to do a lot of
Speaker 1: different things that don't make a big difference, but maybe
Speaker 1: they're easier or more achievable, or less scary or whatever.
Speaker 1: But there's a lot of those, but there is one
Speaker 1: thing usually that would be a game changer, and in
Speaker 1: my view, that's the one to go for. And that
Speaker 1: was Julie Dean, CEO and founder of the Cambridge Satchell Company.
Speaker 1: I love the scale difference in some ways, Carol, because
Speaker 1: in many ways, bigger company doesn't always mean bigger problems.
Speaker 1: Some of the problems they're very similar. And next up
Speaker 1: we sat down with Ann Kerans, she's the executive vice
Speaker 1: chairman at MasterCard. Talked about that business, but also got
Speaker 1: into diversity issues hiring finding great talent, so attracting talent.
Speaker 1: We're going to get into that. I can't not ask
Speaker 1: you though, especially when one of the topics we're talking
Speaker 1: about is growth. Ask you, with MasterCard having such advantage
Speaker 1: point on the global economy, on global consumers, how are
Speaker 1: we doing well. We're doing differently in different countries, so
Speaker 1: we're doing differently between what we're doing in London and
Speaker 1: what we're doing and sometimes the rest of the country here,
Speaker 1: and I'm sure that you're all seeing that. UM. As
Speaker 1: far as master Cards concerned, we're a big global company
Speaker 1: in over two hundred and ten countries. Our market caps
Speaker 1: about two hundred seventy billion today, which is quite a
Speaker 1: change from what it was when we i pod in
Speaker 1: two thousand and six. It was five billion, which just
Speaker 1: goes to show that investment bankers at the time didn't
Speaker 1: know how much payments networks were worth. But I think
Speaker 1: that they've caught up quick um. And and there are
Speaker 1: so many fin techs out there today. UM. There are
Speaker 1: building things to piggyback across our networks, and I think
Speaker 1: that is a really exciting time. We've actually worked with
Speaker 1: sixteen thousand FinTechs and we helped incubate fintech, so it's about,
Speaker 1: you know, a couple of thousand a year, depends on
Speaker 1: what geography we're in so things. There no recession. Well yeah,
Speaker 1: there are recessions in different countries, but of course, um,
Speaker 1: I think you know, in terms of global growth, what
Speaker 1: we're doing is replacing cash. We're replacing cash with digital
Speaker 1: payments and there is a huge secular shift everywhere in
Speaker 1: the world to do this. And still of the transactions
Speaker 1: in the world that you and I would do and
Speaker 1: our everyday lives are cash. So the opportunity is massive
Speaker 1: in this space and that's why the growth and that's
Speaker 1: why the market cup. So we're here to talk about talent.
Speaker 1: I do want to ask you, abody put out their phones.
Speaker 1: I do have a quick question. What's most on your
Speaker 1: minds when it comes to your workforce? And if we
Speaker 1: can bring that pull up the choices are. So, what's
Speaker 1: most on your minds when it comes to your workforce?
Speaker 1: Attracting talent, creating a diverse, diverse, inclusive and supportive workforce
Speaker 1: and culture, retaining talent and workforce? What are you kidding? Me?
Speaker 1: Too busy with everything else, And I'm curious to see
Speaker 1: what everybody has to say about that, um, and as
Speaker 1: the as the as it comes in. All right, retaining talent,
Speaker 1: and we know that there are extreme costs with retaining talent.
Speaker 1: Does the group have it right? In your view? How
Speaker 1: do you see it? If you had to prioritize this list,
Speaker 1: what would you do? Um? I would you know, I
Speaker 1: would prioritize retaining talent as well. Um. Well, it's hard
Speaker 1: to prioritize these things because it's you know, you really
Speaker 1: need to attract the best talent in the market to
Speaker 1: be out there. You know, do bring the best products
Speaker 1: and services, but more and more, especially with the younger people,
Speaker 1: you have to create a diverse workforce to attract the
Speaker 1: right talent in the first place, and then you have
Speaker 1: to create a culture that actually retains them. So let's
Speaker 1: talk about attracting talent. How do you do it at MasterCard?
Speaker 1: What are the skills you value? What are you guys
Speaker 1: looking for and what are the applicants looking for? Because
Speaker 1: I do feel like and I tell folks that come
Speaker 1: to me if they're looking for DAB and like you're
Speaker 1: interviewing where you're working as well, So I'm curious what
Speaker 1: you're sor and what you do to attract talent. Yeah.
Speaker 1: So we're fortunately in a position of being an employer
Speaker 1: for choice of choice all over the world, and I
Speaker 1: think one of the reasons for that is that our
Speaker 1: culture is very good. You know, we believe in decency.
Speaker 1: We think that everybody should have the opportunity to grow,
Speaker 1: and and of course we're in a tech business, which
Speaker 1: is highly desirable. One of the things that's a problem
Speaker 1: for us being in a tech business is actually recruiting
Speaker 1: enough women to be the software engineers of the future.
Speaker 1: And they're just not there. Um, they're not graduating from
Speaker 1: universities enough. I think the figure in the West is
Speaker 1: about seventeen percent. I think it's higher in China. Um.
Speaker 1: And the issue there is that just not enough girls
Speaker 1: are staying on and doing science at schools and going
Speaker 1: through to universities. So we actually run programs around the
Speaker 1: world called Girls for Tech, where we bring in girls
Speaker 1: like ten to fourteen years old into master Card and say, hey,
Speaker 1: it's cool working for a tech and a street tend
Speaker 1: to fourteen years old, yeah, because we think that's you know,
Speaker 1: that's the age before they stopped dropping mats and before
Speaker 1: they stopped making all of their school selections and so on.
Speaker 1: So we think you have to address it that young.
Speaker 1: It's like it's like creating great sports people. You know,
Speaker 1: they start really young, and you're is about four hundred
Speaker 1: thousand students that you've been targeting this way, We've we've
Speaker 1: reached four hundred thousand, we're targeting a million. Yeah, it's
Speaker 1: it's really good program. What's the most important thing? Because
Speaker 1: we had one individual and I forgive me, I forget
Speaker 1: your name? Is it Eric? Yeah? Talked about some of
Speaker 1: the different ways when they bring someone in, and one
Speaker 1: of the things they do is they say, bring your
Speaker 1: favorite T shirt. There's some different interesting things. What is
Speaker 1: it that you look at? Is it the CV that
Speaker 1: you still go to, or their background, or what is
Speaker 1: it that you look at to get the core of somebody?
Speaker 1: I'm just curious what is Yeah, I mean when we're
Speaker 1: doing entry level recruitment, I mean, obviously we're out across
Speaker 1: universities and business schools around the world and we're actually
Speaker 1: looking add you know, what we think the potential of
Speaker 1: the person is what's their personality? To a certain extent,
Speaker 1: you know, skills are a given, skills can actually be taught,
Speaker 1: but you know, are you the sort of person that's
Speaker 1: going to be enthusiastic interested? Are you going to embrace
Speaker 1: the culture these things are really important, and we do
Speaker 1: that not just at university level, but we bring back
Speaker 1: people who have been out of the workforce for a while,
Speaker 1: quite often a women, but sometimes their men. I mean,
Speaker 1: my husband was a traveling a trailing spouse as they say,
Speaker 1: so he had to re enter the workforce. He was
Speaker 1: a school teacher. Um. And it's a great way of
Speaker 1: hiring people sometimes in their thirties and forties who have
Speaker 1: absolutely the right personality attitude. Maybe they need their tech
Speaker 1: skills brushed up, but they've gone another twenty years of
Speaker 1: productive working life ahead of them. And also, if you
Speaker 1: recruit people at this level, you have a better chance
Speaker 1: of getting people to go up into senior management, you know,
Speaker 1: if you retain them. This is interesting too because I
Speaker 1: love that you bring back people kind of at their
Speaker 1: mid career points. But the entry level is important in
Speaker 1: terms of diversity. And let's just talk about men women.
Speaker 1: We are coming at the entry absolutely hands down, there's
Speaker 1: no no, you guys do it mass We definitely do that.
Speaker 1: We definitely do that. So what happened, So you'ret the
Speaker 1: entry level, but you told me that about women across overall.
Speaker 1: Why did it breakdown? Well, Um, you know, when you
Speaker 1: start going up and to senior management, the funnel starts
Speaker 1: to narrow. And we're asking ourselves our question isn't because
Speaker 1: women are leaving to have families. You know, what are
Speaker 1: we doing in terms of flexibility and this kind of thing? Um?
Speaker 1: And I don't think that you know, we have a
Speaker 1: general answer to that question, but we're looking at how
Speaker 1: do people make the first move into management and the
Speaker 1: second move and how do they actually get up through
Speaker 1: through the ranks. And that has been hard and every
Speaker 1: big company. By the way, we're not a massive company.
Speaker 1: We only have fifteen thousand people around the world, which
Speaker 1: were considering when we're in two hundred and ten countries,
Speaker 1: shows who that we're super automated because we're connecting with
Speaker 1: twenty seven thousand banks about fifty million end points around
Speaker 1: the world. Um, so we're not an HR When are
Speaker 1: people intense company? When you look at all, right, what
Speaker 1: do you think in your view? And someone who has
Speaker 1: been working for forty years in the financial sector, sorry,
Speaker 1: are you trying to display my agent? I'm no, no,
Speaker 1: no impressed. Actually I haven't been in the financial sector
Speaker 1: forty years. I've been in a thirty years. I was
Speaker 1: an engineer. I was. I was a research scientist mathematicians.
Speaker 1: My father an engineer predominantly, though if you go back right,
Speaker 1: it was a lot of men. Tell me a little
Speaker 1: bit about your experience in terms of bias biases that
Speaker 1: you experience, what that taught you, what you learned, and
Speaker 1: how you're applying it to MasterCard to make sure that
Speaker 1: there isn't that there it's in hiring or bringing people
Speaker 1: up the corporate ladder. Well, I mean when I was
Speaker 1: an engineer, I was the only woman engineer in Newcastle
Speaker 1: at British Gases Research Station. And actually it has it's
Speaker 1: a double edged sword because on the one hand, you've
Speaker 1: very noticed it stand out, so I mean, that's that's
Speaker 1: an advantage, let's face it. On the other hand, things
Speaker 1: don't work very well for you. So when I decided
Speaker 1: to become an offshore engineer and do my training course
Speaker 1: in the North Sea in April, they threw me into
Speaker 1: the water off the coast of Yarmouth. Um the man
Speaker 1: suit that they gave me, which was the extra small size,
Speaker 1: I was even smaller than that. Bear in mind I
Speaker 1: was in my twenties and a lot a lot lighter
Speaker 1: than I am now and quite honestly, the water just
Speaker 1: gushed through the back of the suit and I nearly
Speaker 1: died of exposure. So they had to create a new
Speaker 1: wet suit for me, a dry suit, actually rubber suit.
Speaker 1: And did there's a good story. I did leave it
Speaker 1: on the train on my way to Charing Cross. I
Speaker 1: was living at Bexley Heath at the time. Left it
Speaker 1: on the six together with a tin of marvel that
Speaker 1: powdered milk that you put near in your coffee. And
Speaker 1: I went to the lost property office and said, I've
Speaker 1: left my bag on the train and he said, yes, madam,
Speaker 1: what did it contain? I said, of rubber suit in
Speaker 1: a in a powdered milk and he said, he said,
Speaker 1: what was the powdered milk? Call? But the thing that
Speaker 1: there about me about this story is that I read
Speaker 1: the other day that the women astronauts there weren't enough
Speaker 1: suits for the women astronauts, and I thought, my goodness,
Speaker 1: it hasn't changed in forty years. It's amazing. But this
Speaker 1: goes into a conversation you and I had. Is it
Speaker 1: the book Invisible? Yeah? Yeah, Invisible Women Invisible wore about
Speaker 1: how the world, Well, it's just not designed for women. Yeah,
Speaker 1: crash dummies weren't designed for us, so we have more accidents.
Speaker 1: I mean they're fixing that now. Microphones weren't designed for us,
Speaker 1: so we kind of squeaky that. In fact, we were told.
Speaker 1: I was told when I was younger, just speak with
Speaker 1: a deeper voice and then you're going to be Okay.
Speaker 1: It's a Henry Higgins syndrome. You know. Why could a
Speaker 1: woman just be more like a mom? Just adapt? Oh? Sorry,
Speaker 1: So I'm talking about diversity versus skills. So tell me
Speaker 1: a little bit more about how you view diversity and
Speaker 1: how you when you're hiring someone at MasterCard, how do
Speaker 1: you layer them? What's most important is that you layer
Speaker 1: skills first and then diversity on top of it. And
Speaker 1: before we do that, pull out your phones again, because
Speaker 1: I have another question. When hiring, I'm curious about all
Speaker 1: of you. The priority is one best person for the job,
Speaker 1: diversity first half the time, Skills matter most half the time,
Speaker 1: diversity mass matters most. We don't have a plan. We'll
Speaker 1: see as these come in. So how do you best
Speaker 1: person for the job. It's always the way that that
Speaker 1: we would hire. But I think that what you do
Speaker 1: is you try to create something which is a balance
Speaker 1: slater diversely, you try to get people from different backgrounds.
Speaker 1: Obviously are looking for the right sort of skills for
Speaker 1: the job. But as I said, skills can actually be taught.
Speaker 1: It's really you know, have you got the best person
Speaker 1: for the job. And I can see that that's you know,
Speaker 1: that is the most dominant answer here. I would expect
Speaker 1: nothing less. And by the way, you know, if you
Speaker 1: talk to anybody who if you talk to young people today,
Speaker 1: by the way, they hate the whole idea that anybody
Speaker 1: is being classified. Don't classify me as a woman, and
Speaker 1: don't classify me as a minority group, and don't classify
Speaker 1: me because I've got a disability, and don't question whether
Speaker 1: I'm this gender or that gender. They absolutely reject that.
Speaker 1: So all of this stuff that you know, we've been
Speaker 1: doing in our generation, here's a person that looks like this,
Speaker 1: and here's a person that's diverse like that. They don't
Speaker 1: like it at all. So you know, we're going to
Speaker 1: have to rethink this. But I agree with you that
Speaker 1: I don't know how everybody feels about this, but we
Speaker 1: can't sly at you know, officers put people into groups. Yeah,
Speaker 1: the women's group and this group that versus And how
Speaker 1: do we expect everybody to assimilate and kind of work
Speaker 1: together if we can't sth me do that? Yeah. But
Speaker 1: you know the other thing is that if you've gotten imbalance,
Speaker 1: then you also have to address that. You have to
Speaker 1: address it somehow. So, you know, especially when you're running
Speaker 1: the country company, you've got to make sure that you know,
Speaker 1: you know how to change things. I'm curious what you
Speaker 1: think about ethnicity pay reporting. Do you do you support
Speaker 1: something like that? You know, I began not supporting it,
Speaker 1: I'll be honest, and I think you know, we were
Speaker 1: together at a Tortoise event where I was saying, hang
Speaker 1: on a minute. You know one of the guys that
Speaker 1: works for me, his father's I Rainian, so he's half
Speaker 1: English half a Rainian. He married an Indian woman, so
Speaker 1: what are his kids? You know, this is back to
Speaker 1: does anybody want to be classified these days? Having said that,
Speaker 1: I do think that if you don't measure anything, then
Speaker 1: you're really not aware of what the gaps are. And
Speaker 1: I think at that particular Tortoise event that we were at,
Speaker 1: the there was huge gaps, not just a gender pay gaps,
Speaker 1: but pay gaps where people with disabilities were enormous, and
Speaker 1: they do measure that was measured only for men. But still,
Speaker 1: I guess being a mathematician I believe in measurement or
Speaker 1: a statistician I believe in measures, Yeah, I do. I
Speaker 1: think numbers and math get to an end. Maternity paternity leaves.
Speaker 1: This really struck me that if you really want equality
Speaker 1: when you're hiring somebody, if you have equal maternity paternity
Speaker 1: leaves for someone, you're not going to look necessarily like
Speaker 1: that woman saying I'm going to lose her for three
Speaker 1: or four months or whatever it may be. But if
Speaker 1: it's equal, yeah, absolutely. I think the thing about paternity
Speaker 1: paternity leaver is have you created a culture that says
Speaker 1: it's okay for and it's usually the men, but it
Speaker 1: can be saved sex partners. But is it you know,
Speaker 1: is it okay for the dads to stay home with
Speaker 1: their kids or you know? And in in our firm
Speaker 1: of the leaver has taken all over the world, and
Speaker 1: that is telling you that the culture works. And I
Speaker 1: agree at levels of playing field. First, it's good for
Speaker 1: the kids, it's good for the parents, but I also
Speaker 1: think that at levels of playing field a bit that
Speaker 1: you aren't looking at women differently from men UM But
Speaker 1: you know, I I also realize that in small companies
Speaker 1: this must be very very difficult, you know, dealing with
Speaker 1: things like these leaves. And I do think that that that, yeah,
Speaker 1: there's a cost. And I think that the government should
Speaker 1: be looking at the whole social infrastructure and what support
Speaker 1: they give to business from birth through to school. Actually
Speaker 1: because I think, for example here in the UK, to
Speaker 1: go to work when you know you're living in London
Speaker 1: and you've got a small child, it's really very difficult.
Speaker 1: You're paying a fortune for it. You know, I actually
Speaker 1: paid for a nanny in order to continue my career.
Speaker 1: I could have had a childminder. Most of us don't
Speaker 1: live near our parents or extended families these days, and
Speaker 1: and so it's it's a real thing that I think
Speaker 1: we should think about social infrastructure. I want to actually
Speaker 1: about corporate boards and I'm jumping because I want to
Speaker 1: get two things. But you, um could chair the thirty
Speaker 1: club in terms of UM women on corporate boards. The
Speaker 1: target was meant to be hit by was reached ahead
Speaker 1: of schedule. UM. You made a point of saying. A
Speaker 1: big point of saying is the floor not the ceiling.
Speaker 1: Why should this number be a baseline. Well, there's a
Speaker 1: lot of research that shows that once you get to
Speaker 1: that level of then whatever group that you've got starts
Speaker 1: to become the normal. You know, if you're sitting in
Speaker 1: a room of sort of ten guys, it's funny, you know,
Speaker 1: if there's a couple of women could be you and me,
Speaker 1: and you're completely different to me in every respect, but
Speaker 1: they could get us confused because we're just other, right
Speaker 1: we have we have a few more women in the room,
Speaker 1: then you cease to become other. And it's the same
Speaker 1: with other groups as well. And I mean, the research
Speaker 1: it's out there. I want to just throw in another
Speaker 1: pole to everybody about in terms of performance, UM, from
Speaker 1: two thousand five, pull out your funds if you could.
Speaker 1: From two thousand five to twenty eleven, companies with one
Speaker 1: woman or more on their boards outperformed those with no
Speaker 1: female board members by how much your choices seven twelve
Speaker 1: percent eight I'll tell you the answer, um. But and
Speaker 1: it's not just about the right thing to do, but
Speaker 1: the research continues to show you that in terms of
Speaker 1: performance and the answer. Correct answer, by the way, is
Speaker 1: d it's over six years and that includes the financial crisis.
Speaker 1: Based on relative share performance. I mean, I mean, it
Speaker 1: may well be showing that these companies anyway are enlightened
Speaker 1: and they're going after the best people for the jobs
Speaker 1: and so on. You know, it's not that you certainly
Speaker 1: stick a couple of women on your board and suddenly
Speaker 1: of performing so much better than the market. The truth
Speaker 1: is that you're a company that actually thinks about this.
Speaker 1: I think that's what that measure is telling you. But
Speaker 1: these measures are real, and I've seen things on the
Speaker 1: S and P that's you know, four hundred percent on
Speaker 1: a study of fifty thousand companies over ten years. And
Speaker 1: I'm a great believer in data because I like to
Speaker 1: see business cases for things. I don't like to think,
Speaker 1: you know, we're just doing this because you know, I've
Speaker 1: got there's got to be a business calse. I do
Speaker 1: want to open up to questions. So please, if you
Speaker 1: have a question for Anne, I think we've got mikes around,
Speaker 1: please just stand up and and do your question of
Speaker 1: a question. Out there in the back. They're getting mike
Speaker 1: to you. It is a big room. It's a great room.
Speaker 1: He's got some really wonderful observation. Just quick say your
Speaker 1: name and your company. Um, Mike kind of outs broker. Um.
Speaker 1: So I've got a female managing director. She's awesome. I've
Speaker 1: worked with her for fifteen years. Um, she gets approached
Speaker 1: an awful lot to make board quota and I'm sure
Speaker 1: that's my strongest retention approach is actually just to hire
Speaker 1: her because she's awesome. But she she's actual's been for interviews,
Speaker 1: She's spoken to me about it, and at some point
Speaker 1: during a four interview process on mentioned quota. Just interested
Speaker 1: in whether you have the same experience and actually whether
Speaker 1: it's the same people being churned. Well, first of all,
Speaker 1: we don't have quotas in the UK. If it's for
Speaker 1: a UK board, certainly we have them in Germany and France, Um,
Speaker 1: most places in the world. They are not quotas their targets.
Speaker 1: But people could use the same term, but quota actually
Speaker 1: means something completely different. I've never been recruited. I don't
Speaker 1: think to meet some sort of quota and I certainly
Speaker 1: wouldn't like it. And most people that I talked to
Speaker 1: feel exactly the same. Not most people. Everybody. Everybody wants
Speaker 1: to think that the right person for the job, whether
Speaker 1: the most senior or the most junior person. Um So,
Speaker 1: I actually don't really believe in quotas myself. Having said that,
Speaker 1: you know, I can also see that if you're just
Speaker 1: not getting any change to occur are at a country level,
Speaker 1: you know, for instance, in Germany, you might take a
Speaker 1: different view. Yeah, and and you your comment about people
Speaker 1: rotating around. I have heard of that in Scandinavia, really
Speaker 1: really small markets there though, you know, like five and
Speaker 1: ten million people, five million people in a small percentage
Speaker 1: of business people Here in Britain, I don't think that
Speaker 1: that should be a problem. And the question, all right,
Speaker 1: just to wrap it up then, oh please, oh right,
Speaker 1: there ahead be defining from Taylor Winters. Do you think
Speaker 1: we should focus on inclusion rather than simply diversity. Diverse
Speaker 1: is very hard to define and you end up with
Speaker 1: people in subdivided groups, as you mentioned, whereas inclusion hopefully
Speaker 1: leads you to diversity. I completely agree with you. Actually,
Speaker 1: I think inclusion is the thing that you should really
Speaker 1: focus on, and I think in in every form, and
Speaker 1: you know, some of the things that I hear, particular
Speaker 1: in the startup industry is in the tech startup industry,
Speaker 1: they'll say, well, I can't get any programmers. And I'll
Speaker 1: say where you're recruiting from, and they say, well Oxford, Cambridge,
Speaker 1: m I T Stanford, And I go, well, let's the problem,
Speaker 1: isn't it. You know, they're not not even thinking of
Speaker 1: including all the great engineering universities and so on. So
Speaker 1: I think it applies to everything. That's a good point though, Anne, right,
Speaker 1: expanding where you're recruiting from, because that people tend to
Speaker 1: go back to the same places and then you get
Speaker 1: the same time. Well, the guy who founded slack, you know,
Speaker 1: he's he's British and and he he actually went to
Speaker 1: Birmingham University, which you know for all of that's look
Speaker 1: at the demographic of the room and you'll all know
Speaker 1: that as the Polly in Birmingham probably a lot of
Speaker 1: you and and his company is a great example because
Speaker 1: he's gone out across America particularly, and recruited from many
Speaker 1: different schools and has a very diverse workforce. As the
Speaker 1: last question, please, I just had a comment on them
Speaker 1: whether you should uh fulfill the quota. Like I'm in
Speaker 1: tech and I get asked to speak at conferences all
Speaker 1: the time because I'm a woman. In fact that they
Speaker 1: don't even hide it. They say, well, we don't have
Speaker 1: any woman, so can you speak. At first I got
Speaker 1: absolutely kind of like I felt annoyed and upset about it.
Speaker 1: But then I realized if I didn't speak at that conference,
Speaker 1: and if they didn't have another woman, or if they
Speaker 1: had a woman that weren't as good as speaking, Um,
Speaker 1: I wouldn't be helping for the next stage. Yeah, well,
Speaker 1: that's very different from getting a job, because if you're
Speaker 1: in a quota, what you're doing is being a role model.
Speaker 1: And I think you absolutely should do that, and you've
Speaker 1: got to make time for it. And it's very exhausting
Speaker 1: doing that all the time, and um, and you know,
Speaker 1: you've got to get the balance between your your day
Speaker 1: job and and and doing that. But I think it's
Speaker 1: very worthwhile. The world needs role models, of world needs sponsors.
Speaker 1: In all of my career, the people who helped me
Speaker 1: were men, because there we're only men there to help me,
Speaker 1: and you know, and they were absolutely fantastic. A man
Speaker 1: promoted me on maternity leave. A man recruited me to
Speaker 1: the c suite, A man recruited me to my first
Speaker 1: board possession. A man recruited me to be a chairman
Speaker 1: of the clearinghouse, so you know, we need sponsors and
Speaker 1: we need men to help us. And that was an Karens.
Speaker 1: She is the executive vice chairman at master Card. So Carol,
Speaker 1: I turned to you, would you take away from Breakaway? Well,
Speaker 1: you and I spent so much time on our weekend shows,
Speaker 1: on our daily show talking about diversity. I've been telling
Speaker 1: you this in the news room. One of the things
Speaker 1: that came up with something like neurodiversity that when we
Speaker 1: talk exactly it is a thing. And when you think
Speaker 1: about workforces, it's not just about having a mix of
Speaker 1: men and women and people from different types of backgrounds
Speaker 1: or different colors, if you will, but it's also people
Speaker 1: with maybe a d h D or dyslexia. How do
Speaker 1: you incorporate them into the workforce? If you think about it,
Speaker 1: it's a lot of entrepreneurs who have had dyslexia. They've
Speaker 1: gone on to create incredible companies. But it would be
Speaker 1: a shame if we're kind of squeezing folks like that
Speaker 1: out of the workforce. Some fascinating conversations. To be sure
Speaker 1: you've been listening to Bloomberg Business Week Extra. Be sure
Speaker 1: to tune into Bloomberg Business Week Radio Live Monday through
Speaker 1: Friday at gpm Wall Street Time. I'm Carol Masser and
Speaker 1: I'm Jason Kelly. This is Bloomberg