1 00:00:00,280 --> 00:00:07,560 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,039 --> 00:00:12,080 Speaker 2: General Electric. GE made headlines back in twenty twenty two 3 00:00:12,520 --> 00:00:16,360 Speaker 2: when it decided to close Crotonville, it storied corporate campus 4 00:00:16,440 --> 00:00:20,759 Speaker 2: in New York's Hudson Valley. In its heyday, GE was 5 00:00:20,840 --> 00:00:25,400 Speaker 2: known for making well almost everything, from trains to microwaves. 6 00:00:25,920 --> 00:00:29,520 Speaker 2: It also had a reputation for making good managers who 7 00:00:29,600 --> 00:00:33,479 Speaker 2: took classes in leadership at that Crotonville office park, and 8 00:00:33,560 --> 00:00:37,279 Speaker 2: many of them eventually left GE to run other companies. 9 00:00:37,680 --> 00:00:42,880 Speaker 3: GE for years was the training ground, the original CEO factory. 10 00:00:43,400 --> 00:00:46,360 Speaker 2: Matt Boyle covers work and management for Bloomberg, and he 11 00:00:46,440 --> 00:00:48,760 Speaker 2: says Crotonville was legendary. 12 00:00:49,159 --> 00:00:53,080 Speaker 3: It was just sort of the sprawling facility upstate, just 13 00:00:53,159 --> 00:00:55,600 Speaker 3: not far from the city where you would go and 14 00:00:55,640 --> 00:00:59,000 Speaker 3: it wouldn't just be like a one day leadership seminar 15 00:00:59,160 --> 00:01:00,960 Speaker 3: like a lot of companies would do where you might 16 00:01:01,000 --> 00:01:03,040 Speaker 3: get a guest speaker from Harvard Business. 17 00:01:02,800 --> 00:01:03,880 Speaker 1: School to a trust fall. 18 00:01:04,120 --> 00:01:06,520 Speaker 3: Yeah, you would stay there. You would stay there for 19 00:01:06,680 --> 00:01:09,000 Speaker 3: days and days, and you know, you would of course 20 00:01:09,160 --> 00:01:12,160 Speaker 3: also learn the ins and outs of like some of gees, 21 00:01:12,240 --> 00:01:14,920 Speaker 3: you know, like their six sigma black belts, you know, 22 00:01:15,120 --> 00:01:18,319 Speaker 3: management techniques, then you would hear from management professor. 23 00:01:18,360 --> 00:01:20,680 Speaker 2: If you're a fan of the sitcom Thirty Rock, all 24 00:01:20,720 --> 00:01:23,880 Speaker 2: of this may sound familiar. One of the main characters, 25 00:01:24,000 --> 00:01:27,520 Speaker 2: Jack Doneghie, the brassy network boss played by Alec Baldwin, 26 00:01:27,800 --> 00:01:31,240 Speaker 2: had climbed to the top of GE's corporate ladder. I'm 27 00:01:31,280 --> 00:01:34,720 Speaker 2: giving the keynote address of the company's six Sigma Retreat 28 00:01:34,760 --> 00:01:36,800 Speaker 2: to Move Forward in Croton On Hudson. 29 00:01:36,959 --> 00:01:38,639 Speaker 1: Oh, is that like a corporate retreat? 30 00:01:39,160 --> 00:01:42,759 Speaker 2: Doneghie is so nervous about that speech. He makes Liz Lemon, 31 00:01:43,000 --> 00:01:45,080 Speaker 2: Tina Fey's character, go with him. 32 00:01:45,520 --> 00:01:45,800 Speaker 3: Lemon. 33 00:01:45,880 --> 00:01:48,320 Speaker 2: The Retreat to Move Forward is a global meeting of 34 00:01:48,440 --> 00:01:49,680 Speaker 2: GE's best and brightest. 35 00:01:49,760 --> 00:01:51,160 Speaker 1: Careers are made there. 36 00:01:52,720 --> 00:01:56,600 Speaker 2: It's no wonder Jack Doneghie was anxious. GE's training center 37 00:01:56,840 --> 00:01:59,800 Speaker 2: was where the company put managers through their paces. 38 00:02:00,320 --> 00:02:02,880 Speaker 3: Your weaknesses would be identified, they would be worked on, 39 00:02:03,120 --> 00:02:05,800 Speaker 3: you know, really hammering home if your weakness was in 40 00:02:06,240 --> 00:02:09,360 Speaker 3: financial statements or on the finance side, if your weakness 41 00:02:09,440 --> 00:02:11,840 Speaker 3: was on marketing, they would work on those and they 42 00:02:11,840 --> 00:02:14,160 Speaker 3: would just churn through hundreds of people. 43 00:02:14,680 --> 00:02:18,640 Speaker 2: That rigorous training made those GE managers attractive to other 44 00:02:18,720 --> 00:02:22,400 Speaker 2: companies when they were looking for new leadership and by 45 00:02:22,480 --> 00:02:25,480 Speaker 2: virtue of how big GE was and how much it did, 46 00:02:25,960 --> 00:02:28,359 Speaker 2: those trainees had broad experience. 47 00:02:28,760 --> 00:02:31,360 Speaker 3: They were conglomerates, so you could work in you know, 48 00:02:31,480 --> 00:02:34,720 Speaker 3: jet engines, you could work in GE Capital, you could 49 00:02:34,720 --> 00:02:37,480 Speaker 3: work making refrigerators, and if you were the head of 50 00:02:37,480 --> 00:02:40,800 Speaker 3: that business unit, you're basically the CEO of a fortune 51 00:02:40,840 --> 00:02:43,080 Speaker 3: one thousand company that did a lot for their global 52 00:02:43,120 --> 00:02:44,639 Speaker 3: stature to be Like, if you learn how to be 53 00:02:44,680 --> 00:02:46,919 Speaker 3: a CEO at GE, you can run anything. 54 00:02:47,240 --> 00:02:49,560 Speaker 2: So Matt says it was the end of an era 55 00:02:49,760 --> 00:02:53,880 Speaker 2: when GE closed Crotonville and sold it, raising questions about 56 00:02:53,880 --> 00:02:56,919 Speaker 2: where the next generation of executives would come from and 57 00:02:57,320 --> 00:02:59,360 Speaker 2: what values they'd learn along the way. 58 00:03:00,120 --> 00:03:05,360 Speaker 3: Just three dozen companies accounted for preponderance of SMP fifteen 59 00:03:05,520 --> 00:03:08,880 Speaker 3: hundred CEOs over the years, so we knew these factories 60 00:03:09,240 --> 00:03:12,280 Speaker 3: always existed. What we didn't know, though, was how they 61 00:03:12,280 --> 00:03:15,120 Speaker 3: were changing. So I said, well, if GE's not the 62 00:03:15,160 --> 00:03:17,440 Speaker 3: pre eminent CEO factory anymore. 63 00:03:17,680 --> 00:03:18,080 Speaker 1: Who is. 64 00:03:21,639 --> 00:03:23,520 Speaker 2: I'm David Gera and this is the big take from 65 00:03:23,560 --> 00:03:27,160 Speaker 2: Bloomberg News today on the show, the next generation of 66 00:03:27,320 --> 00:03:32,079 Speaker 2: CEO factories, the new pipeline for executive talent where tomorrow's 67 00:03:32,120 --> 00:03:35,640 Speaker 2: CEOs are learning to lead and what that says about 68 00:03:35,680 --> 00:03:45,040 Speaker 2: global business. For years, GE's management training program was the 69 00:03:45,080 --> 00:03:49,320 Speaker 2: gold standard, according to Bloomberg's Matt Boyle, and other companies 70 00:03:49,520 --> 00:03:51,760 Speaker 2: sought to emulate GE's approach. 71 00:03:52,040 --> 00:03:55,920 Speaker 3: So that model was replicated, not perfectly, but look at 72 00:03:55,920 --> 00:03:58,600 Speaker 3: a Procter and Gamble, where if you were running Pampers 73 00:03:58,720 --> 00:04:00,720 Speaker 3: or something, you know, you were basic the CEO of 74 00:04:00,720 --> 00:04:05,160 Speaker 3: a global company, or even abroad at Semens, the German conglomerate, 75 00:04:05,200 --> 00:04:09,320 Speaker 3: Honeywell IBM. You know, this was replicated. Johnson and Johnson 76 00:04:09,440 --> 00:04:11,920 Speaker 3: is another one. So you have these sort of other 77 00:04:12,120 --> 00:04:15,760 Speaker 3: CEO factories coming up. But traditionally GE was the be 78 00:04:15,880 --> 00:04:18,240 Speaker 3: all end all. So if you went through Crotonville, whether 79 00:04:18,279 --> 00:04:20,560 Speaker 3: you only spent you know, a few days there or 80 00:04:20,680 --> 00:04:22,919 Speaker 3: a few months, you're really seen as sort of this 81 00:04:23,040 --> 00:04:24,159 Speaker 3: management material. 82 00:04:24,480 --> 00:04:26,320 Speaker 2: I know they sold it off in twenty twenty four, 83 00:04:26,400 --> 00:04:29,520 Speaker 2: so there's a delicious metaphor there. But what led to 84 00:04:30,320 --> 00:04:34,200 Speaker 2: the end of GE's reign as a factory for s 85 00:04:34,440 --> 00:04:34,760 Speaker 2: a lot. 86 00:04:34,640 --> 00:04:36,880 Speaker 3: Of it, you know, the end of GE as sort 87 00:04:36,920 --> 00:04:40,159 Speaker 3: of the paragon of American business. It's fall from grace 88 00:04:40,240 --> 00:04:44,000 Speaker 3: has been well chronicled by Bloomberg and by other outlets, certainly, 89 00:04:44,360 --> 00:04:47,080 Speaker 3: But once you get broken up, once the bloom is 90 00:04:47,120 --> 00:04:49,599 Speaker 3: off the rows in terms of the CEOs you are 91 00:04:49,640 --> 00:04:53,960 Speaker 3: producing and sending out into the world, not exactly distinguishing themselves. 92 00:04:54,000 --> 00:04:57,160 Speaker 3: As you've saw some of the people, especially more recently 93 00:04:57,240 --> 00:05:00,200 Speaker 3: the GE alums who have gone to run Boeing to 94 00:05:00,279 --> 00:05:04,120 Speaker 3: the ground basically yeah, barb no daily at home depot, 95 00:05:04,480 --> 00:05:07,240 Speaker 3: some of them not really setting the world on fire, 96 00:05:07,640 --> 00:05:11,000 Speaker 3: and so it sort of just ceased to be the 97 00:05:11,000 --> 00:05:15,120 Speaker 3: factory that it was still churning out very talented business executives, 98 00:05:15,120 --> 00:05:18,240 Speaker 3: of course, but once you got past that period in 99 00:05:18,279 --> 00:05:20,400 Speaker 3: the nineties and the aughts where it was, you know, 100 00:05:20,480 --> 00:05:23,120 Speaker 3: in a pedestal. But I think GE, since they were 101 00:05:23,120 --> 00:05:26,400 Speaker 3: so high up, had the furthest to fall. 102 00:05:26,520 --> 00:05:29,720 Speaker 2: And as that happened, as GE struggled to find its 103 00:05:29,760 --> 00:05:33,839 Speaker 2: footing and broke up, we saw big tech continue to rise. 104 00:05:34,520 --> 00:05:37,360 Speaker 2: But replicating the kind of leadership that sets those companies 105 00:05:37,360 --> 00:05:40,600 Speaker 2: apart isn't easy. We had Mark Kerman on the show, 106 00:05:40,640 --> 00:05:43,599 Speaker 2: our colleague at Bloombergoo covers Apple, and he was talking 107 00:05:43,640 --> 00:05:46,000 Speaker 2: about the uniqueness of that company that they've tried to 108 00:05:46,000 --> 00:05:48,800 Speaker 2: bring in outside executives, and it's failed time and time again. 109 00:05:48,839 --> 00:05:53,000 Speaker 2: There's something about Apple's culture that can't be replicated. It's 110 00:05:53,040 --> 00:05:55,120 Speaker 2: hard to get somebody to come in and recognize what 111 00:05:55,120 --> 00:05:57,440 Speaker 2: it is or how to operate in that world. How 112 00:05:57,480 --> 00:05:59,240 Speaker 2: much of an outlier is it as you see it? 113 00:05:59,240 --> 00:06:01,840 Speaker 2: Are there still major companies today in tech or other 114 00:06:01,920 --> 00:06:04,440 Speaker 2: sectors that are just kind of by virtue of the 115 00:06:04,480 --> 00:06:07,760 Speaker 2: way they're built or they've evolved, kind of resistant to 116 00:06:07,800 --> 00:06:09,800 Speaker 2: having somebody come in from the outside to run them. 117 00:06:09,880 --> 00:06:12,480 Speaker 3: Yeah, and I think what mark set is totally true. 118 00:06:12,560 --> 00:06:15,520 Speaker 3: Another supporting point there is how hard it is to 119 00:06:15,560 --> 00:06:18,799 Speaker 3: come out of those big tech firms and be successful 120 00:06:18,800 --> 00:06:20,120 Speaker 3: as a CEO elsewhere. 121 00:06:20,160 --> 00:06:21,840 Speaker 1: That was happening a lot now that was a big 122 00:06:21,880 --> 00:06:22,520 Speaker 1: head scratcher. 123 00:06:23,320 --> 00:06:27,000 Speaker 2: Matt worked with a data research group called Live Data Technologies. 124 00:06:27,440 --> 00:06:30,920 Speaker 3: I said, okay, well, can you just tell us where 125 00:06:30,960 --> 00:06:33,800 Speaker 3: every public company CEO over the past twenty years has 126 00:06:33,839 --> 00:06:36,000 Speaker 3: come from, or where have they ever worked, what's on 127 00:06:36,040 --> 00:06:38,880 Speaker 3: their resume? And so we generated this data set that 128 00:06:39,040 --> 00:06:43,960 Speaker 3: showed over three five year periods, how the factories to speak, 129 00:06:44,000 --> 00:06:47,360 Speaker 3: have risen and fallen. When so, when these rankings came 130 00:06:47,400 --> 00:06:49,240 Speaker 3: in and we're looking down the list of the top 131 00:06:49,279 --> 00:06:53,280 Speaker 3: CEO factories. First thing we said was, Where's Apple, Where's Meta, 132 00:06:53,400 --> 00:06:56,600 Speaker 3: Where's Amazon? Where are all these tech titans that are 133 00:06:56,680 --> 00:06:59,520 Speaker 3: these days the sort of paragons of business whatever they do, 134 00:06:59,560 --> 00:07:02,800 Speaker 3: whether it's their return to office policy or their approach 135 00:07:02,960 --> 00:07:06,040 Speaker 3: to try you know, companies model themselves on big tech 136 00:07:06,120 --> 00:07:08,479 Speaker 3: these days, and so we said, well, where are they? 137 00:07:08,520 --> 00:07:11,160 Speaker 3: And we realize there's a couple of reasons why you 138 00:07:11,240 --> 00:07:13,640 Speaker 3: don't see a lot of the big tech firms outside 139 00:07:13,640 --> 00:07:16,880 Speaker 3: of IBM. One reason is positive to us, is that 140 00:07:16,960 --> 00:07:19,800 Speaker 3: when you leave big tech, you often go into the 141 00:07:19,800 --> 00:07:22,120 Speaker 3: world of venture capital. You want to invest. You want 142 00:07:22,120 --> 00:07:24,280 Speaker 3: to invest in the next Meta or the next Google, 143 00:07:24,560 --> 00:07:26,000 Speaker 3: So that kind of takes them out of their running 144 00:07:26,040 --> 00:07:28,840 Speaker 3: to be a corporate CEO. Another reason is that they're 145 00:07:28,880 --> 00:07:32,080 Speaker 3: often very skilled and being what's called like a product 146 00:07:32,160 --> 00:07:35,920 Speaker 3: CEO rather than a general management CEO. So their skills 147 00:07:36,080 --> 00:07:42,080 Speaker 3: are really applicable to launching the next iPhone or launching 148 00:07:42,200 --> 00:07:44,880 Speaker 3: some sort of you know, software as a service type 149 00:07:44,880 --> 00:07:46,960 Speaker 3: of thing. But they're very concerned to tech, and you 150 00:07:46,960 --> 00:07:49,000 Speaker 3: can't just take them out of tech and then send 151 00:07:49,080 --> 00:07:50,880 Speaker 3: them to some other company and be like, okay, now 152 00:07:50,920 --> 00:07:54,320 Speaker 3: go sell refrigerators, so you don't have that GE model 153 00:07:54,400 --> 00:07:56,760 Speaker 3: that you used to. And the third reason is they're 154 00:07:56,800 --> 00:07:58,760 Speaker 3: just young. They don't have enough of a track record. 155 00:07:58,800 --> 00:08:01,920 Speaker 3: Metta only went public twenty twelve, which is just like 156 00:08:02,040 --> 00:08:04,920 Speaker 3: halfway through the time period we were looking at here. 157 00:08:05,080 --> 00:08:08,280 Speaker 3: So there's just not enough executives that they've hired to 158 00:08:08,520 --> 00:08:11,920 Speaker 3: go off into the wilderness and become CEOs elsewhere. So 159 00:08:12,000 --> 00:08:15,360 Speaker 3: that might change, we might see some more CEOs in 160 00:08:15,400 --> 00:08:19,240 Speaker 3: corporate America or the corporate world at large who have 161 00:08:19,400 --> 00:08:22,360 Speaker 3: that big tech pedigree, but for now not as many. 162 00:08:22,640 --> 00:08:26,560 Speaker 2: So there was the underrepresentation of big tech. And another 163 00:08:26,640 --> 00:08:28,720 Speaker 2: trend emerged in the data. 164 00:08:28,280 --> 00:08:30,320 Speaker 3: And it just hit me over the head immediately as 165 00:08:30,320 --> 00:08:33,400 Speaker 3: soon as I saw the chronological breakdown of how the 166 00:08:33,440 --> 00:08:37,560 Speaker 3: professional services firms and the consulting firms were just slowly, 167 00:08:37,640 --> 00:08:40,360 Speaker 3: steadily and then all of a sudden, you know, occupying 168 00:08:40,400 --> 00:08:43,400 Speaker 3: nearly the entire top ten. In our top ten, we 169 00:08:43,440 --> 00:08:48,679 Speaker 3: have McKinsey, Accenture, the A Deco Group, Ey, Deloitte, and PwC. 170 00:08:49,200 --> 00:08:51,720 Speaker 3: And so you start to think, well, where's where's IBM, 171 00:08:51,920 --> 00:08:54,880 Speaker 3: You know, where's GE. They're still there, but much further down, 172 00:08:54,920 --> 00:08:57,400 Speaker 3: so they've been knocked from their perch, and I think 173 00:08:57,400 --> 00:08:59,240 Speaker 3: this is the first sort of story that really takes 174 00:08:59,240 --> 00:09:02,160 Speaker 3: a look at here is the case and here's why. 175 00:09:05,120 --> 00:09:09,120 Speaker 2: So how did large consulting firms become the new CEO pipeline? 176 00:09:09,400 --> 00:09:10,840 Speaker 2: And how is that changing business? 177 00:09:11,320 --> 00:09:22,800 Speaker 4: That's next pop quiz. 178 00:09:22,880 --> 00:09:26,560 Speaker 2: What do Sundar Pichai, Sheryl Sandberg and James Gorman have 179 00:09:26,640 --> 00:09:30,880 Speaker 2: in common? They all used to work at McKenzie. My 180 00:09:30,920 --> 00:09:33,600 Speaker 2: colleague Matt Boyle has been reporting on this trend that 181 00:09:33,679 --> 00:09:37,680 Speaker 2: the new pipeline for executive talent runs from consulting firms 182 00:09:37,800 --> 00:09:40,640 Speaker 2: to C suites and he's been thinking a lot about 183 00:09:40,679 --> 00:09:44,959 Speaker 2: what's required of a modern day executive. So it's twenty 184 00:09:44,960 --> 00:09:45,520 Speaker 2: twenty five. 185 00:09:46,440 --> 00:09:46,959 Speaker 1: What are the. 186 00:09:46,960 --> 00:09:51,120 Speaker 2: Qualities or assets in a good CEO today? I imagine 187 00:09:51,240 --> 00:09:53,480 Speaker 2: that definition has changed in recent day. 188 00:09:53,960 --> 00:09:54,520 Speaker 1: It really has. 189 00:09:54,559 --> 00:09:56,960 Speaker 3: I mean, he speaks to the evolution of the role 190 00:09:57,040 --> 00:10:01,679 Speaker 3: of the CEO. One big thing I came acro is adaptability. 191 00:10:01,800 --> 00:10:05,199 Speaker 3: You have to be able to adapt quickly to an 192 00:10:05,240 --> 00:10:07,680 Speaker 3: ever changing role. Then if you talk about ever changing 193 00:10:07,720 --> 00:10:10,360 Speaker 3: world today is a perfect example in terms of the 194 00:10:10,360 --> 00:10:14,040 Speaker 3: word uncertainty being used what ten million times over the 195 00:10:14,080 --> 00:10:18,440 Speaker 3: past three months on earnings calls and the estimate, yes, exact, 196 00:10:18,640 --> 00:10:21,960 Speaker 3: probably it's low balling it. But you need that ability 197 00:10:21,960 --> 00:10:24,440 Speaker 3: to anticipate. And if you can't anticipate because you don't 198 00:10:24,480 --> 00:10:26,400 Speaker 3: know what, let's say, President Trump's going to do with 199 00:10:26,440 --> 00:10:28,600 Speaker 3: tariffs next week, you have to at least be able 200 00:10:28,600 --> 00:10:33,040 Speaker 3: to adapt quickly. And that's where consultants are pretty strong. 201 00:10:33,080 --> 00:10:35,840 Speaker 3: Their whole job is to go in blind to a company, 202 00:10:36,120 --> 00:10:39,120 Speaker 3: assess it very quickly, and then figure out what to do. 203 00:10:39,400 --> 00:10:42,640 Speaker 3: So adaptability is one another one is just a sort 204 00:10:42,679 --> 00:10:45,360 Speaker 3: of a facility with digits and data, let's call it, 205 00:10:45,400 --> 00:10:48,360 Speaker 3: you know, a tech savviness. They also have a good 206 00:10:48,440 --> 00:10:50,920 Speaker 3: understanding of corporate cultures because again they have to come 207 00:10:50,960 --> 00:10:54,240 Speaker 3: in fly in parachute, in blind, get to read on 208 00:10:54,240 --> 00:10:57,120 Speaker 3: a corporate culture quickly and sort of suss that, okay, 209 00:10:57,120 --> 00:10:59,600 Speaker 3: what's going to be possible, you know, within the scope 210 00:10:59,679 --> 00:11:02,880 Speaker 3: of of this engagement. And they are usually pretty good 211 00:11:02,880 --> 00:11:05,440 Speaker 3: at selling themselves. These are consultants, you know, that's sort 212 00:11:05,440 --> 00:11:08,040 Speaker 3: of if you're not good at selling yourself and your vision, 213 00:11:08,240 --> 00:11:10,319 Speaker 3: you're not going to last very long at McKinsey, a 214 00:11:10,400 --> 00:11:13,360 Speaker 3: Bane or a BCG. And so that is a huge 215 00:11:13,400 --> 00:11:15,200 Speaker 3: part of these days of a CEO's job. 216 00:11:15,440 --> 00:11:18,560 Speaker 2: So this new pipeline runs from the accentures and the 217 00:11:18,559 --> 00:11:23,160 Speaker 2: PWC's and the McKinsey's of the world to these C suites. 218 00:11:23,640 --> 00:11:25,800 Speaker 2: Let me pose to you an age old question, and 219 00:11:25,800 --> 00:11:29,040 Speaker 2: that is what do consultants actually do? 220 00:11:29,400 --> 00:11:32,599 Speaker 1: Well? What are they so fast? Side? That is the 221 00:11:32,960 --> 00:11:34,199 Speaker 1: age old question. 222 00:11:34,360 --> 00:11:37,760 Speaker 3: Certainly, what consultants do, I think is a little bit 223 00:11:37,800 --> 00:11:41,200 Speaker 3: different than what a lot of Americans think consultants do. 224 00:11:41,280 --> 00:11:43,920 Speaker 3: They might just think of a consultant as you know, 225 00:11:44,280 --> 00:11:47,640 Speaker 3: someone who jets in first class, comes to the company 226 00:11:48,240 --> 00:11:51,920 Speaker 3: and has a quick look around and then delivers, you know, 227 00:11:52,040 --> 00:11:54,560 Speaker 3: a presentation. This is what you should do, you know, 228 00:11:54,640 --> 00:11:56,680 Speaker 3: lay off twenty percent of your people, you know, go 229 00:11:56,720 --> 00:11:59,400 Speaker 3: into China, you know, launch a new product, and then 230 00:11:59,400 --> 00:12:03,200 Speaker 3: they get skidattle, they're gone. While that is one element 231 00:12:03,280 --> 00:12:06,920 Speaker 3: of what some consultants do usually more on this strategy side, 232 00:12:07,120 --> 00:12:09,240 Speaker 3: what I learned in the course of reporting this story 233 00:12:09,720 --> 00:12:13,360 Speaker 3: is that that is not what most consultants are doing today. 234 00:12:13,760 --> 00:12:16,840 Speaker 3: The big difference being that they are often sticking around 235 00:12:16,920 --> 00:12:20,440 Speaker 3: and making sure that you know, whatever they recommend, whether 236 00:12:20,480 --> 00:12:23,400 Speaker 3: it's a new technology, a new way of management, they 237 00:12:23,440 --> 00:12:25,760 Speaker 3: stick and make sure it's actually working. So they're kind 238 00:12:25,800 --> 00:12:29,000 Speaker 3: of they're getting their hands dirty in a way that 239 00:12:29,040 --> 00:12:32,239 Speaker 3: I don't think a lot of people recognize that consultants 240 00:12:32,280 --> 00:12:32,800 Speaker 3: normally do. 241 00:12:33,280 --> 00:12:36,240 Speaker 2: We were talking about the kind of training apparatus that 242 00:12:36,280 --> 00:12:39,280 Speaker 2: these old industrial companies built up, if that was a 243 00:12:39,320 --> 00:12:43,040 Speaker 2: corporate campus or just a program, a training program. Do 244 00:12:43,080 --> 00:12:47,120 Speaker 2: you see the same thing playing out at these consulting firms. 245 00:12:47,120 --> 00:12:50,560 Speaker 2: Do They have very rigorous training programs of their own 246 00:12:50,679 --> 00:12:53,760 Speaker 2: with the goal of, yes, building their ranks, but getting 247 00:12:53,920 --> 00:12:57,319 Speaker 2: exactly to the head of HRT accentsure. They spend as 248 00:12:57,400 --> 00:13:01,200 Speaker 2: much on training what they call learning and development, as 249 00:13:01,280 --> 00:13:04,400 Speaker 2: GE used to spend on all of its Crotonville apparats. 250 00:13:04,840 --> 00:13:09,360 Speaker 2: That said accentre has hundreds of thousands of employees, so 251 00:13:09,840 --> 00:13:12,320 Speaker 2: there is a lot of training that needs to be done. 252 00:13:12,400 --> 00:13:14,240 Speaker 2: But I've talked to other firms as well, and they're 253 00:13:14,240 --> 00:13:17,160 Speaker 2: just getting a lot more rigorous about creating putting some 254 00:13:17,160 --> 00:13:19,640 Speaker 2: structure behind this, which is a good thing. 255 00:13:19,720 --> 00:13:20,120 Speaker 1: Certainly. 256 00:13:20,120 --> 00:13:21,800 Speaker 3: Now we all laugh and joke about, oh I got 257 00:13:21,840 --> 00:13:24,320 Speaker 3: to sit through with stupid you webinar, or there's some 258 00:13:24,760 --> 00:13:27,200 Speaker 3: course from hr I have to take, But these companies 259 00:13:27,240 --> 00:13:30,080 Speaker 3: really take it super seriously and they know if you're 260 00:13:30,080 --> 00:13:33,040 Speaker 3: actually paying attention in some of this training. And granted 261 00:13:33,080 --> 00:13:35,320 Speaker 3: it shouldn't all just be boring webinars. It should be 262 00:13:35,320 --> 00:13:37,440 Speaker 3: one on one learning with senior leaders, you know, in 263 00:13:37,440 --> 00:13:39,760 Speaker 3: person stuff, stuff that you're not just going to do 264 00:13:39,880 --> 00:13:42,679 Speaker 3: over a zoom call. But the point is, whether it's 265 00:13:42,720 --> 00:13:46,560 Speaker 3: Accenture or the Swiss Staffing firm a deco group, you 266 00:13:46,600 --> 00:13:49,560 Speaker 3: talk to the heads of HR there, you really learn 267 00:13:49,600 --> 00:13:51,480 Speaker 3: that they really have realized, wait a minute, we've got 268 00:13:51,520 --> 00:13:54,520 Speaker 3: to put some more structure and rigor into this training. 269 00:13:54,559 --> 00:13:56,600 Speaker 3: So it's not just something you tick a box and 270 00:13:56,679 --> 00:13:59,280 Speaker 3: do on a random Friday in the summer. It's something 271 00:13:59,280 --> 00:14:01,040 Speaker 3: that you want to actual we spend time on. You know, 272 00:14:01,080 --> 00:14:03,640 Speaker 3: it's going to make you a better employee and then 273 00:14:03,679 --> 00:14:07,040 Speaker 3: a more employable executive hopefully down the line. 274 00:14:07,320 --> 00:14:09,760 Speaker 2: Is the most common path to go from being a 275 00:14:09,840 --> 00:14:12,439 Speaker 2: partner at one of these firms directly to becoming a 276 00:14:12,520 --> 00:14:15,080 Speaker 2: CEO or their other stops along the way to them. 277 00:14:15,440 --> 00:14:18,320 Speaker 3: It should never be a direct path actually from partner 278 00:14:18,480 --> 00:14:21,640 Speaker 3: at Accenture right into the C suite. That is kind 279 00:14:21,640 --> 00:14:24,920 Speaker 3: of actually a recipe for disaster. Some of the advisors 280 00:14:24,920 --> 00:14:28,320 Speaker 3: I talked to for this story. Had really said you 281 00:14:28,520 --> 00:14:31,960 Speaker 3: have to allow them to make all the predictable mistakes 282 00:14:32,520 --> 00:14:35,520 Speaker 3: in one or two let's say lower level corporate jobs. 283 00:14:35,880 --> 00:14:38,800 Speaker 3: So usually if you're coming out of consulting and you 284 00:14:38,800 --> 00:14:41,320 Speaker 3: get a corporate job, you should maybe work as an 285 00:14:41,360 --> 00:14:45,040 Speaker 3: operations chief or a strategy chief is a very common one. 286 00:14:45,280 --> 00:14:48,760 Speaker 3: Walmart and other companies have hired being consultants as heads 287 00:14:48,760 --> 00:14:50,720 Speaker 3: of strategy, so then you get the feel for the 288 00:14:50,760 --> 00:14:53,720 Speaker 3: company and the culture and you're really immersed in it 289 00:14:53,800 --> 00:14:55,640 Speaker 3: without having to be the sort of the be all, 290 00:14:55,760 --> 00:14:59,480 Speaker 3: end all decision maker before you're elevated right into the 291 00:14:59,520 --> 00:15:00,560 Speaker 3: CEO position. 292 00:15:01,280 --> 00:15:03,200 Speaker 2: I want to ask you about times when this has 293 00:15:03,240 --> 00:15:06,480 Speaker 2: worked out well, drawing from the world of consulting, putting 294 00:15:06,520 --> 00:15:08,680 Speaker 2: folks from there into the c suite, and times when 295 00:15:08,720 --> 00:15:09,200 Speaker 2: it hasn't. 296 00:15:09,440 --> 00:15:11,400 Speaker 3: Yeah, I mean a good example. And this is a 297 00:15:11,440 --> 00:15:14,240 Speaker 3: CEO I talked to as a CEO of Ranstad. Now 298 00:15:14,240 --> 00:15:16,480 Speaker 3: this is company not a lot of Americans know about 299 00:15:16,720 --> 00:15:19,880 Speaker 3: staffing company. Staffing company. They do a lot of you know, 300 00:15:19,960 --> 00:15:23,360 Speaker 3: staffing solutions. If you've got a workforce issue, you'll call 301 00:15:23,440 --> 00:15:26,640 Speaker 3: him in to fix it. They also own the job 302 00:15:26,640 --> 00:15:29,480 Speaker 3: site Monster dot com. So some of us might know 303 00:15:29,560 --> 00:15:30,080 Speaker 3: them that way. 304 00:15:30,280 --> 00:15:32,840 Speaker 1: So anyway, their CEO is this Dutch guy. 305 00:15:33,000 --> 00:15:36,720 Speaker 3: They're based in the Netherlands, and he had run two 306 00:15:37,080 --> 00:15:40,600 Speaker 3: massive units of Accenture. He'd actually been there so long 307 00:15:40,680 --> 00:15:42,440 Speaker 3: he was there when it used to be called Anderson 308 00:15:42,640 --> 00:15:43,440 Speaker 3: Consulting in. 309 00:15:43,400 --> 00:15:44,120 Speaker 1: The old days. 310 00:15:44,320 --> 00:15:46,880 Speaker 3: But the point is, having talked to him, he got 311 00:15:46,920 --> 00:15:49,720 Speaker 3: to know just about every industry under the sun, from 312 00:15:49,800 --> 00:15:53,480 Speaker 3: retails to autos to utilities. So he had the industry 313 00:15:53,560 --> 00:15:56,960 Speaker 3: knowledge of just about any industry, which is very helpful 314 00:15:57,000 --> 00:16:00,160 Speaker 3: now that his clients are across industries. But he also 315 00:16:00,280 --> 00:16:04,520 Speaker 3: was very good at deploying experts to fix whatever problems 316 00:16:04,760 --> 00:16:08,160 Speaker 3: issues their clients were having in his years and Axcenture. 317 00:16:08,520 --> 00:16:10,840 Speaker 1: And he's also just like he's a personable guy too. 318 00:16:10,880 --> 00:16:13,640 Speaker 3: He's not this robotic consultant who just speaks like he's 319 00:16:13,680 --> 00:16:16,640 Speaker 3: a PowerPoint in human form, which I think goes a 320 00:16:16,640 --> 00:16:19,840 Speaker 3: long way as well. So when he missed out on 321 00:16:20,000 --> 00:16:23,640 Speaker 3: the job of running Accenture, he was on everyone short 322 00:16:23,680 --> 00:16:26,280 Speaker 3: list to get a global CEO job and he took 323 00:16:26,320 --> 00:16:29,400 Speaker 3: the job at Ranstad. So he's a great example sort 324 00:16:29,440 --> 00:16:33,720 Speaker 3: of a consultant made good. Now, how about a couple 325 00:16:33,720 --> 00:16:36,880 Speaker 3: examples when this hasn't worked out. Yes, the recent poster 326 00:16:37,000 --> 00:16:40,080 Speaker 3: child for a consultant who did not turn out well 327 00:16:40,120 --> 00:16:43,040 Speaker 3: in the c suite was John Donahoe at Nike, a 328 00:16:43,040 --> 00:16:47,360 Speaker 3: longtime Bain and Co. Consultant, did very well there. He 329 00:16:47,400 --> 00:16:50,840 Speaker 3: also had some other corporate roles before he was at eBay, 330 00:16:51,160 --> 00:16:54,320 Speaker 3: did extremely well there. So he was following like the 331 00:16:54,400 --> 00:16:57,520 Speaker 3: proper path, you know, a couple of corporate roles in 332 00:16:57,640 --> 00:17:00,600 Speaker 3: c suite seasoning. But then he goes Intoni, which you 333 00:17:00,600 --> 00:17:03,840 Speaker 3: know is a challenging culture, a very challenging culture to 334 00:17:03,880 --> 00:17:07,480 Speaker 3: come into from the outside, and it was a flame out. 335 00:17:07,760 --> 00:17:10,119 Speaker 3: Now it wasn't just because he was a consultant that 336 00:17:10,200 --> 00:17:12,360 Speaker 3: it didn't work, but it's sure as heck didn't help 337 00:17:12,440 --> 00:17:14,920 Speaker 3: that he was trying to bring some of his bin 338 00:17:15,080 --> 00:17:18,840 Speaker 3: teachings into a culture and sometimes these corporate cultures will 339 00:17:18,880 --> 00:17:21,000 Speaker 3: just reject it out a hand and say, no, that's 340 00:17:21,040 --> 00:17:23,280 Speaker 3: not how it's done here, this is not you know, 341 00:17:23,280 --> 00:17:26,080 Speaker 3: this is not the Nike way. And you know, financial 342 00:17:26,119 --> 00:17:28,440 Speaker 3: performance COVID on top of it. A lot of things 343 00:17:28,480 --> 00:17:32,040 Speaker 3: contributed to his downfall. But another one is the former 344 00:17:32,080 --> 00:17:35,639 Speaker 3: CEO of Starbucks, who's Mackenzie Alum. There you have a 345 00:17:35,680 --> 00:17:38,800 Speaker 3: case of a founder, Howard Schultz, who just never. 346 00:17:38,640 --> 00:17:39,640 Speaker 1: Really seems to go away. 347 00:17:39,880 --> 00:17:44,400 Speaker 3: Yes, and maybe you know, he didn't have as much 348 00:17:44,400 --> 00:17:46,840 Speaker 3: of a runway as he needed to do some of 349 00:17:46,880 --> 00:17:49,240 Speaker 3: the things to turn Starbucks around, but there was not 350 00:17:49,320 --> 00:17:52,879 Speaker 3: much patience given to him, and so he was out after. 351 00:17:52,800 --> 00:17:53,840 Speaker 1: Just over a year. 352 00:17:54,640 --> 00:17:57,920 Speaker 2: I want to end with a philosophical question, and that is, 353 00:17:58,520 --> 00:18:00,879 Speaker 2: what do we gain or lose by hoving a pipeline 354 00:18:01,240 --> 00:18:03,879 Speaker 2: like this, having this kind of mold of who the 355 00:18:03,920 --> 00:18:06,040 Speaker 2: ideal CEO is? What does it mean that we're kind 356 00:18:06,040 --> 00:18:08,879 Speaker 2: of restricting I don't know, a diversity of opinion or 357 00:18:08,880 --> 00:18:11,800 Speaker 2: perspective on what that job entails or could entail. 358 00:18:11,960 --> 00:18:13,720 Speaker 3: Yeah, I think it's a really good point, and we 359 00:18:13,800 --> 00:18:17,080 Speaker 3: are probably constraining and constricting ourselves a little bit to 360 00:18:17,119 --> 00:18:19,680 Speaker 3: say that, Okay, well now we don't need to hire 361 00:18:19,840 --> 00:18:21,800 Speaker 3: and the CEO doesn't have to be from ge but 362 00:18:21,960 --> 00:18:24,720 Speaker 3: he now has to be from Accenture. So okay, you're 363 00:18:24,760 --> 00:18:27,120 Speaker 3: not getting someone from this box. You're getting someone from 364 00:18:27,160 --> 00:18:30,560 Speaker 3: a different box. Whereas, especially these days in the world 365 00:18:30,640 --> 00:18:33,520 Speaker 3: of business, we really need to be hiring people who 366 00:18:33,560 --> 00:18:35,840 Speaker 3: are not in a box at all, or at least 367 00:18:35,880 --> 00:18:38,240 Speaker 3: willing to look up outside the box and have a 368 00:18:38,240 --> 00:18:42,480 Speaker 3: peek around. But I think it's the job of corporations, though, 369 00:18:42,960 --> 00:18:45,320 Speaker 3: when they are figuring out who's going to be leading 370 00:18:45,400 --> 00:18:48,919 Speaker 3: us into this wilderness that we're into right now, to 371 00:18:48,960 --> 00:18:52,199 Speaker 3: be hopefully looking across the board at not just the 372 00:18:52,240 --> 00:18:55,399 Speaker 3: people from let's say Central Casting, whether Central Casting is 373 00:18:55,440 --> 00:18:59,000 Speaker 3: ge or now it's Accenture and McKinsey and saying or 374 00:18:59,040 --> 00:19:02,680 Speaker 3: at least filling up the senior management roles with enough 375 00:19:02,720 --> 00:19:06,359 Speaker 3: people who are willing to challenge orthodoxy, have a sense 376 00:19:06,400 --> 00:19:08,160 Speaker 3: of you know, is this really the way we should 377 00:19:08,160 --> 00:19:10,720 Speaker 3: be doing things guys? And I think there's a lot 378 00:19:10,760 --> 00:19:13,480 Speaker 3: to be said for maybe taking a chance at least 379 00:19:13,760 --> 00:19:17,439 Speaker 3: on someone who's in a non traditional type and you know, 380 00:19:17,840 --> 00:19:21,800 Speaker 3: roll the dice there and see what happens. 381 00:19:25,200 --> 00:19:26,879 Speaker 2: This is the Big Take from Bloomberg News. 382 00:19:26,960 --> 00:19:27,680 Speaker 1: I'm David Gerra. 383 00:19:28,080 --> 00:19:30,920 Speaker 2: To get more from The Big Take and unlimited access 384 00:19:30,920 --> 00:19:34,360 Speaker 2: to all of Bloomberg dot com, subscribe today at Bloomberg 385 00:19:34,400 --> 00:19:38,320 Speaker 2: dot com slash podcast offer. If you like this episode, 386 00:19:38,440 --> 00:19:40,520 Speaker 2: make sure to follow and review The Big Take wherever 387 00:19:40,560 --> 00:19:43,080 Speaker 2: you listen to podcasts. It helps people find the show. 388 00:19:43,640 --> 00:19:45,680 Speaker 2: Thanks for listening. We'll be back tomorrow.