:00:00. > :00:09.RB back at nine with the latest news.
:00:10. > :00:14.Now on BBC News, Talking Business with Linda Yueh.
:00:15. > :00:19.Welcome to Talking Business with me, Linda Yueh.
:00:20. > :00:24.Whether they call it a CEO, or another title, these bosses are the
:00:25. > :00:25.ones who try to keep their firms and themselves ahead of the competition.
:00:26. > :00:46.So, what does it take to be the boss?
:00:47. > :00:50.Talking to us today about being the boss are three business leaders.
:00:51. > :00:55.Dominic Barton, managing director at consultancy McKinsey and Co.
:00:56. > :00:58.In three decades, he has risen to the top of the world's most
:00:59. > :01:04.Martin Gilbert, Chief Executive at Aberdeen Asset Management,
:01:05. > :01:10.one of the fastest`growing firms in the world who manages more than
:01:11. > :01:26.And John Rice, chairman and CEO of General Electric,
:01:27. > :01:29.he is charged with growing the global business of one of
:01:30. > :01:33.Welcome to all of you. And Dominic, I'm going to start with you.
:01:34. > :01:37.The big question, what does it take to make it all the way to the top
:01:38. > :01:42.I am not sure, which is not the answer you may want to hear.
:01:43. > :01:45.But I think people have to trust you, people have to believe that
:01:46. > :01:48.you take risk, that you are a builder,
:01:49. > :01:55.That you want to make a difference and you have some sense of purpose.
:01:56. > :01:59.In our firm, you are elected, not appointed, so it is a nonpolitical
:02:00. > :02:05.No`one knows why... But that is my sense of doing it.
:02:06. > :02:08.You want to take risks to build something.
:02:09. > :02:20.OK, Martin, you founded your own firm.
:02:21. > :02:23.So that puts you at the very top. But what keeps you there?
:02:24. > :02:31.People now ask me if I'm going to retire and I made this terrible
:02:32. > :02:34.blunder by saying that I would retire as soon as Alex Ferguson
:02:35. > :02:41.And he retired a week later! The Manchester United manager.
:02:42. > :02:47.Now I have found a CEO in the US who is 92, he is my role model.
:02:48. > :02:51.It is such good fun. Why would you retire?
:02:52. > :02:58.It is your hobby when you have grown it to the size we have.
:02:59. > :03:16.John, for an organisation like GE, one of the top ten biggest companies
:03:17. > :03:24.in the world comic what does it take to make it
:03:25. > :03:30.To the point that Dominic made, it is not always clear, it is
:03:31. > :03:34.You work hard, you do what you say you were going to do.
:03:35. > :03:37.And there is a certain amount of luck.
:03:38. > :03:40.You have to be at the right spot at the right time.
:03:41. > :03:43.But I think the point about being the boss is to recognise
:03:44. > :03:47.It is about influence, it is not about telling people what to do.
:03:48. > :03:50.It is about helping teams figure out better ways to do things
:03:51. > :03:51.and then supporting their efforts to do that.
:03:52. > :03:54.It is never really telling people what to do.
:03:55. > :03:56.And I think that is something which from
:03:57. > :04:02.I think the bit about luck is very important.
:04:03. > :04:10.I was lucky enough to be lucky enough to be in a law firm when we
:04:11. > :04:15.Aberdeen asset management and was one of the three founders.
:04:16. > :04:28.The other thing about luck, I would say that we did some work
:04:29. > :04:32.in an organisation where cohorts of people ` we saw some move faster
:04:33. > :04:38.And the strange thing is that the more successful cohorts have more
:04:39. > :04:56.It is a strange thing to say that, but that is the case.
:04:57. > :05:00.It is better to try and fail the never to try at all.
:05:01. > :05:04.If you don't try, the business becomes moribund
:05:05. > :05:09.If you take more bets, you will get more hits.
:05:10. > :05:11.That takes leadership, that you have an organisation where
:05:12. > :05:17.So, John, what kind of leadership traits would you identify
:05:18. > :05:29.The teams in GE that we support want to know that we are in their corner.
:05:30. > :05:33.review, you are not just there to turn pages
:05:34. > :05:40.and be briefed, you are there to help determine where they need help
:05:41. > :05:46.And as soon as they figure that out, it becomes
:05:47. > :05:50.much easier to lead because they come and they are open about
:05:51. > :05:57.And you can work together to figure that out because in the end,
:05:58. > :06:03.It is never about one or two people or a handful of people at the top
:06:04. > :06:06.of the organisation making all the decisions.
:06:07. > :06:09.In this world, it is going completely the other
:06:10. > :06:16.The people at the top make a few key strategic
:06:17. > :06:18.decisions but they rely on people around the world to make decisions
:06:19. > :06:26.I believe that this idea that there was one person on a white hat
:06:27. > :06:29.on a white horse saying go this way is not the case.
:06:30. > :06:32.In my organisation if I said I was the boss,
:06:33. > :06:39.In my view, there are at least 1,400 leaders.
:06:40. > :06:45.I think the thing that I think is critical
:06:46. > :06:52.One of my favourite articles I've ever read, just the title,
:06:53. > :06:56.it was by Alison Richards, Vice`Chancellor of Cambridge
:06:57. > :07:01.University and it is called high ambition.
:07:02. > :07:05.And I think it is getting an organisation to aspire.
:07:06. > :07:15.And there are times when I think when you have to absorb
:07:16. > :07:20.things, there may be other people driving it and other
:07:21. > :07:26.But when things don't go so well, you had better be prepared to absorb
:07:27. > :07:32.Speaking of running things, I can't tell but notice I am
:07:33. > :07:38.When do you think that is going to change?
:07:39. > :07:41.When will we see some women in charge, Martin?
:07:42. > :07:46.I think on the boards now we are seeing many more.
:07:47. > :07:56.But the real issue is the lack of women coming through in management.
:07:57. > :08:00.In accountancy, there is a great example where more than half
:08:01. > :08:12.of the intake of women and yet less than 10% of finance directors are
:08:13. > :08:14.women. So there is something going wrong on the way up.
:08:15. > :08:16.And that really needs to be corrected because
:08:17. > :08:20.when that is corrected, there will be this surplus of people
:08:21. > :08:32.And it is management we need, not women on boards.
:08:33. > :08:36.I just want to say quickly, there needs to beway more,
:08:37. > :08:45.A GE exec in the past. She talks about line roles.
:08:46. > :08:54.She said you have to run the plants, you have to be there.
:08:55. > :08:56.What about when the plant blows up, you
:08:57. > :09:04.That mindset, you need to look at that.
:09:05. > :09:17.Fund management is a great occupation.
:09:18. > :09:19.More than half our grads coming in are women.
:09:20. > :09:23.They make better fund managers, you will be pleased to know.
:09:24. > :09:25.I just want to squeeze in a quick one, which is,
:09:26. > :09:30.I am going to do this going round. John?
:09:31. > :09:35.I really worry about our global footprint.
:09:36. > :09:42.We operate in 60 countries, 60 countries we sell more than $100
:09:43. > :09:47.So we have a lot of things to worry about everywhere in the world.
:09:48. > :09:51.Everywhere we are has a jobs programme, every country
:09:52. > :10:00.expects us to be an investor with a conscience and we have got to figure
:10:01. > :10:13.that out in terms of where we put people, the global talent, where
:10:14. > :10:15.do we put our manufacturing facilities, where do we put our
:10:16. > :10:19.And the world is changing at such a great pace.
:10:20. > :10:22.What we do in headquarters is totally different today and will be
:10:23. > :10:31.You can feel when things are going well, you want to be relevant.
:10:32. > :10:36.We want to be pre`eminent and respected.
:10:37. > :10:40.Do you exercise before you go to bed?
:10:41. > :10:47.But this world is moving so how do you keep making sure that
:10:48. > :10:50.we are on the very forefront of what we are doing.
:10:51. > :10:55.You can't tell until you are not there.
:10:56. > :10:59.That is why you have to keep the pressure up on that side.
:11:00. > :11:05.You have to be anxious in a constructive way.
:11:06. > :11:10.Losing any of our top fund managers because all we have are the best
:11:11. > :11:15.And someone doing something stupid and not telling us
:11:16. > :11:24.If they don't, it just compounds and gets bigger.
:11:25. > :11:27.The other thing for everybody is speed.
:11:28. > :11:32.It is not even enough to know that you have the right strategy,
:11:33. > :11:35.it is are you going to go fast enough?
:11:36. > :11:39.And you can't go so fast that you break the wrong things.
:11:40. > :11:47.But speed today is a dimension that everybody has to have.
:11:48. > :11:50.Global footprint of what is happening around the world,
:11:51. > :11:56.can you give us a sense as to where you see some of the challenges of
:11:57. > :12:03.You are stepping back from financial services at GE and talk through what
:12:04. > :12:10.these challenges are and why you changed your strategy?
:12:11. > :12:16.Well, we are still going to be in financial services but
:12:17. > :12:21.But still when you look at the size of our financial
:12:22. > :12:25.they will be substantial but more concentrated and more focused.
:12:26. > :12:29.But everything else we have done is to organise a portfolio
:12:30. > :12:35.Because we see a world where 1.5`2 billion
:12:36. > :12:40.people lack health care and clean water and electricity.
:12:41. > :12:47.Pushed by social media where people compare
:12:48. > :12:50.and they don't like the comparison. They go to their government and say,
:12:51. > :12:55.If the government can't, there is a change.
:12:56. > :12:58.We saw that in the Arab Spring, we are seeing it
:12:59. > :13:05.So for us, the demand for infrastructure today, even with the
:13:06. > :13:09.macro GDP rates down a little bit in the last year, is still strong.
:13:10. > :13:17.The question is financing ` the financing that
:13:18. > :13:19.used to come from Europe precrisis now doesn't come from there.
:13:20. > :13:23.There are still pools of capital that want to be connected
:13:24. > :13:31.So one of the big challenges we have is facilitating that.
:13:32. > :13:34.Martin, this is really a big change in the financial sector
:13:35. > :13:46.Do you think that changes you have seen are now making it less
:13:47. > :13:48.likely there will be another crisis in the future?
:13:49. > :13:58.I think it is more or less likely, if that is the correct discretion,
:13:59. > :14:07.I think that in my judgement, repealing Glass Steagall was
:14:08. > :14:10.a big mistake because it allowed domestic banks to enter investment
:14:11. > :14:15.I'm totally in favour of separating investment banking
:14:16. > :14:23.And to a certain extent, that has happened by regulation.
:14:24. > :14:27.We live with regulation. We don't complain about it.
:14:28. > :14:33.It raises the barriers to entry for fund management.
:14:34. > :14:42.It is almost possible to set up a new bank now.
:14:43. > :14:46.John mentioned there infrastructure emerging markets.
:14:47. > :14:50.A bit more regulation in the West, maybe things in little bit slower.
:14:51. > :14:52.Dominic, what are you advising clients
:14:53. > :14:58.Are emerging markets the place to really push for expansion?
:14:59. > :15:01.Some people might say it looks risky?
:15:02. > :15:08.One of the things we are looking at...
:15:09. > :15:15.The economic weight and power of the world is shifting dramatically
:15:16. > :15:24.We will have 2.2 billion new middle`class consumers
:15:25. > :15:29.That is a thousand times larger than the industrial revolution
:15:30. > :15:37.It'll drive a lot of the infrastructure requirement.
:15:38. > :15:43.$57 trillion of infrastructure and these are very big opportunities.
:15:44. > :15:47.Martin, you stayed away from
:15:48. > :15:51.China in terms of investing, so you don't agree with Dominic that the
:15:52. > :15:59.I think emerging markets are a good place to be to invest your money.
:16:00. > :16:05.But you won't invest in China, the biggest market?
:16:06. > :16:12.And one of the great fallacies of investing is that economic
:16:13. > :16:15.growth leads to the ability to make money.
:16:16. > :16:21.We would love to invest money in China but we can't the quality
:16:22. > :16:30.That is because there is a lot of government involvement
:16:31. > :16:39.Whereas oddly enough, India, despite the infrastructure issues and
:16:40. > :16:45.the political issues, we find some very good companies to invest in.
:16:46. > :16:49.It is a matter of just finding the companies.
:16:50. > :16:52.We would love to invest more in China but they have to get
:16:53. > :16:58.corporate governance correct and the more open to investors such as us.
:16:59. > :17:03.John, do you think that China is a good prospect for the future, or do
:17:04. > :17:09.For us, China is the second largest economy in the world,
:17:10. > :17:22.Enormous market, so for us, we would be crazy if we didn't go to China.
:17:23. > :17:25.There are risks, there are risks in lots of countries,
:17:26. > :17:33.The answer is the risk of not going to do business in China
:17:34. > :17:36.is greater than the risk of doing business in China.
:17:37. > :17:39.That being said, Martin's point about transparency,
:17:40. > :17:45.foreign direct investment is going to flow to places where investors
:17:46. > :17:52.get transparency and a reasonable risk`adjusted return
:17:53. > :17:56.so that countries that have more of that will get them more investment.
:17:57. > :17:59.The countries with less of it will get less investment.
:18:00. > :18:04.Half of the world's wealth is still in the US.
:18:05. > :18:07.It is absolutely the place for fund management.
:18:08. > :18:09.If you want to raise assets or manage assets on behalf of
:18:10. > :18:19.John, you have a global business, trying to grow
:18:20. > :18:34.Is the recovery good enough in the US and the West to grow?
:18:35. > :18:37.You have to reallocate resources at times.
:18:38. > :18:44.But you also have to take longer term views about investments.
:18:45. > :18:49.When you are investing plant and equipment around the world,
:18:50. > :18:53.you have to be thinking about the next 20 or 30 or 40 years
:18:54. > :18:59.So you have to be able to balance short`term and long`term.
:19:00. > :19:04.We just bought a company based in Italy in our aircraft engine
:19:05. > :19:09.business that is very strategic, has lots of employees
:19:10. > :19:15.in Italy who are really good at what they do and they will help us grow.
:19:16. > :19:23.Both these guys are long`term in their thinking in those situations.
:19:24. > :19:37.A large part of the world does the company quarterly things.
:19:38. > :19:39.Especially in fund management, there's a terrible
:19:40. > :19:42.If only people would think long`term.
:19:43. > :19:45.Our turnover is 10%, but if you are turning over 100%, it is costing you
:19:46. > :19:50.3% or 4% in transaction cost but people don't realise, just
:19:51. > :19:54.buy good companies and hold them. Take the long`term view.
:19:55. > :19:57.Speaking of leadership, global companies, it sounded like me that
:19:58. > :20:05.How many hours and evenings and early mornings have you spent
:20:06. > :20:08.on the phone in different parts of the world?
:20:09. > :20:16.Definitely, it is really a 24`hour job.
:20:17. > :20:20.Even when you are sleeping, the problems are still piling on.
:20:21. > :20:24.You have to resist the temptation to look at your BlackBerry!
:20:25. > :20:37.I keep it in a different room. I bet your wife makes you!
:20:38. > :20:45.But I think the thing we have to do is... Many headquarters locations
:20:46. > :20:53.What we have got to do is get everybody that
:20:54. > :20:57.location to realise is that there are a bunch of time zones
:20:58. > :21:04.And share the wealth or share the pain of the late`night phone calls.
:21:05. > :21:08.So for me, I live in Hong Kong, and I am on the receiving end of some
:21:09. > :21:13.of these but I'm also at a point in my career where I can push back.
:21:14. > :21:23.The average person in Asia in our company spends three or four
:21:24. > :21:27.nights a week on the phone, after working hard all day.
:21:28. > :21:32.The average person in the US does not, typically.
:21:33. > :21:39.Because the only time zone that counts is the one the
:21:40. > :21:44.customer is in. You can't run your company based on the clock at
:21:45. > :21:48.headquarters. And that is a change that a lot of companies are making.
:21:49. > :21:59.I am going to get you to tell me, how many hours a night do you sleep?
:22:00. > :22:17.Five or six. What about you? I would say five to six.
:22:18. > :22:22.Yes. I am based in Singapore. My headquarters are in Britain.
:22:23. > :22:26.That is all we have time for for on this week's Talking Business
:22:27. > :22:30.Thank you very much to my panel, Martin Gilbert,
:22:31. > :22:38.A brilliant discussion on how to be a boss.
:22:39. > :22:42.And thank you all very much for watching and I hope you will join me
:22:43. > :22:59.next week for more Talking Business with me Linda Yueh.
:23:00. > :23:08.We still have a few heavy showers around but through the night
:23:09. > :23:09.tonight, we will see pressure rising so the shallows. To clear way. That