let me just start off by saying it's a great, great pleasure for me to be at Stanford. Both the location and the fact that I'm with you at the Graduate School of Business is a tremendous privilege. As y'all have heard from Dean Jost, I was never an MBA myself, but to counter an MBA environment and Business School, any educational environment is a tremendous privilege. I have to say I envy you guys. I think this is just the most extraordinary, extraordinary campus, and it's really a great privilege to me to be here. I would also just like to say, if I'm a particular for any faculty in the room, indeed on behalf of you and your predecessors, I would on behalf of McKinsey, I'd say thank you to Stanford. Stanford has been an unbelievable source of talent and leadership for McKinsey over many, many years. Many have left McKinsey, they're in other leadership positions, but if I could say to all of you on behalf of your predecessors, the big thank you from McKinsey, it's just

been a one of wonderful privilege for us. Now, what I thought I'd like to do justice with those feuds were the background. There are two things that I thought I'd like to talk to you about tickly as this is sponsored by the GMP and the Graduate School of Business. I'd like to give you a sense of what, at least in my view, is on the minds of CEOs across the world. Not just in the U.S., not just in Europe. This will include Japan, China, Southeast Asia, Brazil, Chile. One of the great curses of my life, but one of the great joys of my life, is I get to travel a lot, and I do get to meet a lot of CEOs. I don't know them always very well. Some are sitting in this room today. They do get a sense of what's on their mind, and I talk to my colleagues a lot, you know, who work with CEOs. Now, I just wanted to give you an idea of what the global themes that I think are on the minds of CEOs and I think will be on

their minds the next three or four years, independent of the unknowns that are going to happen. So, give you a sense, if you look at the global context, what's on the mind of CEOs, and then if I'm a very, very briefly just what I think it's going to mean for leadership skills going forward. I think it's going to be different from what it has been in the last ten years, and I hope that some of that will resonate with you. Whatever you choose to do, whether you choose going to business, public sector, banking, hedge funds, consulting, I hope some of those things will resonate with you. I'll speak for about 20-25 minutes, that's okay, and then throw it open for questions. And so, there's anyone to pursue with me specifically, leave it to the request now. Before I do that, I was told that for some extraordinary reason you'd like to know a little bit about me, apart from the glowing testimonial that Dean just gave, my love of cricket. So, I will just spend a little bit of time talking.

about myself, not just because I like to talk about myself, but partly I think it'll give you a sense about how I think about things. I also think it's very important whenever you hear anyone giving a point of view, what they think, where are they coming from. It's not a question we are sofmap, where are you coming from, what's your background, what's your nationality, what's your experience, for all of us victims of our own prejudice. So, if I give you a little bit of a sense of my own prejudices, so that you can put what I say into context. Now, as Dean said, I joined McKinsey when I was 28 years old. I'd worked in business, I had no MBA. I have to say that when I joined McKinsey, I did not know what DCF stood for. That was quite unusual even in those days. If anything, that Kim's was even more technically minded. It was an experiment in for the first two years of my life at McKinsey. I was taught a bad

experiment in recruiting non-MBAs, so I joined straight. I had no thoughts of being a consultant. I'd always thought my career would be either in business or in academics. By a series of fluke and circumstance, plays a large part in any of us allies. It certainly did with me. I joined McKinsey at 28. I frankly struggled the first two years. I always enjoyed it, so I was learning so much. I was getting the MBA experience in two years, as well as meeting some type of his people. But gradually got the hang of it, decided this is the sort of environment that I like. Not all my friends at the time did, but it suited me, partly because I'd worked in business, and I was able to make a comparison. And I stayed through. I worked mostly in the consumer product sector. I led the consumer practice in McKinsey for eight years, where we didn't have one. I started it, actually. That's packaged birds and retail. Those are the industries I know well. I led that.

practice. I then led our marketing practice, and then I led the London office of McKinsey before, for reasons that I cannot possibly explain to you, my colleagues elected me managing director two years ago. Now, some of you will ask me, or asked me already, what's it like being the CEO of McKinsey, and the answer is, I'm not a CEO. I am NOT a CEO. It is a professional partnership. Most of the people who have talked to you or will talk to you actually run companies. McKinsey is not a company, and I most certainly do not run it. It's a partnership. We have two hundred and ninety directors, senior partners, and six hundred junior partners or principals. So, there are nine hundred people who own the company. They're the shareholders, but the ethos, at least of McKinsey, like most professional service firms, is an independent professional partnership. So, if you ask me how many people report to me, the honest answer would be one, my assistant. Another answer would be nine hundred and forty, and neither answer be

two hundred and ninety, so it's a very, very odd structure of partnership structure. I think something can be as being like a herder of cats, and so I'm not sure that I can, you know, sort of give you a sort of what's it like being a CEO. I have a lot of authority, which I can use or abuse, and Lenny would tell me I do a bit of both. Sometimes I have very little power. I have very little power indeed, which is unlike many, many CEOs. I happen to believe that I think a leadership characteristic in many organizations is moving from power towards authority, but in a partnership, you depend solely on personal credibility and influence and people saying, Yeah, that sounds reasonable. We got to get things done. So, it's a different type of structure. It's around leading people. I won't go on too long, but I think it's a different type of role for most CEOs. The second point is, as Dean just mentioned, I've been elected, not appointed. So, to an extent

it's appear type role, and I have to recognize that it's much more like a political process in that sense. It's an election rather than an appointment. So, having acknowledged what I do is that are rather different from the normal CEOs or the normal leaders that you will see. Nevertheless, I think what I have to deal with is very similar to people who actually run organizations, whether they're on the public set to the not-for-profit space, foreign companies. And let me just give you the four things that I focus on, which I think having watched CEOs is what practically all CEOs or leaders of academic institutions or leaders of civil service departments also have to worry about. So, my point is although what I am is very different, actually what I have to do through a different forum is quite similar. Number one, setting the culture. In my case, reaffirming the culture. I think all leaders of organizations, whatever they are, have to think first and foremost about setting the culture that they want their organization. Number two, identifying, appointing, and building the

leadership team again. I think this is a generic skill that you have to do. How do you appoint and develop the leadership team? Although people don't report to me, I do have the power of appointment. Who runs the West Coast practice? Who runs our private equity practice? Who's going to oversee recruiting? Who's going to drive our initiative to improve the retention of women in McKinsey, for example? All these, I have power of appointment. So, there's appointments, and building the team is something I have to do. Again, I think very similar to what most CEOs have to do. Number three, telling the story. I think Steve Ballmer has spoken to you. He talked about being the cheerleader, pick your language. I know exactly what he means, telling the story. In Mackenzie's case, it's mostly internal. One of the things I thank God for is that I didn't have to deal with investors and analysts. I just do not have to deal with them. You know, our investors and analysts to my colleagues, sometimes that can be even

tougher. You can get tougher questioning, but I know them. I know them, and I can look everyone in the face. I know individually, so that's telling the story about what you're trying to do, what the firm is trying to do, talking to new recruits, talking to people leaving the firm, talking to the partners, talking to clients, telling the story is what I call it, being the cheerleader is number three, and then the final one is defining the priorities, defining the themes that are going to shape my time as a managing director. This, if it was in corporate speak, it would be the strategic agenda, and there's lots of different words that you can use. I use the word themes. What the themes that were going to focus on, so the tasks that I actually spend my time on, setting, and in my case, reaffirming the culture, appointing and building the leadership team, telling the story, and then just defining of the priorities very quickly for those of you that might be interested in McKinsey as an institution. I won't spend much time

talking about McKinsey. Don't panic for those who are interested in it. Just what are the themes that I have chosen? I just like to give a flavor. Another individual would have picked three different themes. This wasn't mandated; it's what I chose them, but just give you a flavor. Theme number one, there are three. I think coping with more than three or four themes. Many CEOs have eight or nine themes. I personally think that's too many. I think one is great, two is good, and three is okay. I've got three, and I can't quite get it down to two. I'm still working on it. Theme number one is redefining what McKinsey means by problem-solving. We've always defined ourselves, our clan, says that people suck, you know, define problems, help clowns identify opportunities, help them deal with challenges and issues. And traditionally, I think it's fair to say that we have had a similar approach for problem-solving that is usually embedded in business schools. Very analytical, very, very focused on structured thinking, very focused on discipline, very focused on

process and that's great. I think it's important. My belief, and I think many of my colleagues believe, is that that is no longer enough. And then we have to spend much more attention on the softer or the people sides of problem-solving. Why do people do what they do? Why do companies make the decisions that they do? What's going on in people's lives, which will affect how motivated they are to do the rational thing? We all know, and you'll have read, and believe me, it's true, 50 percent of decisions that are made are not rationally rational. So why do they go on happening? And there's practically always a good reason, and practically always a good reason. There's somebody on two legs, people on two legs. So theme number one is how can we incorporate a deeper understanding of what motivates behavior, good and bad. Some of the things that motivate decisions may not be very good, but spending a lot more time understanding that side alongside our traditional analytical and process skills is something I feel very, very passionate about.

I don't think it's a redefinition of what we do. It's about problem-solving, but it's bringing this aspect into what we do, which means we have to change our behaviors, how much time we spend with clients, how human we are as people. The language I use for that is IQ, CQ, RQ. IQ, you'll understand, that's intelligence, insight, ideas. Traditionally, what firms like us have associated with CQ is what I call capability and competence. This is where Mackenzie's been investing very heavily for the last five years: deep marketing knowledge, deep corporate finance knowledge, deep IT knowledge. Do you understand how processes work, really understanding how the industry works? Just a bit. Some examples of competencies in my view: the days of pure generalist management and pure generous consulting are over. It's both specialized knowledge and integrative. I think we spotted that quite some time ago, that we have to continue. And the final cue is RQ. It's what I call relational quotient. I don't mean just getting on

with people being nice and being able to drink a cup of gin and tonics with people. I don't mean that. I mean understanding how people relate to you, to each other, to their company, and to decisions since it's a part of a company ethos. Our County 'those, so that's team number one IQ c q. Are you trying to redefine and broaden the definition of problem-solving? I believe if we can do that, I think it'll lead to better outcomes for our clients, and I think more motivation and satisfaction for people. Team number two is Asia. Asia, you'll have heard that before. This is not the most staggering insight in the world. Everybody knows it's important, but knowing it's important to making it happen is something different. Mackenzie's been in Asia for a long time. We opened up in China in 1993, long before any other professional services firm, and we have them puffed, and we struggled, and hit our head against a brick wall. For example, you've been in

India for a long time. We've been in Japan a long time, but we really are doubling down. Just an example on that, we've had 16 partners moved to Shanghai in the last 15 months, so really, really getting serious about Asia. I don't need to tell you why we're doing that; you know better than I do, but really, really getting serious about that. Now, come on to this. It actually has a lot of challenges for culture, how you think about things, and how you do things. You all know about GDP moving eastwards, all that stuff. You all know about China and India. It's going to have far, far bigger implications in the way organizations around, in my view, than anybody's yet realized. The final theme on my agenda before I go on to talk about the purpose of this talk is innovation. Innovation. McKenzie was quite good at talking to plants about their need to innovate. We haven't always been frank with you, being quite as good ourselves. We are really looking at challenging our

orthodoxes of the way we do things to particular areas. I'd pick on one is our people, how we serve clients, how we deal with people. You know, you would have heard from too about the people, about the consulting lifestyle, how we work, how we deal with clients. We're going to really, really tackle that head-on, and a lot of that is innovating the way we work, using technology, using flexibility. If any profession could, then should be flexible, it's consulting. People coming in and out, you know, we know it's very difficult for a law firm or a taxation department or people offshore engineering to be flexible. We can be, and so making flexibility really work is something we're going to do. Making diversity a reality, we talk about my kid, everybody talks at McKinsey being the benchmark of a diverse, culturally diverse organization. I wish that were true. I wish that were true. Yes, we have every nationality in the world. Yes, we have a lot of women that work for us, but that is not my

definition of diversity. Most of our people have MBAs. Most have engineering quantitative backgrounds. Most would fit in this room within a nanosecond. I think diversity is diversity of personality, diversity of academic background, and we are actively looking to recruit example people, people from liberal arts backgrounds, from medical backgrounds. We even recruited somebody recently who's a priest, and I want to push that. I think it's very, very good. Maybe it's the Dali Lama I show you. Maybe you are right. That's why I'm here, so to do that. So, diversity to meet diversity to me is a lot more, a lot more than women in different races. I think it goes cult-free. I think it's the way people think. People's academic backgrounds has a huge influence on the way we think. We're really, really pushing that very hard. Second point of innovation. Our shuttle is the knowledge. We are a knowledge institution. We're probably more like an academic institution. We are like a business. We invest hugely in knowledge development. We're often cited as a role model for

knowledge development. If that is true, God help everybody else, that's all I can say. And we are really, really looking at that very seriously. One thing that we have not yet responded to, and we had the most fascinating lecture from a professor of psychology, is how the Internet and how teenagers learn and communicate with each other. I don't know if you watch how people blog and exchange information. We're looking to apply that to the knowledge base so that you build knowledge through interaction, preferably personal but through technology. These sorts of techniques of knowledge exchange, we're really working on, and we were investing massively here. I just want to give you a flavor of that. And then finally, we're going to get a bit more sassy about the way we deal with clowns. We have a very, very methodical, very disciplined, extremely professional approach. We're going to experiment with new ways of the work or the way we work with tasks, how to communicate with them, how we relate to them, how we use different problem-solving approaches. So just to give you just one person in my case.

Manji director McInnes view of the themes that I have when you hear other CEOs. I'm sure they talked about themes. It's about redefining problem-solving and broadening it, really doubling down on Asia and focusing on innovation, particularly the way we handle our people and particularly in terms of knowledge development. Just a little bit of a long introduction, but I hope he gives you a sense sort of where I come from, the things that I worry about. Now let me just move briefly onto the main core of what I wanted to say to you, which is what's on the mind of global CEOs and what do I think will be on the mind of global CEOs. There are five themes. I'm not going to spend much time on them. I'm just going to list them. If any of them intrigued you, perhaps you can expand on them in the questions. Theme number one: strategy is back. Strategy is back. Now, strategy, I've always thought, is a cyclical thing. I think most themes in business are cyclical. Three years ago, strategy was

dead. You need strategy. It's a waste of time. You can't predict anything, and there's a lot of nonsense going on about strategy three years ago. There's a lot of nonsense going on about strategy now, about it's all about strategy again. That's not true either. What I'm saying is there is a time for strategy, and there's a time for implementation. There's a time for growth, and there's a time for cost-cutting. There's a time and a cycle of companies and industries. Now is the time, and I think it's gonna go on unless there's a real economic crash. We're really rethinking about strategy, and specifically the basics of strategy, of where and how to operate, not compete. Come on to that. How to operate. What's driving that? Every country I go into the world, virtually every CEO I talk to, the two themes that they are worried about is growth, not margin, not cost, it's growth. But this time relate that is risk. How much risk are they prepared to take in order to grow, and how do they deal

with the financial community, and these virtually everywhere, doesn't matter to Japan or in China or in a family business in Southeast Asia or in Brazil, that keeps coming through. There's a lot of empirical evidence that says growth is the ultimate determinant, not just of value but also of survival. There's a lot of pressure on companies to grow, and it's this growth-risk trade-off which I think is absolutely Nexus. CEOs are more thoughtful, in my view, than much of the financial community, and certainly than the median, the public on the risk side of it. Profitability is extremely high at the moment, in my view. The systemic risks in the system and some of these have been grossly underestimated, but the CEO sort of know that, and they didn't want to do about it. Most of them do not want to get the investments. Yes, I know we're doing very well, but really it's much risk, and you think you just didn't do that, and what's your sound price? But they do worry about it a lot, and the other thing that's linked to it which I

think is not talked too much, and I think has gone outside the academic gender as well as time frames. Over what time frame do you think about growth and strategy, and there's a definite cultural and intellectual clash going on here. The cultural trend is towards short-termism, the intellectual trend when you look at investment, I think is towards more of a long-term look, and there isn't any good theory at the moment for thinking about timeframes of strategy. I think I might say about three or four years ago that there was quite a lot about piecing. I know there's a lot of intranet; all sort of died. I hope someday, some academics will pick up this issue of time frames. How sustainable a strategy is, is a very, very important part of the value of a company, and that's something that CEOs are really wrestling with. But if you, when you go to Asia, where they do take up a very, very long-term view. So theme number one is, if I call it the strategic agenda of this interplay.

between growth risk and timeframes, and there's a lot of muddled thinking going on between the two. Team number two, you're now. This is deeply boring, but it's important. It's globalization. Mark 29, in my view, at the very early stages of globalization, and my view, we're just beginning to see some of the management implications of what globalization is actually meaning for companies. The reality is for most firms, particularly American firms, is that globalization is going to new markets in Asia. That's going global. No, it's not. It's often. It's exporting and increasingly going global on the supply side of shoring, outsourcing, could it what you want. What's happening now is we're moving beyond that to actually redefining organizations in a global context. The OP, what is called offshoring, which I think is a complete misnomer about what's going on and supply chain. I just leave that is beginning to affect how organizations actually operate. I'll tell you a story. I told the CEO of one of the big semiconductor manufacturers, world leader, and he said

look, I've got a big problem, he said. I need a new CFO of one of my divisions, and I've got two candidates. One is in the US, gets paid 750 thousand dollars a year, plus benefits, and the other candidate is in India, and he gets paid $40,000. I think the Indian person is better. What do I do? The best one. So if I promote the Indian, and then what do I pay him? Three million or sixty thousand dollars? If I pay him 3 million, what does that say to the organization of whom now 3,000 in India? If I don't, how can I say you'll remember the top management team? What do I do? So we're beginning to see that, and this is going to happen. This is now finance, it's going to happen in HR, it's going to happen in marketing. This is a company that had 60% of its sales were global, but the culture in the history of

the company is 100% American, and they're going to confront very, very fundamental issues in this case: compensation and team. There was one person on his board, and it was a token person who is non-American. We're going to see some massive challenges coming out sometimes, so big that I think you'll see some companies being forced to withdraw from being as infinite as they'd like because they can't cope with it. Organization: a massive, massive issue. So let me just say globalization: don't just think of it in terms of markets and supply chains; that's obvious, everyone's got that assuring. It's a second, and like everything in management, it's the second or third order consequences where things get really interesting, and this is going to get very, very interesting. Third point: deeply obvious, but again, I apologize for raising it, is absolutely crucial, is technology. Technology is an enduring issue, again like globalization, particularly and on the internet. Everything that was promised in the internet in 1997 turned out to be true. The only people who got really burned with

the financial community. Everything else in terms of impact on business, in terms of our organization's, turned out to be true. It is absolutely fundamentally transforming the way business is done. Again, I'm sure you've been told this often, but when you see what I do and see it, it really is transformation. It means something when you see what it's doing. It is fundamental, and the biggest impact, which again has not yet been seen, is what it does to human behavior. At the moment, it's transformed processes, and it's transformed distribution possibilities through channels, but the human dimension is only now just being understood. You'll see organizations with very strong cultures unwinding because of their dependence on technology. They're doing incredibly well, some of them, because they're dependent on technologies, but that culture is unwinding because the human glue has been replaced by technology. This matters if you want to be an enduring organization. So, that's theme number three: a fresh look at technology, which goes way beyond the usual approaches, using it to optimize processes, second, third-order consequences. Again, a lot of

It comes back to organization, fourth one capabilities. This is particularly the hot theme in Asia. It is not an to talk to this group about capabilities unfair. You do not represent the world. Please remember that you do not represent the world. You represent a very, very, very small and privileged part of the world. Capabilities, not just talent, not just intellect, the deep knowledge, whether it's about marketing, about finance, is a massive problem, particularly in very fast-growing economies like India and China, also in Russia, Central Eastern Europe. Also, I would suggest in the States as well, there is a huge capability deficiency. People often talk about the biggest stumbling block to growth in China is resources and environmental pressures. It's not every CEO I talked to that says we are sort of management, particularly general management, particular commercial management, particularly financial and marketing people. It's people. There's going to be a tremendous, tremendous focus on capabilities. It's a wonderful time for you to be in the talent pool at the moment, and I think this is at the beginning, not at the end, particularly when you look at

the Asian economies, and by capabilities, I don't mean just very bright people; that's the talent side. It's no good being great at tennis if you should be playing cricket. So, this is about getting the right capabilities in the right place and time, and many companies have very skewed capabilities. I've mentioned China; I think it's true in many technology companies in the US. They have great technical capabilities but very weak marketing skills. In China, they have tremendous engineering talent. The output of PhDs in China is greater than that of the US and Europe put together every year, just to give an example. They're not short of engineers, but they are shorter people. So, this is matching the capabilities that you need with the strategies of your organization, and it only means something when you get very micro about what skills and what talents, and there's a massive problem building out there. The final one, which I'll finish on before I conclude by talking about what does it mean going forward, is leadership, which is an issue that I've written about, and I'll try not to Witter on about.

particularly for very large successful companies, what's the nature of their relationship with the societies in which they operate. This is sometimes called, much to my fury, corporate social responsibility. You know what I'm talking about, but the relationship of successful companies to the societies in which they operate, and this is petunia, this is societies as citizens, societies as government, societies as regulators. What is the role? How do they interface with them? How do they influence them? How are they influenced by them? It's a massive, massive issue, and it's not just a Western NGO thing. This is a big issue, and I think it's going to become a huge issue in Japan, in China, in India as well. It's a massive business problem. It's a massive business opportunity as well. So, I would just say that's another theme that I hear. It is not just a creature of the liberal left press in the West. So, if I could pick up five themes that I think certainly the last four, and I think the first one will endear, it is this notion.

of the interface between growth risk and time frames and the tools, technical analytical as well as judgmental, that help you shape that and how you communicate that to your employees and investors. Really thinking through the second or third order consequences of globalization beyond supply chain economics and customers getting much deeper into the organizational space. Really thinking through the second, third, fourth order consequences of Technology, particularly the internet. Not only the internet forcibly getting very precise about capabilities. It's not just talented people, it's very, very precise about the caper as you need. And then finally, particularly for large firms, wherever they be, the relationship of these large firms to the societies in which they operate. I think those, as I've interpreted right based on my conversation of five shaping fees. I haven't talked about marketing, operations, pricing, organizational design. These are what I call the usual suspects. If you can't be competitive on costs, if you can't market properly, if you can't get your customers sorted out, game's over. It doesn't matter where you are, you have to get those right. I just don't want to

talk about them. I don't think they're game to differentiate. Those are what I call platform tickets. You have to get those right. Interesting. Twenty years ago, people said if you get those right, you have a competitive advantage. We've moved on from that. That's the ticket to pay now. Just in conclusion, if this is right, one person's view, my background and prejudice, if what I said is right, what does it mean? What types of leadership are likely, leadership skills are likely to be needed going forward, irrespective of the country or the geography or, in my view, the industry you come from. Obviously, there's going to be differences. Personally, I think we are seeing and we're going to see a lot more of a move from what I call hard types of skills towards that what is traditionally called softer types of skills. Analysis, strategy, engineering, technology are crucial, but I think they have to be interspersed with people who understand how teams work, how organizations work, how people are motivated. If, as I believe to be the case, the 1980s was the decade

of strategy. The money was made strategy. Remember Michael Porter competitive advantages great stuff, and that was where the big bucks are made. 1990s was technology. That's where the really big bucks are made. People got early on technology. I believe the next fifteen years is people who get the productivity equation right through people. I think we're going to differentiate themselves, and I call that hard to soft. It's really hard and soft. You've got to be rigorous. You've got the difference, but I think this human dimension, people productivity, I call it, and particularly move to a knowledge economy where the greatest asset, the people you have, blah blah blah, all the stuff you hear, thinking through what that really means is absolutely going to be crucial. The types of skills you recruit, the types of people you croute. I also think it's the reason why if you didn't make it possible why women I think are going to be very successful in the next 10 or 15 years because they, I hate to generalize, can often naturally relate to that people who naturally

think in those ways. I think will become more and more valuable resources. I think global culture and mindset is going to be crucial. It's an obvious point to say, but if you believe what I said about globalization, it's not just enough to spend two or three years in different countries. The number of people, particularly Americans, of any Americans who've been two or three years, you know, for 20 years, but still don't have a global mindset, is staggering. People who really understand how different countries work, how different people work, I think is going to be crucial so that nationality doesn't become a source of even comment. That's, to me, would be the ultimate definition of a winning company. So, having a true global culture, go back to my story about the CFO, a culture that you can naturally deal with, that you can accommodate, that people can move from Malaysia or Sri Lanka to a head office in Chicago. It takes one day before they're productive. That's what has to be the mindset. Huge challenge. Challenge number three, I think, is particularly

true for CEOs, but I think it's going to be increasingly true for all managers with a global company is what I call the need for diplomacy. I stole this word off John Brown at BP. It's a wonderful idea and a wonderful concept. By diplomacy, the ability to influence events, to persuade people while always being respected of yourself. I think that's going to become a crucial skill internally and externally. Trust is going to become a massively important word. Power, status, hierarchy, big banana. I think these are gonna be, I hope they are, dead words in 10-15 years' time. I call that diplomacy. I'm sorry I stole the word. I think it's a wonderful word. And then the final point I'll leave on is they need to be flexible, flexible I think both as personal personalities and organizations. I talked a little bit about for McKinsey. I think organizations are going to have to be very flexible in the way they offer careers to their employees, particularly if, as I believe, women are going to be more active, but

increasingly for men, and we are seeing, and I'm sure everybody else is, this demand for a much different set of opportunities and the way you live life and go to work. I think that's going to be true for everyone. I think being very flexible, being very accommodating, adjusting careers to the individual rather than at the moment whatever anybody says, individuals to the careers. Most of the time, I feel terrible, but that's the way we do things here. Number of times I heard, There ain't gonna have to change. What does it need for you to make it work? What does it need for you to make this work? We believe in you. So, I think this idea of flexibility, individual and institution, is going to come absolutely crucial, which runs against the career trends of the last 50 years. So, if I can just pick out the implications of those trends about hard to soft, a true global culture and mindset, the importance of diplomacy as the skill, and I would add you to study history around diplomacy to see what that... I think history is the best way to

learn that particular skill and the importance of flexibility, both personal and institutional. I think will be defining skills over the next 10 years. I probably took longer than I should have done already. I will stop there on that particular note. I hope I've given you at least my sense of based on tools and discussions with CEOs and colleagues and partners of mind about what's on the mind of CEOs across the world and at least one person's interpretation of what that might mean for new leadership skills going forward.

Offshoring Means New Challenges: Ian Davis, CEO McKinsey & Co.

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