Dominic Barton, global managing director of consulting firm McKinsey & Company, has an impressive bio. He was previously the firm’s Asia chairman and leader of its Korea office, is a recipient of South Korea’s Order of Civil Merit and Singapore’s Public Service Star, and is also the author of more than 80 articles about business.
But Barton’s rise to the top was neither swift nor always smooth. During a Wharton Leadership Lecture, Barton talked candidly about some of the lowlights of his 29-year career at McKinsey. For example, his early days at the firm were not quite what he expected. Knowing that McKinsey was an advisor to CEOs, he “had a kind of idea” that he would be put to work in that capacity. Instead, his first assignment was to determine how many pieces of KFC should go in a lunch box. “So there’s McKinsey working on the biggest problems on earth, and I’m trying to figure this out,” he said, adding that “four” was the answer to the chicken question.
Barton noted that when he joined the company in 1986 in Toronto, he never intended to embark upon a business career. He was working on an MPhil in economics at Oxford, with a focus on industrial economics, and simply wanted some firsthand experience of corporate realities. “I figured I’d come to McKinsey for two years and get as much experience as I could, then go back to the academic world,” Barton said. “The more I worked in the firm, the more curious I grew…. At McKinsey you’re always learning. Just as soon as you get comfortable with something, you go to the next level, and I love that.”
Third Time Lucky
One level that Barton did have trouble moving to, though, was the key step of being elected a partner. In his talk, he was very open about the fact that it took him three tries, and said it was a painful process. “Many people who are joining McKinsey have obviously done well [through life] or they wouldn’t be here…. So being told at times that you’re not actually doing that well can be a bit of a trauma to the system.”
“Many people who are joining McKinsey have obviously done well [through life] or they wouldn’t be here…. So being told at times that you’re not actually doing that well can be a bit of a trauma to the system.”
Barton noted that after his first try, he was told that while he appeared to have the intrinsic capabilities to be a partner, he needed to demonstrate those qualities more often: to “be tough and go at it.” He characterized the second attempt as “more embarrassing, in a sense, because it was quite public.” People knew that he had “been around” for a substantial amount of time as a senior engagement manager. This time, the feedback was: “’We are not actually sure you do have the intrinsic capabilities’ and ‘you’re not a good problem-solver.'” Referring to the fact that problem-solving is the essence of being a consultant, Barton quipped, “This is like telling someone in the church that they’re an evil bastard.” He said that relatives and friends began to gently suggest that he might not be cut out for business after all.
Barton talked about how stressful the experience was since, typically, when he had worked hard at something, it had turned out well. Then he had a breakthrough. “I had splinters in my back from going over the bar so often … and I finally realized, you know what, I’m going to set my own bar. And I’m going to make it higher than theirs.” He would stop focusing as much on “jumping through hoops for other people” — and if things did not work out, he would go elsewhere.
Barton’s strategy apparently worked: He stayed with the firm and rose to the position of global managing director in the summer of 2009. However, within a few months he faced one of the biggest challenges of his new post. Against the backdrop of an economy still reeling from the financial crisis, the news emerged that two senior McKinsey executives had been arrested for insider trading.
“It was the biggest shock. You just can’t imagine,” said Barton, adding that the two individuals in question, Rajat Gupta and Anil Kumar, had been 25-plus-year veterans of the firm. “McKinsey & Company is about trust. At the end of the day, if people don’t trust us, we can’t work. So this was a very big deal.” Around the time the story broke, Barton was living in London, and about to go to his first meeting with then-British Prime Minister Gordon Brown at 10 Downing Street. He recalled being painfully aware that day that headlines about McKinsey & Company’s insider trading were splashed all over the newspapers. “I remember standing there [at the gate] in the rain thinking, ‘Should I go in? Because this is probably not the best time. Should I just go back home and have a hot chocolate?'” Barton says he did go in, however, and that “people were very warm,” listening and sharing stories about difficulties they had been through.
According to Barton, the experience of the scandal taught him some important leadership lessons. One was to be “completely open” in such a situation. “I had [heard] advice that ‘you had better not say very much; wait until you find out more.’ But my view is that I’m just going to say how I feel…. If you’re honest and authentic, people pick it up and know that you’re serious about it.” He said he actually communicated much more about the event than he tried to hide it in situations such as recruiting, for example.
“I had splinters in my back from going over the bar so often … and I finally realized, you know what, I’m going to set my own bar. And I’m going to make it higher than theirs.”
The second lesson, said Barton, was to spend time understanding what really happened. “[McKinsey] has human beings; we have people that do bad things. And we have to help each other try not to do that.” He added that monitoring systems have been put in place: “If someone’s more than two standard deviations off with a peer group, they get audited. It’s automatic.”
A ‘Student of Leadership’
“I’m a student of leadership. It’s an amazing opportunity in this role,” said Barton, stating that for the past six years, he has met with at least two CEOs or government leaders every day. He identified some common themes that emerge when CEOs reflect on their careers, which in Barton’s experience cuts across regions, industries and functions. One is that they would have “moved faster on people … taken people out faster, moved them up faster and spent more time on people…. I’ve not heard a single leader not say this [among] those that are toward the end of their career,” Barton said. He also noted that many CEOs express regret about not having been more ambitious for their organizations. From his own experience, he said, it takes a couple of years to get used to being in the role, but “if you don’t get moving, your time is up.”
Another theme Barton identified from talking with CEOs is the importance of mentally compartmentalizing. “You get so many issues coming at you, and some of them can paralyze you.” He related a story from a Liberty Mutual CEO who told him, “‘In my first three weeks of my job, I would have kicked you out of my office.'” The CEO explained that at that time, he had been told by his general counsel that the company was being sued for $6 billion, and that everywhere he looked, all he could see was $6 billion. “Now, he said, ‘I’m talking to you, and I have six of those [issues going on right now], but I’m focused on you.'”
“McKinsey & Company is about trust. At the end of the day, if people don’t trust us, we can’t work. So this was a very big deal.”
Taking Your Own Medicine
“I think we’re very good at telling our clients what they should do, what medicine to take. But we don’t like taking it ourselves,” Barton said, on the subject of innovation and modernization at McKinsey. But these areas are big priorities for him. He noted, for example, that the firm is becoming more involved with technology, in ways such as providing software to clients and investing in, or building, technology companies. “We are partnering with people we never would have partnered with before. It’s only 12% of our activity now; I’d like it to be 40%. I think we’re on track to do that in the next three years.”
Barton also spoke about his concerns that McKinsey stay “relevant” in the global economy. The economic power is shifting to Asia and Africa, he said, and it is “happening fast.” He noted that his colleague Vikram Malhotra, McKinsey’s chairman of the Americas, has been a major driver of the firm’s awareness about this even though he runs the North American practice. “Vik is the guy saying, ‘What are you doing in Africa, what are we doing in China, India, hiring people, building it.'” Barton added, “I worry that we need to move faster. That’s why we need to innovate…. If we don’t challenge ourselves, we’ll get challenged in a big way.”
Image: “Dominic Barton” by World Economic Forum from Cologny, Switzerland – Plenary Session – Growth & Drivers – World Economic Forum on East Asia 2009. Licensed under CC BY-SA 2.0 via Commons – https://commons.wikimedia.org/wiki/File:Dominic_Barton.jpg#/media/File:Dominic_Barton.jpg