Businessweek Extra - Bloomberg Breakaway CEO Summit

You catch up with some incredible CEOs, fast growing companies, and it's really a community of CEOs all sort of learning from each other. I love the vibe. That's exactly what it's all about. And I've got to say the conversations we had were incredible. It was a variety of industries, including a conversation with the CEO of h G. We're talking about Intercontinental Hotel. These guys are enormous, so we got a view on the hospitality industry, what they're doing

and also what's the role of a CEO. We talked with Keith Barr, who's the CEO of h G. And what's interesting, Jason, something that you and I have been talking a lot about is what's the role what's the role of a company and a CEO in some of those bigger, broader issues that are out there, whether it's on trade, whether it's on the Hong Kong protests, whether it's women on boards. We talked about a lot of things.

I want to talk about a bunch of things. But I know, burn just in a pole and I know we missed it, but let's um, I don't know if we can bring that back up. About what percentage are you expecting to grow your business over the next year? And I was curious what the findings are. This was the pole we just did, Keith so flat to down. So most people are looking for wow, fifty or higher. I'd like to be in those businesses. What kind of growth right are you looking for? Are you surprised whether

I mean these are mid you know, mid cap sized companies. No, I mean I think if you have mid cap company and you have the right business model and the right markets is huge potential. I think one of the challenges the big multinational space now in the current economic environment is how do you continue to grow at the pace

when your business as big as it is. I mean today where eight hundred and fifty thousand hotel rooms open around the world, another two development, and on top of that base, we're expected to grow and accelerate growth every year in a bigger denominator. Not is it in with a needle? What kind of visibility do you feel like

you have on growth right now around the world? We have it market by market, and then when you try to aggregate it all up, it's confusing, you know, because you can sit there and go half full and half empty, because you look at things like record low unemployment in many markets, continue to see positive GDP growth rising, middle class urbanization rising, all these real positives, and then you get your head spinning on you know, brexit US China, trade,

Hong Kong, Germany going potentially into recession, political uncertainty in Mexico. And so literally any given week I go, things should be either really good or really bad, depending upon which news I look at. It really is that voltal in this current day and age, and so I think, well, you have to think about what your long term growth strategy to grow in an ever more increasingly volatile environment.

I wanted to take us back um two years ago when you first became CEO, and you had mentioned to me on our prep phone call that your industry was bifurcating big getting bigger and the smaller companies struggling, and you had to make some decisions fast. Tell us little bit about what what you had to go through. Yeah, I mean, we have been one of the most successful um lodging companies in the hotel industry. So phenomenal total

shareholder return over a decade. Uh, you know, were on public thirteen years fourteen years ago four pounds fifty Today we're trading at forty seven pounds. Returned thirteen point six billion dollars in cash to shareholders along the way, so great returns um. The challenges is the industry is splitting. The top five hotel companies today have twenty five percent of existing room supply but fifty eight percent of the pipeline.

So the industry is clearly moving to consolidate amongst the biggest players, and we don't want to get left behind, and so how do we effectively double our pace of growth over on the mid term. And it was really coming into saying we've been incredibly successful. We've created a lot of shareholder value. The biggest players are moving at pace to grow faster. What do we need to do to grow at that pace going forward? And we had to really transform the company of the last two years

to be able to do that well. And I want to get into what you did, because you really challenged

your team, right, Yeah, what did you say? Like? Because what you guys have to figure out what it was really And it was a difficult one because again, the narrative had been rightfully so we've been incredibly successful, but things had changed, uh, And so effectively, I took my senior team and they didn't know about it, but I walked them into a room with board after board after board of content about what analysts were saying about us, what are people were saying about us, what was happening

with the competition? And it was a stark wake up call, which was good company, great potential. What are they gonna be able to compete going forward? Can we be agile enough? Can we move fast enough? Our colleagues saying, you know, can we really compete? What's it going to take? And so it was that kind of in your face wake up call because it's quite easy for me to sit there and say, hey, we've been successful and keep doing

what we're doing. And yeah, we'll keep growing margin and we'll keep growing cash and we're gonna be a good company, right, But really to be competitive, we were going to have to change. And I had to wake him up to that. M and A was a part of it. And I want to talk to you about that. I want to

ask our breakaway members. Pull out your phone once again, got a pulling what you believe is the best way to grow your company, and your choices are by my way there, organic, all the way, investments, technology, and as that pole comes in, um, I want to ask you, Keith, because I know M and A was a big part of your strategy. Technology, organic, Okay, interesting, M and A was the way for you guys, and organic it was yeah, both. And so I came out two years ago to our

shareholders and said, I'm going to restructure the company. I'm gonna take a bunch of costs out of this business, about a hundred and twenty five million dollars of costs down. I'm not going to give any of it back to

my shareholders and invest at all for growth. And that growth is going to underpin effectively our ability to acquire a couple of companies and then launch three brands organically because um, you know, in our business model, organic launches phenomenal returns on capital right, almost infinite because we don't have to spend that much, and so those are incredibly creative.

But we can't do everything organically, and so we recognize in the luxury space in particular, we were going to have to do M and A, and so we had acquired Kimpton Hotels and Restaurants in the US, the leading boutique company. We then went out inquired Regent, and then

we went out inquired Six Senses. So again uber luxury brands, luxury brands, lifestyle boutique ones that have taken decades to build, and so I was acquiring that I P. I was acquiring that brand equity, um, because it would take me a long time to build in a lot of capital. But then I went out and launched a few brands where I could build those quickly, get them out there, and again sell those and just grow the business accelerated that way. So a combination of the two. Growth also

sometimes means taking the underperforming, non performing assets out as well. Right, you were shutting properties as well. Yeah, it's that's probably one of the hardest things in this job. Why because you can really convince yourself to keep bad hotels because they're paying you money. And when you're under pressure to perform, to show growth, to show revenue cash generation, to think should I really take these hotels out? But you have to remind yourself and these rules in particular, you are

the stewards of this business for the long term. And it takes a long time to screw up a brand, but once you've done it, it takes a long time to fix it. And so we're consciously taking out about two and a half percent of our system globally every single year and just culling out poor quality reevaluating every year. Every year, we're taking out about two to three percent of our hotels, and that's just saying, you know what,

it's a poor quality asset, wrong location. And to keep moving quality up and moving customer perception up, you have to do it. And when companies don't, they're more profitable in the short term, they pay for it in the long term because effectively, customers begin to lose faith and trust in you. What about an investment that you make our new property you open up, how much time is a fair amount of time to give it to make to give it a go, and are you willing to say, wait,

I made a mistake, this isn't working. It varies by brand, you know, and things like that. I mean, most of our deals are long term deals. So you've got ten year deals, so most of the removals are happening at the latter portion of the life cycle of a hotel. And read the question there is do we renew it for another ten years, another twenty years, or do we

take it out? Or if we have a hotel that's coming near the end but isn't performing well, do we take a legal route and say, you know what, you're not meeting our standards and and it's time to take you out of the system. We always try to work with our owners, because again we're UM an eleven billion, almost told billion market cap company where asset light though, so out of five thousand, seven hundred hotels around the world today, we only have an owned and least stake

in twenty one hotels. Now that's changed dramatically of the last decade. We used to own hundreds and hundreds of hotels. The last hotel we sold was the Intercontinental in Hong Kong for ninety five million dollars to give you context, So we had lots of big boxes, lots of real estate. We're now down to where we say we grow with other people's money because we partner with real estate investors around the world to open hotels, and so I always want to work with them to make sure we're a

good business partner. But if they're not going to be good stewards of our brands, fund a man that I have taken out makes sense. Where are you seeing growth the most? When you look around the world, what are some of the markets that you find? Things are just kind of falling into place and there's a lot of demand. So I am I'm originally from the States, been been overseas for the the last fourteen years, lived in Australia, China

and the UK for the last seven. I built our China strategy and that is a third of our company's growth. You're in China for a while, yeah, almost five years, Uh, and it's an extraordinary market and so uh today it's about a third of our company's growth and growing kind of probably three x four x the rest of the world on big numbers too, and So when you think about on a global basis, lets US, for example, supply

growth in the US is around two percent. The supply growth in China excluding the economy segment will be between eight and ten percent. So it's it's growing massively and it's the level of infrastructure investment. So China is huge for US from a growth perspective. We're accelerate our growth in the US, but it's our biggest market. But then you've got other exciting markets like Japan is continuing accelerating growth, Vietnam is continuing to accelerate growth, and you've got pockets

also in Europe. Now coming out of that kind of the duldrooms after the fential crisis are beginning to see growth as well. Where aren't you seeing growth? Where aren't we seeing growth? Where seeing kind of the weakness you know what I mean? Places that we think that should grow that aren't. Like Mexico is a good example. Mexico has great potential, but with the political instability there, you're not seeing You're seeing growth, but not the growth to

the potential of that market. Overall, UH and you are seeing some slowing and some of the more with tool markets. Now, UK is a good example where there's not a lot of new growth happening here. London is doing fantastic, but the provinces are struggling here in the UK because of the impact of brexit. UM Germany is beginning to slow down a bit too, getting close to being in intercession

as well. The nice thing about our model though, is we're in a hundred countries around the world, so you know it's a bit of Some markets are down, some markets are up, and we continue to grow you over year. I want to ask everybody, since you mentioned brexit, UM, got another question for you, what external factor is hindering your company's growth the most? And our choices are Brexit, trade tensions, that's all one, disruptive technology, lack of qualified talent,

access to capital, over regulation, and others. So as those come in, we'll pull them into our conversation. But I'm curious what external factor is hindering your company's growth the most. I'll think what frustrates me the most because we're growing quite well. We're actually doubling our pace of growth right now, so it's hard for me to say is governments don't really understand the value value of tourism and hospitality. On

the economic cycle of the world. Um so when in ten jobs today it exists as related to travel, on hospitality and tourism about to inten close to is that what's being created. It's it's a huge part of the global economy. It's a huge part of giving people skills where they can start entry level and work their way up. And it's a huge part of value creation and cross

real estate. Most governments really take this industry for granted and just assume it's going to happen, and so governments that really understand the value of tourism and infrastructure benefit from it. But I'll give you an example one country I used to live in where the tourism portfolio got lumped with the resources portfolio Australia. Imagine how much how much focused tourism got when the minister was also worrying about resources, which is the single biggest thing drive in

the Australian economy. Yeah, and so, and it's sitting down with with people think about labor. You know, immigration policy. You know, I've been pushed aggressively. I've had multiple meetings

here in number ten. You're saying you've got to rethink your immigration policy because you don't understand what the impact of what you're suggesting are you know, and and and that that's what frustrates me when governments really take for granted an industry and don't understand that how much value can do about accelerating growth and driving prosperity for for countries and creating jobs. Do you find it interesting? I just want to look at their responses, what what external

factor is hindering your growth? And most they say access to capital? And I think if you're a startup, I could you know and understand? I can understand it. Um, what's strange? In my kind of an easy money environment? There's so much such a way to capital. I mean right now, I mean we're in an environment where we have never seen more access to capital private, public market, especially private markets incredible amounts. I mean, yeah, does that

surprise you? Did? It did surprise me in that, you know, because I mean even like I was, I was, I was just in a meeting now in a real estate development group, and you know, people are constantly saying, I've got two billion dollars of capital to deploy. Where can I put this? Because Johan's somebody wants to that. Anybody needs some some hotel real estate, and there's I mean,

that's one of the real challenges in today's age. Right, You've got historically low cost of debt, huge amount of capital sitting on the sideline need to be put to work. Where does it find the right returns? And that's driven some interesting behaviors in the public markets. Have you've seen recently, Absolutely, we work anyone. Yeah. Um, future growth. I do wonder about,

like you talked about China. I want to dig a little bit deeper into that because I have this little tricky times and strange bedfellows growth into a politics, and I think about China specifically Hong Kong. There was some impact on your earnings. Others in the hospitality industry, in the luxury industry are certainly feeling the result of those

Hong Kong protests. Um. I think about the n b A getting whips ode after one of their coaches made some comments in support of the protesters, and then quickly the NBA saying wait, wait, wait, wait, you know we love you China. I do wonder about, you know, what is your responsibility and role as the head of a publicly health company, as a leader that has looked to when there are injustices around the world, and yet you still want to make sure the door is open for business.

How do you how do you reconcile this? Yeah, it's one. It's one of the tensions in leading global companies of understanding what level of drive for change and advocacy do you have to take and what's your role in society overall? I think in this day and age um there is more of an expectations of global chief executives state more of a leadership role on big issues, whether that's you know I talked about like sustainability is a big thing

that we're focused on. We come back to diversing inclusions nothing because in general, people see governments failing in those spaces and customers and colleagues look to us as saying, what are you going to do about it? Right now? When it comes to some of the broader issues of where you're gonna work, you know, we've been in place. We've been in China for thirty five years. We're at the foundation of that industry and so you know we're

we're can closely across China. Thing. How do we work with universities and schools to develop talent and help people to come into centery and build, build prosperity, and build careers. And so, you know, we talked about our core purposes true hospitality for everyone, and that means in the communities who work, and so we helped build schools in China.

We partner with universities, we train and develop. We have thousands of students in our academies UM because we really fundamentally believe that as people travel the world more and stay connected, that the world is a better place. And that makes me see the results of that in terms of being involved in a place. And you have said, no, I know, we talked about a Russian deal and you guys were like, Nope, they're not going to get involved. But during China for a long time, you're in Saudi Arabia,

you're in the Middle East. Yeah, you know, it's being an advocacy for changing and we talked about for example, UH in Australia last year, the team came to me and said, we want to publicly come out and support UM gay marriage, and I said, absolutely, We'll get behind it. Change your logo, we change our logo for pride UH

and now we can do that there. Now in some markets, I wouldn't do that because effectively, I know that it goes against government policy or the laws, But how can we advocate for other change trying to make things better? And so you know, you mentioned Saudi is an example of where there's been transformational change for for for in the positive in terms of the Saudi ization of the workforce, the role of women um in the workforce. Now the opening up of Saudi too now fifty one countries, visa

and arrivals. So lots of positive there now that without question. They've been challenges in the past though, and things that aren't right right and so but if you're in there, you're in the dialogue. You can help shape things for the better, for the future and help continue to build out that industry. And the more that you know, more the country's open up, we believe it's better for the world.

And you do see the fruture effort. I'm going to purse a little bit because I do think after Jamals, I think we just the world couldn't believe it right, and I think everyone thought okay, and the world did take a step back um roughly a year later or so. Saudia Ramco certainly see the financial community everybody wants a piece. I'm not making a judgment call, but I do wonder when is it that you know companies have to put

their foot down and say this is not okay. Yeah, I mean, and again I understand there's cultural differences, but then there's something that was horrible and it was wrong. What happened? You have a choice. They saying this is a country that is going to continue to open up, wants to drive for international tourism, wants to be more open to business, wants to open up to more cultures. Do you participate in that and help that happen or do you sit back and say, no, we don't want

that to happen at all. And so, you know, generally are like I think when I go back to China, go the positive influence we've had in shape in their telustry in China is great, and we can do that in so many different countries in the world. You see an impact by being there, Well, I see it in the people that we've helped in their careers. So I look at so my team when I moved to China

was in the general managers. There were principally foreigners. I would go into room like this and running my Chinese business. We're basically expats, and we made a commitment when I was there eleven years ago saying, you know, we have to localize our workforce because that's the right thing for

to do this industry long term. And today I walk into our our leadership team meeting there like Chinese now, these teams have worked for us sometimes for ten and fifteen years, and so we've given We've enabled their careers to develop and grow. And so that's the good that we can do is as an industry to help grow people's careers and give them access and then help people

work internationally as well too. So so when you think about some of the inequalities in this world, that is certainly a big issue right now right and certainly impacting elections around the world. Uh and many would say rightfully. So, um, you find that by being in a market you can maybe help. I mean there's some markets we don't go into, and there's some things, some people deals we want to do.

We mentioned there was a deal the other day that came up and we looked at it and going as far as we can tell, there's somebody involved here who's basically on the no list, and it was going to be a great hotel and a great location. I said, we're not going to do so would have made money for you guys? Would money would have been a lot of money for us. But again, fundamentally, when you're running, whether you're running a public company or private company, the

decisions you make to find who you are culturally. And you know, I always say to my team, people will hear what I say, but they will see what I do. So I can say all these great things about who we are culturally, but if they see me go over there and do that deal, they're saying, he's in just for the money, doesn't mean it. Diversity, women, people of all backgrounds, inclusion. And I love it that this is what came out of this group rather than diversity inclusion.

How do you work that in and how does that help you in terms of growth at the company? You know, it's UM. It's a huge priority for me personally, and so I created a diversity inclusion board for the group, which I chair when I took over as chief executive. UM right away, yeah, right away? Yeah? Did you walk in and be like, are you guys kidding me? It was just a realization of where we had to change.

We're very traditional British company and pretty buttoned up, like we wouldn't have changed the logo to the Pride flag a year a few years ago, and I keep out of being simple math. We need great talent. There's not enough out there and we have to be a better company to work for. And so you can do it say we're gonna be focused on diversity and inclusion because is the right thing to do. There's a business priorities.

I can't attract enough high quality talent out there around the world today, and so we have to head down that path of making sure that everyone, irrespective of you know, preferences or ethnicity or whatever it might be, whose talent feels welcome to work in our company and has a

great opportunity to grow. And that's been it's been fantastic to see and you know, it's it's empowering to your organization when they see you actually making a difference and when people come in and want to talk to you about it. Is there one you talk about this board that you've created, So is it entry level all the way through your board in terms of treating diversity, And it's all the way through but um, but it's both operationally. One thing that we're challenged with is getting women into

senior operational roles. We are really gender balanced to a point and then it becomes male apart. We've been trying to pick that apart. And really we've been around for a long time. I know you for well in two issues. One was and I mentioned walking in there was clearly a historic bias against women in commercial roles. And then again there was a bias against women in commercial roles. It was your great and a functional role. It gonna be great head of HR, You're gonna be a great

marketing director. But you know what, you know, you don't really maybe have the sharp enough elbows and the hard enough drive to be in that commercial role. It's bullocks, honestly, And but it was the perception out there for a long period of time and or that you have to it's his act and look and be like a man to be successful one of these shops. And we have

to dispel that myth. And so I mean I promoted now three women in the last probably eighteen months into m D roles and there's some of my top forms the entire company, but two of them previously they were said, we're told directly they don't have what it takes to be in these shops point blank. I mean we're actually told recently, not so long ago, not so long ago, and so you know it's but what did you take

in leadership proactive talent management? I mean, I sit down with my C. H. R. Oh and we're mapping out any time between twelve and twenty four months of moves for people to make sure that they have the skills. Because the biggest promises you haven't asked. You haven't you have an aspiration to do the job. We haven't given you the experience. The job comes open, what happens we

sit there and tell you don't have the experience. We fundamentally are now managing the talent saying what are the experiences you have to have to be ready for that job in eighteen to twenty four months. And now by doing that, we're setting ourselves up with much more optionality than we have previously. Because it's not easy to fund workers anymore. It's not and you don't want to lose them.

That's expensive for the company. No, No, And the thing is everybody's trying to recruit and fishing the same pond. You just can't keep doing it. So I have to ask you, why isn't your boyf D fifty men and women. It's been a challenge where where we get awards for it, but we're not. Um. I'll be born with you. And you know I talked about there's not enough women who have been in the senior management roles and companies. So we're really struggling to find enough of that talent out there.

And that's where I'm pushing, you know, more and more of getting more women's CEOs, more women's CFOs, more people in the c suite and senior management, so there's more people have had some of those experiences to get ready for boards. I did push them though, because I said, okay, wait a minute, there have been a lot of boards

that have been predominantly men for a long time. And let's see, we had the financial crisis, We've had accounting scandals, so even though we had people who had the skills in place, we had a lot of problems. I'm just saying, 've been a good sport. I do want to We only have a couple of minutes for questions, as anybody have a question for Keith, really there, do we have the microphone? Do you have the Okay, we'll get we'll

get a mic too. Good question, excellent question. So, Um, for every analyst meeting I had and those of you that you know we're being a public company, is like they're constantly hounding you on you know, anything that could threaten your business. They were convinced for four years the

Airbnb was the existential threat to this industry. We finally have convinced them that's not the case because home sharing has been around as long as hotels and in general, what digital has done, whether it's the Ubers of the world, of the Airbnb's of the world, as they have removed friction in the path to purchase in previous industries and effectively been able to consolidate. And so Airbnb basically has

put out a lot of other businesses out of business. Um, it's brought a little bit of supply in, but it's had just a nomenal effect on our industry overall. Um. But it was it was one of the hardest things to be in the public eye. People going, they're gonna kill the hotel companies and we're like, no, they're not. And here's why do you have another question? Oh, oh, I'm sorry. Uh, let's go to Mike and we'll come

back to you. I promise we'll try and be quick so we can get a few more question said, Go ahead, please, Hi. It's a question about you know, equality, inclusion, everything, and you know women being one of UM factors. You know, because people can be diversed on ethnicity, on origin and many many things. How in your experience, UM, you define the most effective way to deal with certain things that are not spoken within teams. Western versis non Western person,

you know, different backgrounds, different universities, degrees. Just for clarity, I'm not complaining about my case, but observation. You know, when you see this hidden attitudes of superiority, inferiority, you know, bias against bias against people you know, and if you observed, for example, I come from big investment, being right, then I run my own company, or you go to different places, it's it's I think, a common problem globally. That's my observation,

without question. Uh. The breakfast meeting I was at this morning, we were talking about so we're running right now a global program about conscious inclusion and unconscious bias, and we were talking about we often think about its men versus women, but there's so many other unconscious biases that are out there and um and not because you were speaking about when I highlight regularly and I learned was non native English speakers in our company, we didn't realize there was

an unconscious bias against them because effectively in the hospitality she were about executive presence and ability to present and

so forth. And so it was amazing, right, so our talents in in Asia, who speak sometimes three, four or five languages and English isn't there first, were some of their views were being discounted because they weren't a native English speaker in the And so what we've had to work through is really understanding of how do we help facilitate much more structured conversations in those environments to get the best and brightest out of all of our people.

And it was an humment with me and I hadn't realized it, and actually came from our China team because one of our most intelligent leaders in China presented and people were kind of really not engaging, and I'm like, this is one of the smartest people in this entire company. But because he's not perfectly articulate in English. People were kind of discounting what he was saying and not being

able to get across. So it's a it's a it's a clear point of so what did you do in that case or just in general to like get the company a thing differently? Well? With him? Actually, you know, I coached him. I worked with him one on one because he was going through because we were doing a

practice session for him before presentation. I realized I'm going to have to work with him and help him do this, but also making sure that we cued the team up on what were the critical things we were trying to get out of this, and that they knew how to engage with him and not just be expecting to be spoon fedded. But it's it's a tough one and I think that in particularly global companies, multinationals, you could be

really concut ways of working in style too. I mean, my team in China used to joke with me, you know, I'm you know, I grew up in the US and a pretty linear point at a point B, straight line, get things done, um, And if you work in China, you'll know that there's nothing straight line about working in China. And so the team asked me, said if I would put a little bit more wave in my line, they would try to straighten there's out a little bit. And and we worked through that and because and you have

to think through who you're trying to lead. And then when I was writing our China business and strategy, you know, my favorite quote was one time one of my top team walked into me and said, Keith, it's really hard to draw elephants if you've never seen one, and you're asking me to do that every single day. Super intelligent had never worked in a scale business, never been outside of China, and so I'm asking this person to do

stuff without contextualizing it for him and helping. And I was like, wow, very humbling moment, because I was frustrated that he wasn't performing, and it was actually on me why he wasn't performing. That's Keith bar He's the CEO of I h G. So that's a big, established company. And then we went a little bit smaller. Julie Dean, she created the company. She's the CEO and founder of the Cambridge Satchel Company. So we talked about what it

was like to really start something in your kitchen. So we're gonna talk a little bit about markets, if that's okay with you. That's what I thought we were talking about. It's a good long way. First of all. Two, when you started your company with your mom, Yeah, it was just me and my mom because my mom's the only person that I didn't have to pay. So it worked out really well. It did write really well. Yeah, she's

doing okay. She's brilliant. She is one, um the most stylish, optimistic, fun to be with person of anyone that I know. Um and and just perfect, perfect taste. She criticizes a lot, but I mean it goes with the territory, so it's fine, yea to right. Her favorite saying at the moment is Julie, your life is passing you by. That's our next Bloomberg breakaway. But my mom had come to that woman. So let's go back to two thousand eight. Nice timing, financial crisis,

no factory, no suppliers. Yet you have an idea, an urgency. You even need to pay your kids private schooling, no investors. Just six hundred pounds you and your mom. Six hundred pounds is not nothing. That's that's true. That's true. Six hundred pounds is not nothing, right, I know that you know in the word and forgive me and the world's inequality. I shouldn't be insensitive. No, you're right, it's not insensitive that six hundred pounds. Yeah, and you created a company

take us back there. Yeah. Um, so it was it wasn't really that I had my eye on global markets to do with timing. It was more that, um, my daughter was getting bullied at school and had all these bruises on her arm, so needed to get her to

a different school. The urgency, Yeah, thats surgency. M So it was seeing her going through such awful time, seeing her literally kicked on the floor at one point that it was the end of the summer term, and um I said to her, don't worry, you're not coming back here. So that's when you have urgency, because you can't say to your daughter, you're not coming back here and then I hope that she's forgotten and take her back. She was eight, She was eight, and her brother was six. Um,

and so yeah, there was a sense of urgency. It meant that I had the school summer holidays and six hundred pounds to create something that would sustain a twelve thousand pounds a year school bill for two people, because you can't not send the brother because then he'd hate her forever. It's not health. Fee's healthy. It's not healthy. So um yeah, and and school fees that's after tax. You know, that's some money you take home after tax, so you have to learn earn a lot more. So

you have this idea. Yeah, Well no, I didn't actually have an idea. I just had a need. I think, okay, I think that's the thing, And so I had to go home and um, sit at the computer and create an Excel spreadsheet called Things I Can Do to make school fees dot xls were the other ideas. So I just came up with a list of ten because ten's always a good number for lists where we're bag settles. Well, it was, they were all. The positioning wasn't important at that time. It was all in the sort of the

ranking of the columns sustainability. Can you start it with six hundred pounds? Would you get enough money fast enough to meet school fees? If I died in the process, would it be something that would be ongoing? Because I didn't want them to lose their mother and go back to a bad school, so it's quite logical. Oh my god, I need a therapist right now. No, it's not. It's just you know what happens, isn't it. You just got

a crack on. You just do, which is such a sensibility that I got in reading about you and your conversation. We'll get into that, but you really do. Logic has guided you in creating your business. It's all about logic, otherwise I don't really understand it. So when you think about markets, this is what this keynote is about, did you do any kind of research about that and trying

to understand? Because I didn't have masses of time, and I knew that I needed to have on my list of ten things because I gave myself half an hour. I'm very time compulsive, so it was like fifteen minutes to create a logo, ten minutes to come up with a brand name, half an hour for a list of ten things. So, um, because it's good to be efficient, right yeah, nothing like an amateurnalist, nothing like a deadline.

I love it. Yet things done exactly and um, So satchels were on there because I was just sick of having to buy bags that didn't last, and they weren't sustainable or you couldn't clean them, and they looked awful, And then you were back at sports Direct buying some cheap thing with a nasty zip that wouldn't work for very long and had high school musical on it, and then they wouldn't like it a month later, so you'd

be back getting another one, you know. And then so I just didn't want to keep buying, right, And I had a school Sachel, and I had it right the way through school, and it it sort of looked better at the end than it did at the beginning, and I just thought, there are some things worth thinking about.

Your school bag isn't one of them, all right, So then you finally do don't quote me on that one, because my business is like based now on Sachels so more exactly, so the school bag is actually definitely worth thinking about. So you decided to move forward with this. I mean, you did everything. You coded your for a website. You know how to code, right, you learned, I learned. You learned. It's nice because it's quite logical and you

figured it out. It's fine. Factory manufacturing, Like, what did you do that? That was a trickier one that was a trickier one. So we actually got persistent right in finding your first kind of You found a shot that you like, I was really irritating, is what you're getting? And I think that that's probably but it works. You found a shot that yeah, And I think the thing with manufacturers, well, it's the thing with me that I've realized over the last ten years is I'm actually really

poor at communicating certain things. So I think that everyone sees things the way that I see things, and then I'm irritated when they come up with something different. And it's because I haven't explained it took a long time to get to that point. Um, And so in my head I was thinking school satchel. Everybody knows what that looks like, so why are people being so would and and not? And so in the end I was so

frustrated that sort of made this. See now you come into this kind of world and you know there's names for things. So it's prototype. I made a prototype. It was two cereal boxes covered in brown paper with sort of like buckles grow done with a sharpie on the front, and it's like, I want one of these, and you'd go around and you've got used to things like if they said they were artists, and it meant it was going to cost too much and I wouldn't be able

to sell it. And so I went around. But I needed to find someone really who who properly made them, not as one offs. Um. And so I googled school Satchel and it wasn't on the first like I went so far back in these pages, further than you know I've I've ever been a rabbit hole. Oh my gosh. Um. And then in the end I found this school in Scotland that that mentioned school Sachel in their uniform. I thought, yes, this is what I want to score. And so I

phoned them up and asked for their outfitters name. They gave it, and and I phoned them up and I said, um, I need Satchell's. Can you supply me with Satchel's And he said, um, no, I only have twenty four year that the concept of scaling wasn't big on his mind. I say, and um, And I said, well, can you tell me where you get them from then, because I really need to sell a lot of these to make school fees. And he said, no, I'm not telling you who my manufacturer is and that's really smart. I mean,

why would you do that? But there's there's kind of like this rule of the person who wins in this circumstances is the person it means the most too. And on this it was like I get to send my daughter to school where she doesn't get bruises, and um, he just doesn't want to tell me the name of his manufacturers. So this was never going to win on his side, and he could have saved himself a couple

of really miserable days. But if he just realized what your method was, you just kept calling relentless and so it is it's a school outfitter and um, so he's got this shop in Scotland and so from the moment he opened, I would call him like every twenty two minutes with a different question, and I'd be so disruptive, and so it would I'd phone him and say, so, um, what color are the settels? And he said, I I sell brown And I said, um, is that dark brown

or like brown? And and it was just to disrupt him, and he said it's just light brown. It's like a chestnut brown, chesnut brown. Put the phone down and then I'd phone him next and say yeah, and I have my time. It's like, how would you describe chestnut brown? You know? Because I and then turning two minutes later, it's like do you do black? You know? And then do you do red? And the whole day, the whole

whole day, and I was like deeply annoying. And then the next day I phoned up and straight in there with what sizes are set? I'm thinking maybe certein would be a bit better, because voting can be a little overpowering. And then I'd phoned him back and he lasted about three hours into that day and then he just said

how long are you going to do this for? And they said, It's a really strange thing is that in my heart, I know I have thousands of questions, um, but when I phone you, I can only ever seem to think of one at a time. And then he just gave me the name of this manufacturer and he was quite ungracious. Actually he said, here, God make his life a misery, which I didn't think. It was really sort of nice, but probably manufacturer. I got what I wanted,

So tell me about expansion. I know I'm jumping ahead a little bit. I do because at one point you did have to expand only manufacturer, but then you found out that manufacturer. It was hard because I had the first manufacturer, and and there was something to do around health and safety because I had four UK manufacturers that were quite small. Each one of them would not go. They couldn't really make more than about a hundred and

fifty bags a week. And um I had come up with this idea of sending fluorescent bags to New York Fashion Week on bloggers so that when the lights went down and they sort of took the photo of the bank would pop out from everywhere. And then the New York Times said we were the street style of New York Fashion Week and I had sixteen thousand orders on the website that and I had four manufacturers and they could all do a hundred and fifty bags a week. So I'm going back to the math that and talked

about that doesn't work that we had. That was a challenge that one um so I talked to the Department of Trade and they put me in touch with a company that were having real problems. They were about to go out of business, but they worked in leather and footwear, and so they had a lot of the same machines, the post machines, and some of the same machines that they need. Um they started and they really wanted to ramp up. So this was good, the one fifty a

week thing. This was really good. And they knew that I had sixty thousand bag backlog and so they were really on board. They could see the potential for that. Within three months of I was buying everything I was buying because they had no money and knew about to go under. So I had to pay for the bags as soon as they arrived, and I bought all the raw materials and they just paid the stuff. Within three months I found out they were taking a large percentage

of the leather. I was buying, making bags with my knives to the patterns and hiding them in a lock up across the road and then trying to launch. And that was all based on a brand. So that was an unforeseen circumstance. Talk about learning on the job. Yeah, that manufacturer you mentioned to me when you went after him, and I know there's litigation involved. He said, you've got no other choice. You're just as right. I know. That really irritated factor. That irritated me when I was seventeen.

I'm not stupid, so um that yeah, that really he pushed my buttons on that one. And I think that as soon as I knew he was doing that, I just can't deal with people that I can't trust. You know. That's a huge, massive, massive thing, and so I had to go down and get all the leather out of there and then deal with kind of the issue of where am I going to take it? Where's the manufacturer going to come from that's going to deal with this

massive backlog of orders that I've got. There's something amazing. In three weeks you opened up your own factory. I did because he said I didn't have a choice, and I disagreed with him on that. So I took all but two of his workforce and set up a factory. Well done, Well, he was wrong, because our factory now does ten thousand. We can make about ten thousand bags a month and that makes us the biggest bag manufacturer in the UK. And so I think that you do

always have a choice. It's a great lesson, tell me, um for our group here scaling up. You know, what's your advice about scaling up? Sometimes you can plan it, sometimes it just happens. And I think in the fashion business you can often go from not well known to all of a sudden you're known overnight and you have to scale you know, how do you any advice? Yeah? I didn't do scale up well at all? Okay, I

mean didn't start up. I did well. Start up. I was just going with my instincts and it worked and I did that really well. Scale up I didn't do well. So um, I was lucky. I got investment from really really good UM play it's really good vc UM. But what I didn't do well was at that point, I think in going through the investment process, I lost my self belief, I lost my sort of self confidence, and I thought, now I need to pass this to people who know how to scale up, whereas I know how

to start up. You separated them from start up? Did Yeah? I did? And I just, um, I just sort of felt that as a founder, I need now to trust people who have done it before. And and that was that was my mistake, because that's you know, it's not right because they might know how to scale it before, or maybe they don't know how to scale it before.

Maybe they just worked at places that were really big and had a big turnover and big teams and huge budgets and brought in loads of overhead, which wasn't my intention, but was the effect. It's was something you said to me. It struck me in terms of bringing in this outside investor. It was five years after you started, you said, after a Vivian Westward collaboration, which which was you know, as part of the start up rather than the scale up.

You said, because it was at the size that I didn't want to be the only person that it came down to needed support strength on my side of the table. Yeah, And that's stupid when I look back on it. When I look back at like, at the worst point, our backlog was over thirty thousand bags and I was starting a factory from nothing. Why did I think that I then,

you know, didn't know what I was doing. It's interesting, It is interesting, and I think that there is a thing of I'm I'm really hopeful when final stages of getting another investment at the moment, but this time I sort of feel like I know what I'm doing and I'm an integral part of the journey for this next part, and I'm not willing to trust any thing too much. And just stepped back too much. Even if somebody has done huge things at netaporty or whatever, you know, it's

just different budgets. And I think as well, and I know that I started came such was six pounds and we never had debt ever, never had debt. And for five years we had no investment. We didn't even have an overdraft. We had nothing, and grew into a company that was worth forty million, you know, and and no debt. And I think that I know now that I don't

I don't like debt. I can't be a company that focuses just on growing turnover, even if it means discounting and then just having loss making and thinking you're successful. I can't do that, you know, because that's not It doesn't make sense. It's not And I thought it was interesting what you said about you've learned that in many ways you're the advantage of not having been part of an established brand in industry, to not come from that background, because it made it so easy for you to say,

why would I do that? It's not largical, which is really refreshing. Yeah, which is you know, And this is the thing when you have people at a very very experience in their areas um and they come in and say this is the way it's done. You know that you can it can be a bit It's like, oh, that's the way it's done. Okay, that's why I've got this person. But that's the way it's done. And then going to a catering place where they come out with all these things for party, a launch party that I

didn't know. I didn't know you were supposed to pay guests to come to your party in the past years. Who just would Sophia and Lusbecter did all our records you she didn't ask for any payment for the goodie bags, goodie bags that you're supposed to pay people to come to your party. Give them a goodie bag filled with so much stuff of such value to these people who already have more money than than you know, most of your customers, and then pay for a car to take

them to their next party. It's like, why is that? Okay, that's not normal, you know it's not It's not normal to have catering where they think that you need a theme and a fruit sculptor. When did fruit sculptors even become a thing? You know, I know that I'm from South Wales, so it's the bar is different. It's London and you get away with stuff. But I mean either no,

but a man making penguins out of grapes isn't normal? Yeah, you know, and this is still the value of my mother can run things pastor and just so you'll say that's not normal. Is my favorite quote of the day already. Um, I do want to open up for questions, but I do also want to ask you before we do that, just quickly, you have dealt China is a large market for you love Chinese people, and I do think and there's so many of them, all right? Second? Great, all right,

second favorite quote. But I do think, especially from the US, we keep these trade wars and we do wonder are we going through decoupling where the world's going to be US and associate with its allies and China associate with as allies. What is it about the Chinese market that you think companies people run you know, if we're in Europe, not in Europe, whether they're in China or here, they

still need a bag. Isn't irrefutable logic? But you also I thought what was fascinating is you talked to people on the street. Yeah, you talked about a mission you went on on with Prime Minister Cameron. Yes, And but you were talking to there's a high level networking. Things pretty shy, right, But you were talking to the woman in the cloak room downstairs because I wanted to know if she was going to buy a bag that looked like and I showed her my bag. If you wanted

this bag, where would you go to find it? Because I wanted to know is it? Is it j D? Is it tea mall? Is it by? Where are they going? Understand it? Because I wanted to understand what normal people that people that don't know about food sculptors, normal people, where they would go to look for the bag, because

that's where we need to be. And and the people at the reception weren't necessarily going to be the people that they told you, And she told you yes, and then all the people behind the reception desk in the hotel said the same thing. So I knew I was right, And so that's really helpful. That's super super helpful. I mean, going on something like a retail safari, that's another stupid thing they call it. We'll go in a retail safari. It's when you get dragged aroun shops like you've never

seen a shop before. Stey logic. It makes no sense, makes no sense. And do you want to open a scepter? Questions? Um? Does anybody have a question for Julie Um doing the mics? I don't know where they are? Oh, please take them back perfect just quickly say your name and why I'm sorry? And Sofia Cook, I am chief exectly of food food manufacturing. Um, hearing of a lot of very similar things that I'm

going through. How do you recruit now, given that you've learned a lot in your journey, I really and recruiting is the most important thing, most important thing, And I recruit now the way I recruited right in the beginning. So Um. The first thing that you'll see on any Cambridge sexual job advert is must like dogs, you know, absolutely must, because I take my dog to work and if they don't like dogs, it's never gonna work. That's where there was a man in the bathroom. He said

he liked dogs. Clearly he didn't because he was scared to come out of the bathroom. Because Rupert was lying on the floor in front of the bathroom. So it's just exactly just leave him in there and he can think about what it means to lie. Um. And and there is this sort of thing of you want people who aren't going to say, ever, that's not my job because I have embossed initials on bags for ten o'clock at night or three in the morning, because I didn't

want anybody else to take that shift, you know. And and so if I'm willing to do that, I don't want someone who says that's not my job. You know, that's not my niche or whatever. Um, somebody who really really roll their their sleeves up and not to find that out though, well I think you can. You can when you talk to people about even how they got

to the interview. Then often you'll you know, if if tiny little things really get to them and irritate them, just say this isn't gonna work, or this isn't gonna work as you're boring or you're miserable, or because you're not gonna want them around. You know, we have the

tightest team, I would say, the camera sexual team. And Becket is over there, so she's got to say yes now, but it's um, it's the people that you would want to spend time with because they're going to be your team and you're gonna spend a lot of time with them, So you can't all just put up with people. Your team is the most most important thing. And do you have a list do people? Do you have a large list to choose from of people? What? When when we

advertise things? Yes? Yeah, the difference no, But I think that you don't need a large list because you only need one. You know, you need the one brand fit. And when when Becca Becca got hired for a job, she didn't even interview for I mean, she loved the brand so much that she interviewed for a job that really was clearly not your No, it wasn't your thing,

but you know, she just wanted to be seen. And I think that that that's the really important thing when you find those are the people that you want and you think that is just spot on. I need that person. I'll figure out where, they'll figure out what they do. It's great, that's great. Ut come here first to the box. I gotta throw it. Yes, what's the box about the thing? It's like, oh, okay, Hi, I'm Charlene Chen, co founder of a fintech company called as a Finance. Thank you

so much for sharing your story. It's incredibly inspirational. So I find that as co founders and CEOs I'm a CEO UM one of the challenges that we find is how to prioritize your time and energy as a founder and as a leader and as a company. So, you know, we're faced with crossroads where we could expand into a new market or a new customer segment, or just double down and you know, penetrate an existing market. What were some of the hardest crossroads you face and how did

you decide where to prioritize your energy. So it's a really good question. I think that UM. I remember when we had the the awful experience of sacking the manufacturer, having the eighteen thousand sort of sixteen thousand, it went up to backlog, UM trying to start a factory, trying to pick my children up from school and read the Golden keybook God um and and customers constantly emailing in to say where's my bag? Where's my bag? Because not once did it even occur to me to shut the

website down, which, looking back on it was interesting. UM And And there were so many polls. You know, there were so so many polls. I think that for me, um, my children will always come first. So you know, I had to be there to pick them up from school. And I don't care if I work through the night, but I need to pick them up from school and give them fish fingers or whatever. Um and and then I can walk through the night because it keeps me

grounded and stops me becoming a weird person. And um and and then it was I need to somehow, even if it's like a blanket email, just say and just be totally honest and say, I'm really trying to get to this, but I'm focusing on the one thing that will get your bag. And just be really clear that the only way to make all these horrible problems go

away is to start a factory to make bags. Otherwise, because it's it's scary, right, You've already spent the money that these people have given you on their bags on renting sewing machines, so you've got to make the bags

and get them done. And then once you've sort of sat logically and thought this is the plan, this is what I'm doing, to just not give it another second thought and to put blinkers on, and if that means turning your phone off or whatever and just not looking at email or whatever, just blinkers on and just focus on it in such a clear and determined way, because you'll know that there's one thing that would would make

more of a difference than anything else. I And then it becomes are you willing to do a lot of different things that don't make a big difference, but maybe they're easier or more achievable, or less scary or whatever. But there's a lot of those, but there is one thing usually that would be a game changer, and in my view, that's the one to go for. And that was Julie Dean, CEO and founder of the Cambridge Satchell Company.

I love the scale difference in some ways, Carol, because in many ways, bigger company doesn't always mean bigger problems. Some of the problems they're very similar. And next up we sat down with Ann Kerans, she's the executive vice chairman at MasterCard. Talked about that business, but also got into diversity issues hiring finding great talent, so attracting talent. We're going to get into that. I can't not ask you though, especially when one of the topics we're talking

about is growth. Ask you, with MasterCard having such advantage point on the global economy, on global consumers, how are we doing well. We're doing differently in different countries, so we're doing differently between what we're doing in London and what we're doing and sometimes the rest of the country here, and I'm sure that you're all seeing that. UM. As far as master Cards concerned, we're a big global company

in over two hundred and ten countries. Our market caps about two hundred seventy billion today, which is quite a change from what it was when we i pod in two thousand and six. It was five billion, which just goes to show that investment bankers at the time didn't know how much payments networks were worth. But I think that they've caught up quick um. And and there are so many fin techs out there today. UM. There are building things to piggyback across our networks, and I think

that is a really exciting time. We've actually worked with sixteen thousand FinTechs and we helped incubate fintech, so it's about, you know, a couple of thousand a year, depends on what geography we're in so things. There no recession. Well yeah, there are recessions in different countries, but of course, um, I think you know, in terms of global growth, what we're doing is replacing cash. We're replacing cash with digital payments and there is a huge secular shift everywhere in

the world to do this. And still of the transactions in the world that you and I would do and our everyday lives are cash. So the opportunity is massive in this space and that's why the growth and that's why the market cup. So we're here to talk about talent. I do want to ask you, abody put out their phones. I do have a quick question. What's most on your minds when it comes to your workforce? And if we

can bring that pull up the choices are. So, what's most on your minds when it comes to your workforce? Attracting talent, creating a diverse, diverse, inclusive and supportive workforce and culture, retaining talent and workforce? What are you kidding? Me? Too busy with everything else, And I'm curious to see what everybody has to say about that, um, and as the as the as it comes in. All right, retaining talent, and we know that there are extreme costs with retaining talent.

Does the group have it right? In your view? How do you see it? If you had to prioritize this list, what would you do? Um? I would you know, I would prioritize retaining talent as well. Um. Well, it's hard to prioritize these things because it's you know, you really need to attract the best talent in the market to

be out there. You know, do bring the best products and services, but more and more, especially with the younger people, you have to create a diverse workforce to attract the right talent in the first place, and then you have to create a culture that actually retains them. So let's talk about attracting talent. How do you do it at MasterCard? What are the skills you value? What are you guys

looking for and what are the applicants looking for? Because I do feel like and I tell folks that come to me if they're looking for DAB and like you're interviewing where you're working as well, So I'm curious what you're sor and what you do to attract talent. Yeah. So we're fortunately in a position of being an employer for choice of choice all over the world, and I think one of the reasons for that is that our culture is very good. You know, we believe in decency.

We think that everybody should have the opportunity to grow, and and of course we're in a tech business, which is highly desirable. One of the things that's a problem for us being in a tech business is actually recruiting enough women to be the software engineers of the future. And they're just not there. Um, they're not graduating from universities enough. I think the figure in the West is

about seventeen percent. I think it's higher in China. Um. And the issue there is that just not enough girls are staying on and doing science at schools and going

through to universities. So we actually run programs around the world called Girls for Tech, where we bring in girls like ten to fourteen years old into master Card and say, hey, it's cool working for a tech and a street tend to fourteen years old, yeah, because we think that's you know, that's the age before they stopped dropping mats and before they stopped making all of their school selections and so on. So we think you have to address it that young.

It's like it's like creating great sports people. You know, they start really young, and you're is about four hundred thousand students that you've been targeting this way, We've we've reached four hundred thousand, we're targeting a million. Yeah, it's it's really good program. What's the most important thing? Because we had one individual and I forgive me, I forget

your name? Is it Eric? Yeah? Talked about some of the different ways when they bring someone in, and one of the things they do is they say, bring your favorite T shirt. There's some different interesting things. What is it that you look at? Is it the CV that you still go to, or their background, or what is it that you look at to get the core of somebody?

I'm just curious what is Yeah, I mean when we're doing entry level recruitment, I mean, obviously we're out across universities and business schools around the world and we're actually looking add you know, what we think the potential of the person is what's their personality? To a certain extent, you know, skills are a given, skills can actually be taught, but you know, are you the sort of person that's

going to be enthusiastic interested? Are you going to embrace the culture these things are really important, and we do that not just at university level, but we bring back people who have been out of the workforce for a while, quite often a women, but sometimes their men. I mean, my husband was a traveling a trailing spouse as they say, so he had to re enter the workforce. He was a school teacher. Um. And it's a great way of hiring people sometimes in their thirties and forties who have

absolutely the right personality attitude. Maybe they need their tech skills brushed up, but they've gone another twenty years of productive working life ahead of them. And also, if you recruit people at this level, you have a better chance of getting people to go up into senior management, you know, if you retain them. This is interesting too because I love that you bring back people kind of at their mid career points. But the entry level is important in

terms of diversity. And let's just talk about men women. We are coming at the entry absolutely hands down, there's no no, you guys do it mass We definitely do that. We definitely do that. So what happened, So you'ret the entry level, but you told me that about women across overall. Why did it breakdown? Well, Um, you know, when you start going up and to senior management, the funnel starts to narrow. And we're asking ourselves our question isn't because

women are leaving to have families. You know, what are we doing in terms of flexibility and this kind of thing? Um? And I don't think that you know, we have a general answer to that question, but we're looking at how do people make the first move into management and the second move and how do they actually get up through through the ranks. And that has been hard and every big company. By the way, we're not a massive company.

We only have fifteen thousand people around the world, which were considering when we're in two hundred and ten countries, shows who that we're super automated because we're connecting with twenty seven thousand banks about fifty million end points around the world. Um, so we're not an HR When are people intense company? When you look at all, right, what do you think in your view? And someone who has been working for forty years in the financial sector, sorry,

are you trying to display my agent? I'm no, no, no impressed. Actually I haven't been in the financial sector forty years. I've been in a thirty years. I was an engineer. I was. I was a research scientist mathematicians. My father an engineer predominantly, though if you go back right,

it was a lot of men. Tell me a little bit about your experience in terms of bias biases that you experience, what that taught you, what you learned, and how you're applying it to MasterCard to make sure that there isn't that there it's in hiring or bringing people up the corporate ladder. Well, I mean when I was an engineer, I was the only woman engineer in Newcastle

at British Gases Research Station. And actually it has it's a double edged sword because on the one hand, you've very noticed it stand out, so I mean, that's that's an advantage, let's face it. On the other hand, things don't work very well for you. So when I decided to become an offshore engineer and do my training course in the North Sea in April, they threw me into the water off the coast of Yarmouth. Um the man suit that they gave me, which was the extra small size,

I was even smaller than that. Bear in mind I was in my twenties and a lot a lot lighter than I am now and quite honestly, the water just gushed through the back of the suit and I nearly died of exposure. So they had to create a new wet suit for me, a dry suit, actually rubber suit. And did there's a good story. I did leave it on the train on my way to Charing Cross. I was living at Bexley Heath at the time. Left it on the six together with a tin of marvel that

powdered milk that you put near in your coffee. And I went to the lost property office and said, I've left my bag on the train and he said, yes, madam, what did it contain? I said, of rubber suit in a in a powdered milk and he said, he said, what was the powdered milk? Call? But the thing that there about me about this story is that I read the other day that the women astronauts there weren't enough suits for the women astronauts, and I thought, my goodness,

it hasn't changed in forty years. It's amazing. But this goes into a conversation you and I had. Is it the book Invisible? Yeah? Yeah, Invisible Women Invisible wore about how the world, Well, it's just not designed for women. Yeah, crash dummies weren't designed for us, so we have more accidents. I mean they're fixing that now. Microphones weren't designed for us, so we kind of squeaky that. In fact, we were told.

I was told when I was younger, just speak with a deeper voice and then you're going to be Okay. It's a Henry Higgins syndrome. You know. Why could a woman just be more like a mom? Just adapt? Oh? Sorry, So I'm talking about diversity versus skills. So tell me a little bit more about how you view diversity and how you when you're hiring someone at MasterCard, how do you layer them? What's most important is that you layer

skills first and then diversity on top of it. And before we do that, pull out your phones again, because I have another question. When hiring, I'm curious about all of you. The priority is one best person for the job, diversity first half the time, Skills matter most half the time, diversity mass matters most. We don't have a plan. We'll see as these come in. So how do you best person for the job. It's always the way that that

we would hire. But I think that what you do is you try to create something which is a balance slater diversely, you try to get people from different backgrounds. Obviously are looking for the right sort of skills for the job. But as I said, skills can actually be taught. It's really you know, have you got the best person for the job. And I can see that that's you know, that is the most dominant answer here. I would expect

nothing less. And by the way, you know, if you talk to anybody who if you talk to young people today, by the way, they hate the whole idea that anybody is being classified. Don't classify me as a woman, and don't classify me as a minority group, and don't classify me because I've got a disability, and don't question whether I'm this gender or that gender. They absolutely reject that. So all of this stuff that you know, we've been doing in our generation, here's a person that looks like this,

and here's a person that's diverse like that. They don't like it at all. So you know, we're going to have to rethink this. But I agree with you that I don't know how everybody feels about this, but we can't sly at you know, officers put people into groups. Yeah, the women's group and this group that versus And how do we expect everybody to assimilate and kind of work together if we can't sth me do that? Yeah. But you know the other thing is that if you've gotten imbalance,

then you also have to address that. You have to address it somehow. So, you know, especially when you're running the country company, you've got to make sure that you know, you know how to change things. I'm curious what you think about ethnicity pay reporting. Do you do you support something like that? You know, I began not supporting it, I'll be honest, and I think you know, we were together at a Tortoise event where I was saying, hang

on a minute. You know one of the guys that works for me, his father's I Rainian, so he's half English half a Rainian. He married an Indian woman, so what are his kids? You know, this is back to does anybody want to be classified these days? Having said that, I do think that if you don't measure anything, then

you're really not aware of what the gaps are. And I think at that particular Tortoise event that we were at, the there was huge gaps, not just a gender pay gaps, but pay gaps where people with disabilities were enormous, and they do measure that was measured only for men. But still, I guess being a mathematician I believe in measurement or a statistician I believe in measures, Yeah, I do. I think numbers and math get to an end. Maternity paternity leaves.

This really struck me that if you really want equality when you're hiring somebody, if you have equal maternity paternity leaves for someone, you're not going to look necessarily like that woman saying I'm going to lose her for three or four months or whatever it may be. But if it's equal, yeah, absolutely. I think the thing about paternity paternity leaver is have you created a culture that says it's okay for and it's usually the men, but it

can be saved sex partners. But is it you know, is it okay for the dads to stay home with their kids or you know? And in in our firm of the leaver has taken all over the world, and that is telling you that the culture works. And I

agree at levels of playing field. First, it's good for the kids, it's good for the parents, but I also think that at levels of playing field a bit that you aren't looking at women differently from men UM But you know, I I also realize that in small companies this must be very very difficult, you know, dealing with things like these leaves. And I do think that that that, yeah, there's a cost. And I think that the government should be looking at the whole social infrastructure and what support

they give to business from birth through to school. Actually because I think, for example here in the UK, to go to work when you know you're living in London and you've got a small child, it's really very difficult. You're paying a fortune for it. You know, I actually paid for a nanny in order to continue my career. I could have had a childminder. Most of us don't live near our parents or extended families these days, and and so it's it's a real thing that I think

we should think about social infrastructure. I want to actually about corporate boards and I'm jumping because I want to get two things. But you, um could chair the thirty club in terms of UM women on corporate boards. The target was meant to be hit by was reached ahead of schedule. UM. You made a point of saying. A big point of saying is the floor not the ceiling.

Why should this number be a baseline. Well, there's a lot of research that shows that once you get to that level of then whatever group that you've got starts to become the normal. You know, if you're sitting in a room of sort of ten guys, it's funny, you know, if there's a couple of women could be you and me, and you're completely different to me in every respect, but they could get us confused because we're just other, right we have we have a few more women in the room,

then you cease to become other. And it's the same with other groups as well. And I mean, the research it's out there. I want to just throw in another pole to everybody about in terms of performance, UM, from two thousand five, pull out your funds if you could. From two thousand five to twenty eleven, companies with one woman or more on their boards outperformed those with no female board members by how much your choices seven twelve

percent eight I'll tell you the answer, um. But and it's not just about the right thing to do, but the research continues to show you that in terms of performance and the answer. Correct answer, by the way, is d it's over six years and that includes the financial crisis. Based on relative share performance. I mean, I mean, it may well be showing that these companies anyway are enlightened and they're going after the best people for the jobs

and so on. You know, it's not that you certainly stick a couple of women on your board and suddenly of performing so much better than the market. The truth is that you're a company that actually thinks about this. I think that's what that measure is telling you. But these measures are real, and I've seen things on the S and P that's you know, four hundred percent on a study of fifty thousand companies over ten years. And I'm a great believer in data because I like to

see business cases for things. I don't like to think, you know, we're just doing this because you know, I've got there's got to be a business calse. I do want to open up to questions. So please, if you have a question for Anne, I think we've got mikes around, please just stand up and and do your question of a question. Out there in the back. They're getting mike to you. It is a big room. It's a great room. He's got some really wonderful observation. Just quick say your

name and your company. Um, Mike kind of outs broker. Um. So I've got a female managing director. She's awesome. I've worked with her for fifteen years. Um, she gets approached an awful lot to make board quota and I'm sure that's my strongest retention approach is actually just to hire her because she's awesome. But she she's actual's been for interviews, She's spoken to me about it, and at some point

during a four interview process on mentioned quota. Just interested in whether you have the same experience and actually whether it's the same people being churned. Well, first of all, we don't have quotas in the UK. If it's for a UK board, certainly we have them in Germany and France, Um, most places in the world. They are not quotas their targets. But people could use the same term, but quota actually

means something completely different. I've never been recruited. I don't think to meet some sort of quota and I certainly wouldn't like it. And most people that I talked to feel exactly the same. Not most people. Everybody. Everybody wants to think that the right person for the job, whether the most senior or the most junior person. Um So,

I actually don't really believe in quotas myself. Having said that, you know, I can also see that if you're just not getting any change to occur are at a country level, you know, for instance, in Germany, you might take a different view. Yeah, and and you your comment about people

rotating around. I have heard of that in Scandinavia, really really small markets there though, you know, like five and ten million people, five million people in a small percentage of business people Here in Britain, I don't think that that should be a problem. And the question, all right, just to wrap it up then, oh please, oh right, there ahead be defining from Taylor Winters. Do you think

we should focus on inclusion rather than simply diversity. Diverse is very hard to define and you end up with people in subdivided groups, as you mentioned, whereas inclusion hopefully leads you to diversity. I completely agree with you. Actually, I think inclusion is the thing that you should really focus on, and I think in in every form, and you know, some of the things that I hear, particular in the startup industry is in the tech startup industry,

they'll say, well, I can't get any programmers. And I'll say where you're recruiting from, and they say, well Oxford, Cambridge, m I T Stanford, And I go, well, let's the problem, isn't it. You know, they're not not even thinking of including all the great engineering universities and so on. So I think it applies to everything. That's a good point though, Anne, right, expanding where you're recruiting from, because that people tend to go back to the same places and then you get

the same time. Well, the guy who founded slack, you know, he's he's British and and he he actually went to Birmingham University, which you know for all of that's look at the demographic of the room and you'll all know that as the Polly in Birmingham probably a lot of you and and his company is a great example because he's gone out across America particularly, and recruited from many different schools and has a very diverse workforce. As the last question, please, I just had a comment on them

whether you should uh fulfill the quota. Like I'm in tech and I get asked to speak at conferences all the time because I'm a woman. In fact that they don't even hide it. They say, well, we don't have any woman, so can you speak. At first I got absolutely kind of like I felt annoyed and upset about it. But then I realized if I didn't speak at that conference, and if they didn't have another woman, or if they had a woman that weren't as good as speaking, Um,

I wouldn't be helping for the next stage. Yeah, well, that's very different from getting a job, because if you're in a quota, what you're doing is being a role model. And I think you absolutely should do that, and you've got to make time for it. And it's very exhausting doing that all the time, and um, and you know, you've got to get the balance between your your day job and and and doing that. But I think it's very worthwhile. The world needs role models, of world needs sponsors.

In all of my career, the people who helped me were men, because there we're only men there to help me, and you know, and they were absolutely fantastic. A man promoted me on maternity leave. A man recruited me to the c suite, A man recruited me to my first board possession. A man recruited me to be a chairman of the clearinghouse, so you know, we need sponsors and we need men to help us. And that was an Karens. She is the executive vice chairman at master Card. So Carol,

I turned to you, would you take away from Breakaway? Well, you and I spent so much time on our weekend shows, on our daily show talking about diversity. I've been telling you this in the news room. One of the things that came up with something like neurodiversity that when we talk exactly it is a thing. And when you think about workforces, it's not just about having a mix of men and women and people from different types of backgrounds or different colors, if you will, but it's also people

with maybe a d h D or dyslexia. How do you incorporate them into the workforce? If you think about it, it's a lot of entrepreneurs who have had dyslexia. They've gone on to create incredible companies. But it would be a shame if we're kind of squeezing folks like that out of the workforce. Some fascinating conversations. To be sure you've been listening to Bloomberg Business Week Extra. Be sure to tune into Bloomberg Business Week Radio Live Monday through

Friday at gpm Wall Street Time. I'm Carol Masser and I'm Jason Kelly. This is Bloomberg