Annabelle
Low, GMBA Class of 2018
In its fifth season, the McKinsey
Global Leadership Course is one of the Tsinghua MBA Flagship courses, taught by
one of our school’s Advisory Board members, McKinsey & Company’s Global
Managing Director, Dominic Barton, and Tsinghua SEM’s Professor Zhirong Duan.
The course’s objective is to
develop future leaders among top students at Tsinghua through McKinsey’s unique
approach. It aims to equip students with new knowledge and theories drawn from
leading business practices in key functional areas, with an emphasis on
building students’ capability for problem solving with deeper insights. The
course provides exposure to and interaction with distinguished business leaders
for leadership development purposes, with an end goal of expanding students’ grasp
of broad yet concrete leadership concepts such as leading organizational
change, driving innovation, and decision-making in crisis. For the first time,
this year the course had a “Lead in China” theme, which meant that the contents
were further contextualized to the business environment in China while still
retaining a global perspective. Another first: the course was accompanied by a
digital classroom.
The response to the course was
enthusiastic, with students actively participating in the robust Q&A sessions
that followed each class. Some of the key takeaways from the course are as
follows:
Class 1:
Core Themes of Leadership: Dominic Barton, McKinsey Global Managing Partner
Mr. Barton set the frame by
emphasizing that we are at the start of a unique time in history – economic
power is shifting to the East and South. The world is moving faster than ever
before, creating an incredible pace of change within the business world. In the
new era, who a leader is (i.e., their character) matters perhaps more than what
a leader does.
The next 20 years, he argued, will
be some of the most disruptive and exciting our world has seen, driven by four
global forces: shifting economic power, accelerating technological change, the
aging population, and underpinning this all, system-wide transformation.
In 21st Century
leadership, leaders will be defined by what they do and who they are. Leaders
must set bold ambition. They need to anticipate the second bounce, prioritize
and compartmentalize, keep a dual “telescope and microscope” perspective, and
manage their energy, not their time. Meanwhile, leaders are also “Chief People
Officers.” They need to possess a sense of purpose, selflessness, decisiveness,
and resilience.
Class 2:
Technological Disruption: Winston Ma, Author of China’s Mobile Economy: Opportunities in the Largest and Fastest
Information Consumption Boom & Alan Lau, McKinsey Senior Partner from
Hong Kong Office, Leader of McKinsey Asia Digital practice
Mr. Ma and Mr. Lau shared that
innovation is a must for China. They offered evidence that previous growth
engines are stalling due to an aging population and lower return on assets.
Innovation is also falling: it drove 40-48% of GDP from 1990-2010, but only 30%
in the last five years. Digital adoption in enterprise has been lagging, which
means that this could be the next big wave for Internet-driven value creation. There
are many “disruption” opportunities in China – for example, Internet-driven
innovation, experimentation with new business models, B2B Internet/digital
applications, open innovations, and hackathons.
Class 3:
Investor’s Perspective: Mark Wiseman, Senior Managing Director of BlackRock
Mr. Wiseman stressed that
encouraging long-term behavior across the investment value chain is critical
for success. However, he acknowledged that getting this done was easier in the
past 30 years due to relatively high returns and that returns over the next 20
years could be significantly lower than long-term averages. He also shared that
the asset management industry would be driven by these four key trends: rapid
growth, as institutional investors, who already have an estimated $82 trillion
USD in assets under management, are entrusted with a greater share of
households’ wealth; changing product demand, with growth being driven by
passive/ETF, multi-asset solutions and alternatives; new clients, where
emerging markets account for a large share of global flows; and regulations in
both mature and emerging markets that affect market structure and competitive
dynamics.
Class 4:
Operations: Fredrick Spalcke, Chief Procurement Officer of Royal Phillips;
Karel Eloot, McKinsey Senior Partner from Shanghai Office, Leader of McKinsey
Asia Operations practice
Mr. Spalcke and Mr. Eloot turned our
attention to operations, reminding students that operations excellence is
essential to competing today, as it can increase revenue and hugely reduce
costs, directly boosting profits. This is even more important to China, where
the key to success is becoming efficiency-driven, instead of growth-driven.
China’s economy is at a turning point, and operational excellence is key to
increasing productivity and addressing rising costs, increasing consumer
expectations, and volatility.
Operations excellence comprises two
dimensions – an advantageous strategic footprint and superior execution. Industry
4.0 will become increasingly important to operations as it disrupts the
industrial value chain and requires companies to rethink their way of doing
business. Achieving Industry 4.0 requires work on the digital operating system,
management infrastructure, and ecosystem. However, despite all the hype about
Industry 4.0, many companies in China feel unprepared when implementing
Industry 4.0 strategies. While there is not a “one size fits all” solution,
achieving Industry 4.0 still remains key.
Setting the stage for the next two
sessions, Mr. Spalcke and Mr. Eloot highlighted that the most difficult part of
improving operations is creating behavioral change. Experiential learning is
the preferred approach for adult learning and capability building.
Class 5:
Organization: Neil Anthony, Former Chief Human Resources Officer of Novartis;
Mary Meaney, McKinsey Senior Partner from Paris Office, Leader of Europe,
Middle East, and Africa Organization practice
Mr. Anthony and Ms. Meaney kicked
off the class by sharing a few startling facts and statistics: that the world
is changing faster than companies are becoming resilient; half of all companies
on the S&P 500 in 2010 will be gone by 2017; 70% of all change efforts
fail, and of these, 70% are due to organizational issues. As such, change
requires a rigorous approach.
Using Novartis as a case study, Mr.
Anthony and Ms. Meaney broke down how they managed to implement large-scale change
at Novartis with McKinsey’s proven five-step approach to making change stick:
1.
Aspire:
Decide where the organization wants to go. Set a clear vision and compelling
case for change.
2.
Assess:
Take an honest look at how ready the organization is to get there. Develop a
rigorous, fact-based diagnostic of the organization’s performance.
3.
Architect:
Devise an executable strategy on what the organization needs to get there,
taking into account the need to change and reinforce mindsets and behaviors.
4.
Act:
How do we get started? Engage all levels when implementing change.
5.
Advance:
Planning how to keep moving forward.
Class 6:
Corporate Transformation/Restructuring: Christina Zhu, President of Fonterra
Greater China; David Pralong, McKinsey Senior Partner from Sydney Office,
Leader of McKinsey Strategy and Corporate Finance practice
Continuing from the previous
session’s trajectory, Ms. Zhu and Mr. Pralong left us with five principles for
successful turnarounds:
1.
Wake
up: Distress and turnaround situations are common, and denial is the norm.
Acting early is beneficial and increases the likelihood of success.
2.
Question
everything: Companies in crisis often have many issues; managers often focus on
the wrong thing with wrong conventional wisdom.
3.
Aim
for the “impossible”: Successful turnarounds include aggressive targets.
4.
Fix
the plane while staying aloft: Cash flow improvements create a “cash runway”
with likely business model changes.
5.
Sustain
by changing mindsets: Performance management is very intense in a turnaround;
changing behavior requires a change in mindset.
Class 7:
Corporate Finance: Lincoln Leong Kwok-Kuen, CEO of MTR Corporation; Nicholas
Leung, McKinsey Senior Partner from Beijing Office, Leader of McKinsey Greater
China
Mr. Leong and Mr. Leung shared key trends
in global infrastructure investment:
1.
Infrastructure
investment as a share of GDP is much higher in emerging markets than in developed
economies.
2.
China
spends more on economic infrastructure annually than North America and Western
Europe combined.
3.
The
world needs to invest $3.3 trillion USD in economic infrastructure per year
through 2030 to keep pace with projected growth.
Rapid urbanization in China and
other emerging markets requires investment in new forms of urban mobility. They
predict that the metro, combined with bike, cars, and walking, will form the
backbone of urban mobility in dense, developed cities. Out of this arises a
need to explore innovative models for funding railway projects, which require
large upfront investment and considerable maintenance and asset replacement
over time. Using the example of MTR Corporation, to bridge the funding gap,
external social benefits needed to be internalized in order to achieve
financial viability for the rail operator.
Class 8:
Tri-Sector Leadership – Leading in the Public, Private, and Social Sectors:
Xiqing Gao, Former Vice Chairman and President of China Investment Corporation;
Dominic Barton, McKinsey Global Managing Partner
Mr. Barton and Mr. Gao brought what
we had learned so far together by giving insight to what it means to lead in
the public, private, and social sectors. Mr. Gao expounded on the Confucius
framework for leadership, which advocates leading oneself before others so that
one can lead better and further. Different priorities can be developed and
exercised within each sphere of influence as follows:
1.
Personal
character: Daily self-reflection, loyalty, trust, practice, modesty, health and
energy, and virtuousness;
2.
Family
& community: Compassion, respect, and friendship;
3.
Corporate
leadership: Ruling by promoting virtues, leading by example, and governing from
within; and
4.
Global
mindset: Peace, trust, aspiration, and sharing with the aim of achieving
equality.
With those insights and a few final
words of personal advice, Mr. Barton closed the eight-week Flagship course and
left students to ponder and apply the course’s rich array of perspectives.
User Login
