旁白: What makes a company last for generations? It's not their strategy. It's what people do day in day out. When things get tough, it's the people that pull through, not the plan. And we see this in all the companies that we invest in. Culture separates the great from the good. And so the question becomes, what is great culture? To me, it's how you make decisions, how you argue, how you debate, how you fix your mistakes, how you act when you don't have all the answers. Strategy is important, of course, but you can always write a new one. So the question becomes, what is a winning culture to you?

Patrick Duplacy: Welcome to the investment conference 2026. I am Patrick Duplacy.

Shelpi Nanda: and I'm Shelpi Nanda. We'll be your hosts for today.

Patrick Duplacy: The topic of this year's conference is what's a winning culture. In an age where you can copy a competitive strategy, poach their talent, replicate their technology, culture is the only true competitive advantage.

Shelpi Nanda: and show the hardest to build.

Patrick Duplacy: That's right, Patrick. Which is why this conference brings together leaders that have wrestled with the hardest questions about culture. How do you build it, transform it, scale it without losing what makes it special? And perhaps most urgently, as AI reshapes organizations, will your culture keep pace or hold you back?

Shelpi Nanda: And that's what brings us together today. So, a very warm welcome to everyone present in the room here.

Patrick Duplacy: And to those of you joining us via live stream from around the world, we're happy to have you with us.

Shelpi Nanda: We have quite the lineup today, each bringing a different answer to what makes a winning culture.

Patrick Duplacy: And here's how the day unfolds. Four sessions ahead. In part one, we look at the fundamentals. What's a winning culture? Why does it matter?

Shelpi Nanda: Part two tackles transformation. How do you transform culture in established organizations?

Patrick Duplacy: In part three, we look at high performance cultures in the age of AI.

Shelpi Nanda: And part four closes with something special, a live podcast with Jamie Diamond.

Patrick Duplacy: What better way to end than in good company?

Shelpi Nanda: Absolutely. Now to set the stage, I'd like to invite Nikolai to share why culture matters now more than ever.

Patrick Duplacy: Please welcome Nikolai.

Nikolai: Well, I have a confession to make because when I was a bit younger, I loved earnings calls. I loved first quarter calls, second quarter calls, revenue, margin, cash flow. You know, I read balance sheets in bed a bit like you guys read poetry or do you read poetry. But then I realized that there was something else which was much more important because where did the numbers come from and what made them change and that's when I realized I needed to spend more time on culture because numbers they tell you where a company has been, culture tells you where it's going.

Nikolai: So in the fund we invest 20,000 billion Norwegian burner, we are invested in 7,000 companies across the world and when we invest we have an investment horizon of decades. So when we look at who are successful and who fail, we don't look at quarters. We look at many years, many tens of years. And I've been convinced that it's all about culture because companies which in many cases look exactly the same, you know, same sneakers, same elevators, same banking products, some of them end up winning and some of them end up bankrupt. And we see it everywhere. But of course, no more extreme than in the banking sector. Some end up staying for hundreds of years. Others are gone. And it's not about the balance sheet. It's about the corporate culture. Who do you hire? Who do you fire? How fast do you make decisions? How worried are you about telling the truth to your boss? That's all culture. It's about speed, innovation, risk-taking.

Nikolai: Now, let's think about 2007 for instance in Finland. Nokia, they controlled half the world market for mobile phones. Half the world market. Then the iPhone was launched. The mid managers saw the next day that this was a real threat to the business. didn't dare to tell the top management because of fear of failure. Six years later, Nokia gone because of a culture of fear.

Nikolai: So where does culture come from? Well, it comes from the top. I have now in the good company podcast spoken to 200 companies. Now, according to my wife, 200 companies is not enough to become a good listener. But I'm trying hard. So, I sit down with the head of Jivona and I ask him, "What is your culture?" And he says, "You know what? It's about performance. It's about taking the right amount of risk. it's about empathy." And then I said, "Well, but you're just describing yourself, aren't you?" And he starts laughing and he says, "Well, and that's exactly why it's working." So, basically, culture is coming from the characteristics of a CEO and it's being transmitted to the corporation. It's not what you write on the wall, it's what you do every day.

Nikolai: Now, the world is changing faster than any time before. And AI is reshaping all the organization all the organizations. So it's not a matter of should we adopt AI it's just a matter of how fast can we adopt it and what is it that prevents us from do it from doing it in the organization. The companies getting it right they are the companies where people can make a difference straight away where speed matters more than hierarchy. And the ones getting it wrong have cultures built on fair and cultures where it's about this is the way we've always done it. These companies will be gone soon.

Nikolai: But then there is a new term which I love and that is called high agency people. High agency people is people who do original things with speed and with force. And we have a lot of them here today to talk to you. So you will see cultures from many different directions, different countries and different industries. But what all these companies have in common is high performance culture and a level of ambition that is worldleading. By the way, way beyond the type of ambitions we typically see in this country because here extreme ambition means beating your neighbor to the ski tracks on the Sunday. But ambitions really matter because if you have high ambitions, you achieve great things even if you fail. If you have low ambitions, you achieve nothing even if you succeed.

Nikolai: So the companies we are meeting today have extraordinary growth, market share gains, return on capital and it's been going on over decades and today we are going to learn from them. They are what we in the oil fund called kickass companies. And what better way to start than with David Rubenstein. He co-founded one of the most successful investment companies in the world. He's a master interviewer who has sat down with hundreds of CEOs and politicians. He knows exactly what separates winners from the rest. Please help me welcoming my friend David Rubenstein.

David Rubenstein: Thank you, Nikolai, very much. I'm happy to be in Oslo. I didn't come here to lobby for a Nobel Peace Prize, so if anybody wants to give me one, I'd be happy to take it. But if Mr. Nobel were still alive today and I had a chance to meet with him, I would say to him, well, if you're going to have a peace prize, that's a good idea. But why don't you also have a peace prize or a prize for corporate culture? Because companies that are great and create good cultures can change the world just the way great peacemakers can.

David Rubenstein: Think about it. the iPhone that was referenced earlier. The iPhone was maybe one of the most successful consumer products ever and it has changed the world as have all smartphones as well in ways that I think benefit all of us. And so when you have a great company that produces a great product or great service, it can help the world just the way great peacemaking can help the world.

David Rubenstein: Now when I was a little boy in Baltimore, Maryland, growing up, I can't honestly say that my role model was a great corporate leader. I was focused on baseball or sports or other things. And little boys in my era wanted to grow up to be sports heroes. Today, younger people in their teenage years probably don't want to be sports heroes as much as they want to be corporate leaders and entrepreneurs. And that has changed the culture of the world.

David Rubenstein: Think about this. In any given year, there'll be roughly 50 to 60 million new companies started. 50 to 60 million new companies started around the world. about six to seven or million a year in the United States about 8 million a year or so in Europe and maybe 20 to 25 million in Asia and other parts of the world as well. So 50 some million new companies started after one year about half of those won't be around and after another two years another half won't be around and after another year about half more won't be around. What companies actually get to be there for five years or 10 years or 15 years?

David Rubenstein: Well, there are companies that have charismatic leaders. Typically, typically it starts a company might start with one or two or even three charismatic leaders that have a vision of what they want to do. Second, they have a product or a service that they're interested in selling to people and convincing people their lives will be better with that product or service. And they are not as focused on making money as they are on getting people to buy into their vision that this product or this service will make people's lives better. They also have a willingness to try to work hard to get to their end and their willingness to make certain that their product and their service will get a fair hearing from around the world.

David Rubenstein: But the companies that survive for 5 years and 10 years and 15 years and 20 years are companies that have more than a charismatic leader and a good product or good service. They have an incredible culture and it's culture that enables companies to go from one generation to the next generation. As we all know, very rarely do you see a great company survive the founders's demise. It happens and Steve Jobs is a perfect example of it happening.

David Rubenstein: Steve Jobs started the company in the late 1970s and he was actually thrown out of the company, thrown out of his own company and he was out of the company for about 14 years before he was brought back. And then he changed the world by a number of products that and services that Apple developed. And then when he passed away, he was leaving behind a company many people thought couldn't survive without the founder. But because it had an incredible culture, the company dramatically grew. When Steve died, the market capitalization of the company was about $350 billion. Today, it's about three and a half trillion. So it's up about 10 times. How did the company go under Tim Cook's leadership to such a incredible place in the world? Well, it's because the culture that Steve Jobs had built was expanded by Tim Cook and ultimately that culture permeated the entire employee base and entire customer base of the company.

David Rubenstein: And so what you have sometimes is you have a number of charismatic leaders who build a company. They sometimes can make it go to the next generation. Sometimes they cannot. It's very difficult, very difficult to make a company go much better after the founders are gone. It happens from time to time. We don't know for example what will happen to Bergkshire Hathaway. Bergkshire Hathaway was built by one charismatic brilliant investor and he made it one of the most valuable companies in the world. Now there's a transition and time will tell whether it works or not. But generally if you have a good culture, a good culture will enable a company to survive.

David Rubenstein: And what is a good culture? It's a good culture that a company has and enables it to survive not more than five or 10 or 15 years but 20 or 25 years or beyond is it's a it's a concern about making certain that the customer comes first. Making certain that the employees are treated fairly. Making certain that everybody has a chance to succeed and has be listened to and make certain that you're producing a product or a service that really people want and really does something useful for society.

David Rubenstein: And producing a culture like that is like your own DNA. Everybody here has the DNA from their parents. And your DNA is really what shapes you to some extent. To some extent, you can improve upon what your parents did. Some cases maybe you won't improve upon what your parents gave you. But many companies can improve upon what the founders gave them by using the DNA that the founders gave them. And they can even go beyond that. And so when you're looking at corporate culture, what you have to do is look at what the founders created, but can that founders culture beyond go beyond when the founders leave the scene? And those are the great companies.

David Rubenstein: The companies that survive for 25 years and 30 years and 40 years and beyond are the companies that people will always emulate and want to have as role models because they're the ones that have a culture that people admire. They're the ones that put customers first. They're the ones that put employees first. They're the ones that put the people that provide services to the company, the suppliers first. Making certain that you worry about other people more than yourself is the most important thing in corporate culture. And in corporate culture, the companies that survive the most and that really prosper are not the ones where the CEO is making the most amount of money or is worried about the amount of money he or she is making. You worry about worrying about other people is what makes companies survive and do so well.

David Rubenstein: So as we look at corporate culture and we talk about it today, just think about this. In the end, the companies that we all want to have as role models, the companies that we all would like to build or invest in, the companies we all think that we'd like to have our children build as well if they start their own companies would be ones that have a corporate culture that puts the customer first, that makes sure the employees are treated well, that has a vision of what they want to do for society to make the company succeed and make the world a slightly better place. the concern about making money is not the generally the thing that makes a company prosper at the beginning. Certainly, you need to have a culture that really drives everybody and having everybody pull together.

David Rubenstein: And that's what when I'm investing in companies, what I'm looking for is companies that have a culture where people want to come to work. They like working there. They think they're doing something useful for society. And making money is nice measure of success, but it's not the main measure of what a company's all about. And so as you think about corporate culture and through this conference today, just think about whether these companies that you're going to hear about are companies that have a culture that you want to have as you want to invest with. They're companies you'd like to work at, you'd be proud to have your children work at it, and the kind of companies you wish you had started because those are the kind of companies I think that we all want to have in our portfolio and all the kind of companies we want to have as as as companies that are trying to make the world a better place. companies have a good and everlasting corporate culture that really will survive the founders and that will ultimately make everybody think they're producing a product or service that makes the world a better place. Thank you very much.

Malin Nurbach: Thank you, David. Our next speaker started investing from his Harvard dorm room in 1986 and founded one of the world's leading alternative investment firms just a year after graduating. Kenneth Griffin is the founder and CEO of Citadel, which manages over $60 billion in capital. At Citadel, winning is core. They hire the top 1% and create an environment where that top 1% push each other to be even better. How do you build a culture where the best want to stay and compete? Marlon Nurbach, the chief investment officer for market strategies, joins him to find out. Please welcome Kenneth and Malin.

Malin Nurbach: Thank you, Ken, for joining us here in Oslo today. I cannot think of a better person to talk to about winning culture. So, winning is one of Citadel's core values alongside integrity, learning, meritocracy, and extraordinary colleagues, but winning is the one that stands out there. So, why winning?

Kenneth Griffin: So, first, it's just wonderful to be here today. Thank you so much for having me participate in this wonderful conference. And one of the things that is very true is that this team which has done such an extraordinary job of managing the sovereign wealth of the nation has been focused on delivering for the people of Norway. You have had a winning team which has really delivered in a profound way for the people of your of your country. Let me let me be clear. Why do we actually enumerate winning as one of our core values? Because regretfully in the United States, we went through a period of time in which winning seemed to be out of vogue. We lost our way in the wilderness. And great firms are focused on winning. As as David Rubenstein put it, can you create a product that the consumer will value, the consumer will pay for, and what the consumer will reward you for creating and for building? Firms that are winning firms do just that. And firms that that create inferior products are firms that fail. And what worried us is in a culture where participation trophies were becoming ubiquitous, we lost our way as a country and what it took to win.

Kenneth Griffin: And we at Citadel really do believe in the importance of winning for our clients. That's core to our business. And I, you know, I was thinking about what David had to say in terms of of companies and products. One thing to keep in mind is at Citadel there's no shame in making money. We manufacture money. Our clients give us capital with one goal in mind. Can we manufacture more money with that capital?

Malin Nurbach: You certainly manufacture money in a very impressive way. So when it comes to a winning culture, Nicolai just mentioned speed as one of the pillars to a winning culture and your colleague here just told me that one thing that amazes him with Citadel is that you can still move at the speed of a startup even though you are thousands of employees. So how do you do that?

Kenneth Griffin: So I wish we could. I wish we could. But as you grow, as a business grows in complexity and grows in stakeholders, grows in regulatory footprint for example, it actually becomes necessary to have more process, more bureaucracy to make sure that what you do is in the is on the right side of the road. So startups have have greater flexibility than your established firms but your established firms have far greater depth and resources. What you have to be very focused on is that you are controlling the size of the bureaucratic state that you keep a constant focus on the ability to rapidly make decisions and when a decision is made to rapidly execute upon that decision.

Kenneth Griffin: But because you have a bigger footprint, you're still going to have to go through a few more steps than that smaller startup might have to go through. But with more resources, with the ability to to interact with other global players on a on a far more stronger playing field, we're able to move quite quickly. On on decision-m though, you know, this is one where where large firms do tend to find themselves lost in the wilderness. You know, I'll tell my colleagues all the time. They they put something to my desk for input from me. I'll give them a date. I'll be back to you in 72 hours, 48 hours, 96 hours. If you don't hear from me, I gave you an a yes. It's your call. Like, don't let yourself in management be an impediment to decision-m by those who are junior to you. And in some sense, in some negative consent to move forward is really powerful because it tells people that they have agency that they can make a decision.

Kenneth Griffin: You know, one of our one of our key internal principles is the most junior person who is closest to the information. That's the person who optimally should make the decision as often or as frequently as possible. Now, will they make mistakes? Of course they will. But they will grow much faster in a culture where they're empowered with agency to make decisions. They will learn from their successes and they will learn from their failures. But most importantly, they are rapidly learning and that's how we create leaders.

Malin Nurbach: So it's a good point and talking about developing people. So the Wall Street Journal reported that you spend several weeks every year reviewing the performance assessments for thousands of employees. So how why is that where you choose to spend your time and what does it say about the culture at Citadel?

Kenneth Griffin: Well, first of all, I think it says that I deeply care about how my colleagues are advancing in their careers. And what I'm looking for is I'm looking for patterns of where we are not developing talent strongly enough and aggressively enough. So where in the business are are our newest hires, whether they're out of college, out of a PhD program, a lateral hire from another global investment bank or global investment management firm, where are people not flourishing? And I'm trying to understand what do we need to do as a firm? What do we need to do differently? Whether it's whether it's professional development, whether it's the experience that people have, whether it's the trust that are placed in our in our newer hires, what do we need to do differently to get more out of people?

Kenneth Griffin: You know, one of the things I'm most proud of at Citadel is the extraordinary amount of human capital that we've developed over 35 years. people who run today one of the world's most successful hedge funds who run one of the most successful securities dealers in the world and bluntly countless people who run most of the many of the financial institutions around the world whose roots trace back to Citadel. I think these are all a testament to our consistent focus on developing people to be the best that they can be.

Malin Nurbach: So, Citadel was a pioneer in quantitative investing and you've been using machine learning for well longer than most of us knew what that was. So, how do you with that head start? So, 10 years of head starts on on the AI movement today. How do you make sure you stay ahead?

Kenneth Griffin: Well, I think that's actually a wonderful story about the kind of firm we want to be. I remember when TensorFlow was released and five of my colleagues came to my office like the day it came out and they literally said TensorFlow which was Google's machine learning toolkit was going to revolutionize the world like with with complete conviction and I said okay and they they were basically saying we want to go spend the next couple of weeks really engrossed in what this body of knowledge means and how we can apply it in in marketmaking in securities. And I said, "Well, I mean, of course, like go for it."

Kenneth Griffin: And and really the point of the meeting was not permission. It was their excitement over this transformative technology. Like they wanted to bring me behind the curtain to think about what machine learning was going to mean for our business. And I remember calling one of those colleagues about four weeks later and saying, "Okay, so what what are your initial findings? Like what have you gleaned so far from using TensorFlow? He goes, "Well, it's it's it's in production." And I'm like, "What? What do you mean it's in production?" He goes, "We use it to quote the US equity portfolio. We've been doing that for the last two weeks." And I'm like, "It's been four weeks since the meeting." He goes, "No, no, like a group of us work pretty much every single day, 12 to 14 hours a day, because this is one of the coolest things we've ever worked on, and this is going to transform the world, and and we're already using it in production. That's a winning culture.

Malin Nurbach: That's a winning culture. And around technology, so with Genai technology is not only for the technologies but for everyone. So have you changed the culture around how you manage well the culture around technology adoption in the firm?

Kenneth Griffin: So so I think it's important to remember that that about one in three people at Citadel are a software engineer. So the firm is very very deeply invested invested in technology like it's it's core to what we do. I think it's just important to keep that in the back of your mind when you when you touch on this topic. So for us with with generative AI, I think I think frankly one of the biggest problems out of the gate was there was perhaps too much enthusiasm for embracing GenAI that the the early generation large language models were really really fascinating to people because for the first time machine learning didn't create a vector of zeros and ones. It created written word.

Kenneth Griffin: It could write a poem. It could write a song. Could write a story. It could write a narrative. I mean, it interacted with people in a way that technology has rarely interacted with with individuals and it was incredibly alluring to people to how do I use this to change what I was doing at work. Um, one of the tougher conversations I have with a colleague is I said, "All right, I want I want a list of all the GenAI based projects that we have at Citadel." And he came back with 200 projects. I said, "No, no, five. We're going to do five." And he's like, "Well, what about the other 195?" He said, "We're going to kill all those. We're going to do five. We're going to actually push them really hard. We're going to see what works and what doesn't work.

Kenneth Griffin: But we can't afford to let everybody be pursuing random ad hoc projects. like it's just it's just too expensive. It's too much of a distraction. Now, of the five that we pursued, we had a real success with just over half. Now, of note, the Gen models have gotten marketkedly better. I don't think we incurred any cost of killing 195 projects. And I do believe that over the course of the last six months with the introduction of of OpenAI uh 50 with with cloud 4647 I think you have a transformative sea change taking place you've got many more use cases today that are practical that are implementable that are meaningful in impact than you did two years ago.

Kenneth Griffin: So I think one of the one of the key challenges for a business is always that dilemma be between being on the bleeding edge and being on the leading edge. And I think good companies think very long and hard about where's it worth being on the bleeding edge. So it was with TensorFlow.

Kenneth Griffin: And where do you want to be on the leading edge? Where do you want to be a fast follower? Where do you want others to sort of pave the way in front of you and you can follow quickly and capitalize on their learnings? I think it's very important in running a big business to think about when do you want to be in the bleeding edge when do you want to be in the leading edge and pick that path with valition don't let that come down to random happen stance.

Malin Nurbach: so one of the places where you're in the leading edge is hiring the top people you have thous hundreds of thousands of applications every year and you said Citadel hires winners in life and not just winners in business so say I'm applying for a job at Citadel and I'm sitting next to you for for a job interview. So, what's the one question you would ask me to see if I was the right cultural fit for Citadel?

Kenneth Griffin: Oh, I I wish one question would do the trick.

Malin Nurbach: What's the most essential question?

Kenneth Griffin: Look, I I don't think there's it's not one. It's a mosaic. Okay, we're all we're all people. We're complicated. And what you want to understand is is what is the mosaic of this person and how does that fit into our team holistically and the team they're going to be a part of. So there there are a few things that I'm I'm deeply interested in in in learning about you. Nikolai, you spoke about ambition.

Kenneth Griffin: Okay. Um I actually prefer the word aspiration over ambition because I think I think it it it appeals to our deeper inner meaning more directly. What do we aspire to do in this world? What do we aspire to create or to change? I want to know your ambitions or aspirations. I want to know what does success look like to you?

Kenneth Griffin: You know, I I had a young man from Harvard with me years ago and I I asked him, you know, this is going to this is going to be right to the point. If you made $10 million, what would you do? And he goes, I would quit and I would climb the highest peaks around the world. I said, okay. I said, "I don't think this is the right firm for you." And he goes, "Well, you've already made an offer to me." I said, "That's wonderful. I strongly urge you not to accept it.

Kenneth Griffin: because I don't want to hear from somebody who's 22 years old that like there's some number that represents their magic number. If they made that much money, they're going to climb mountains out around the world. I want to hear how they're going to climb the next mountain at Citadel, how they're going to grow a business for us, how they're going to change the firm, how they want to lead our Asian business, or like look, if I made $10 million, I'd like to think it was done because I was very successful at X and that I'd have more responsibility here to have a bigger impact on the firm. That's what I want to hear, right? So, I look for I look for people's aspirations. I look for their track record of being a winner.

Kenneth Griffin: You know, I I love people who competed in competitive sports in high school and college. They're not going to play tennis for Citadel's tennis team, but their willingness to get up every single day and go to practice. Their willingness to put it all out, in this case, on the court and to win or to be beaten says a lot about their resiliency and their perseverance. And those are really important life skills that you learn in playing competitive sports. In fact, in choosing to compete in any arena, speech and debate as a musician, competing in any arena tells me that you are willing to win and to lose. And that is such an important life skill.

Kenneth Griffin: You know, people forget that my average equity portfolio manager is right in about 53% of their stock picks. Okay. Could you imagine like you're going to your surgeon, he goes, "Yeah, about 53% of my patients live, right?" What a humbling job. You're right about 53% of the time. If you're right about 53% of the time with the right upside downside ratio, you're actually extraordinarily good as a portfolio manager. But that means you go home a lot of days really wrong and really humbled. Do you have the mental fortitude to come back to work the next day and get right back at it?

Malin Nurbach: Well, I think those are some great advice and insights to a winning culture and I think that's a good note to end on. So, thank you so much, Ken. This has been very insightful.

Daniel Balthazar: Thank you, Kenneth and Maron. Our next speaker brings a distinctive approach to culture. Michael O'Leary is the group CEO of Ryan Air and previously served as CEO of the airline. He transformed a struggling airline through a lowcost model. Today, it is Europe's largest and one of the most profitable airlines. His approach, a relentless focus on cost and execution. The result, a culture of extreme efficiency and an airline that has made travel affordable for millions. Daniel Balthazar, co-chief investment officer of Active Strategies, will explore how he did this. Please welcome Michael and Daniel.

Daniel Balthazar: Daniel, good morning.

Michael O'Leary: Morning,

Daniel Balthazar: Michael. Warm welcome to our conference.

Michael O'Leary: Thank you very much. Great pleasure to be here.

Daniel Balthazar: We met in this office a couple of years ago for an investor meeting.

Michael O'Leary: We did.

Daniel Balthazar: After that, I received a letter from you thanking me for the meeting, which made me really feel really, really special. Never happened to me in my 25 years of doing this. What does that tell me about you and Ryan?

Michael O'Leary: Well, firstly, it tells me you didn't buy enough our stock after that meeting, which is why I had to do the follow-up letter to encourage you to buy more. Um, and and

Daniel Balthazar: we we have a cost focus as well. We like to buy low.

Michael O'Leary: Oh, you there's never been a better opportunity. Stock is down about 25%. Just don't tell anybody because we're buying it as fast as we can at the moment and I don't want to be competing with anybody else in the room.

Daniel Balthazar: Very good. So if the culture is set at the top, how does that translate into how 25,000 people behave every single day?

Michael O'Leary: I get very nervous at these culture meetings, skeptical when we do all the cultural stuff. I respect David, but you know, I don't want to be running a company that survives 300 years and for 55 generations. We want to make money for the next 5 10 years. and if we do that there's a reasonable prospect we'll survive 15 20 years but ultimately somebody's going to come along and reinvent the wheel.

Michael O'Leary: I don't think Nokia failed by the way because you know the management were arrogant or there was a culture of fear in Nokia. Nokia failed because fundamentally the iPhone came along and totally transformed the technology and that bevils all of us. What keeps me awake at night? Star Trek. because it doesn't matter how bloody cheap my fairs are going to be. And when it comes to flying in Europe, no one's going to beat Ryan on price ever, but somebody sometime is going to invent some way of beaming people across Europe. Although the European Commission will probably find some way to tax it for some environmental cause, but ultimately we will get the technology or some sort of transform of technology will come along and it doesn't matter how good our culture was or how good our cost base was, we're going to get blown out of the water.

Michael O'Leary: Until that time comes, our culture is we kind of we do not and I I kind of shout and rant and rave at everybody. We're not interested in explaining our culture. Our culture is we want to deliver the lowest fair most on time flights and we'll do it by having the lowest cost bar nobody in the industry and we will keep transforming our cost base. We lead the aeron industry across the world. We were the first people to buy get rid of travel agents. You know when the internet came along because we've been paying 20% for distribution for you know 15 years in an industry that had a 1% margin. Why the hell we paying 20% to mom and pop travel agents? internet came along, we were out the door, banned the travel agents and were gone.

Michael O'Leary: Um, we were the first people 15 years ago to charge for bags. And as you know, as it says in the good Bible, Moses came down from the mountaintop and the fourth commandment is thou shalt be entitled to bring free bags on board aircraft forever more. Um but by charging for bags we went from 80% of passengers on our flights bringing a bag on a a stay duration of one and a of 2.5 days to 20% of passengers today now bring a bag in which means not alone have we gotten rid of huge amounts of labor at our airports and again I slightly disagree with David I want to treat people well but ultimately I want to get rid of as many people as I can within the business but and the ones who remain I'll treat well.

Michael O'Leary: Um, pilots, for example, you know, are egregiously expensive employees. By law, they can't fly more than 800 hours a year, which is 18 hours a week, which I think is ridiculously unproductive. And for that, I paid them about a quarter million each. So, but technology will in time come along. You know, if the US military can fly drones or fly, you know, aircraft across, pilots will ultimately get competed out of the system. I want to treat my pilots very well. I want to treat my camera crew very well, but at the back I also want to find some way of finding a technology that'll replace them all. And then the cost of flying across Europe, even with the European EU EU's environmental taxes and ridiculous regulation, will become even cheaper than it ever has before.

Michael O'Leary: So our focus and our culture is all about make it cheap, make it on time. After that, go away, you're not getting anything else. and then be viciously obsessively focused on how do we make it cheaper, cheaper, cheaper by constantly reinvesting the reinventing the system and fundamentally changing customer behavior. Charging for bags was one of the greatest initiatives we've ever come up with in not because and everybody's obsessed with oh I we just want the money. I would happily give away the money ultimately to shareholders but give away the money if I can get rid of the last 20% of bags. I would have no check-in staff. I'd have no baggage handling staff. I'd have no lost baggage staff. The aircraft fly about 3% lighter, which reduces my fuel consumption. My fuel bills about 5 billion a year.

Michael O'Leary: So the hidden benefits of getting rid of checked in bloody bags is that we're consuming less fuel. And with jet oil today at about $157 a barrel, anything I can do to get out that kind of those kind of costs, we will do. And that's why we are the most profitable airline in the world. We are certainly the biggest international airline in the world. And yet we plan to grow in size from 200 million passengers last year to 300 million passengers in the next 8 years by ordering 300 by order taking delivery of 300 new aircraft which from Boeing the Max 10 aircraft which are 20% bigger in terms of seats but they burn 20% less fuel per seat. I am going to transform my economics for the next 10 years with this new technology. And but and they'll be flown by the same two pilots, the same four or five cabin crew. Which should make us hugely lower cost, widen the price advantage I have over every other airline in Europe. And I'm going to blow them all up and own the industry until somebody in a back bedroom somewhere invents some way of beaming people across Europe and then I'm screwed.

Daniel Balthazar: Excellent. You operate in a hyperco competitive industry.

Michael O'Leary: Are you competitive industry? Hyper competitive is Europe? No, they're all useless. Government owned, heavily regulated, hugely government subsidized. All the legacies are running around at the moment trying to get bailouts. God bless the Republicans in the United States. They're now about to bail out two of the most bankrupt airlines, Spirit and JetBlue, who should have been allowed to go to the wall many years ago. So, no, it's not a hyperco competitive industry. It's a very badly regulated industry. it is governmentowned which is why it it is inefficient hugely expensive and inefficient in Europe. So all I have to be is modestly competitive to be better than the rest of the competition in Europe but that's not setting the bar very high.

Daniel Balthazar: Amazing.

Michael O'Leary: Most people though most employees they don't like an over focus on cost. How do you keep them motivated?

Michael O'Leary: Fear, terror, stalking the corridors late at night. Um we don't I mean you know the great thing about Rhiner is we've been doing it this way for 30 years. So you know we hire about 50 graduates every year. We hire people who want to work hard. We try to set an example there. It is a very slim kind of man. There is only three layers of management between somebody on the front line and me. And therefore we keep it very flat. But the advantage we have is we're a single you know we're a one goof kind of operation. It's only an airline. All we have to sell is a seat. So we don't need complexity. We avoid M&A. We don't get involved in, you know, buying hotels or buying airports or buying whatever else it is. We buy aircraft hopefully at times of distress when Boeing or Airbus needs orders and then all we do is sell seats all day long. So we don't need a lot of complicated management and then but we are very good because I think we have a very flat management structure. We're very good at pouncing on new initiatives as they come along.

Michael O'Leary: And the great advantage of being the great strength of Ryan Air is we're not very much beloved. We finished last in almost every passenger survey. We have never won. There's a there's an award in Ireland for the Irish Travel Agents Association which there's only two airlines in Ireland. Airlingers have won those awards which is the exate airline. He lingers have won the travel agent airline of the year award for 30 years in a row. I have promised that we will I will quit if we ever win that award.

Michael O'Leary: Um, so but the advantage of sorry I just cut the advantage of not being overly sensitive about my reputation or our image or being culturally popular is we're ruthlessly low cost and that gives us huge freedom to chase those kind of costsaving measures or to reinvent the way we the way we drive the airlines and then ultimately all the other morons will follow us along. I mean the American airlines have just discovered charging for bags 15 20 years after we started doing it. Now they're trying to make it do it as a way of gaining revenue whereas we did it not as a way of generating revenue but as a way of eliminating cost.

Daniel Balthazar: It's fascinating because most of the CEOs we talked to they talk about more customer centricity keep the customer heck put the customer in the center of everything. Yet you're doing the opposite but win.

Michael O'Leary: But that's because we have an enormous price advantage over everybody else. customers ultimately in every survey. Oh, I wish they were nicer. I want a refund of a non-refund. What part of no refund don't you understand? I don't care if your granny died or you know your cat was ill and you couldn't travel on the day. It was a non-refundable fair. Now I want you to fly because I can sell you about 6 of ancillary revenues on board my aircraft. But I'm 216 million and we appear occasionally we it happens even to us. We occasionally mismanage situations. We get a huge amount of adverse publicity and what I notice every time we get a lot of adverse publicity is bookings go up.

Michael O'Leary: Elon Musk who I have never met never had any interaction with it. We had this issue we were trying to put Wi-Fi on board our aircraft at the start of the year. I think Wi-Fi free Wi-Fi on board aircraft is coming. The problem at the moment is the technology doesn't yet exist. We have to put couple of dimples on the outside of the aircraft. It would be about a 2% fuel drag and my fuel bill is 5 billion a year. 2% fuel drag is something of the order about a hundred million and I'm not paying 100 million to put free Wi-Fi on board for my passengers. Starlink which is a terrific technology. I have no issue with the starting technology. Starling believe passengers will pay you €12 you know and it'll pay for itself. Clearly they've never met any round air passengers. Um because that by the time we've gone up and down the cabin selling them teas, coffee, scratch cards and anything else we can kind of think to sell them. we don't have time to be running up and down taking one euro transactions any so

Michael O'Leary: I happen to say look Starink is great but you know the system doesn't work we're not taking a fuel penalty of 100 million a year because that would be you know 50 cents on every ticket and he someone told Elon Musk that I'd slagged off Starling so he popped up something on his internet feed going who is this wanker in Ryionaire who's this Ryanire gobshite he's clearly an idiot he knows nothing about flying so I pop back who is this Egypt in Twitter running that cesspace that is Twitter having a pop off me I'm correct it does have a fuel drag he says it doesn't have a fuel drag and then he says I know nothing about avionics which is probably true I know very little about avionics but he knows nothing about flying lowcost airlines either.

Michael O'Leary: he then ran a poll on his Twitter ex I don't have a Twitter site by the way thankfully I have better things to do with my life but he ran a poll at his 1.5 should I buy Ryan we politely pointed out you're American therefore You can't buy a Ryan Air. We're European and you have to be more than 50%. You won't. And next thing it exploded during the second week of January, which is one of the quietest weeks for bookings in Europe. And my bookings just took off.

Michael O'Leary: Next thing we're running around, how do we manif how do we manif? So, we ran a big idiot seat sale. We got AI to come up with some ads of me smacking him over the head with some and him choking me. Da da da. And we manufactured about $30 million of free publicity. I was holding a press conference in Dublin back in January to do my kind of usual this summer. We'll do 25 do roots. They took the press conference live on Sky CBC went live to this Egypt in Dublin talking desperately trying to make some news about how Elon Musk is wrong. We got about 30 million free publicity out of it and bookings for about 6 weeks went up by about 3 percentage points.

Daniel Balthazar: Did you send him a thank you letter?

Michael O'Leary: Pardon me.

Daniel Balthazar: Did you send Elon Musk a thank you?

Michael O'Leary: No, actually we sent him a free voucher for a free Ryan flight round to the Twitter Twitter offices in Dublin. and got a photograph of me handing in the free radier voucher. He hasn't claimed it yet, but I hope he will at some point in time in the not too distant future. So, one of the other things we do is we will jump on any bit of cheap publicity we can because cheap publicity in our business where you have such a price advantage drives enormous sales and enormous bookings.

Michael O'Leary: And so as long as it doesn't revolve around safety, if you know, and I remember Trump getting elected the first time said if he murdered somebody on Fifth Avenue that he'd still get elected. And we were thinking, well, maybe if we murdered somebody on Fifth Avenue, would it drive bookings up on Ryan Air? We thought, no, that was probably pushing the envelope a little bit too far. But other than that, if it doesn't involve safety, we're up for any bit of cheap publicity we can get. Okay, so to summarize, a cost focus, free marketing and an incredible sense of humor definitely created a winning culture. Thank you very much, Michael. Please join me with a show. Thank you very much.

Patrick Duplacy: Michael and Daniel, Michael, could I ask you, Michael, could I ask you to remain seated for a panel discussion? Okay. So far,

Michael O'Leary: by no.

Patrick Duplacy: Fantastic. So far, we've heard some very different approaches to building winning cultures. Now, let's bring those perspectives together. David and Kenneth will be joining this panel, and joining them is Robin Group, the CEO of MAN Group, a global alternative investment firm with over $200 billion in assets. She brings another lens to high performance culture. David will moderate this session. Please help me welcome them to the stage.

David Rubenstein: Good to see you again, my friend. I get to follow that act. That's going to be tough.

Robin Group: Right.

David Rubenstein: So, um, Robin, you are the CEO of Mand Group, right?

Robin Group: Correct.

David Rubenstein: And you're not a man, right?

Robin Group: I So I Well, since I last looked. Yeah.

David Rubenstein: And you're the first woman to be the CEO of Man Group in 250 years or something like that.

Robin Group: Something like that. Yeah. So, how did you get to that job?

Robin Group: Yeah, determination. Um, how did I get to that job? One, I worked there for a decent amount of time. Two, I've held lots of different roles. And I've got lots of war wounds to show for it. Um, and I was the best person for the job when it came open.

David Rubenstein: Okay. And the best person for the job always gets the job.

Robin Group: I like to think so.

David Rubenstein: Okay. And Ken your firm has been extraordinarily successful in everything it's touched. But in the great recession of 0708, you came very close to not being that successful. Were you ever worried that you weren't going to survive in the 0708 period?

Kenneth Griffin: So 07 no 07 was actually phenomenal year for us. But there was a there was a day 08 I remember getting the elevator at home and saying like literally I I hope when I come back we're still in business. and CNBC had a van parked outside of our four walls trying to get that bankruptcy footage. So, it was a it was a tough 16 weeks in 2008. Now, the good news is history's written by the winners. We've had a great run since 2008 and that moment's largely become a footnote in our history, but one that I'll never forget.

David Rubenstein: Michael, um you're identified as the CEO for a long time of Ryan Air, but you didn't start Ryionaire. Mr. Ryan started it. Had you not been working for him, do you think you would ever have wound up in some capacity like your job you have now? Because did you the personality you have now is a personality? Did you have that personality before or did you grow it as you kind of were running this airline?

Michael O'Leary: Was did I always have a deformed personality? Probably. I was educated by Christian Brothers and then Jesuits. So it was a miracle I survived that. Would I be in the airline industry? No. I would hopefully have gotten a job in a proper functioning industry where you could make money like Kenny.

Michael O'Leary: Um, but the unlike Robin in my case, I got the job in Raire because nobody else wanted it. The Ryans had set Brian Air to be at the start of EU deregulation back in 1987. They wanted to kind of compete with their lingus on the Irish UK roots and they lost 20 million in three years and the thing was going bust. I was this bright young guy coming out of college had my accountancy degree. I was actually very quiet reticent. I don't want to be a never wanted the publicity. And eventually they ran out of chief executives. There was nobody left to run the bloody place. So I was sent in to just staunch the losses. Do whatever you want and go whatever you want to do. My first recommendation was close this turkey. It's never going to make money. It's doomed to bloody fail. This industry is for the birds.

Michael O'Leary: And Tony thankfully sent me off to see Southwest in the States at the time when Herb Keller was doing what he did so well in Austin in Texas. He was a legend and he was the guy who kind of created the lowfare industry. And I was sent off to see him. And I have this legendary dinner with Herb Keller. What do you I mean what do you remember at the dinner with Herb Keller?

Michael O'Leary: Absolutely bloody nothing. He was at the time about 65. I was about 26. He drank me under the table before the starters had even got there. But I saw a southwest I we I come from Europe. Oh, everything was slow. A plane would drive in and an hour and 15 minutes later turn around cuz the pilots had to have a smoke and the camera crew had to have a winge and everybody had to call their union to see whether they were feeling like going out in the next fight of the day. This thing arrived. It was like a Formula 1 pit stop. Aircraft in everybody on it. Aircraft out gone. And it was pretty clear if you could turn planes around in 15 or 20 minutes instead of an hour and 15 minutes, you get two more, three more free flights per day per aircraft. So that's where it all came from.

Michael O'Leary: So it was the combination of Tony Ryan's stupidity in setting up an airline, but Herb Keller's vision in say you can actually run a very efficient airline, which is the key to Ryan Air success. Now, earlier you mentioned a couple times safety as being an exception to some things, but sometimes people would say, well, if it's a lowcost airline, maybe they're going to scrimp on safety. How can you assure people you're not scrimping on safety?

Michael O'Leary: Uh, you can't. Uh, but ultimately, we've now been doing this for about 35 years. We have the youngest, newest fleet of aircraft in Europe. We have a fleet of 300, 650 Boeing 737s. We bought them all from new. We own them all. They're not owned by some bloody leasing company. So, you know, we own them all. depreciation only charge. We have no debt on the balance sheet. We train all our own pilots. We have 16 simulator centers. We do all our own aircraft maintenance in aircraft maintenance in-house and we're about to take the engine maintenance in-house as well. So the best you can do is you point to your record over 35 years and certainly in our first 15 or 20 years it was a bit cheap and you know they don't do the maintenance. I think that's kind of disappeared.

Michael O'Leary: But you're only as good as today. We do three and a half thousand flights a day. will carry 700,000 people today. Today we have to do everything safely. Tomorrow we have to do everything safely. And I it always makes me worry statistically the bigger and bigger and bigger we get. I always worry statistically you're likely to have a screw up somewhere along the way. But so far for 35 years we've managed to avoid it.

David Rubenstein: Okay. Ken, many people don't realize you operate two big businesses. One is the most profitable hedge fund ever, um, Citadel, but you have a separate business, uh, Citadel Securities. What is Citadel Securities and why did you start that business when you already had a very profitable hedge fund?

Kenneth Griffin: So, Sil Securities is one of the largest market makers in the world. In fact, we we trade about 25% of the US equity turnover every day. And over the course of the last couple weeks, we've averaged about a trillion dollars a day in turnover. So, it is a a firm that is at the center point of liquidity around the world. It is powered by world-class technology, great predictive analytics, and a really, really brilliant management team. So, it shares much of the same DNA as the as the hedge fund side of the house. Great people, great technology, great analytics. It's it's very much similar to what we do in the hedge fund in terms of the the culture and ethos, but we do it with a very different commercial intent.

David Rubenstein: Now, there's a story that might be apocryphal. Many stories about people who are famous have apocryphal background stories. One of the apocryphal background stories about you is that when you were in college, you got Harvard University to allow you to set up a antenna that would receive stock quotes. So as a student, you could trade stock. Is that true?

Kenneth Griffin: So it was a satellite dish actually. Yeah. I was I was updating my Xbox with my son next to me and he was about 13. He's he's 18 now. He looks at me goes, "Dad, you were alive before the internet." And and back in the 80s, there was no internet. There was no like stock quotes were actually hard to get. So, I had a satellite dish on top of the dorm room. the cable actually came through a fourth floor window down an unused elevator shaft and into my room. And that gave me access to real-time prices from the floor of the New York Stock Exchange.

David Rubenstein: And it worked.

Kenneth Griffin: It worked.

David Rubenstein: And if you hadn't done that or if your early trades had worked, would you be doing something more important like being a lawyer or something?

Kenneth Griffin: I'd be doing private equity, David.

David Rubenstein: Right. Okay. Well, there's no higher calling than private equity. Of course, I'm chasing girls around the college dorm.

Michael O'Leary: gratification, Michael.

David Rubenstein: So, Robin, um, you're a publicly traded hedge fund.

Robin Group: Yeah.

David Rubenstein: Most hedge funds are privately owned. Why are you publicly owned? And what's the advantage of being publicly owned in the hedge fund world?

Robin Group: Well, not my choice, by the way. So, I haven't sat in that seat. So, 35 years roughly of listing. So advantages, everybody knows what's going on at Mang Group. There is nothing to hide. And so in those quarterly updates that we do that Michael looks so forward to doing, um, we are completely transparent. And clients like that institutionally, if you're going to be in a space where people are looking at you and saying, "Hang on a second. Are these people who want to do business with?" Sometimes there's an advantage to having to tell everybody what's going on in your firm every quarter. So that's an advantage.

David Rubenstein: Right. You came to this firm largely as a lawyer and as a compliance officer. Yeah.

David Rubenstein: Usually compliance officers are people tell you you can't do this, you can't do that. How did you go from

Robin Group: Didn't say I was a good compliance officer. Um

David Rubenstein: people are telling you you can't you can't do this, you can't do that. You usually don't rise up to be the CEO. So were you a not that good compliance officer?

Robin Group: That um I believe that sometimes the best people to understand risk are the people who want to take the risk as well. If you sit me in in my executive team, they'll probably sit down and tell you um perhaps the person with the highest risk tolerance in the organization is me. And that's something that either I've grown up on because I've I was a sort of a litigator I guess in American terms or a barrister if you go back into the UK. So I'm an advocate. I understand risk. I've grown up in risk. I've run towards risks when sensible people have run away from them. And that makes my understanding of risk management, which is what we do all day, what we deliver all day, um, quite acute. So, no, it's not usual. Was I a terrible compliance officer? I'm not going I don't think I was terrible, but I understand risk.

David Rubenstein: Okay, Michael. Not long ago, you said that you wanted to charge people to go to the bathroom in your planes. Did that plan ever work or and why were so people so upset about that? Because couldn't they go for 45 minutes without going to the bathroom if they didn't want to pay?

Michael O'Leary: This is one of the great free stories that keeps on giving about I did an interview with some BBC news journalists about 25 years ago. I don't but we were on about something else. I I think taking seats out and putting sand in cabins and you know like the tube in London they'd be hanging on to the rails and she said what's next you going to charge for toilets? And I Yeah, we have a team working on that at the moment. And you know, if we could take out the two toilets at the back, we could put in six seats and six seats, we'd put 4% lower fairs that are and it still comes back every 25. You're the guy who wants to charge for toilets on board planes.

Michael O'Leary: There is actually we won't do it, but there is a theory in it. Actually, if you could take out two of the LS only have one toilet left and charge for the planes. You look at the extent to which people obsess about not paying for our baggage fees on board. You people packing up and weighing their scales in their bathrooms. I'm not going to pay bloody rare for the bag. They do the same thing with the toilet as well on board and we could put extra seats on the plane and with extra seats we'd be able to charge lower airfares but we're not going to do it.

David Rubenstein: You talked about once about charging extra for people overweight.

Michael O'Leary: No, no, we were very good. We that that we actually never did that one because it wouldn't make

David Rubenstein: Don't give him ideas. Never mind. That

Michael O'Leary: was actually that that came out of the states. I think we're with respect uh quite a lot of physically challenged people. Uh the Europeans are a bit slimmer although you because we're paying so much environ stupid environmental taxation over here. Uh no we've never planned to aircraft weights are done on average weights for adults and children. So it would make no difference anyway.

David Rubenstein: You have a good business in Europe. Why don't you just take that business to the United States? Why don't you go to the United States?

Michael O'Leary: Because that is where the culture starts to go wrong. You believe in your own This we work this very well in Europe because we have pretty much incompetent competition in Europe. Lufanza, Air France, KLM and these guys run by incompetent European government owned airlines. The US airlines are a bit more aggressive. You they are much stronger and much more well embedded. And the minute we and our management team says this has worked great in Europe, let's go all go off to America, California or Florida and we can run an airline over there, they'll all be out the door to go to the sunshine. I mean, if you've spent any winter in Ireland, everybody wants to get the hell out of the place.

David Rubenstein: So, that would be distraction. The other I mean, I think Kenny's demonstrated over many years in Citadel. Zealous focus on your business. Do not get distracted. And I don't want to go to Europe is a deregulated market. The only good thing about Europe is it is a deregulated market for air travel. So, thankfully, I get very little government interference. The minute I go outside of Europe to the Middle East, to Asia, to the US, it is hugely government regulated. and the states is already a reasonably well-run a although it's quite expensive. It wouldn't work because and it would undermine Ryder because we'd all get distracted.

David Rubenstein: Now, you were trained as an accountant, but usually the accountants I know are usually low-key people, very boring people. How did you get this personality as an accountant?

Michael O'Leary: I mean, well, firstly, I mean, a lot of people question whether I was trained or even trainable. Um, I did pass the exams, but only barely. Um, you know, I grew up on a farm. I so I'm a farm boy. We we learned how to work hard. I was always I if I came through accountancy I didn't I I wanted to be very kind of quiet and retired. I don't like the publicity. But I recognized when I got into Ryan we had no money for advertising. So it had to do something. Branson at the time was running around getting you know getting do all the cheap publicity. Herb was very good at in the states as well. So it was the obvious thing to do was okay you can't be successful here if you're going to be a kind of quiet as a mouse accountant. So, let's reinvent now. And remember, the Irish are generally good at being brash bullshitters. So, there is a gene in all of us, where we just talk a lot of rubbish and we're very good at talking lots of rubbish. In fact, we've built generation.

David Rubenstein: Would you hire an accountant with your personality?

Michael O'Leary: Um, would I hire an accountant? Well, thankfully that I have much more sensible people hiring accountants than the likes of me. You're not doing that. I would hire people. I mean, I I look at CVS. So, Kenny looks at CVS. He gets these Small Lotus out of Harvard. I want people if they grew up on a farm, they're in the door straight away. And I the thing I look for is not what your degree was, is what summer jobs did you do you know during your holidays from school and from college. And if you worked hard and you went out, you know, to be you got part-time jobs. Those are the people I want working in RER. I want people who work hard.

Michael O'Leary: Brains. It's the airline industry. We don't need a lot of brains and we don't need very bright internets cuz it's a stupid industry anyway.

David Rubenstein: Ken K can recently the mayor of New York pointed out that you had bought an apartment in New York and he wanted you to pay a so-called Pieta terror tax even though you have employed thousands of people in New York. You're building a new building in New York. You're contributing a lot of tax money to New York. Did that upset you?

Kenneth Griffin: Uh what upset me was the actual the the personal attack. Like we're you you were at the White House correspondence dinner on Saturday where they tried to assassinate the president and not too far from where I live in New York is where they assassinated the CEO of United Healthcare.

Kenneth Griffin: So I think the willingness of the mayor of New York to make this a policy debate, a personal attack, just demonstrated a profound lack of judgment. Just a profound lack of judgment. And I I understand that New York has bills to pay. Would you like to run New York for us for a couple years?

Michael O'Leary: I'm unelectable, Kenny. Nobody would vote for me.

Kenneth Griffin: Yes, but like you actually be a distraction from running.

David Rubenstein: Are you going to Ken? You're going to go ahead with your building in New York?

Kenneth Griffin: Well, you know, I'm meeting with the governor um Thursday.

David Rubenstein: Okay, you'll figure it out.

Kenneth Griffin: And we'll we'll talk about our future direction in New York. Here's the real question. Is New York going to put their fiscal house to order and run itself from a position of a strong government that's pro business or are they looking to play like like why do the Americans think we can do socialism? Like we have none of that in our DNA and we're just going to screw it up.

David Rubenstein: Now Ken, you are a very large maybe the largest donor in the United States of various political candidates and you've met many of these political candidates. Uh you're probably smarter than all of them. Why don't you just run for president yourself? Have you ever thought of that?

Kenneth Griffin: Didn't you just say I was smarter than all of them?

Kenneth Griffin: I mean, David, like what what a nightmarish job these people sign up for.

David Rubenstein: To be the president of United States, you wouldn't want to do that job.

Kenneth Griffin: Okay, if you could snap your fingers and be in the Oval Office, of course, I'd love to do that job. That would be like such I I love solving problems,

Kenneth Griffin: but it's not that simple. You've got to go through a a campaign cycle, which is just the most humiliating, and degrading process in the American American society.

David Rubenstein: So, uh, you're also a very large donor to lots of charitable causes. How do you deal with people coming to you every hour on the hour for charitable contributions?

Kenneth Griffin: Uh, Kase and Julia,

David Rubenstein: you have somebody that takes care of it for you.

Kenneth Griffin: I do. I've got two outstanding people that take care of it. You know, my job, my job is to manufacture money. We spoke with that early on. I've got my investment team. I focus on the business as much as I possibly can. I've got great people around me who are involved in our philanthropic efforts, who are involved in our political efforts. They know the values that are important to me. They know the key objectives that we're trying to, you know, obtain. Like, how do we educate American children to be the future leaders of the free world, but my day in and day out, it's about driving the returns for our shareholders.

David Rubenstein: The US hasn't had a recession for more than 10 years, a technical, more than a technical recession. Um, usually have them every seven years or so. Are you worried about a recession in part because of the war in Iran or anything else coming to the United States?

Kenneth Griffin: I mean, look, the business cycle has been banned. We We both know this. You know this. We all know this. Everybody in this room knows this. The business cycle has not been banned. We're going to have a recession around the world at some point here in the in the foreseeable future. What worries me is not the fact that we're going to have a recession. It's that we're losing the fiscal space to engage in counteryclical spending to keep the economy on the strongest possible footing. And and frankly if there were a panic in the credit quality of the of the leading sovereign debts around the world the US happened in the UK just what about 18 months ago now was it Liz Trust's moment

David Rubenstein: 10 days

Kenneth Griffin: 10 days of excitement. Yep.

Kenneth Griffin: I mean terrifying is it not as a risk manager.

David Rubenstein: Yeah.

Kenneth Griffin: Right. So the key is the western world has to put its fiscal house in order. so that we have more flexibility and more capacity in the next downturn to keep people employed, to keep our businesses going, to keep our economies as strong as possible when they're under duress.

David Rubenstein: Okay, Robin, this week in the United States, the the king of England is visiting the president. You're a British citizen.

Robin Group: I am.

David Rubenstein: What do you want to have the king get out of those meetings? many people in England focused on on that and why send the king why not send the prime minister to meet with the president of the United States.

Robin Group: There's it's great when you're asked to speak about why the king is doing something anyway. So I I saw on social media I do that thing interviews with the American general population about did you know the king and the queen is coming and a lot of them said not really and I'm not sure why. And when asked what they should do, the American population, these folks on social media said they recommended certain burger joints that they could go and visit, which I thought was very useful. Um, in the UK, when asked, there were at least five interviews where people felt sorry for the king having to do this visit because what were they going to do? And how predictable or unpredictable is that conversation? How meaningful is it going to be? I have to say I haven't spent much time thinking about what I think the king should be doing. I I strangely I'm a little like you. I'm kind of focused on what we're supposed to be doing every day which is returning value to clients.

Robin Group: Nevertheless, these are difficult times and what we need is sense and stability and what we need is some version of how we find solutions and things. And if the king can add to that debate, terrific. But I don't think I'd be holding my breath. Let's suppose I have some money and I want to invest the man group and I say I don't really know much about investing but I'm going to give you I don't know $100,000 or $100,000. Uh what kind of rate of return could I expect to get if I went into a reasonably safe but hopefully profitable investment that you would get to buy from me?

Robin Group: So number one let me just explain man Group deals with institutions and we don't deal directly with wealth and retail. So, I'm just being mindful that somebody doesn't ring up the phone at the end of this. Um, number two, it depends what you're after at the moment. And I think if we really think about wealth portfolios right now, what worries me or what I think about a lot is whether wealth and retail are having the access to diversified portfolios that they should have to try and weather the storms of these volatility that we're seeing in markets. So, with 100,000, it depends on where your risk profile is. It sort of depends on how old you are. sort of depends on how much risk you want to take. Sort of depends about whether you want to be in Europe or whether you want to be diversified. Sort of depends whether you want to lock your money up or not for a period of time. So I think it depends on a bunch of questions in the middle of that.

Robin Group: But the thing that worries me or the things that I think we talk about a lot with the people in this room about how do you navigate markets at the moment when you have such volatility and such dispersion? if you want to go into something relatively flat and relatively safe.

David Rubenstein: In the u in the hedge fund world, there seem to be many more men running hedge funds than women. Why do you think that is and is that going to change anytime in in our lifetime?

Robin Group: Um it's an interesting question about whether the the the historical bunch of people who have gone into these careers are right. There's a certain gendered to nature to this. When we started looking at this years ago, we started to look at hang on a second, what are we recruiting from? And is there some bias in the pool or and then we looked at the pool and then we looked at universities and we looked at who was taking the courses from whom we were hiring from and they were predominantly being populated by men. That is changing, but it's changing slowly. And what you're not going to do is find us clicking our fingers and finding different populations of gender makeup. We want the very best people to run money and ultimately there is a little bit of bias in that or a little bit of gendered nature in the in the pool of people. Would I like to see it change? For sure.

David Rubenstein: Michael, let's suppose you want to go on a vacation outside of Europe and would you fly another airline and do you fly other airlines to find out what mistakes they're making? And what airline do you think is the best next to Ryan Air?

Michael O'Leary: I occasionally have to go to the states on investor road shows David to explain to investors like you don't put the hundred grand into man put it into Raire shares at a 22% discount year to date. Um I mean I fly whoever's cheapest going across the Atlantic. That's my only other kind of uh

David Rubenstein: you don't when you fly for you're going on vacation with your family. You don't fly first class on some other airline. You always want to be in the coach.

Michael O'Leary: You know I I want to be on Ryan Air. I want to be seen on Ryer. The great thing of flying on Rhiner 2 is I can't fly I have to fly in rows three, four or five because if I'm up in the front row of seats everything's we're doing some VIP kind of nonsense that Yeah. So and the great advantage of it too is when I'm flying with RER I'll go up and pull the boarding cards at the boarding gate. inevitably I get about 25 Facebook pictures and I appear on the all these people. So God your man is up there doing cutting edge front line back to the shop floor kind of stuff. No actually I'm going on the same flight as you but it's good for cheap PR.

David Rubenstein: You ever have you have complaints? Do you tell them right then and there or do you

Michael O'Leary: I have lots of complaints usually that I'm pulling the boarding care passes too slowly or I'm the reason the flight is going to get go delayed but I'm also respond I I run our complaints department where we have a very prompt policy of responding to all complaints within 24 hours usually with a polite no.

David Rubenstein: For most for most passengers what's the most important thing price safety or getting there on time? uh safety is but but I mean assume that safety is a given because without safety you have nothing 99.999% of passengers want making a booking what's the cheapest fair to XY Z it is not available same it is not I destination obviously route frequency but 99.99% which is why the internet has transformed air travel and a machine learning uh which we had they probably didn't spend enough time machine learning is going to transform it again for the next 10 or 20 years.

David Rubenstein: Okay. Ken, when you're hiring people, do you want people that are high IQ, are hard workers, good athletes? I mean, somebody comes in front of you, but they're first in their class at Harvard, but they're kind of nerdy and they don't really talk very well. Uh do you hire them or you rather have an all-American athlete who looks great? What kind of people do you want to hire?

Kenneth Griffin: So, I I need both. I need both. I need I need people who are that all-American athlete with with a lot of charisma, a lot of leadership and a lot of intellect because I need people who have like the innate leadership skills that go with that. But I also need some of the people who are just wickedly smart, often a bit introverted, but we've got tough problems that need to be solved and they know how to solve them.

David Rubenstein: Final question. What is the best sovereign wealth fund in the world in your view?

Michael O'Leary: I would have to say Nor except they don't have enough exposure to Ryan Air. But we're getting there. That's why I'm back up in Oslo again and again and again trying to persuade them to upweight their investments.

David Rubenstein: All right, Ken, you have the same view on the best sovereign wealth fund. You have many of them invest with you.

Kenneth Griffin: This this is an absolute no-win question for me. Okay,

Kenneth Griffin: but I will say this. I will say that the fact that the leadership team of this Commonwealth fund is so committed to the betterment of the people of Norway is actually really touching. And I I think everyone should give a huge round of applause to Nikolai and his team for their commitment to bringing the best and brightest to this organization and the consistent focus on how to deliver for the people of Norway. It's really quite remarkable.

David Rubenstein: Robin, I assume you would have the you would have the same view. The best sovereign wealth fund that you invest with or that you're with today.

Robin Group: What he said plus because it why why say something when something's been said so eloquently plus this. We all get better all of us on the financial provision side when we work with the smartest people in the world. And so that there is nothing better than working with a team, an investor, a sovereign wealth with no who make us better at what we do and that's what this team does.

David Rubenstein: Thank you all very much.

Kenneth Griffin: Thank you.

Robin Group: Thank you.

Patrick Duplacy: Thank you, David, Kenneth, Michael, and Robin. We will now take a 30 minute break. We resume at 1:45. Please help yourself to refreshments and do introduce yourself to somebody new.

旁白: Norway is a small country, yet we produce worldclass athletes. I've spent 20 years studying what separates good from exceptional in cockpits, on football pitches, and investment teams. The answer is rarely talent or resources. Transforming a culture is the footprint of leadership. It requires a shared sense of ownership. Not only identifying what's broken, but naming what works and being able to protect just that. We can celebrate past success, but we are never better than our next performance.

Patrick Duplacy: Welcome back. The second part of the conference explores one of the most difficult challenges in business. Cultural transformation in companies.

Shelpi Nanda: Building a culture from scratch is hard. Transforming the culture in an existing organization that might be harder.

Patrick Duplacy: Our first speaker is Ajay Banga, the president of the World Bank Group. He's led cultural transformation twice. once in a phenomenal manner at Mastercard where he was the CEO for 12 years and now at the World Bank.

Shelpi Nanda: The private sector tends to move faster. The public sector has decades of history, multiple shareholders, stakeholders.

Patrick Duplacy: How do you drive cultural transformation when the rules are completely different?

Shelpi Nanda: We'd love to hear more.

Patrick Duplacy: Please welcome AJ.

Ajay Banga: So they say that culture trumps strategy every time and the pun is intended. So that's where we're going to start from. Everyone in this room has built or led organizations. You've all done something of that type. You've shaped teams. You've kind of made decisions under pressure. You have lived the reality that culture is not something abstract. You've got your own hard one views on it. No doubt. But I'm not here to tell you that I've figured it out. I just have an unusual vantage point as you said. I've had the chance to be the CEO of a of a public company. That's Mastercard. And and now at the World Bank Group, it's quite different. It's 25,000 plus people with 189 governments as my shareholders with 25 executive directors resident in my building with 20 advisers each, which means a lot of people who want to know what I'm doing.

Ajay Banga: So, so, so, so I can't really goof off either. So, what we all know there is that as a CEO, I think culture is what determines our success. I think culture is what is the single most important thing all of us work on. And and it's easy to talk about it, but what exactly is the darn thing? And I think what is it and how do you build it are the two most important questions that most of us have to answer. So, so in an effort to be faithful to Nicola, I I actually have written a speech down on culture, which is pretty interesting. I've never done that, but I'm going to read this out to you so I don't miss a few things. I spent a lot of time working on this one.

Ajay Banga: I think what culture is depends on your organization. I think regardless of your unique circumstances, culture is the glue. It is absolutely the glue. how people make decisions, how they take a risk, how they work together to deliver whatever your mission is. It's how you drive an organization to say yes if rather than no. Every organization has plenty of people incented to say no. There are never enough people who say yes if you do it this way. Finding that culture is important. Culture is not a value statement. It is not a poster on the wall and definitely it is not what the CEO says at town halls. It's just not.

Ajay Banga: So at the simplest culture is what gets measured, what gets rewarded, what gets tolerated. But most importantly, it's what happens when you're not in the room. And so that's the culture that I'm talking about. And I think the idea of it's what happens when you're not in the room is what makes it a force multiplier. And the how is where culture lives or dies. Because while everybody's context is different, there are some common things between the public and the private sector and there are some very big differences.

Ajay Banga: So first what I call the decency quotient DQ. I learned very quickly that IQ and EQ were important while I was growing up. But I believe that now what you need in leadership is what's called the decency quotient. And so I I just named it that. I was making a joke in a town hall and I'd just come out of listening to Warren Buffett talk about DQ. In his case, that was Dairy Queen, the ice cream. And so you could see how my mind works. And I was looking for something to talk about to tell people what I meant and to give a word to what I was trying to explain to them about culture. And this idea of decency quotient came. But decency is not about being nice. It's actually about being fair, direct, and consistent.

Ajay Banga: Tell the truth to your people even when it's uncomfortable. Give that feedback with clarity. Speak up when it's difficult. Treat people with respect. All that. It doesn't actually slow the organization down. It does quite the opposite because it allows you to move faster because people trust the system. And it improves decisions because people are willing to challenge and to be challenged. And so it actually works in the right way if you do it the right way. Fear drives behavior for a while, but it doesn't build judgment. It doesn't build ownership, and it doesn't build initiative. Decency does. And so, leadership has to feel like a hand on your back. You got to push people forward, but not a finger in their face. And that's what decency quotient is all about. That's the first thing.

Ajay Banga: The second one is clarity of purpose. In a large organization, I think the biggest cultural problem is often not resistance. And James can talk to this adnauseium. It's actually confusion more than resistance. Clarity in his case in Morgan Stanley, he very clearly delivered a message of what they were going to focus on which was wealth management as the way that Morgan Stanley would grow, right? In that changed an organization that had multiple ideas of how they would grow to very focused, very simple, very focused. And I think simplicity is the key. And making something simple is actually the hardest thing to do. So people think that in simplicity you've lost detail. Actually conversing in simple terms without jargon is the world's most difficult thing to do as a leader.

Ajay Banga: At Mastercard the company had to redefine itself from a payments processor to a technology platform. How did I simplify it? I united everybody around one set of mission and it said kill cash. just kill cash as compared to thinking about everything else. And that included technology, it included payments, included analytics, it included data, it included anything that you could do. Financial inclusion, working with the downtrodden, getting social security payments into their hands, figuring out digital identities all came inside the idea of killing cash. It gave them a very clear sense of direction.

Ajay Banga: So at the World Bank, similar issue, how do you kill poverty? And I've got come around to saying instead of having many different causes, let's do this for climate, let's do that for gender, let's build a hospital, let's do a skilling center, let's do schools. At the end of the day, what you're trying to do to kill poverty is to give people a job. not necessarily working for a big company or a small company or as an entrepreneur or just staying in their small farm and being content with the productivity they get by connecting up to technology to a cooperative. I'm just giving you many ways to do this. The point is a job earning is the best way to drive people's hope and dignity.

Ajay Banga: And if you sort of think about this carefully, a friend of mine once said that poverty is both a state of mind and a state of being. Being you can solve by giving grants, by giving aid, by giving donations, by writing philanthropic dollars. Mind doesn't get solved with that. Mind needs you to feel productive every morning, optimistic, feeling that you've got a future. So I think the most important thing is the job gives you both a way to defeat a state of being and a state of mind to drive a nail into the coffin of poverty.

Ajay Banga: That's the clarity that has settled in and I think once you start doing that you get this multiplier effect of people making decisions on it. The last thing about clarity, just never tire of discussing what you've decided is very simple because leaders get bored saying the same things. Organizations don't get bored hearing it. And I think if you want something to stick, you got to say it again and again and again and again until it shows up in how people make their decisions. So that's the that was the second topic. The third is measure what matters. Align your incentives. You guys are all pretty clear on that. At Mastercard, we had some simple metrics.

Ajay Banga: At the World Bank, I had a corporate scorecard. For those of you from the private sector, you will love this. I had a corporate scorecard of 155 items when I showed up. And I tried to explain to my board of those 25 people that 155 items is about 130 too many for a corporate scorecard. Because at 155 items, I will always get an A+ because I would have delivered on 30. and you'll never get me to discuss the other 125. That's how it works. It took a long time. We got ourselves down to 22 items and all 22 now on our website. You can go and click on them and you can track where I am every month project by project on delivering against that. And I keep telling our board, sunlight is the best disinfectant.

Ajay Banga: And so transparency of your targets, simplifying them, fewer are what we're trying to do. So now all this is lovely but here's the context difference between the private sector and the public sector. In the private sector pressure comes from markets comes from shareholders comes from profit motive performance competition crisis. You got clear levers compensation hiring firing capital allocation. At Mastercard if something wasn't working I could use all those levers jiggle with them fix it quickly. In the public sector the challenge is completely different. We've got a mission, but we also have 189 shareholders, each with a different and nuanced way of looking based on their domestic politics, which they bring to my office every day.

Ajay Banga: You've got long-standing processes. Tenure is long. Risk aversion is very real. We're kind of like an academic institution trying to get real work done. So, you can imagine how complex that is. And you cannot reset that system overnight. And compensation is not a lever of the type that you have in the private sector. So you work all the levers you have. You align teams around the outcomes. You simplify what you say. Simplify structures. You become explicit in what gets recognized. You become explicit in what gets funded. It takes longer. But the principle is exactly the same. If you don't align the system, culture will not move. And alignment comes from simplicity and focus and leading from the front with how you speak about what you're doing.

Ajay Banga: So it's just a closing thought for you. I have told everybody who worked with me over the years that leadership is not a privilege. It's not your birthright. You weren't born with it. It is absolutely what you have to earn. And at some point in your career, someone trusted you like someone trusted me with the responsibility for other people. And at that point, your job changes forever.

Ajay Banga: And so it's not long about just delivering results. It's about creating the conditions where the people who work for you can feel your hand on their back pushing them forward. And that is what culture is all about. Because actually you're not going to be there to put your hand on their back all the time, but they have to feel it anyway. And that's culture. Thank you very much.

Rula Kof: Thank you, AJ. We continue our exploration of cultural transformation. Next stop, Wall Street. James Gorman became CEO of Morgan Stanley in 2010 in the aftermath of the financial crisis. Over 14 years, he transformed the firm, not just the business model, but the culture itself. Today he is chairman emeritus of Morgan Stanley, chairman of Disney and a senior adviser to general Atlantic.

Rula Kof: Joining him on stage to explore this journey is Ruler Kof, editor of the Financial Times. Please welcome James and Ruler.

Rula Kof: Hello everyone. Um, and hello James. I haven't seen you in a in a while. Uh,

James Gorman: I'm retired that's why.

Rula Kof: Yes. Yes. Uh, so looking back at um culture, I came across all sorts of statements that I then discovered were actually called gormanisms. And so I thought that I would throw at you a few of your gormanisms. And

James Gorman: this could be dangerous. But anyway,

Rula Kof: well, only one of them. I think I think the rest are fine. Uh, so and then you can you can talk to us about it.

James Gorman: Yeah.

Rula Kof: The first one, strategy earns you the right to talk about culture.

James Gorman: Mhm.

Rula Kof: Tell us about that. Yeah. Um it's very hard to talk about culture if the business isn't isn't working you know

Rula Kof: which is what happened when you were when you came into more

James Gorman: you can go I mean how this came up the board of directors came to me when Barclay's bank had a new chairman new co and they did a global tour which was a culture tour and they said to me kind of why aren't you doing that I said because firstly we're still figuring out what we're going to be when we grow up. I don't know what Blay is going to be when they grow up. What do you do if you go around the world, you tell people, "This is our culture. This is what it means. These are our core values." A week later, you come back and say, "Unfortunately, you're fired." But it's still a great culture. So, you've got to have a strategy which is viable, which gives people an opportunity and promise for the future, and then build the cultural values around it. And those values is what let you change your strategy over time because it gives you the confidence it's coming from the right place.

James Gorman: So strong companies I think of it as it's it's like you know different cabins on a a a train. You've got the strategy then the culture then the strategy then the culture then the strategy and that's how companies stay around for decades you know centuries is they're prepared to reinvent. They reinvent with the strong bones that come from confidence in their culture. But you've al you've also said that nothing drives culture more than winning. So winning people have to feel that they're winning before you can forge a real culture.

James Gorman: Well, that's something I think I agree with with was it Michael today? Although I'd have to say I just want to say and I'm not saying this to pander to you. I flew in on SAS this morning. It was a fabulous flight. The food was great. The people were nice. They didn't charge me for my bags. everything. It arrived 50 minutes early. 50. I was the first person through customs. I loved it. So, I'm sure Ryan Air is good. I just haven't been on it. Um,

Michael O'Leary: where the toilet's free?

James Gorman: It's Yeah, toilets for free. It was good. Um, you know, I I think if again people will people will support a a non-winning culture, but you'll get a certain type of people who support that. If you want real goers, people who are prepared to put themselves, you know, on the line of fire, run to where the drama is, then they need to know that they're part of a winning organization. Charisma works great once you tell people to, you know, charge up the hill and they get all shot out and they say, "Well, that's not a really good idea." You say, "It didn't work so well, but charge again." And they say, "Have you got another way of getting there?" You know, it's like, so people need to be part of something. And if it's winning, it's infectious. And if it's infectious, they truly do exceptional things. So, yeah, your job as a leader is to figure out a winning strategy that puts everybody in a position where they can thrive.

Rula Kof: Employees should stop feeling like tenants looking for their next bonus and start feeling like landlords. It's it's quite difficult to tell bankers not to be thinking about their next bonus.

James Gorman: Well, I said it in the nicest possible way.

James Gorman: Um, you know, at the end of the day, uh, you've got to decide. This is another thing I had a discussion with the board. I said if I have a dream which is to get a really smart you know neuroscientist and really smart software developer and a computer scientist and put them in a room together and say come up with a camera and the camera has to take a picture of the inside of people's heads. So when they go to work in the morning they stand in front of the gates like you know the floppy gates whatever they are you don't pull out your card to get in. The gate opens if it takes a picture of your head and you've passed the test. And the test is half of you has to be coming in for yourself. Cuz to deal with adversity, to drive forward, you've got to have ego, confidence, whatever. But half of you has to be coming in for the institution.

James Gorman: So the the the rallying cry to the to the the bankers or the traders or anybody was, you know, it only works if we all make it work. And if it's just about you getting your piece, 98% is you. If everybody does that, that's a war of attrition that won't end well. And by the way, you're paid in the stock. And the stock is going to go up if it goes well. So why wouldn't you want this all to work? And that means putting a little bit of yourself aside to do what's right in the institutions. And happily, our investment bankers did. They were fantastic about it. But but blunt language and expressing it as you you know, I don't come in for James Gman Securities. I came in for Morgan Stanley. and I respected its history. I respected the people who'd led it before me and I respect the people after it. Your job is to take the ship from one port to another, not to take over the ship only for yourself.

Rula Kof: Was it was it much harder particularly during the the um uh the co pandemic and with younger you often hear today that younger people want experiences. They're not necessarily looking for a career in in one uh in one uh institution. Um, and you know, you've had a few controversial comments like, uh, if you're not, if you're so unhappy, just leave- w

James Gorman: sort of thing my dad would say to me. You know, it's like it's the truth.

Rula Kof: But you've also said if you're in career land, you're building a professional life and that requires being around other human beings to pick up soft cues. Young people are nuts if they're not in the office. That's where mentoring happens.

James Gorman: Yeah. I you know I felt very strongly as CO was going on and and I was criticized by a lot of people for what I said and partly was I'd had CO very early and got through it. So their attitude was it's easy for you to say what I said was I don't know if it's on your list. Um if you can go to a restaurant you can go to the office.

Rula Kof: There's one on the Hampton.

James Gorman: What happened was I was at I was at a restaurant in New York picking up my food. I've been to the gym. I was picking up my food at this little Japanese restaurant called Bond Street ST and a big dude walks up to me, puts his arm around me, he says, "Great to see you." I said, "Who are you?" He said, "I work in the organization blah blah blah." And he said, "It's fantastic and crowded restaurant." And and he said, "Can we get a selfie with his table? We all do a selfie together. Everybody's high-fiving each other." And I said, "Hey, finding being back at the office." I couldn't go in the office. Not safe.

James Gorman: Like what? What about all the kids? He's the senior management director. What about the young kids who are coming back to an apartment with three other kids in them? There's no privacy. There's a dog barking. You know, the neighbors are yelling and they're supposed to be doing work and they want to go in the office and their bosses aren't there. I said, "It doesn't work that way." We got the opportunity. We were mentored. We were developed because other senior people were around. Even as simple as would you, when I was a young lawyer, one of the senior partners one day said, "Would you walk with me?" It was like four blocks to the court for a trial. had I wasn't involved in the trial, but he was smart enough to realize that just being together for four blocks would change my day, change my month, I think, and I got to talk to him and no, you've got an obligation if you've come through that mentoring to give back. I feel that very strongly.

Rula Kof: One of the most important um uh things that you've done uh at Morgan Stanley was to manage the succession and you've become a bit of an expert in managing uh success succession smoothly and you've been charged with doing that more recently at Disney. Um, what does it really take? And isn't it just throwing money at the other candidates, which you also did?

James Gorman: Well, we um I don't know that we we certainly we gave sign on bon b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b bonuses to couple of people at Morgan Sunday. We did none of that at Disney. So there's not like one model. Um I mean this could be a very long conversation but the the cliffotes are um transparency. Yes, we're having a process. These people of the succession committee the board will decide. There will be a start date. There will be a transition date and there will be a finish date. And after the finish date, the C old CEO will be gone. There won't be like hanging around the hoop. They're gone. the new CEO will be put in place and they'll either have a non-executive chairman or an executive chairman for periods of time. So, transparency of process, total respect, tell people the great news is you're being considered.

James Gorman: If you're really ticked off about the twoing and throwing, there's an option here. Take yourself out of consideration. Nobody did that, right? So, you're considered. I want to give you absolute respect, but our job is to find the best candidate for this company for the next 10 years. And that means we're going to be rigorous. We're going to ask you questions. We're going to make you I had the Morgan Sandy people write strategy papers. Um I only gave them two weeks. I said, "Come to my office. Send it to me in advance. I'll read it. I don't want any paper. I'm just going to ask you questions." So that way if somebody wrote it for you, it's not going to be good, right? It's got to be real. It's what you think. We did health checks. We did all sorts of stuff. So clarity around the process, honesty, transparency.

James Gorman: Uh when the when the the king the king has to be dead for the new king to succeed. So the king has to leave. And that's and I I left. I said to the board, they said, "Stay, you know, you could stay a little longer." I said, "We can, but is it the right thing for the company, for the institution? You need somebody to do it 10 years. The fact I can eek out another couple doesn't work." So all of those are the elements but it really starts with with clarity, transparency um and intentionality. There will be a result. You know Disney had messed up succession had problems I should say for some years going back many decades. And we were absolutely convicted as a board it was going to be clean and Bob Iger to his credit did a great job through the transition. We have a terrific new CEO Josh Tamara

Rula Kof: but he was his choice. What's that?

James Gorman: He was Baba Iger's choice, wasn't he?

James Gorman: No, it's the board's choice. No, that's No,

Rula Kof: but he was happy with it.

James Gorman: Yes. Very. Um, the job of a

Rula Kof: think he won't he won't come back anymore.

James Gorman: Absolutely not. The job of a CEO is to present viable candidates fit for purpose. The job of the board with the succession committee doing a lot of the leg work is to ensure inside and outside the company you've considered all options and then properly test and arrive at decision and it requires a board vote. We looked at I I mean I had so many people giving me names of people they thought could run Disney. It was a joke. I said, "Do you even know who the internal people are?" "No, I don't know them, but my guy is the right person." Right? So I said, "Fine. I'll look at I'll look at anything." I went on looked at podcasts. I looked at TV interviews they did. I looked at speeches. I did reference checking on a whole bunch of outside people. We decided the best person was inside and they beat all comers and that's the right answer. But it's important.

Rula Kof: You managed you managed to also keep another internal candidate who didn't get.

James Gorman: We kept we kept three internal candidates at at Disney and we kept the two other alternatives at Morgan Stanley. All of them were kept and everybody said it wouldn't happen. and I said, "We'll see."

James Gorman: Um, treat people with respect. It makes a real difference.

Rula Kof: Is it true that you reach out to all to new CEOs in the US and share your advice? What do you do when you hear somebody's a new CEO? Call them up and you say, "What?"

James Gorman: Yeah. I called, I didn't do it in the early years, been late years. I called every Fortune 500 CEO within a month or so of getting their job. and many of the international cos European more than Asian to be honest. Um it was just say congratulations. Uh I'm not here to sell you anything. I just want to introduce myself. If you ever got issues you want to talk about and they immediately start talking about their chairman won't leave. They've got an activist dysfunctional member on the board. Their kids are unhappy about them doing the job. They're going through a divorce. I mean suddenly it was like whoa. I didn't mean that. thought I was just saying hi and you get into a long therapy discussion.

James Gorman: Um there was only one guy turned me down, a French guy. I forget who he was. Um and he said, "I don't talk to bankers." I said, "Well, that's good because I'm not a banker." But anyway, there you go.

Rula Kof: Uh so we've got exactly 16 seconds. Uh no, yeah, 16 seconds actually left. Uh, last night the president and the first lady both demanded that ABC get rid of Jimmy Kim.

James Gorman: Ah, the journalist that you is sneaking out right at the end.

Rula Kof: Yeah. Yeah.

James Gorman: What are you going to do?

Rula Kof: What am I going to do about what? About their demand.

James Gorman: Yeah. I there I have I have 12 seconds. The ro the role of directors on any issue um of consequence is to advise not to do and the reason for that is the people who make the decisions live with the consequences.

Rula Kof: What would your advice be?

James Gorman: I'm not going to share my advice. That's that's obviously between the board and and the CEO. But these these are not these kinds of issues happen at time to time in large companies and um it's the job of the CEO with their team to figure out the right answer and they'll be guided you know by the board but it's like anything if you throw 10 15 people together they might have different views but I'm highly we have a terrific new CEO Josh um he's world class so I'm sure he'll rise to the occasion and do what the right thing is.

Rula Kof: Okay, you wiggled out of it. Thank you, James.

Shelpi Nanda: Thank you, James and Rula. Our next speaker faces a different kind of transformation challenge. Karen Rodstrom is the president and CEO of Danlier Truck, the company that invented the truck in 1896. That's 130 years of industrial heritage, which today is both their strength and their challenge. As the industry reinvents itself, how do you transform a culture built on engineering perfection to move at the speed this moment demands? Please welcome Karen.

Karen Radstrom: So, I started as the CEO of Daimler Truck two years ago. Um didn't get called actually by Morgan Stanley, but maybe I'm still waiting for that. Um one of the first things I did, which I think is quite reasonable when you start as a new CEO, working through the strategy. So I worked with my management board of course strategy department some consultants who wanted to give us advice um top down bottom up bringing in the talents and sort of coming out with um what I thought and the whole board thought was a really really strong strategy. five pillars, very clear vision, mission, we know what to do.

Karen Radstrom: And then the first time we were going to present the strategy was in our top leadership meeting with the top 200 leaders of the company. And just a couple of days before actually just kind of out of curiosity, I started looking, you know, what have we said in the past in these conferences and what did the former CEOs talk about? And then I realized when we started flipping through the old slides, uh, a lot of the strategy was kind of the same as what we had been talking about for or not me but my predecessors for like the last 15 20 years. Uh, for sure there were new elements like digitalization, AI, servitization etc. But if you looked at the bulk of it really to be very honest a lot was quite similar.

Karen Radstrom: And then we realized that we actually don't really have a strategy problem in our company. We have an execution problem. And this is really tricky because as you mentioned in the introduction, we're 130 years old. Uh engineering excellence, always innovation leader. Um today we're the biggest truck and bus company in the world. Um so obviously we did a lot of things right to get to where we are today

Karen Radstrom: but that does not guarantee success not even the next quarter and definitely not for the next 10 20 or even 130 years and besides that as we talked about a lot uh the world is really changing um you have everything kind of macro or um on a large scale that's happening in the world with AI technology, geopolitics, the shift of power balance in the world. But besides that, in our industry, we also have the transformation of technology. Uh we've been developing diesel trucks for the last 100 plus years. Now we're looking at electrification, hydrogen. We have softwaredefined vehicles. Uh we also do a lot of work into self-driving vehicles. There's new business models. People don't want to own the assets anymore. So our industry is also changing and besides that Daimler truck is changing.

Karen Radstrom: On the one hand we're 130 years old. On the other hand actually we were spun off out of this big Daimler conglomerate just four years ago. So in many ways we're just a fouryear-old company learning what it's like to be to be a listed company um and and to function in that environment. So without putting any blame on the past, we needed to focus a lot more on how do we drive transformation going forward. And then we came up with these um three kind of simple worlds, simpler, faster, stronger. And that's a mindset that we now try to bring into everything we do in the company. And it's sounds very easy. Someone else also talked about doing things simpler, but I mean we are a German company. I would say we're a global company, but our headquarters in South Germany and we're very proud of our heritage and what we come from. But for sure we had in order to build the engineering excellence that built our strong history, we needed to pay attention to detail. And I think German success is really built on strong structures, clear decisions, strong direction. So that's not so easy to change.

Karen Radstrom: It's not enough to put simpler, faster, stronger on the wall and expect everyone to run. But where I see it really positive is it's actually a license for anyone in the company to question how we do things. And that's maybe also not the historical strength of German companies that people really stand up and ask why do we do it like that? But I've heard now from many people in the company it's like yeah is there a simpler faster way we can do this and that kind of opens a different kind of conversation than when you're just perceived like you're complaining about your boss potentially.

Karen Radstrom: Um but we wanted to do it even more let's say concrete. So we started looking more broadly on culture and what is culture and the way we defined it in our company is the culture is the sum of all the practices you have in the company and practices can be a couple of different things. So first of all it's the values. It's kind of the the words on the wall and and what you put in your uh annual reports and and what you say that you stand for. But practices is also all the processes that you have in the company. The formal processes on how you recruit people, how you um pay for performance, budgeting, whatever. And then it's also all the informal processes um which is the way you do things in a company which is actually not a formal process but everyone just kind of knows that's how we always do it here and that's how it always has been done.

Karen Radstrom: And we started looking at all these practices and actually we found a very structured way that we are picking three to four practices every month that we want to change and we look at it we describe how do we do it today and what's the desired state on how we want to do it in the future and then we're rolling out new practices in waves. So every one to two months we have a wave and there's three to four new practices coming and I think that's a very concrete way to drive a change of culture in a very old company and it can be you know some of it is like super well sounds basic but even the small things are not easy.

Karen Radstrom: Um so what we do now is we start every meeting by looking at who's sitting around the table. Why are you here? Are you here because you want to add to the discussion? you want to be part of the decision making. Are you just here to gather information or are you here because this guy is presenting and I'm his boss and then the boss of the boss and then the boss of the boss. So I just have to be in the room to be sure what's being said. And by doing that we have realized actually we can walk a lot of people out of the room who are not there to really contribute to a to a result.

Karen Radstrom: Um also I got crazy when I joined Daimler. There's powerpoints for everything. So every meeting I get a PowerPoint. It's like 50 pages. I have to pre-eread. I come in. Um so that's we have not totally banned PowerPoints but we have stopped having powerpoints by default. Um and we see that it drives a completely different quality of discussion because you really focus on the problem and how to solve it instead of sometime spending a lot of time describing all the backgrounds.

Karen Radstrom: Um so those are some small ones. Then there's some bigger ones. uh trying to kill the budget process right now. Um normally we would already now actually start to plan the budget for 2027. Um it's you know starts with what's the total market going to be what's macro etc. And then we build from bottom up. It's a huge process very structured. Um so now we're killing the budget process. uh we will not start until October, November because then we have to prepare it for the board. That's a really interesting one. Um and it's very fundamental um in our company because it's it's one of the real core processes that that some people love. Um so yeah, not me.

Karen Radstrom: Um so maybe that's a little bit just the practical approach to to how to change culture and I think we're just getting started on this journey. Um when people already now start to get frustrated I tell them you know this is not a campaign this is really something we need to go out and focus on and I think I will do it for my whole CEO tenure to really push push push push and slowly move step by step by step by step. Um, but that's what makes it so fun and interesting to be in these old industries that are transforming very fast.

Shelpi Nanda: Thank you Karen. We now move from industrial engineering to retail with another story of transformation. A company where the culture itself is the brand. Yes. Broaden served as CEO of IKEA Group from 2017 to 2025. As CEO, he led major transformation, making IKEA sustainable, digital, ready for a new generation of customers. But here's the paradox. IKEA's culture is what makes it IKEA. Swedish values, affordable design, accessibility. Evolving that without losing that which people love could not have been easy. Please welcome Yes.

Jesper Brodin: Thank you so much. Thank you. Thank you. Thank you. I feel terrible. I have a PowerPoint. Uh Cory, so I don't know what to do now. Uh but listen, I I think um for a couple of moments I would take the opportunity uh uh to actually try to give a couple of images of culture uh the tension, the harmony and all of it.

Jesper Brodin: Um let me start um eight years as a CTO CEO a little bit more. Uh I had 30 years in IKEA last uh August and you know what happened? I got an email from myself congratulating me to 30 years in IKEA. And here comes the culture part offering me three extra days of vacation. Now I I can't remember the the company who was on the stage before talking about cost consciousness but that sets the level I think for all of us.

Jesper Brodin: Now um I wanted to take uh I wanted to bring a couple of bad pictures from my own iPhone as well but just to share how does actually culture look like and for me there are a couple of things we can talk about but for me it's really the notion of that if you're a leader you have to live the culture you have to be the culture. So the first picture I brought is this beautiful uh picture of me doing if you look at our uh files it says we're doing front tweaks in IKEA because we think it's genuinely important for us to follow our decisions in reality. I am absolutely crap at selling kitchens. I I don't know all the mistakes I've done over the years. So my people recommend I do the dishes. I do that quite well actually.

Jesper Brodin: Um and now I tell you a story about culture. This is actually me on the first week of being CEO. I was on a trip around the world to meet a lot of countries, customers, co-workers, and get myself an opinion about where we were as an organization. And this actually happened. So, I was doing the dishes and the restaurant manager at this store, he came up to me and said, "Are you actually a manager?" He said to me and I was doing the dishes, very occupied. I said, "Yes, I have to admit." And then he didn't recognize me. And then he said, "Are you reporting to the Swedish country manager?" And I was doing the dishes and I said, "No, it's actually the other way around." And he looked at me and he bursted out in laughter hysterically. And then he gave me a hug and he said, "Keep on dreaming." So that's a key for you. There you go.

Jesper Brodin: Now, um, the interesting thing, this is also absolutely the truth. I went on this trip because I felt I think I felt some sort of obligation to show up and meet people. I I was a bit nervous in my role and I for once I didn't want to get lost into the boardrooms and in the head office. So I went out there when I came back I had a report a travel report uh brought to my management group and at the moment when I shared it uh actually one of my colleagues said that's not a report it's a strategy. I said no it's a report. He said, "No, it's a strategy." But the interesting thing with the trip was the report was only listening to customers and to co-workers and we having a very strong culture at IKEA with all its benefits and all its strength um had actually over the years stopped listening. I think our front window became smaller and our back uh review mirror became bigger. So we almost almost missed the digital transformation and the online because back then we were absolutely just analog and I will fast forward in a moment to what happened during the pandemic because actually that trip and that moment uh potentially saved the company.

Jesper Brodin: Um I wanted to talk about this man some of you might recognize him the founder of IKEA. Somebody asked me yesterday what is the name IKEA come from? And actually he was 16 years old when he went to the registrate to form his company. His father had to be with him. He told me this story himself. And then the register said, "So what is the company name going to be?" And he had no clue. So he said, "What's your name? Ingvar I Camprad K. Where do you come from?" El Aaron. That's a So that's IKEA how it was actually started. Um he passed away nine years ago. And I haven't told this story before, but I think it also says something about uh culture.

Jesper Brodin: I was in the boardroom last time I met him uh trying to convince my board to actually make historic investments into digital and that was seen as a problem by the board at the discussion we were having and in came uh Ingval. He could hardly walk, 91 years old. And obviously all the attention went from me to him in the room. And then he stopped and he said, "So what are you doing?" He asked and I I think I was a bit annoyed and I said with trying to solve a problem in then he started crying and he said, "Oh, how wonderful to have a problem." And then he left and that's actually the last time I met him. Yeah. So um this was not part of my uh job description but this is what happened during the years uh and probably a couple of more things and we could add to the uh I think the weight on the shoulders that are on all leaders of today.

Jesper Brodin: I think potentially the generation who's been leading in different positions the last 10 years has had more trouble than any of the generations before. So we certainly got our share of of challenges. At IKEA, we decided among all these challenges, we believe and we're happy to speak to it that climate change is going to be the most dramatic and it's based on ethics, if you like, a morality that we are happy to claim as leaders, but also that a majority of our customers and our co-workers are deeply concerned and expect us to take action on it. Third, which I want to talk about, is what we discovered down the road, the economic benefits, which we didn't know when we committed ourselves a few years ago.

Jesper Brodin: So I'm going to skip to some of the achievements and I'm not here to to brag about the numbers that we have produced the last years but in the backdrop of all these crisis IKEA has had an incredibly strong path of of growth. There are three real reasons behind it and probably more than I you know will ever know. But the first one I would claim is culture because during crisis IKEA as a constituency I found out during the pandemic the benefit of a culture that has invested years and years in acknowledging people to do mistakes. We didn't experience paralysis actually people all over IKEA took action simultaneously. We had to steer up some things. We have to coordinate of course but we had a lot of willingness to actually be part of the crisis. So I think the 24% growth we see here is mostly dedicated to a bloody strong culture.

Jesper Brodin: Secondly, it comes from the transformation into online. We went from a fully analog company to today do about 30% thereabouts in online. During the pandemic, we had 100% online. Note that IKEA at the start of the pandemic had only one market out of 14 up and running on online. We had a plan of two and a half years to scale out online. It took six weeks due to the crisis that we were into.

Jesper Brodin: But the cool thing I wanted to share with you because I think it's less known is that during these years we have actually taken the company from a carbon perspective minus 30%. So plus 24 in business revenue minus 30% in absolute carbon and this is not scope one two only what we buy or what we do in the company. This is the full value chain upstream and downstream and I have brought the numbers to you. So now somebody talked about nerd nerds before. Now I'm going to get super nerdy here and share with you the equation about this because I find it fascinating.

Jesper Brodin: To start with, we were um having all sorts of speculation about what our carbon footprint was until we actually got data. And this is the Paris agreement approximate numbers of IKEA's carbon footprint. It holds a couple of very interesting elements. Um first of all most people would think transport was a biggest uh element and it turns out that customers transport or home deliveries is the inefficient one if you like um but the transport of flat packs around the world as you can see on the number here is not the biggest one raw material and stay with that raw material is actually IKEA's achilles he seal if you like both from a carbon point of view.

Jesper Brodin: now would I transpose the uh cost elements of IKEA's value chain from retail and upstream the numbers will actually resonate quite similar. We have about 36% of our cost today sits in raw material in IKEA production, transport, retail approximately the same. So what we realized when we looked at these numbers is that if we touch carbon we might actually touch cost.

Jesper Brodin: And it turns out when we uh go a few years down the line what you see is that IKEA has actually managed to reduce carbon