The Bridge with Peter Mansbridge - Dominic Barton on China, Good and Bad.

Episode Date: January 23, 2023

He's the internationally known Canadian at the centre of two big stories -- the negotiations that led to the release of the two Michaels, and the controversy over consultancy fees that are leading to a parliamentary committee.  Dominic Barton, Canada's former ambassador to China, and the former global managing partner of McKinsey is our guest for the full show.

And hello there, Peter Mansbridge here. You are just moments away from the latest episode of The Bridge special program today. We have the inside story of what happened in the negotiations between China and Canada on the release of the two Michaels. And we get the story from the man who led the Canadian sides team. That's coming right up. And hello there, Peter Mansbridge here. Dominic Barton, does that name ring a bell for you? Well, if it doesn't, it probably should. Dominic Barton is an extremely well-known Canadian, both in diplomatic circles and in business circles internationally, around the world. He's extremely well-known. Right now, he's the chair of the global mining firm Rio Tinto. But in his past, two particular things of interest. One, ambassador for Canada to China

during the period of the two Michaels being held in a Chinese prison. That's one. Two, he's the former global managing partner of the McKinsey Group, the consulting firm, the huge international consulting firm that has been at the center of some controversy, and we'll get into that a little later, and his particular role in it. But also, consulting firms in general. Around the world, consulting firms have expanded their business considerably. And that includes here in Canada, where they consult for private firms,

but also for government. And the opposition has been raising questions in Ottawa about why have consulting fees risen so dramatically? And what does Dominic Barton have to do with this story? And is he too friendly with the Liberals? Is that why the Liberals give him so much work? Those are questions the opposition wants answered. We'll ask Dominic Barton if a committee gets going in Ottawa, will he agree to come and testify in front of it?

You'll hear his answer in this interview. But first of all, we're going to start with our discussions about China. Because Dominic Barton has an interesting history on China. He's advocated in the past for closer ties with China, both on the part of businesses and governments. Has that changed as a result of what he went through during his time as ambassador in China. Let's find out.

Enough of the preamble. Let's get to the discussion. Here we go. Our conversation with Dominic Barton. So I guess the first time or the last time we actually met and talked was in Halifax about 10 years ago when we were both guests at a conference that was encouraging the four Atlantic provinces to look beyond their own borders in terms of potential markets. And you were encouraging them to look at Asia, specifically at China.

And I'm wondering, thinking back to that time, you know, a decade ago, would you still say the same kind of things you said then today? I think some aspects would be different because clearly the world has changed, but in terms of the fundamental opportunity for Canada in Asia or the Indo-Pacific writ large, I feel even more passionate about that. And I think we've seen that if you look at some of the, you know, what's happened on the lobster front with Nova Scotia, not only in China, but also in other parts of Southeast Asia and so forth. And so, you know, this is a part of the world that is becoming now

the dominant economic weight and and for our prosperity i think we have to be linked to it i think that the the kind of the i wouldn't say blind but kind of broad like there's lots of opportunities everywhere i would i would sort of be more refined about that um you know i think you know we're not going to be investing in satellites or doing partnerships and um maybe of the aviation business, you know what I mean, on the technical side. But on some other aspects, I would go even harder, again, on the agricultural side. And again, I look at it as a regional opportunity. I think China is fundamental to it, given it's the biggest trading partner with every single one of those countries in Asia, right? The supply chains are linked.

So that to me, it's the opportunity high, I would refine, I'd be a little more refined about what are the areas to work in and who you work with. And I think I would also be a little more sophisticated in terms of thinking about, for example, within China, where within China, China is not one blob, if you will. It's a whole series of different cities with different tastes, approaches, opportunities. It's within the system, but there are differences on that front. And I think in Canada, we've focused too much more broadly or in the clan of classic Beijing, Shanghai, Guangzhou area, and there's many other areas to focus on.

So I don't know if that makes sense or not. Well, let me dig down just a little bit on that because you use the word refined. And I'm wondering, is that another way of saying we've got to be a little wary in certain areas? We've got to be more guarded in certain areas when dealing with China. Yeah. Yeah, I think if you go back even 20 years ago, our view of what China was radically different about where it is. I think we had views that they were going to, as they became part of the global economic system, they would become more like us. And I was definitely in that camp of, you know, that this is a trade and integration will lead to other changes. And, you know, I think in 2012, you know, then moving into 2015, that it became quite different.

Right. And I think the notion of what I when I say refined, I was thinking more about the trade aspect. I think if you think of wary, yes, I think we have to protect our own security in terms of where we are. I think that's much more significant. I think that there are areas where we may have to be much more aggressive about defending our values and where things are because of how China has changed on that front. And that's where I think this view of, you know, it's a, you need a multi-pronged approach to dealing with China. I don't, you know, China, in my view, I've said this before in some of the committee sessions in parliament, it's both China's good and bad. But they're going to be in our grill. And so we have to have a more sophisticated approach of dealing with it.

We cooperate where it makes sense, where we have common interests. We challenge where we differ. And those can be on human rights or views about international trade or whatever the particular issue is. We compete. And so it's a broader approach than how are we just going to trade with China. You've had, obviously, a lot of experience dealing with the Asian area and China specifically, and from both the public sector and the private sector. Your time as ambassador in China for Canada, what did the whole two Michaels experience teach you about this relationship

and whether that adds to the sort of the unease or the wariness uh in terms of of how to deal yeah it's a it i mean i don't know where to where to begin on that peter right because it's a there was a lot of things happening i mean i i i clearly saw some of the darkest parts of a system personally. What do you mean by that? Well, having the two Michaels where they were held, you know, it was very difficult circumstances in which they were living, how they communicated, what was happening with the families. We saw it with the trade. If you recall, we've had, you know, we had, you know, a chunk of our agricultural trade shut down and what that meant to people. Because I met the entrepreneurs that were selling that product and what it was

doing to their business to not have that done, to sort of have a switch off of that. And then the negotiation, right, in dealing with China, because this wasn't business, right? This is geopolitical. And that was a massive learning experience. On the other hand, there were a lot of things I'd learned about China in terms of relationships and getting things done and being able to influence that I could draw on or use.

So I think that in my business work, there was never the case of someone is going to die because because of the work we do you know this is i'm not suggesting people are going to die but it was it was extremely serious and personal and you knew the people and uh when you're dealing between two countries and two countries that are upset at each other and a quite a powerful china that is upset there were you know there were meetings that were very unpleasant let's put it that extremely unpleasant can you take us inside on that like how was it unpleasant how was a meeting unpleasant um if you know uh i'm just trying to think about where to start because, Peter, there's some stuff that's best not go.

I'm not trying to be cryptic about this. But would you be arguing across the table? Would you be yelling at each other? No, it's not yelling. It's just quiet and clear. So first of all, you know, you're sitting across the table and each of you has a view about a particular matter, right? And, um, there would be my first meetings. That was the big wake up call. It was, you know, the, the,

China was extraordinarily angry at Canada. And some of the language that was used, it was kind of, you know, I remember one of the first meetings I had in Beijing and the meeting started. And I didn't know about the diplomatic process, which is you have to listen to the other person complete what they're doing. But they had a document about an inch and a half thick of speaking notes, right? And so they started and started off saying, you are a lapdog of the United States. That's pretty confronting. You know, you are a lapdog of the United States, you know, what can be done, but you don't have the fortitude to do the right thing. And let me explain to you how your system works. It works like this and that, and you don't understand your own system.

And that's pathetic. That's pretty good. And so that I was getting, and part of this is diplomacy, where they were angry. They were trying to send a message to me to send a message, if you will. But for someone in my background, and we'll come back to this later on McKinsey, I was always taught, you don't, we tell truth to power. And if you, you never, if someone does something you don't feel is right, you must speak out. So I did at one point, I got quite upset about this lapdog commentary. And I said, we're not lapdogs at all we have our own view of

how we do things I talked about Cuba I went and what I did was I interrupted this guy which was not the thing so he went apoplectic and went back to the beginning over spoke me and then went back to the beginning of the document and started over again um and so it wasn't yelling, but it was just direct. You're a lapdog. And that was, you know, it kind of went on. And we had that for about an hour. And then I asked for a tea break because I thought this is clearly what's going on here.

And we went back. But there were just other occasions when, you know, when countries are mad at each other as the ambassador you are conveying a message and you will receive a message um and there were times you know we we will try and you know they if they've ever perceived at our times but that we were threatening on things it would be like if you let me explain to you what happens if you think you're going to get us to do x because of y let me tell you what we'll do to you not not personally but to people that you're you you you know you're dealing with and and so forth and that's just something

that's you know quite it's rough uh it can be rough and and we were our country you remember our our countries were not speaking to each other there was no conversations that were going on so just there was a lot of pent-up anger that had to be released and your job as the ambassador is you you are the interface if you will and that doesn't mean that i didn't and we don't also push back but that's not um you know that's not the norm in my world uh if you will of course you can get upset about things and do it but there when it's getting you have countries that are angry with each other there's then a very precise focal point to send messages. And it was a quiet, clear, tough.

And so we also had to, you know, we have to do that. And there's a formality to it. Was it clear from the beginning that it was all about the Huawei executive who Canada was holding in Vancouver? That was the core essence of it. 2018 was kind of peak relationship, you know, the number of ministerial meetings that were going on between Canada and, and China, it was, it was kind of a golden period. It was a, you know, and it fell from such a height, if you will, it was the vertical drop that was the most, I think, dramatic part of it. And, and i think there was a sense of

not okay there's yes madam mung has been arrested but it's kind of how could you do this i'm talking from the chinese how could you do this you know we have this relation how could this happen how how did you how could you not know that this would upset us do you know what i mean i'm just speaking from their end and for us it's kind of wow well you know we have this you know what I mean? I'm just speaking from their end. And then for us, it's kind of, wow, well, you know, we have this, you know, we've been talking about a free trade agreement if you recall, and, you know, even, you know, the Bill Morneau was going to be doing, you know, not, not only sort of doing a budget release in New York and Toronto and Montreal, but Shanghai, right. It was that kind of a, you know, we,

that's where we, so this drop and kind and Montreal, but Shanghai, right? It was that kind of a, you know, that's where we, so this drop and kind of a, it's almost like people have known each other well, this breakdown, and that's where I think there was just, there was a lot of emotion and anger around, and there'd be no communication for a long time, right? You know, when, because I was there in September, and the communications really, I think it was sort of in March and, you know, just completely were not that we didn't have ambassadors in either country. So I think there was a there was also that kind of pent up anger, the drop.

Clearly, the Madame Meng thing was the core of it. We were also upset too. So it was a, and it was kind of the sense always of how could you guys, you Canada do this when we've had this, you know, it's a 50 year relationship. You gave us wheat, you took, you know, you, you helped us when we were on our knees, you know what I mean? This is a, this is the kind of Canada we have our students start, go to your universities because we respect how you, you know what I mean?

It's this, how could you do this? So there was a, that was part of, that was another part of the backdrop that had to be dealt with in this process. Do you, did you think at that time that they were, aside from everything else that was going on, that they were trying to involve themselves on the Canadian political scene, that they were trying to interfere in the Canadian election process? I never had that sort of discussion.

We didn't get that sense or discussion. I know that there's been conversations and discussions about that now, but that wasn't it. I mean, we were very much focused on our bilateral problem, which meant there was no communication and where were we going to move. That wasn't on the agenda. You know, we hadn't picked up anything on that front. I want to try and use your expertise to help me understand something

that happened at the APEC conference. And I'm assuming you've seen the videotape or you've heard about this situation. The meeting, if you want to call it that or the confrontation as some people describe it as between president xi and prime minister trudeau uh the video and that's why i'd like your eyes if you've seen it and read about it what how you interpret what happened in that moment because clearly it seemed to us that president xi was not happy he was upset and he was making his feelings clear um but when you look at it what was happening in that moment and why was it happening yeah i guess i've given what i've told you before about some of the the discussions i've had or, where they were quite rough.

You know, I wasn't as, I wasn't shocked by that. I think it was, I think it's exactly as what you said, President Xi was upset, and he was telling the Prime Minister directly how he felt and where it is. And I think what was unique about it is people actually got to see President Xi with some emotion, having an unscripted discussion because he's very clinical, right? Normally, we see him standing at podiums or reading speeches. This was kind of freestyle President Xi. And so I think that's what was interesting. Some people think he was playing for the cameras in that moment. He might have been.

The way I looked at it was this was a, you know, it was him expressing, as you said, frustration. I think he assumed that a conversation they had, I don't know the background to that and where it was, and he wanted to say it. I don't think, my sense too is the Canadian interpreter wasn't there, so it was being done with the Chinese interpreter, which is all, you know, that's a, it just, it makes it less comfortable because you like to have your own interpreter. So I think that also puts the prime minister in a tough place. But I saw it as a, as a transaction. That's how I, I saw it. And, you know, there's all sorts of, you know, of sending a message of where things were.

I think what the prime minister said back was good, just about, he had to, you know, that was on, you know, he is having to react to, to what's there. But I think it i think in a sense messages were delivered but that's part of what what what happens whether it was a setup or no i i just don't i don't i think that i think i think what was most interesting about that episode was being able to see a glimpse of president chi. And when he's, you know, I don't think he could script. I think that was him talking where he, how he was feeling. You could hear, I did watch the tip. You could hear the, you could hear the pitch change.

So, but again, I think this is a thing where we'll talk later about it. I think it's important that leaders can be able to talk with each other to be able to even if they have fundamental disagreements with each other and so i'm i'm more for the you know that we saw that i i you know i think that having conversations having and i've been in some where I've seen him with other people delivering messages to him, other government leaders. So he's, you know, that he's received that himself and where it is. So I don't think it was that, I think for us, it was maybe looking as observers unusual. I didn't try, I saw it more as a transaction. And what I was most interested

in was the, just seeing the president, you know, speaking from how he felt. He seemed to be placing conditions or expressing conditions to the prime minister that if you want this relationship to carry forward, you're going to have to meet some of these conditions in terms of what they talked about, what they talked about in public, what they talked about in private. Is there anything abnormal about that? I don't know. I didn't. I mean, I think he was upset about something. He wanted to give direct feedback. I think that there's actually a genuine desire to have conversation, to want to be able to speak. I think it's, you know, I think it's being clear about whether this conversation is a, you know, from his point of view, he was not, he, he, he felt maybe that that wasn't, he, he,

he had a different understanding of where that was, but I didn't see that as a, I wouldn't read a big deal into this thing to sort of say the Canadian-China relationship is all of a sudden here or there because of it. I think it was a communication with messages. I think the prime minister delivered a clear message back. And I think that that doesn't mean there can't be conversations. I think there can. But I think it was just an expression of frustration. And I think the prime minister was probably surprised, like, this is surprising.

I'm not expecting that. Do you know what I mean? So I wouldn't read. I think there's too many things we can read into a short conversation. There's many conversations that are occurring all the time between different parties on that side. They both may have got what they wanted out of it. Yeah. In fact, you know, from a PR standpoint, they both may have declared victory on that one. Here's my last question about China. And it's once again about President Xi, and it's about what you went through on the case involving the two Michaels. Is there any doubt in your mind that the final decision

that China made about releasing those two men didn't go straight to the top, that it was right at the top, that the president would have had to sign off on that? I do. I think one of the challenges in China is it's a very opaque system, right? And so understanding how decisions get made is one of the most important things to be able to do if you're negotiating. And it's too often the case that people find out they may be negotiating with the wrong people.

And that's up to us, the interlocutor, to figure that out. I don't think it's being hidden. It's just we have to figure that out. But it's very important to do that. But I think this was a very fundamental issue between our two countries and the united states as well right you've got the united states was also involved in this and you know the there have been many communications about this situation uh amongst the three leaders you know canada you know prime minister prime minister trudeau prime president Trump, President Biden, and President Xi. And

often when President Biden and President Trump met, President Biden would raise this case. So it was number one, raised regularly at um so he he's 100 aware of obviously what's happening and i think it's one of these decisions where you know there's a lot at stake um in terms of how this is all done um and especially when you have three countries involved that's that's what you know three countries in a company. So I, that's my personal view. I do think it, you know, I'm not suggesting he was orchestrating it or dry, you know, but I think it had to have, he had to, he would have to be comfortable with it. Just like, by the way, our prime minister, he had to be comfortable. We didn't just go off and do this and come up with it and say, here's what we're removing. And I think the U.S. case was a little more complicated because you had different departments that were involved in this.

But for sure, you know, with President Trump and then with President Biden, there was a desire to be able to get this done. And as I said, I've said this in other conversations, there were red lines. Everyone had red lines. Prime Minister Trudeau had very significant red lines about what I could do and could not do. President Xi had red lines. Huawei had red lines.

And President Trump and President Biden had red, you know what I mean, in terms of. And so that was that's why I think it was at that at that level, particularly because it involved three countries. You know, there's there have been other cases like this, Japan, China, you know, Russia, China. But in this case, we had three countries. And I think that, therefore, makes it even more higher stakes. All right. We're going to take a quick break.

When we come back, change your topics. But first of all, this. And welcome back. You're listening to The Bridge, today's special episode, a conversation with Dominic Barton, who is in London for this conversation. You're listening on SiriusXM, Channel 167, Canada Talks, or on your favorite podcast platform. Okay, change of topic from China to something that you obviously know well, the inner workings of the company you used to basically run, which was McKinsey Consultants.

It has been in the news for some time now on a lot of different fronts, but also on the Canadian front. And there have been demands from the opposition parties in Canada, in the House of Commons, that there be a special committee to look into the relationship between McKinsey and the Canadian government, between consultants and the Canadian government, between consultants and the Canadian government, and what's happening on that front and whether or not consultants are somehow replacing bureaucrats and what is this doing to the system of government. Let me start with one of the main charges that the opposition is making, is that there's some kind of special relationship between McKinsey and the Liberal government, and they use this as evidence of that, that the consulting fees for McKinsey have gone up astronomically

since the Harper years. Nobody seems to be disputing that. Is that the case? And if it is is the case why was it the case or why is it peter i think first first of all i think that you know the idea that there's a some sort of a cozy relationship whereby then mckinsey you know because they know the prime minister and they know the liberal government, they therefore get consulting fees. This is just a complete crock. It's a crock. And I think the McKinsey statement said it very well.

All those contracts that McKinsey won were done through the procurement process. It was a totally separate, rigorous process. That's point number one. The prime minister called someone up and said, I think you That's point number one. I think that's very, they were not, you know, the prime minister called someone up and said, I think you should use McKinsey. There was a very deliberate process that public procurement uses. And I think that's a very important part to me, because it actually, it annoys me that that sort of, you know, notion that there would be a, you know, that that would actually work for McKinsey, but also for the government, it's not. And I think the statement makes that very clear.

The second point I would make is that, yes, there isn't a dispute that the fees increased for McKinsey. But if you put McKinsey in the context of the overall consulting budget, it's 5%. And there's a fellow from, I think it's TV Ontario, that actually put the chart. I don't know if you've seen it, Peter. It's well worth looking at. Look at it. You need a magnifying glass to see McKinsey on that chart.

So there was a significant increase, which other firms, Accenture, I can go through the list here of the different players, Deloitte, others were doing. So there was, I think the question is more around, you know, the government using consultants. That's, I think, an interesting discussion to have. I have a view on that, too, which I'm happy to jump into. But I think the notion that there was some special nefarious relationship between the liberal government and McKinsey, I think it's just wrong. It's not the facts don't corroborate it. And that's why I think McKinsey in the statement is looking forward to being in that, if there is a committee, to be there to talk about it.

So that's the first point. And I might even add myself, when I was the ambassador, one of the things we worked on was we had to build a PPE supply chain for Canada, if you recall. And at one point, 93% of the PPE for Canada was coming from China. It was a huge effort to build that. The people I was dealing with was Minister Anand and the procurement people who were fantastic, but there was a consultant also there from Deloitte. I don't know how much they were, but they were very helpful because this was a highly unusual situation. It was a mass effort to be able to set this up. So there was a consultant that was there helping in the process, right, that was there. So I just want to make, you know,

I, you know, in McKinsey tends to be quiet. They don't say a lot. I don't, we don't, but then this one, it upsets me because I think it's egregious. I think it's bad journalism. You know, I think about you, you've spoken about the past about, about good journal. I think people should do their homework and not, and not pick the pieces that they want to, to tell a story. And that's what I, that's personal. It's emotionally how I, what I feel here is the case. So again, all contracts done,

according to due process, they weren't handed out to me. They had to go through a rigorous process and then put it in context. I think the more fundamental questions I mentioned is around, okay, there's been a lot of expenditure on consultants. The other thing I might add, I just want to make clear from a personal point of view, the first party that I got involved when I started doing some things in public service was actually the Conservative Party, was Jim Flaherty. God rest his soul, I loved working with him. He was fantastic. I worked on Stephen Harper's, there was a commission looking at the efficiency and effectiveness of the public sector under, you know, this is, I was the McKinsey, Mr. McKinsey

was working with the, you know, yeah, I don't, there wasn't much work, but that, that wasn't what I was doing the work for. It's nothing to do with where it is. So I, I just, I, it, it, I just think we have to put, make sure that people understand where the background is and where it is. And I think, you know, let McKinsey talk about this. The other thing I'd mention, too, is a lot of that ballooning was since I left McKinsey. So maybe I didn't do a very good job. I don't know when I look at what other firms are doing or so forth. That was post.

A lot of that was post my time. But that's my, sorry for rambling on, but that's my view. Well, one assumes that if there is a committee and they do investigate and they do report, some of the things you're saying will come out in that report. Yeah. If you're asked, would you appear before the committee? I would. I would. I have no,, I think again, this is, you know, I don't know, again, in the media, it's kind of McKinsey, Dominic Barton.

I'm proud of, of having worked at McKinsey, having led at McKinsey. So I will, you know, I'm very happy to do that. I think the, the key people are obviously the people who have worked you know on the project projects led it and so forth uh because i you know again i had nothing to do with any of those those pieces but i'm i'm very happy i'm very happy to be you know open and transparent and tell my view about about things are. Let me back up a bit time-wise to when you were at McKinsey. Part of that time is currently being looked at in not a nice light by a lot of different organizations.

It's now the subject of controversy in several countries around the world and the subject of intense scrutiny in the u.s europe and canada mckinsey paid a 600 million dollar fine obviously i'm reading here but i just want to refer to my notes on this mckinsey paid a 600 million dollar fine to attorneys general in the u.s and apologized for its role in the opioid epidemic. To what extent do you feel the McKinsey's work contributed to an epidemic which is still bringing misery and fresh deaths to families every day in Canada and around the world? Yeah, as I said on that, on the opioid crisis, I think there are things that i'm

not proud of and i feel very sorry for the impact that that what the opioid crisis had i also think um it's important to be clear about what it is that mckinsey did and didn't do it's a mckinsey gets uh thrown under the bus for a lot of different things that are out there. I think we, you know, in retrospect, you know, working for the Sackler organization, checking what is it that we're working on? Is this an organization? Even if we believe that the work we're doing is good, it's in an organization where challenging things were occurred. We should be asking ourselves questions on that. So I think there's lessons to be learned, and I feel badly about that. And as a firm, we have made mistakes, but I'm also incredibly proud of the work that's

been done on many fronts, including during the COVID crisis, helping many countries be able to get through that, what we've done on education, what we've done on diversity. So, you know, I think you're also referring to the book done by the two New York Times reporters. I think, again, it's not a balanced book. And there are some things that, again, we can learn from. But this is a firm that has, there's no mandate that people have to work with McKinsey. It's not like accounting. It's a choice. And it's a firm that charges pretty high fees in terms of where it is. And so the only way basically that McKinsey survives is through the impact of its work. I remember this when I was there, eight out of the 10 clients that were developed in McKinsey came through reference. This firm has impact. You should work with them. They cost a lot of money,

but they have impact. So, it's not a, you know, the firm continues to grow. It has to be based on the impact of the work that it's having or it can't continue to move forward on that. So, I just wouldn't… What do you say to people who say, look, McKinsey worked on the opioid file and they've paid the price for that. They worked on a file involving some of the tobacco companies. They've worked with the Saudis.

And some of these people raise the question, well, you know, who wouldn't they work for if they would have taken those kind of contracts? How do you respond to that? Who do you say no to, or who would McKinsey have said no to over the years? Well, there is a risk process, and I don't want to – I think, again, that's one of these questions. I want to be careful about talking about people.

If you can imagine, right, Peter said, well, we didn't work with X, Y, or Z. But I can tell you, there's a lot of companies that McKinsey didn't work for and doesn't work for. And there are a lot of companies that McKinsey stopped working for because we were concerned about the impact. And I remember being involved in several in Asia where, in fact, one client was in South Korea was so upset, said, you know, you can't fire us, we can fire you. And by the way, if you do leave, we'll see to it, you don't work here anymore. And our view is, then we're out. So there are many instances of that. We don't publish that. It's not a very, you you know effective way of running an organization but it's done and i can tell you i saw it i've seen it i've seen it in canada when i was a young

associate you know we we had it was you know not a very significant office i think there were probably 40 or 50 people it wasn't very busy so a lot of our people had been sent to scandinavia and other parts of the world we had one client who was very keen on working with us and there was a view amongst the partner team that we weren't having impact so we stopped working and that meant and admit there was nothing for people to do they were they were shipped overseas so there's a rigor uh to that it doesn't mean we get it right. The processes are always there, but we do it. And then if you talk about Saudi, I think you want to be careful about who else does work.

And there's a lot of people that do work in Saudi. So let's just be thoughtful about that dimension when we go through it. There's a lot of financial institutions, pretty well every consulting firm. Again, it's what you work on and how you work it. I'm very proud of the work we've done on diversity in Saudi. And there's things that you do not work on, if you know what I mean. So I think, you know, there, first of all, have been very clear choices that have been made about not doing things. There's a rigorous process that the firm goes through.

I think it's got even more rigorous given, you know, what's happened in the last while, which is good. But I also think it's important to understand where it is that we work. You know, right now, let's say we go back to the China one, saying, you know, working, we were involved, I was involved in helping one of the Chinese banks IPO. That was in 2004. I'm proud of that work that we did. Now, would we do that work today? Probably it's a

different set of conditions, right, in terms of where we work. So I think we should just be thoughtful about that context as well. I still keep, I have a Globe and Mail from, I think it's 2004, where it's about China and how this is going to be the new frontier for all of you know it's and i and it's looking at it today you kind of go wow that how could we but that's let's remember you know um let's remember that that type of thing so um i i believe mckinsey has very good processes i think mckinsey will. And I think at the end of the day, there's a test, right, about whether people will pay for the impact and the work that McKinsey does. And if they don't, then McKinsey will have a very difficult time. But that's not the case.

If you just look at how the firm seems to be doing i'm not involved you know what i mean but i just look at where it is um just one question left we've only got a couple of minutes but uh it's funny listening to you talk about that globe and mail headline from the early 2000s one of the headlines in the new york Times today is China's authoritarian government has gotten in the way of the country's growth, which has come full circle in a way, right? Here's the last question, and it's on this consultancy issue, and you've raised it a couple of times, and I did as well. This question about there's been such significant growth. Has it been warranted in overall consultancy use by governments,

and not just in Canada, but in many parts of the world? And is it basically eliminating that public sector role of the bureaucracy, civil servants who spend their life trying to help and advise and carry out direction for a government that has set the direction. Is there that danger that what we've witnessed is the erosion of the public service? I worry about the two things, but I don't think they necessarily are related, if I could say that. I think that if you look at the consulting industry, it's boomed. Every private sector is using way more consultants today than they did 10 years ago. It's one of the highest growth industries in the world, right? And has been for a long period of time. Because there's

just, I personally think it's because there are so many changes that are underway where there may not be playbooks for how you do it. You need capacity because people are not sitting on their behinds doing nothing. They're busy. You need extra capacity to be able to do things. So it's not just about government, the consultant. This is about society. There are, whether you like consultants or not,

there has been a very significant increase in demand, and it continues. And again, if I look at talk about Accenture, look at what I think it's Deloitte that's now thinking about splitting up so they can have a dedicated consulting practice. So this is a private sector, public sector, and actually civil society factor. There are more consultants working in civil society as well. That's point one. And I think there's very clear evidence of that in the growth rates and scale, just hundreds of billions of dollars. I think on the public service side, I think there's been a huge amount that is going on in the last, particularly the last five years in every government around the world, but particularly in Canada. So there's a volume is not about policy it's about execution it's helping

get something especially in government that the government wants to actually get done as opposed to let's come up with some new idea uh of how to do this it it has to and by the way the people hiring the consultants are typically public servants it's not i don't think it's a minister that's i've never come across that i think it think it's a department that says we need this help. But the part that I guess what makes me think about it is that we need to, you know, I think make sure that we develop deeper expertise in the public service to be able to do execution. We've heard about some of the backlogs going on on passports and immigration. That's a logistics issue, right? And there's people who know how to, that's all they do all day is think about processes. It could have been from the

automotive industry. It could be because you worked with Federal Express. It could be whatever, but you've got a deep expertise in doing those types of processes, and you want to tap into the best of that to bring it in. But that doesn't mean we shouldn't also have some of that capacity in the public sector. So I think this, I think, raises the question of where do we want to have the expertise in-house versus outside? You think about some of the technology changes that are underway and how far, how the scale of what that, that shift has been. And then look at what a bank spends on consultants for technology. It's a huge amount of money, do you know what I mean? Because you don't necessarily have that capability.

That doesn't mean you shouldn't build some depth. So I think there's a question around maybe the, what do we, you know, what level of expertise do we have to have in government? Maybe it isn't in every department, but it can be used cutting across departments. What's the training and development that we provide our people to be able to do what we want to do? How do we prioritize what it is of what we're doing? that consultants do is bring outside ideas, unorthodox views that can help push things forward. And what I say with that is I actually learned a lot about leadership and management by

being in the public service too. I think I would have been a better consultant if I'd spent time earlier on in my career in the public because there's just different, you know, you have a far broader set of objectives in your objective function than one or two in a private sector company. You have a different set of stakeholders and those things could be helpful. So I think again, one, let's just put this in context with what's happening in the world with advisory work. This isn't a government that's gone crazy. This is happening worldwide in every sector.

It's happening in the defense sector. So, you know, I think we just got to make sure we put that in context. And then I think there are some good questions to ask, too, about what can we learn from this? What could we do more in-house versus outside? But the idea that having more consultants means you're doing something wrong, but as a sort of a view i think is i would challenge that well we're uh we're going to leave it at that uh for for this day but as you said there there are good questions to ask and in terms of the follow-up on this and uh perhaps we'll get a chance to do that on another day but you've been terrific with your time and we appreciate

it very much dominic barton joining joining us from London. You take care. Thank you, Peter. Dominic Barton, Canada's former ambassador to China during the Two Michaels episode and one of the leading international business figures, now with Rio Tinto based in London, the global mining firm, and formerly the global mining firm, and formerly the global managing partner of McKinsey, the consulting agency. So there you go. Our special interview launching this week's programming with Dominic Barton.

I hope you found it interesting. There's a lot to snack on there in terms of the different things he had to say and i hope you do just that coming up this week tomorrow of course uh we will take a look at the situation in ukraine with brian stewart in his regular tuesday commentary wednesday smoke mirrors on the truth with bruce and uh thursday your turn and the random ren Random Renter Friday is Good Talk with Chantel and Bruce. If you have a thought, something you want to say on the interview today, drop a line to themansbridgepodcast at gmail.com. Themansbridgepodcast at gmail.com. We'll include it, perhaps, at least some of it,

on your turn this coming Thursday. That's it for this day. I'm Peter Mansbridge. Thanks so much for listening. We'll talk to you again in 24 hours.