Reshaping 2021: Charting a course from disruption to growth | Think Big

Welcome to the uh london business school webinar series called think big. This is a new series of webinars that we are hosting over the next year or so uh, and i am julian birkenshaw. I am the host of this first webinar uh, and the series that will come in the next few months will feature some of my colleagues and what the theme of these these webinars is is were going to be looking.

At big global issues and were going to be bringing in experts to talk about those issues and today were going to start with a pretty important topic for pretty much any business out there right now. Trying to chart a course from disruption to growth. To try to look beyond the pandemic to figure out what the next few years,

Will bring for us all and to discuss this topic were delighted to have with us two highly successful london business school alumni, uh first of all, nisereen shoker whos, the chief executive of the middle east region for online fashion, retailer yukes netapote and secondly, claire woodman whos. The chief executive of the emea region and chief executive for morgan stanley international, so let me just get a couple of words from each of you to introduce yourselves and your companies and israel. Why dont you go first sounds good! Thank you and thank you for inviting me

To be part of this session, my name is nasreen im. Currently, the ceo for middle east for ux nation, which is the leading online luxury retailer and essentially were distribute, were part of two different companies, one that focuses on luxury and one that focuses on off season. So really taking advantage of the full cycle of fashion. Before that, i also worked in retail for the virgin virgin group and then before that in media, so its as media and fashion have come.

Together, its been really good to see them, you know both experiences coming together in such a seamless way, perfect, so you’re, no stranger to disruption, um claire. Why dont you say a few words about yourself as well. Thank you and uh julian. Thank you for inviting us today, um so im claire woodman. I am at the head of emir from morgan stanley.

Um in europe were a: u s: um, a financial services firm and in europe we have 9 000 people and we operate in 19 different countries um, i didnt start out in banking. I actually started out in the city as a lawyer at clifford chance and decided. I wanted to work my way up the food chain and joined um, one of clifford chances.

Clients, morgan stanley, so ive been with morgan stanley for 20 years and ive done a number of roles across the bank, predominantly around our capital markets, business and we have one of the largest equity businesses um in the globe on the globe. So that’s my background, i graduated from london business school somewhat late five years ago, but thoroughly enjoyed my time and i can absolutely say that its really helped um inform the way that i manage and lead our organization in this region. Perfect thanks and nizarin. Of course, is

Also, an obs grant from i think 2004 so lets lets get going and we will start with uh with disruption and and that’s, probably you know the hottest. You know business buzzword of the last decade im going to say i mean there’s, a number of others out there, but everybody worries about disruption and clearly not just the covert pandemic. But

That whole digitization of of the world before that disruption is something weve been living with for a while. Listen im going to go to you first, just because um youve got a fascinating background. Um, particularly, i think in the the original um period. When bertelsmann, i think it was who you worked for at the time uh got into the uh, the sharing of music online uh and the whole napster episode, which many of the the people listening will remember. Lets.

Help remind us a little bit about what happened there, because of course napster were the original kind of disruptors and it didnt end completely nicely for them. Uh tell me tell me what your your role in that was and what lessons you might have picked up from that period yeah. So speaking of disruption im one of those people who really thrives on disruption because im normally hired to disrupt or

To turn around a business that’s through disruption or an industry that’s going through disruption, so it works very well for me, um when i joined burlesman, we essentially made most of our money printing cds and we probably made more money on the physical product than actually the The rights of the music and so on and, as things started to change, napster came on

Board 60 million people were actually sharing music and listening to music for free, and we had this idea that well that’s the future and therefore lets go ahead and buy the business and lets digitize books. We had random house that’s, digitized music, completely, not realizing that before you do something like that, as smart as that seemed at the time. If you dont have all the stakeholders in play, then its going to be explosive.

And disastrous and its self-combusted, basically because we were trying to charge for it when, in fact the price was free, so and uh. The difference here is this, and it taught me very quickly the difference between the bleeding edge and the leading edge, and we were definitely the bleeding edge. The leading edge became apple, music and spotify who benefited from that disruption, as labels began to realize that this is here to stay and people arent going to go back to buying cds again

But we were sued by every single label, including one of ours, which was ironic and it cost the business a lot of money and it cost naxter as well its its future, which is very very unfortunate because they should have been the winners of this. In the end, it was spotify and apple, music, and so many others. So i do have a follow-up question on that and ive

Often wondered about this right, which is you know back 20 years ago, the the music labels. There were three or four i mean birdless moon, sony warner emi. Whatever um i mean they owned, all of the all the content right and yet somehow none of them succeeded in transitioning onto selling this stuff online and as you say, it was of course napster. Then of course it was apple and then it was spotify. Why did none of the incumbent companies

Manage to actually manage that transitional process themselves, the business model was definitely flawed because they were the publishers as well as the producers. So what meant most of the times is that the artists themselves did not end up making a lot of money unless they were touring, because that was the income they made or whether it was merchandising which obviously, now you see a lot of artists have become designers, Because that’s, where they realized the money was but probably it was more than anything,

Uh poor management, it was so difficult to convince people. Whove been doing one thing for 25, 30 years living a very, very lush. The music industry was a very, very lush industry. You know parties and limousines outside and by the way i worked for all the labels. You mentioned, and it was all the same, so they just could not

Imagine that their lifestyle was going to change ever, and so they fought it right rather than joining it. And after that came obviously video and film didnt learn from it either so again other than netflix. It went through exactly the same thing and the way they structured. The deals i mean weve got a lawyer as well to tell you that also the royalty rights were so divided. They were so ridiculous. You know every country had its own

Different um schemes, and so even trying to put all of that together, was so messy that they preferred the status quo until there was no status quo and there was no more business and then people like jay-z and others decided heck. You know im just gon na tour im, just gon na print t-shirts, im gon na make um, i dont, know very famous expensive, sneakers and ill make a better living. I dont need you, no, the! As you say, the the value in that

Industry has migrated away from the the selling of of the music, as you say, to the the touring rights and the and the and the other selling of their brand yeah yeah yeah yeah im. Sorry claire. I will get you in a second, but i ive just got one more question just to follow this line because im fascinated by it, you know history, doesnt, repeat itself exactly. Does it because what were

Seeing in the movie world right now is yes, of course, weve got netflix, but weve also absolutely got disney, for example, fighting back quite effectively and warner, and others who are now vertically integrating forward in order to ensure that they dont actually lose out. In that same way, right, but its the closed garden concept and the customer doesnt want a closed garden. They want to be able to choose

Anything they want from anywhere, and this idea and by the way music labels try to do it. Universal did their own platform. Bmg did their own platform bmg and sony then ventured together to do their own platform and then the ones that won were the ones who were apple music. I e they let everybody choose what they want or spotify who actually encouraged independent artists, and that became even a bigger success. Now disneys saying im just going to let my customers watch disney on my channel

And you know somebody else says: no, just my movies on my channel that watch it happen. It will go the same way. Music went and for me to watch it happen over and over again just goes to show you that management does not actually learn from history. Interesting, so if anyones watching wants to chip in on that debate, id id love to hear from you, but look claire were going to speak now about a completely different industry. I mean banking is, of course, ripe for destruction by by virtue of the fact that banking is

Almost by definitionally a digital industry i mean money is the ultimate digital product, and yet you know compared to the story. Weve just heard the the big investment banks, the big retail banks, its the same guys out there running the show, as were 20 odd years ago. So so do tell us a little bit about how i mean morgan stanley, you know probably as much as well as anybody has navigated this period of huge disruption, the financial crisis, the digital

Transformation of the industry, what have you done? How have you managed to stay ahead in some ways? Why are the forces perhaps a little bit different than we heard within israel? I i guess we faced. You know crises and situations which um has forced bank management teams. Actually, to have to listen and learn and um, and i think its interesting actually julian. If you go back and think you know what did the

Global financial crisis, what positive things came out of that it came. What came out of that was a banking industry that was much better capitalized had much better financial resources to deal with. You know future situations, and so for us, banks and um and some of them roll forward to, i would say 2012, and this is relevant to um the pandemic. Hurricane sandy had a pretty big impact.

On some: u s: banks, including my own operations in a particular part of manhattan, and it caused us and a number of peers to dramatically invest in our technology resources, our desktops, our data centers, and also our just sheer technology capacity to run our plants, which we Increased way beyond actually our operating levels, that was absolutely crucial. No one ever predicted the pandemic roll forward to that and then having to get 95 of your

Workforce to work from home and not in their offices and actually having good financial resources to be able to support clients and their refinancing needs so to be able to support clients um also to support our employees, who we absolutely took their health and well-being. As the number one priority into the crisis, to get them bid to be able to be up and

Running and be able to connect through to their systems in the office and basically operate at home as if they were in their offices, was you know a huge lift, but i do i do wonder whether we would have been as well placed to do that. Had we not made all of the investments and the um and dealt with hurricane sandy in the way that we did so um? Certainly we have had to take. You know each crisis to focus on our financial resources. Our people

Resources and then our operational resilience, you know completely front to back and as i look forward now, what i do see as we um confront this hugely complex and challenging question of what does return to the workplace in terms of offices as opposed to working from home. Look like and the hybrid discussion, and i think it puts us in a really good place – to try and get the best out of of both, and i would say that from the pandemic. What i have seen in our organization is some really

Interesting changes over such an accelerated time frame in terms of behavioral change in terms of decision making im going to. Can i come back to those points i i really do want to get into the micro part of the story, but i dont want to lose the kind of the macro bit so so hold that thought. Um disruption, i mean youve done a

Fascinating story there about how you kind of you know, found yourself much more resilient, perhaps than you would otherwise have been. But when i look at the the macro forces around disruption in banking – and i look at blockchain, of course, as is a huge uh force for change and, of course, the whole internet banking thing before i guess my question is: why has banking as a whole not Succumbed to the same

You know forces that that weve seen happening in in music, where, for example, outsider companies come in, i mean. Is it? Is it as simple as regulation? For example, i mean banking is a heavily regulated industry that must have helped you and others to to survive this period. What are the, what are the forces for inertia in banking? I guess is the question im trying to get at look, i think, um. I actually think that

Its um its in its an interesting question, but i think if you look at the asset management industry and the the whole retail and wealth industry actually that’s going through a dramatic change. As consumers want to be able to do much more in on a digital and a digital way, you know very is a very significant generational change in terms of their consumer behaviors. You know you know generations dont want to go into see an advisor and go into a branch. In fact, you know for the last 14 months it wasnt always easy to actually go

Into a bank and do a brush and so actually being able to provide, you know digital services to be able to do all of the things that traditionally, you would have done by meeting with an advisor or by going into a branch et cetera. You know consumers want to be able to do on their iphones, you know at their desktop, etc, and so i do think there is change. I

Dont think the regulators have actually perpetuated an oligopoly at all. In fact, they’ve gone out of their way to create sandboxes and places of you know safe and um. You know prudentially safe innovation and actually, if you look at the retail banking space, you know there’s lots of new entrants and um. You know and disruptors. You know a number of small banks that are really challenging.

And pressing you know, retail banking, etc. So i do, i do think were were definitely seeing. You know channels, it is, it is fascinating and we will move on in a second. But i i am conscious that banking is a is an incredibly resilient industry. Youre not wrong, i mean i, i know the industry a little bit and, as you say, the regulators are at pains to have. You know, for example, open banking in the uk is a is a big thing, and yet you know the

Big guys are still sort of more or less keeping the little guys at base, so it is uh. It will be interesting to see if that, if that trend continues, i want to shift pace slightly um. A lot of people are worried about. How do i do transformation, so you know ill ill talk to companies all the time about. They need to engineer a digital transformation in their company and here im not so much talking about the technology. I mean claire youve talked a lot about that which was

Terrific, but almost like the human side of a digital transformation, and indeed the very first question we received was – was exactly on this issue of whats the human side of digital transformation. Nissan. Do you want to give us some top tips there? In other words, based on your experiences, what youve learned, how would you advise companies to take this whole process of of digital transformation seriously from a human perspective? We came a long way. Initially, digital transformation meant you have a cto and the cto builds an empire and they buy all kinds of

Softwares and they start guiding the company in terms of how the tech transformation is going to happen, and then you have the non-tech people running the business and then the tech people running another part of the business now that’s proven not to work and the idea of A cto should should not exist, or a digital chief, digital officer lets say, should not exist. Essentially, every person should become a

Digital officer of their own division department at all levels, that’s easier said than done, especially if its a traditional business trying to become a digital business, so ive experienced that a few times so again at birdsmen. When i worked there, we had book clubs and music clubs which were very traditional and were trying to make them more digital. You choose everything online, you do everything through the app and so on, and the first thing is the people whove

Been working in the legacy business are not ready, theyre. Just not. They believe that that business is never going to move over. So you have a change, that’s needed either people change or they have to leave the company. I know its harsh but its the fastest way forward and then upskilling the ones that stay to become as digitally savvy as possible and mixing them with digitally native employees. Otherwise it becomes

Very very difficult, so at uk centreporte we are a tech business and we generally there arent that many tech luxury people you can hire. So you end up hiring people from the fashion industry who worked in stores, worked in physical retail, its not always easy to move them from physical retail thinking to digital its not. But what they need is the tools to do so. Thats our job as a

As a company to be able to do that, what i would say is the worst thing we can possibly do is have two camps: one that’s legacy and one that’s digital. I did this once in my company, where one day i looked at their job descriptions and i added e-commerce to everyones job description. A third of them resigned. You know, im

Out of here i wasnt hired to do this. I thought i was doing something good because im adding to their capability im, making them more marketable in the business, but they werent ready for it. But the reality is that, even if you’re running an e-commerce business and you’re a buyer, i cant have a buyer, whos running e-commerce and a buyer whos running a store. It has to be the same kind of thinking and that affects your whole supply chain, because you know its all about assortment its all about the number of

Products that you have theyre the ones who are going to win and pricing and so on. If you have two different teams, then your site is priced different to your your store, um, its a different experience all together your supply chain, you’re, not taking advantage of all your stock that you’re buying, so you’re left with a lot of over stocks that you’re unable To sell at the end of the season so weve come full circle. I think from having it being completely separate and costing businesses millions and billions to getting to the point now where we

Understand, efficiency in it is in it becoming integrated thanks claire what whats your thoughts on this i mean this notion that you know youve got to embed digital sort of everywhere and youve got to build everybodys capability. Is that the philosophy youve taken in morgan stanley as well? Well, look across our institutional and our wealth. Businesses in the us um you know, technology is um, is vital and we have to weve

Constantly always have to, you know, invest in our technology because our systems and our capabilities and we operate at such fast. You know execution times. You know in our trading businesses that it has to be kind of embedded in in everybodys job descriptions as nasreen said, but in terms of getting you know, change affected um. I am. I actually think that you really have to figure out. You know what your clients

Want and then you have to understand the culture of your organization, so in some organizations and julian youve youve referred to this because youve done work on this about digital transformation in banks – and you know, lots of um there’s been lots of focus on some firms. Use you know agile teams and and as a way of getting stuff done and um, and i would say that you know over the years we tried lots of those

Different type types of techniques to get you know changed through the organization and um. Perhaps it hadnt always been well embedded up from when it was um started, but um last year, when we went into the pandemic, we actually sort of did the the uber agile team. In terms of our crisis response team was your your best in class. You know isolated with complete autonomy to make decisions for the organization, and i would say, using that agile framework to effect change and transit transition us to work from home. Um really was an enabler

And – and i think that model can be replicated if its – you know, digital transformation that an organization needs to make, but there there has to be complete sort of understanding and agreement about. You know what that’s going to do and what, how empowered those people are in the organization to do that, so that those decisions that they make dont then get. You know second guessed in different parts of the organization and, of course, the pandemic. No one could negotiate about the pandemic. Everybody had you know one clear,

Priority which was uh the health and well-being of our people in their minds. No, i mean it is fascinating. I mean weve all lived through this in our own organizations, but you know the speed with which organizations responded back. You know roughly a year ago in terms of of prioritizing, just as you say, health and well-being of employees uh getting customers needs, short-term needs met, absolutely the problems of inertia and blockages just disappeared, melted away, and we were able to to do amazing things.

And, of course that has, i guess, both of you. I mean quick comments on this before we move on, but in terms of, are you finding ways of somehow taking the the essence of that new way of working and building it into your way of working going forward? I mean claire ill go to you first on that one! Oh, no, you know absolutely i mean um weve had you know at points in time. Over the last 14 months, weve had um, you know 95 percent of our people in

This region doing their their jobs very well and in a very productive fashion at home, and so of course there have been. You know a a ton of learnings in terms of what we can do to enable our people and our employees to maintain productivity, but also to try and work on. How do we maintain the social cohesion of the organization? Because morgan stanley is a social organization where you know predominantly the work that we do is done. You know in offices, and so we are now grappling with the uh, the the step change of

Gradually returning to office and enabling you know areas where there’s flexibility that has actually helped our teams, do, you know a better job by having a mix of in office and work from home. So there are lots of lessons and lots of of of of things that weve taken away from it, and one of the things is, i have to say, is using this sort of technology to use, to communicate and to to serve a purpose that you may have You know

Historically, had you know 800 people convened together in a large, you know location you, you may not need to do those sorts of things again. So absolutely the pandemic has changed. Learning and networking. You know interacting um and im. Sure nisri can give us lots of uh. You know tips around. You know how to do this, because i think

Actually, certainly for services, industries um, you know the internet and the accessibility and the benefits that the tools can use have really not been um leveraged enough good. So listen. Let me go to you on that. I mean were moving into this question of of what is the future of work? Almost you know and ive. Clearly, an awful lot of people are now saying: well were not going back to normal

Normal is now a combination of the old and and the new hybrid is as good a word as any nizzling whats, as has as you can support, he got a sort of formal position on this. In terms of are people being allowed to to stay at home? Are they expected to go to a mixture of work and home office, whats whats, the plan and and how are you making the most of the opportunity affordable? I think the the transition was a lot easier for us, because we are a global organization where we operate in many countries, were

Were a matrix organization so anyway, we live and talk to people on the screen to begin with, that’s how we that’s how we operated before the pandemic and weve always had a work from home two days a week, which has been always, i would say, ahead of The curve incredibly civilized for for the company and very very helpful for for the work life balance so when it became five days a week, it wasnt such a big transition because the technology was already in play. We had state-of-the-art, you know vpns, and everybody knew how to connect with

One another: we knew how to speak and react to one another by screen, which is to me the hardest part. However, business aside and yes were all efficient and were working 10 hours a day and so on. What i do see is a a breakdown in team culture that begins to happen and that’s critical for the ones who draw the recent joiners, especially they dont, get to understand who we are. They dont know the team dynamics theyre getting to know us via screen. No one-to-one interactions – this is

Going to be setting the stage for them for the many many years to come in terms of how they interact with us, so coming back to work is essential for them, plus not everybody has a country home that they can go to a lot of our employees. Probably live in a one bedroom, they share apartments with a lot of people, so the office was actually a a space to rest and relax or if its a mom, she she loved being home, but she loved

Also, having that time away to focus, so we found that a lot of young employees were really struggling mentally putting in place like a buddy system uh. What we call like walkie-talkies – and things like that – were really important to keep them close to us from a human perspective. Now what happens now? We have to come back to the office.

Without a doubt, and what i, what what i caution is that its harder than we might think so the idea of you just send an email out and say: oh yeah, okay in two weeks, were all coming back to work. There are a lot of people who have now found out that this is their best way of working and theyre a lot more efficient. This way and its the new norm for them.

And going back to the office seems very abnormal, so were gon na have to just like we held hands with them being at home. Now we have to do it on the other side, getting them back into office mode working, you know getting dressed in the morning. You know yeah wearing your high-heeled shoes again, you know, i mean were in the luxury fashion business, its part of who we are

Yeah, okay, so i mean ive heard. I mean ive thought about this. A lot ive done some research in this area. I mean its often said that that you know the things that the office are good for. Uh are the three cs and those three cs are uh culture, um collaboration or creativity is sort of part of collaboration, and clients is the third now um. I dont know if you by that i mean by all means comment but claire. Let me ask you: first of all:

What are you doing? What are you trying to do to to overcome this culture gap? I mean israeli touched on it already. I mean you know. It is true that you know the the young bright young things who are joining morgan stanley have never been to a morgan stanley office. I mean its hard to see how they will get

Acculturated until theyre, given some sort of you know face-to-face exposure. How are you dealing with that? Well, firstly, i dont think culture is just something that is transmitted physically. I think that actually and weve worked very hard with um. You know our analyst classes, who joined last year to make sure that we did plenty of you know online discussions. As nasreen said, you know the equivalence of buddy systems and networking events and plenty of virtual events to in fact, we went overboard with you know, doing hosting virtual sessions, etc.

To really try and make up for that and um, and obviously, as certainly in in the uk and in continental europe as the economies start to come out of lockdown and we can get more people back into the office. We will use that time. As you said, to really focus on those three cs, particularly the collaboration and really focusing on you, know ensuring that people understand what our core values and what our culture is in terms of how they do their business, but were very conscious of that. And we are

Always when we talk about the business, we talk about clients, we talk about the strategy. Julian were talking about our culture at the same time and and um james gorman. Our ceo has been always from day one but being ceo really focused on you know, strategy, leadership and culture and really embedding those from day one when you join the firm. As you know, a junior analyst um, i think, um. I think, as firms and organizations start to think about um the transition to more time back in the office and look

Our organization weve, had to have quite a few people, do performing essential services. None of our offices actually closed during the pandemic. We had to have continuity of our services, but we are actually thinking about. You know the activities and the roles that you know. People and teams at different layers of the organizer and levels of the organization perform to really think about. How do you use as nazarene said that time when you’re in the office, and as you said julian

To really maximize you know your collaboration, cooperation interactions and basically replenishing some of that um, as one of my colleagues said, relationship capital that is getting a bit depleted. Having been you know in this very distributed model for so long and actually one of the um. I think the the um linda grattons recent piece in um, the

Um, sorry that other business schools, yes and how to do hybrid right actually has a really good framework for organizations thinking through if, if they havent started to think through this, this um this challenging because, as nasreen says, its going to be really complex to um. To to to return to the the office um and it will take time – and i think it will, you know it wont – be a linear um. You

Know path, it will be, you know, fairly um cyclical, because this thing will change and were not. You know quite out of the pandemic and of course, every country is nezrene works for a global organization, too weve all got, you know were all operating at different phases. The us is opening up much faster than europe. Um, and you know our colleagues in apac have um, have had a much higher office presence um than we have here in um in europe yeah i mean some of them almost never closed in

Fact, which feels strange to us that’s right, that’s right. That is what happened so um. So look, i ive got loads of questions and we wont get to anything like all of them, but im going to ask a bunch of them in a second. But weve got one final question. I want to to ask both of you about before we before we move to audience questions um. Looking to the future um i mean this

Is a session about you know from disruption to growth? Um, i mean by all means answer how you see fit, but but certainly one huge uh trend. One huge opportunity. Slash threat is the whole sustainability agenda. In other words, the extent to which our our own organizations are able to play a sensible part in in that collective global effort, that’s needed uh. Can i get each of you to to share some

Some of the things that you’re doing in terms of of sustainability um, i guess ill, go to niserene first and then ill go back to square, so sustainability has actually been part of our dna for a very, very long time its. Why ux got started in the first place and then that support has had sustained for probably almost eight years now and its

One of our most popular franchises and continues to grow. What i find fascinating is how the middle east has become much more interested in sustainability than any other factor. So when the youth and their 70 percent of the population were asked, why would you shop with an e-tailer retailer? There are many reasons assortment price etc, and the number one reason was

Sustainability and they can because theyre, you know, theyre young theyre, smart. They can read right through fake. You know messages that are just done for csr purposes or when you’re authentically building a sustainable brand um, also working very very closely with designers who are using reusable materials. Like gabriella hearst, who now is the creative director of chloe who uses recycled cashmere um, you know on the very very high end,

But also on the entry level were finding many many opportunities to do that. We have councils. We have a program called infinity, its a personal commitment that every member of wine up has to has to commit to in terms of their everyday job, and nothing brings me more happiness than to see this in the mainstream retail business than than anything else. You know this is its

Something ive been advocating forever when i was with virgin. I was invited to join richard on stage to talk about disruption in retail, and i was talking about unconsumption someone said im, never ever going to get a job in retail. Again that you know, how could you advocate on consumption and what i was saying was we have globally? We have enough of what we need and we should invest in pieces rather than doing the dollar stores.

Because, essentially somebodys paying, if you only pay a dollar for something somebody else is paying more than a dollar, it could be with their losing a an arm or a finger. It could be losing an education if you’re young, it could be losing your eyesight if you’re doing you know small network somebodys paying for it one way or the other if its not dollars its in health. So

We all have a role to play and its nice to be working for an organization that takes it very very seriously, thanks claire whats, um whats, because obviously bankings a very, very different sector in regard to this, but i think youve still, you still got quite a A story to tell here right, oh totally, i mean look esg investing is um, is mainstream finance now and um. Actually, i was just looking down because i wanted to make sure i got the figure right. The global flows into esg funds,

In december, reached a record highs. Last year of 62 billion, i mean over the past five years. You know esg investing has really, you know accelerated in growth, but for us you know um, like marine nezreens organization, we recognize the risks posed by global sustainability. You know including climate change and um, you know inequality and the impact on communities um. You know over a decade, you know a long time long time ago and we set ourselves. You know throughout the last decade,

Various targets and commitments that we would stand by and in 2018, we made a significant commitment to finance over 250 billion dollars of you know: low-carbon solutions for uh clients. In terms of you know clean technology and financing. You know renewable energy, alternative sources of energy, sustainable bonds, um you know, and uh and transactions that would facilitate. You know the transition to a low-carbon economy. Last month we announced that we would

Triple that commitment to 750 billion dollars and that’s made in part of a you know a much larger commitment to really um. You know mobilize and uh drive sustainability, but in terms of coming back to you know, strategy and culture, how did we get our organization behind that? You know were a traditional us investment bank. It was all about you,

Know really actually not having a silo and nezreen talked earlier about. You know it doesnt work. If you have a chief technology officer that just sits in one silo, you know these changes in organizations have to be across each and have to be very horizontal, not vertical, and certainly what we did was embed. You know esg and sustainability across not just our own operations and remove single-use plastics from all our buildings, but also really ensure that we were providing best-in-class advice, research, research, analytics

And really work on the um, the transparency and the comparability of companies, data and these rooms are, you know, alluding to you know. Green washing well were really working to help the industry. You know come up with good metrics and good data that enables you to compare the journey that you know. Companies are making as they you know, transition their organizations to uh lower carbon environments. Is it the case in banking? I actually have no idea what the answer to

This is you’re getting um the banks who have made a you know, a credible commitment to sustainable, investing, sustainable finance, etc are actually getting a premium on their share price or or or not, and because, if i look, for example, the energy industry, i can see clear Evidence that the the companies who have put you know full commitment to renewables are actually getting a return on that eberta, lower and nl and so forth. Compared to to exxon lets, say whats happening in the banking sector. Do you do you monitor that? So we? So look

Um, our research, absolutely we look at different um data sets of corporates and what we have seen is certainly in the world of funds. Sustainable funds have achieved over 2020, better returns than their traditional peers. Now you might say that 2020 was kind of the year of you know: sustainability and a wake-up call to esg. But actually, when we look at you know a longer-term time horizon, we see that actually there’s lower risk, there’s, reduced costs and there’s. You know the opportunity set for companies to drive higher returns.

And uh you will, you are seeing that you know coming through and translating to you know better pricing in terms of you know the financing that’s available. So this this the change is happening and were absolutely seeing that for sure so lots lots of questions. As i say, and im going to bounce around a bit im just going to try to pick up on some of the the ones which i

Think are kind of interesting um. Somebody asked – and this is from nazarene asks about consumer behavior and i guess an interest in in trying to tap into the differences in consumer behavior across the different parts of the of the middle eastern market, that you’re you’re selling into um. And, of course, looking across the whole range of the different fashion items, i dont know quite whats underneath underneath this question. But can you can you give us a flavor, because this is

An industry i have no personal knowledge of how people buy fashion online. Can you just well? I mean we. We never could have expected what people were gon na do online in a pandemic when they werent going out. But what was really strange is they were buying a lot of bags and shoes so, and we heard that from all retailers and they were buying jewelry and they were buying. Beauty is

An obvious one: there was a lot of focus on skin care and you know masks and things that they were doing at home. But what was very surprising for me is shoes. You know we had nowhere to go yet. People were buying shoes and very, very flashy shoes. So to me, what was very, very obvious is optimism. You know its uh, its a classic case of being very, very excited and feeling like

You know its uh were coming out of this lockdown soon. The other thing, i would say, is um and actually its its a full, its its an either or spectrum, so its either very high spending or what you would call revenge spending. And this is just the industry in general or you’re. Seeing people who are very, very promotionally, driven uh smart, smart, promotionally driven you know they want good brands at the right price and theyre willing to wait um. So those trends were

Definitely seeing and theyre global trends its not just us, you heard a lot of people say, tops were selling more because of zoom and so on. Weve seen really strange. You know behaviors like why would you buy a bag? You want to buy a pair of shoes when you’re not going anywhere, you know, but to me those were all good signs. You know we were selling really

Expensive evening gowns, and so people were definitely preparing for when will open again. Those are good signs very, very good signs. The middle eastern customer is really unfazed shes, a beautiful amazing customer. Well, i must admit i do not recognize any of what you just said, julian everyones preparing for the roaring twenties. You im going to take a completely different line now, unless claire wants to speak to her, what nursing just said, but

Claire there was a question about digital currencies from central banks. I mean that might be a little bit techy, but but you know we, we do see a lot of central banks now talking about launching their own digital currencies. We central banks, of course, looking very closely at the potential of blockchain technology. Do you want to just give us a quick, a quick sense of what the what the

Issue there is yeah, look, um look, um most central banks have um, are looking at um digital currencies and some form of of currency um. I think they, i would differentiate those from um. You know bitcoin and um and other currencies in that. I think there’s the the an intention that they will be backed by you know: um, you know fiat currency etc, but um absolutely i mean i think most central banks are really

Looking at the the benefits and the tools of – and you referred to – blockchain technology and distributed ledgers – and you know, can these be informative? Are they helpful? So yes, absolutely the ecb, the bank, um and um, and more recently the federal reserve have all said that they are looking at uh digital currencies, so lets see um what happens indeed in that space. Well, this is it because, obviously

If you’re a central banker, you are extremely nervous about this concept of a of a sort of a completely deregulated banking system. So and look, i can absolutely see why. Why well see some sort of um some sort of hybrid thing where the central banks are are maintaining some sort of control but making use of the of the technology um heres a difficult

Question um and that’s what i call don and he says you know the metrics that you monitor in order to ensure that you dont get disrupted. In other words, as you look at the disruptive forces out there um, the big challenge you always face is when or when should we move? In other words, take blockchain is a great example, but its not the only one. You know at what point. Do you jump into blockchain its quite possible to get in too late its also possible to get in way too

Early, so this doesnt have to be about blockchain. It could be about any of those forces for change. But how do you monitor the new things that are bubbling along in order to make sure that you catch the right wave at the right time? Maybe i can talk, maybe i can talk about that a little bit i mean studying a lot of, and we did that.

A lot you know london, business school, where you study a lot of businesses that you know had their heyday and then collapsed, and why did that happen and across the board? Its always because when a company is doing very well, it starts pulling dividends. Stock prices go up, you know your shareholders want um, a better, a better price and so on, and the investment in whats next is less and less. Unless you have a

Visionary leader, whos, always assuming that disruption is, is there and its bubbling and id rather create it before someone else, does i mean the walmart amazon example? Is the best one possible where you know walmart is a you know fortune, one company? No one could go near them. They had a store, a mega store in every little town. In america they owned america, they owned factories, they owned everything and one day, jeff bezos came up with

Books and then here we go and now when they try to go back in and invest as doug mcmillan started doing in the last three years, its too late. You know its its too late. They should have done that 10 15 years ago, but they couldnt, because the leadership was old, school and and probably thought oh whos, this jeff bezos guy hell, you know hell, never make it, but any business were in when were doing our best is when we expect That someones going

To be looking at us thinking, i can do this better or i can do just the same so that’s when you you need to invest. What do you think i mean in terms of monitoring current potentially disruptive trends? Yeah, i know, look um. I think um last year was quite a um sort of an execution year and a conclusion of of some of our transformation and um julian um. As we have talked before, the um we made two acquisitions last year in the us one was we bought a very large online brokerage, firm

E-Trade um, which we are integrating and fund manager, eaton vance and both of those acquisitions were as a consequence of recognizing that we wanted to diversify and complement some of our existing businesses, particularly in the wealth and asset management space in the us, where we knew that We had we had particular gaps, and so i think part of your the answer to your question is you know, as you’re constantly re-evaluating where you are on your strategic journey.

Youre evaluating, can you grow um organically, in places where you know, youve got gaps or where actually, it makes much better sense to um. You know to acquire and inorganically grow that more quickly and gain true scale and um. You know that’s, had you know a significant. You know impact on the size of our business in our footprint in the us, and so that really has complemented all of the the services and the um that we can provide. Certainly, on the the wealth and asset management space and then we, when we turn to our

Institutional businesses were constantly thinking about. Where potentially, are there disruptive forces? Where are there areas where we have to keep investing in terms of remaining? You know best in class in terms of the the technology and the services and the capabilities that we can provide, and so some of it is about metrics, but also, i think, its um its about um. You know stress testing and you know basically its that um. Well, you taught us this at business school and you know horizon scanning and looking

Around corners and that’s quite hard to do but um its absolutely necessary in terms of understanding the landscape, and i guess for nazarene this whole growth in sort of recycling, re reselling – and you know, sort of this upcycling in terms of you know in the retail sector – Has been, you know her companys been you know, front and foremost at that thanksgiving one thing i was going to add as well with with richard branson one thing he taught us is this idea of

Always saying yes, because when airbnb first started they probably went to a hotel chain and when uber first started, they probably went to a big car manufacturer. You know a lot of those disruptive businesses at one point, pitched to the large organizations who said terrible idea. You know look at what they were wearing probably walked in with jeans. You know a little bit unprepared and the answer was no and a lot of those

Businesses came our way, and we said no so learning from those experiences at virgin and other companies is always say. Yes, you never know those two kids are going to walk through the door and give you this crazy idea might in fact become your biggest disrupter. Just a couple of years later, well its an established fact isnt it that netflix tried to sell themselves to blockbuster. I think it was 2 000 yeah said no. Okay were running out of time. Ive got two more questions. One

Very i mean if you can answer quickly, that would be great um. What should we do with the older generation? Somebody says that quite what the older generation is, but perhaps its its always somebodys older than you isnt it so so maybe its certainly its not the people who grew up with technology. I guess its the old baby boomers of which im kind of the last year um do we do? Can we train these people up to

Make them digitally savvy, should we just give them uh traditional jobs in the back office or to servicing equally old clients? Sorry im being liberally politically incorrect here, but but yeah no im gon na. Take that because im definitely against age discrimination um. I believe its attitude not age and ive, seen it um ive, seen very young people who are very, very

Resistant to change and ive seen people at you know its hard to even say older, but very, very open to different ideas, willing to learn uh willing to adopt new technologies and they train themselves. So they dont even need like special programs or internships, or anything like that. Whats probably more important is establishing what i would call return ships because more than ever as the

Retirement age is getting older and older, especially in the uk. There is this period of time where people are feeling poorer and poorer as they get older. So actually, i think companies have a responsibility to bring them back and do returnships into the into the business. So that’s probably very effective to keep them feeling valuable claire. Any quick thoughts on that before

My final question yeah, learn and learn from them. Um and um agree with them. Nazarene we had a return to work programme um years ago that started out to um help women whod actually taken. You know a period of time out of the organization um and financial services, actually its um, not just for um. You know women who are

And mothers who are returning to the workplace, its broader than that so um they are very, they can be really successful. Programs for organizations thanks and ive had several of these questions. So im going to ask one of them. You have two incredible women leaders on the panel today. What advice would you give to other women sailing through disruption, and you can take this in whatever direction you want, but you’re going to have to be pretty quick because were going to finish this thing off in two minutes. Any any quick thoughts on on

On being a female leader in todays, im gon na give it to claire because shes a woman in a financial institution so claire go ahead. Um keep up your network um um, stick with it and um develop your own um board of directors to give you support and reciprocate so its incumbent on all of us to bring others through um. The

Organizations that we run so um that’s, that would be my tips didnt, you add anything id say. Definitely if you feel like you, you dont have a skill get it. In my case, i felt that i was missing some financial skills. I went got an mba and i focused my courses on finance. That was really important and then i knew that that i was good at turn around. You know i loved messy things. I loved to clean up messy things and i was good with people. So the best advice, i would say is know yourself.

And apply yourself in industries where you feel you can be the most successful and forget about glass ceilings and all that equal pay, just focus on what you do best perfect and indeed london. Business school does have a very successful women in leadership executive education program which, if any of you are interested uh id, be very happy to provide more information about it. So a nice uh opportunity for a plug for one of our programs. There we are gon na wrap up there. Thank you so much nezreen. Thank you. Claire

Fascinating conversation, obviously we covered a huge number of issues and we only really scratch the services of the questions were going to make this a video available for anybody who signed up and obviously anyone whos listening. Please watch out for future announcements. If youve, given us your information, so we can get hold of you, we will keep you updated on all our future events. So without any further ado, im gon na call proceedings to hold

Thank you very much for listening. Thank you for joining us and have a good rest of your day. Thank you very much.