Imagine you are having lunch with your wife halfway across the world when you get an e-mail from London headquarters to go and interview someone who may be a candidate for a high-profile job.
You’re the chief executive of the company, so you could delegate this task. But that’s not Tidjane Thiam’s style.
“We were in Singapore and I’d kept my Sunday clear as I was with my wife, and I got an e-mail from the HR director that there was one talent who wanted to meet me and I said okay,” the CEO of the global insurance giant Prudential told Asia Focus.
The reason? “I personally interview the top 100 people in the firm.”
So with apologies to his wife, he cut short lunch at the couple’s favourite Chinese restaurant and went to meet the candidate, who was “shocked” to see a global CEO giving up his Sunday.
“I had to do this because I always say people are important, and if it means giving up my lunch with my wife to meet the candidate on a Sunday, I can do that,” said Mr Thiam.
The fact that the African-born chief of a UK-based company was in Singapore says a lot about where the focus of Prudential is these days. It has been going all-out in growing Asia to expand its operations, organically and through acquisitions if and when opportunities arise. And while Mr Thiam is confident that insurance penetration in this part of the world can only rise, his philosophy is to make smart investments, not burn cash.
One such opportunity arose in 2010 when AIA Group, the Asian insurance operation of the once-ailing American Insurance Group (AIG) came up for bids. Prudential under Mr Thiam made an offer for $35 billion and even prepared for to raise more capital if needed. Eventually the bid failed but even while it was under way he faced a barrage of criticism for overpaying.
The failure to clinch a deal that would have pushed Prudential to new heights is something that still troubles Mr Thiam today. The reason, he said, was the insistence by many that he lower the price Prudential was offering, which the AIG board finally rejected.
AIA was later floated on the Hong Kong Stock Exchange, and the value of the company quickly rose above Prudential’s original bid price.
“I was forced to reduce the price and I told them that we would lose the deal and yes, we did,” he says as he sips a double espresso in the business centre of the Mandarin Oriental Hotel in Bangkok.
“Some even wanted it at $25 billion, and you know what, I would love to buy a Rolls Royce at $10,000 as well,” he says with a touch of sarcasm, but the frustration is also evident in his voice.
“February 2010 will happen only once in history when AIG is blown up and the USA is desperate for cash and the government will sell [an asset] at any value to get that cash,” he said of the lost opportunity.
The failure of the deal also was followed by an apology to UK regulators by the company for failing to following due process in disclosing its pursuit of AIA. Prudential was fined 30 million points and the CEO censured.
“I only apologised that I was sorry I didn’t get it,” he says, noting that AIA today has a market capitalisation of around $59 billion. “I am sorry that I would not have [another such] opportunity to create this much value for Prudential, that’s what I’m sorry about.”
The valuations Mr Thiam calculated for AIA’s Asian operation were based on projected growth of 15% annually, which industry critics and The Guardian, among media outlets, derided as outrageous. AIA has grown by 32% annually since then.
10 HOURS A DAY
The AIA setback has not dimmed the fire in the executive who continues to practise what he preaches: “Keep your head up no matter what comes along.”
Prudential under Mr Thiam has seen its share price quadruple since the day he arrived as CEO in March 2009. If he’s been driving the company aggressively, he drives himself hard as well.
While he works about 10 hours a day himself, he has two BlackBerry phones that keep him “plugged 24/7” into the company.
“I walk into the office around 8am and work intensely but the goal is to get out as early as I can every day,” he admits. “Once I’m in the office, I just work and work and work and don’t waste time.”
The ability to produce at maximum capacity is something he attributes to his training at school, as his habit of taking coffee breaks regularly with junior staff to give them encouragement.
Encouraging others is something he likes to do and something that was taught at l’Ecole Polytechnique in Paris, where he was the first student from The Ivory Coast to be admitted. The school had a policy that if one was among the top third, then one should help to mentor the bottom two-thirds so that everyone had a chance at opportunity. Those in the top tier would have to spare two evenings every week and teach others.
“It’s a fascinating philosophy of all succeeding together, away from being too self-centred to more of a teamwork approach,” he admits, although he says he would not want to put his two children through the same French educational system.
“Every system has its pluses and minuses and I am not a great advocate of the French education system because it has many drawbacks, and both my children I have put in the English education system.”
But the fact remains that a lot of the CEOs of the top 500 companies are alumni from l’Ecole Polytechnique, a school that produces only 300 graduates annually. “It’s a very good system as it is training by elimination,” he says.
SCIENTIST BY TRAINING, FOOTBALLER BY PASSION
Mr Thiam’s time at boarding school taught him a lot of things, from managing time to managing his capabilities.
“When I was in boarding school we were forced to do things in time and if we were too late it was called cheating,” he says.
If someone is in a school where he has to be up late at night to get things done, he says, then perhaps he doesn’t belong there. “I think that if you cannot do a job in a reasonable amount of time then you should not do it because you are not capable of doing it.”
But even as he has come to know from experience, not everyone gets the things that they want in life.
The top baccalaureate graduate in Ivory Coast and the top of his class in high school in France, Mr Thiam said his interests during his school days were in literature, history and philosophy, although he was “reasonably good in sciences”, and pursued mathematics and physics seriously.
His passion, though, was to be a forward for an English football team.
“Not everybody is born to do things as they wish and I would have loved to have been born to be a forward for a Premiership team but my skills are not there,” he said.
“I used to spend two hours every evening just to perfect my kicks and I got nowhere, so at one point I had to accept that that was not my calling or path in life and do something else.”
Mr Thiam, 51, took a roundabout path to the insurance business. He studied advanced mathematics and physics in France and worked in management consulting before returning to government service in Ivory Coast.
When the Ivorian government was ousted by a coup in 1999, he returned to the private sector, first with McKinsey in Paris and then the insurer Aviva. He joined Prudential in 2007 as CFO and became CEO two years later.
Even though he is now responsible for steering Prudential worldwide, in two interviews with Asia Focus he was reluctant to specify where he wants the company to go in the future, only saying that in the past three years the company has done well and his aim is to keep up the momentum.
“I am a scientist by heart and I don’t know any scientist who does not believe that the world is random,” he replies to the question posed about the future of Prudential.
“And you will catch very few scientists making predictions. It is foolish. Why and what did you know in 2006 that is happening in 2013?
“Did you know social media would be what it is? Did you know Syria would blow up, that we would have the biggest financial crisis take place?
“There are 7 billion people getting up every morning and doing their thing and anybody who can predict their behaviour is just a fool.”
“I have wishes and desires and reality trumps that and I will adapt my wishes and desires as realities come along.”
PUBLIC VS PRIVATE SECTOR
Mr Thiam started his career in the private sector and remains there after a brief and unhappy if well-intentioned detour into the public sector.
His father was a journalist and his mother was the niece of Felix Houphouet-Boigny, the founder and first president of Ivory Coast. He served five years in government to help bring about stability in his native country.
“If you ask me, I prefer private-sector jobs and out of the 27 years I have spent [working], only about five years were in the government sector,” he said.
He sees the private sector as important for creativity and the ability to innovate. The risks and rewards are clear and there is more accountability.
But he joined the government sector in 1994 at the invitation of the then-president Henri Konan Bédié after the country went through an economic crisis.
At the time, 14 former French colonies in central Africa were all using the same currency. But as troubles deepened, a 50% devaluation of the CFA franc seemed the only solution, painful as it was for some.
“It was a unique time, and if people like me and others did not get involved the downside risk was very severe. It was not my decision to go to the public sector but it was something that was needed and I wanted to do something meaningful for the country,” he recalls.
The five years of work in the government sector taught him a lot and he feels that he did accomplish a lot in helping to stabilise the economy. Ivory Coast became the region’s top recipient of foreign direct investment in the years after the devaluation, according to the International Finance Corporation.
At the time of the devaluation, inflation was running at 32.5% and growth was low. “After that we stabilised the country with growth of 5-7%. We felt that we had done well and the problems were political not economic,” he explains.
His team had managed to put the economy on the right path, with successful privatisations, such as telephones, the energy sector, railways, airports and others.
But it all ended with a coup that ousted the government and although the coup leaders asked him to return to his position, Mr Thiam declined and moved on.
Some may wonder, who is this magician who has managed to be successful in every aspect of his life, and his simple answer is that it is not him but instead it is the team that helps him.
“The only thing I have done all my life is build teams,” he says with a nod to colleagues seated nearby.
The team he built in Africa, he said, was very good and all the people who had worked with him have gone and done phenomenal things in their lives. “And I am proud of them. I did not pull them because they are their own people and I like people who are their own people.”
The reaction of a team to the changing environment is what determines the difference between a good and a bad team, because the external environment is the same for everyone.
“It is how you react to the situation that makes all the difference. That will be determined by the people in the organisation,” says Mr Thiam. “People say that Prudential is lucky because it is in Asia. As far as I know, every insurance company is in Asia. We are not succeeding because we are in Asia. That’s a lazy way of thinking; we are succeeding because we have built a very strong team.”
Even at Aviva, which he left after being passed over for CEO, he proudly says that the people he recruited continue to head the key assets that Aviva calls as its “crown jewels”, such as Poland and Turkey.
“I hired the CEO of the Polish operations. Turkey, I signed the deal there. The CEO was also appointed by me there,” he proudly admits.
“At Prudential too I have trying to do the same thing: to build a team that is multinational, and at the end of the day what matters the most is the team you work with.”
But building talent and looking for the right people is something he takes to his heart, as was evident from the meeting in Singapore.
As the first black executive to run a FTSE 100 company, he also knows what it means to be talented and moving up the corporate ladder.
“I will give you an example,” he says. “I went to see my son at Brown University [in the United States] and met with a lady in charge of talent search, and her only task was to fly around the world to look for talent.”
This woman, said Mr Thiam, had found promising students in sub-Saharan Africa, Cambodia and other parts of the world.
“Now look at this: the USA today is the biggest economy in the world and they think they need talent. They pay people full-time to go around the world to look for talent, and there are other countries that build walls and say we don’t need anybody,” he says, emotion rising in his voice.
“This is a competition. Who do you think is going to win? I’m not going to answer that question for you. You can see who has been winning and who is going to win in the future.”