Bringing an Entrepreneurial Mindset to Big Business — with M&G CEO Andrea Rossi

0:00A CNBC original podcast. We all have to make big decisions in our lives. Decisions that define and influence our professional and personal journeys. If you reflect on them, some are good and some I'm sure you'll definitely regret. In my nearly three decades as a financial journalist, I've interviewed literally thousands of CEOs, politicians and market voices, and they all had to make decisions to get to where they are today. In this podcast, I hear about those choices as well as the moments of doubt, risk and conviction that impacted our guests' journeys and the people they lead. This is Executive Decisions with me, Steve Sedgwick.

0:43In this episode, I speak to Andrea Rossi. The gentleman who was interviewing, he asked me the question, he said, what is it you would like to be in five to ten years? And I said, I want to become a CEO. I want to run a big business. Andrea is the CEO of investment management firm M &G. Despite being an incredibly successful business leader, he's a man who enjoys being out of his comfort zone. That mindset has led to both triumphs and setbacks, but his entrepreneurial spirit has never wavered. I feel like an entrepreneur. Whatever role I've been, I always felt as if I was owning the company. When I worked for GE Lighting, I used to go to hotel rooms and check all the light bulbs just to make sure they were GE.

1:21And if they were not G, I would turn them off and say that it didn't work. Andrea's background is as diverse as his career. A Frenchman with a Swedish mother and Italian father now living in London. He credits his pan-European roots with shaping his adaptability and leadership style. I knew I was always going to work in Europe and I wanted to work in Europe. I believe in Europe and I want Europe to succeed. These are Andrea Rossi's executive decisions.

1:52You have a Swedish mother, you have an Italian father, you are fluent in at least four languages, you speak different languages to different members of your family. You were born in Stockholm, but you were schooled in the French system, Brussels, London, South Kensington, Lise. You've been around a lot as well, isn't it? What do you consider yourself? I consider myself a true European, of course. I love Europe. I love its history, its heritage. I love the fact that Europe has great places. And all these places you mentioned, the capital, Stockholm, Brussels, London in particular, which is my town, which I live the most, are great.

2:28But it's true. I mean, my mother is Swedish. My father is Italian. The French brought me up. And yes, I've lived in London most of the time. So, yes, I'm a true European. When people ask, where are you from? I say, I'm European. Yeah. And I can't place you. As I say, you strike me as a real Londoner for sure. But I'm a real Londoner. And I've got no exotic international heritage as well. So, I mean, that has given me a grounding that I know that I'm from London. That's who I am. And two English parents. It's a bit dull, but I know where I'm from. Has it affected you in knowing who you are and where you're from?

3:03No, it has. And London has always been for me the international capital of the world. And that's why I was attracted by London. In London, everywhere you go, you would sit in a restaurant. you will hear four or five different languages, not only European languages. So, no, it has not affected me. I think being pan-European has helped me to adapt better also elsewhere in the world. It has helped me when I do business in Asia, in Japan, or even in Latin America or in North America. Yeah, it's interesting. You notice the adaptability of the members of my team who have got an exotic or international background.

3:40We've got a producer sitting over there who's, she's Canadian. She's lived in Singapore all her life. She loves London now as well. And it does give a degree of resilience and adaptability and perhaps a world open view rather than a closed mindset. Certainly. I mean, it helps you to be, to adapt when you're in different cultures. Swedish and Italian is probably the most opposite you can think of in Europe. I think so. Yes, I know you have a... I have my own knowledge of the both. You have your own knowledge of Sweden. and we should not make any stereotypes, but for sure in Sweden they're organized, they're calm.

4:17The Italians are probably more passionate, flexible, innovative. They're certainly not calm. And if you put them together, well, it can be a pretty good mixture. But I think what it has helped me a lot is it helped me to adapt and to listen, to understand other cultures. That's why also when I spend time in Latin America or spend time in Asia or Japan, I manage to better relate to other people. You mentioned the qualities of the Italians and the qualities of the Swede. I'm an enormous fan of both as well. But is there sometimes a conflict in Andrea Rossi of whether you are that Italian or whether you are that Swede or indeed French, dare I say, due to your education?

5:01Well, sorry, it doesn't help to be called Andrea Rossi because everybody thinks I'm Italian. Which I did as well when I first met you. I probably looked Italian as well. But no, there's been conflict. I think people expect me to be a bit more Italian. And I probably feel a bit more Swedish sometimes. I lived 14 years in Stockholm. And given my mother was Swedish, generally a boy is nearer her mother than her father. My father will accept that. But it has created sometimes some conflicts. But I would say I always try to take the best from both and use it to my advantage. What is the worst of both?

5:34The worst of both is, well, Italians, we go into stereotypes, it's difficult. But you can say that because you're half Italian. Yes, I know I can. No, Italians generally would speak before they think. So it will be very emotional. Whereas the Swedes, they will ponder a lot before they speak. Sometimes they will not speak. I think they complement each other. It's funny to see my father would say things he didn't mean. My mother would never say a thing she didn't mean. My Italian wife would tell me things that she probably would not mean five minutes later. I would never, ever say something that I do not mean.

6:11There's a great meme going around about the Swedes, having a meeting, and the man who makes the big faux pas of starting the meeting talking about the agenda, rather than talking about the weekend and how everyone is and everything. And I think my affinity for Sweden, my family there, it's fairly true. No, the Swedes are organized. And I'm the kind of person that, you know, if I have an Ikea, I follow the guide. My father would never follow the guide. And then there will be pieces left. And he said, well, the table still looks okay. Yes, Papa, but, you know, still there are these things. You should have followed the guide.

6:42And I will always follow the guide. So you've had a brilliant education as well. I mentioned the Lise in South Canada and various European cities as well. You did your degree in Saipensa. And then perhaps the most formative thing was your MBA and INSEAD as well. Did you enjoy doing the MBA? Has it laid the platform for the future career that you've had? Yes. I mean, going back to my heritage, I believe in Europe and I wanted to do something where I could then stay in Europe. And INSEAD is probably the MBA for Europeans or for non-Europeans that want to work in Europe. So it helped me a lot. Sapienza did economy and commerce.

7:21So what I studied at the MBA was similar, but for sure, it was a great opportunity to meet other cultures, work on business cases together with different nationalities. And interesting enough, seeing how they all adapted to each other, you would always have the French who would say, I insist, listen to me because I have analyzed this all night. The Lebanese who would try to sell us everything and other things during the case. and then of course the Germans and Swedes were very very organized so it was good, it was formative but it created I'd say a good basis for then taking off in Europe. I mean I knew I was always going to work in Europe and I wanted to work in Europe, I believe in Europe and I want Europe to succeed.

8:07And of all places to end up after that, Enfield, North London. Now I can say this with affinity because I'm from that part of the world, I was from the neighboring town part of London as Enfield. So I know it pretty well. But this was, and we're moving on to some of your key decisions now as well. You made the decision to join GE, which is an education itself working in the world of Jack Welch and then Jeff Immelt thereafter. I, CNBC, am a former employee of GE, of course, from our heritage. Tell me a little bit about that, because you say that was one of your best decisions ever. It was, in my view, from a career perspective, it was an even formative experience.

8:48was the best ever decision. It's interesting. When you came out from MBA, if you ask anyone, this was during the 90s, they all want to become bankers or consultants. And of course, everybody wanted a job in a city. And there I was and I took a job with GE. I had the offers from others, but I decided to go for GE. And I went for GE for a very simple reason. The gentleman who was interviewing, he asked me the question. He said, what is it you would like to be in five to 10 years? And I said, I want to become a CEO. I want to run a big business. That was the right answer, by the way. That was the right answer.

9:21And he said, okay, and you think you're going to become a CEO by going to an investment bank? And I said, yes, of course. I'll become then a CFO. And then from a CFO, I'll become a CEO. Okay. And in consulting, he said, well, in consulting as well, I learn about an industry. Then I become the head of strategy in a company. And then from there, I move on and move on. And he said, okay, what about if I told you you can become a CEO directly? Maybe not with the title, but we're going to make you go and work in a factory as a product manager up in Enfield. I didn't even know where Enfield. Thorn Lighting.

9:50Thorn Lighting called G Lighting. When it was Thorn Lighting up in Enfield, he said it was London. So I said, of course, London is fine. I did not know it was so far up north. It's not the West End, is it? I say this with affinity for an East End boy. Enfield is not Hyde Park. It's not Park Lane, is it? It's not. Yeah, it's not Mayfair. It's not the city. It's, yeah, it was a different place. and it was a bit further than I thought. But it was a great experience. It allowed me to work with people and focus on people management. It allowed me to work on processes, which are key. You're talking about production here, input outputs.

10:27But more importantly, it allowed me to have a P &L from the start. So I had a P &L, I had clients, I had production, I had people management. I was only 28 years old. No city job would give you that directly after an MBA. I mean, I started off on the trading floor and they gave me a P &L quite quickly. It was terrifying for a young man. So enormous responsibility early on as well. And I mentioned GE as a job, but actually it was GE that we both know from then. It was an education as well. They put you in one division, then you end up in another and another and another. And there is a model there and Six Sigma as well.

11:02That was pretty much the Jack Welsh education. Of course, it's formally developed by Motorola. Ola, tell me a little bit and tell our listeners about Six Sigma because it is still very powerful to this day and has its criticisms as well. Well, Six Sigma for me has always followed me. I believe it's a super important topic and it's based on processes. But it starts with clients. It's understanding, first of all, who are your clients and what is critical to your clients? What are they looking for? What kind of what they call CTQ, critical to quality? What were they looking for in terms of service, in terms of output?

11:41And of course, there's a process that delivered that output. So Six Sigma is making sure that that process delivers Six Sigma result to clients, which means 3.4 defects out of 1 million, which is effectively what happens when you fly with a plane. That's what you want. You want Six Sigma. You want to make sure that the plane arrives safely. On an average, processes actually are sort of Three Sigma. So they deliver 7%, 8 % defects every time. So it's understanding the clients, redesigning processes, and of course, who are doing that? People. So it's people, process, clients. And that's something that always has followed me.

12:19Whatever I've done, any job afterwards, I always look from a client's perspective, from a process perspective, and then making sure we have the right people in order to execute. So it's followed you in the 25 years plus since then as well. Yes. But it has its criticisms that it doesn't always work. And it doesn't work sometimes because not everyone gets the buy-in. Not everyone is selected correctly. Not everyone in management fully adheres to it. There's a lack of awareness of the benefits as well. And there is resistance to culture change. Have you come across those as reasons why it hasn't worked in your career?

12:53Yes. At the end of the day, like any initiative, if it doesn't come from the top, And if the CEO is not passionate about it, it will be difficult to get it through. In GE, it worked very well. I would say in Motorola, it probably did not work very well because there was not that leadership focusing on it. It became more technical. In GE, it was driven by Jack Welch and it was driven by all the leadership team. And actually, they put their best people in Six Sigma. And I think that is how you actually get the culture then to embrace it. The reality is it's a technique and who executes on it are the people.

13:31If you don't then have the right people, the right culture, you will never succeed. So the cases where it has not worked, I think it's because there was not the right sponsorship and most likely not the right people delivering on it. And yet earlier on in our conversation already, you've talked about one of or a couple of your skills that you got from your very early moving around Europe was your flexibility and adaptability. Does Six Sigma necessarily value those qualities? Because if you stick to a doctrine, you stick to a set of rules, that doesn't necessarily mean you can be flexible and adaptable with those rules.

14:06Yes, and it's true because Six Sigma, you're right, you measure, you have a process, but you can also redesign the process. So that could be yours because your client's needs, they change constantly and you might have a process which is not fit for purpose and therefore you need to redesign and design for Six Sigma. So it actually allows you to have that flexibility. I'll talk about M &G a little bit more a little bit later on as well. But when you come into M &G, you were the newest CEO, October 2022, up until this moment as well. And maybe you mentioned Six Sigma, maybe you mentioned the style of it as well.

14:41Has it been tough for the team to kind of take on board this new idea? I have, yes. I mean, I mentioned it. We have implemented it to a certain degree, I would call it more agile or lean Sigma. But I think when you think about Six Sigma, you need to think about, first of all, it's about clients. Any organization should know their clients and they should adapt to making sure that they deliver outcomes to the clients. And clients, of course, can be internal or external. But then what is it that actually delivered that? It's a process. Everything is a process. Selling is a process. Servicing is a process.

15:17Innovation, innovation innovating is a process and ultimately it's the people that makes it work so it's client process people and i think the the big focus i had when i entered them into mng was more focus on clients this was a business which had not been growing for many years and now we're growing again improving our processes so taking out the complexity of our processes so client outcomes were better. But more importantly, making sure I had true people, leaders, people that knew how to lead teams, not technical experts only, but people that were interested in people, team management, team spirit.

15:57That is the competitive advantage of any firm in the world. And that's, of course, what we're trying to aspire at M &G. And for me, when I see the best leaders and I see the best people and the best people I work with at CNBC, they have empathy, they have kindness, they have team spirit, they do not have this overriding ego. I am probably the person with the biggest ego in my team. And yet, the qualities which I admire most are when we work together and we say, we haven't got a big personality, we're going to do this together. That's important for you in all your roles? It's very important for me.

16:32I did a lot of sports when I started seven-year-old and I I loved team sports. I was always the captain of any team sport we did, not because I was the best player, but because I listened to people. I was generally interested in having the different views. And that has always followed me whenever I, I believe if you can create a strong team, then you can do anything. And winning as a team is much better than winning by yourself. And by the way, losing as a team, it's even better because you learn so much as a team.

17:08Tell me a little bit more about sport. I didn't expect to go down this way as well, but what sport did you play? Just tell me a little bit more about how you enjoyed it. Again, you wanted to be the captain, though, yeah? No, well, it's not that I wanted to be a captain. They chose me as a captain. I was generally already when we played for the coach, but ultimately I even ended up being coach. When I was at the French Leafs in Stockholm, we had a basketball team. We had no coach, and I was the coach and the captain. We used to come to these games against other schools. There was a coach there.

17:36I said, where is your coach? And they said, no, no, Andrea is our coach. And they looked at me and said, and then we won the game. So there was always part of you that was team-spirited but actually liked to lead. Yes, but because I was interested in people. It comes, and this comes even, this comes from my Swedish grandfather who always, he was a Swedish captain of the Swedish Navy. He always, from the very beginning, Andrea, you always have to first put the team, the community in front, never think about yourself. It was always about making sure you put the team as the key topic in front of you.

18:13And I followed him already as he was doing all kinds of sports. And I saw how he was acting with his team. And he explained to me how even in the Navy, it was all about the team effort. Yes, there were decisions, but it was always the best outcome you got out of the team. So I was always very interested in it. I'm generally interested in people. I think it has also to do with my background being half Swedish, half Italian, brought up by the French. All that has helped. But it's come up so much already in the short time we've been speaking that the mentorship and the bond you've got from your family, you've mentioned all sides of your family already, and it just grounds everyone in life.

18:51It just gives you something that's a huge foundation for everything else you achieve or don't achieve in life. You've always got your family. Yes, you've always got the family. Exactly. No, family, and this is probably a bit more Italian, but family is the center of what we do. I mean, we live because of our family. Yeah. Okay. So we've had the big epiphany of GE and Six Sigma, and you've learned the processes which have stuck with you throughout your career. But you were an industrialist then. You're at GE and then you've moved on to GE Capital. Yes. And you could have spent the rest of your career there maybe.

19:24But you've gone then and spent 20 years, I think from 1999. Nine, yes. To AXA. Yes. Tell me about this amazing period of your life where you are now you've gone from being an industrialist to a banker. Well, AXA was an interesting one because obviously it was a French company. And I knew the French very well given that I've been in the French school all my life as a student. and when AXA came around, I still remember, I thought, oh, it's French and it's insurance, must be boring, but I still went for the interview. And then I was very, very lucky to meet two gentlemen. First, Denis Duvern, who was a group finance director, and then Henri Decastre, who was the group CEO.

20:06And of course, when I met in particular Henri, A, I felt, oh, this is a Jack Welsh, but much younger. And yes, I felt this is the company I want to be. I want to be with these people. And they were extremely international. The story of AXA was very interesting because they started out very, very small and then they did acquisitions. A little bit like GE. GE Capital was all about acquisitions, but then very centralized, putting their culture, their name everywhere. Everything they acquired became AXA very quickly. So it's like a GE, but with a French flair. So yes, it was very, very interesting.

20:44I did M &A and then of course they gave me responsibilities of big businesses, which I enjoyed in Middle East and Italy. And then I moved from insurance to asset management as well during access. So yes, it was very formative and I have to say my big mentor was, well there were two, was Denis Duvern and Henri Ducastre. And you say they were very much like Jack Welsh in terms of the attitude as well, but having worked for a French bank myself in the 90s, a Crédit Lyonnais for many years. And it was a very different culture, very different culture from the British bank I'd worked for previously as well.

21:21Tell me a little bit about the differences of working for a French financial institution compared with working with GE. I can't imagine them being more different. Well, from the outset, I thought so as well. But AXA is probably the most anglicized French company. I don't know if that's a good or a bad thing in the eyes of the French. No, well, yes. And by the way, we were criticized because we were always presenting in English. We present our full year results. We do it in English. All the meetings, although we were speaking French, they were always in English. Everything was done in English. So I think that helped.

21:56Yes, the French are a little bit different than the Americans. The Americans, they will look at 80 % of the problem and then they say, okay, let's go for it. The French would look at 99.9 % and they will analyze again. And then they will analyze again and then they might go for it. It's a different culture. But no, AXA was very dynamic. And I have to say, I felt it very Anglo-Saxon too, very pragmatic. And of course, that dynamism of acquiring business, integrating them well, I felt it was very much similar to G. and they launched Six Sigma as well. So obviously I helped them a little bit. What made you stay put for 20 years at AXA?

22:34I believe that you should never be in your comfort zone. You know, you are always there to learn. You're always there to contribute, but more learning. The moment you become in a comfort zone, you should try to do something else. And you might say being in a company for 20 years means you're in a comfort zone because you know the politics, you know the people. What made me stay at AXA was the opportunity of moving around. So I moved from corporate to business units, back to corporate, insurance to asset management. So yes, the 20 years went rather quickly. And it's gone quickly too here because I'm moving on from 20 years at AXA to what I think was the toughest decision of your life.

23:11And I'm going through a very difficult period in some ways as well because you decided after an immensely successful period to set up your own asset management business. And I say it's your toughest decision because not only is it exciting, going on your own, but also your timing was tough. It was just before COVID. Talk me through this. Well, when you spend so much time in the corporate world, many of us feel that they have this entrepreneurial spirit. We all wanted to try something entrepreneurial. And of course, you meet many entrepreneurs and you all feel, well, I can do that as well. So I had thought about this for a long time.

23:45I thought about Europe, always Europe, it's always Europe. I thought about private assets And I felt that Europe needed another player in private assets, a sort of mini Blackstone, but European one. And I thought about it for a long time. I had the business plan, left AXA, set up a shop. And what timing was this? So this is 2019, yeah? This is end of 2019. So January, office in Mayfair. The name, APM, capital partners, so alternative portfolio management was all focused on private assets. that we were ready, business plan partners, we had the office, we had some seed money coming in, but of course seed money comes in after a couple of months, and we were ready, ready to go.