Looking back, you mentioned how business is an art and there are good artists and bad artists. What have you learnt that makes a really good business artist?

In most companies, it is not your IQ which is going to make a huge difference. If you are a pharmaceutical company, you have a whole organization, thousands and thousands of people, who are dependent on the R&D department. If the R&D department discovers a blockbuster, this company is going to do wonderfully well. In most companies, you don’t have to have an IQ of 160, for the company to be successful. It is about creativity, for some; it is about resilience, for others. It is about persistence, it’s about will, it’s about processes. It is the blend of the creativity and the processes and the will and the persistence and all of this, within a given culture, which makes a company successful, or not.

It’s not about IQ. It is about EQ and will. Therefore, you have to engage employees that what they are doing is important, because each of us is bringing a brick for that wall and we are building a wall and we are going to be the best at doing what we do. You have companies in which the culture is to win. At school and at home, it’s just like in a company. You go and ask C students or D students, whether they love what they’re doing in their course and they’re going to tell you, oh, no, no. It’s hard; it’s terrible. How come, when you ask A students, you will see a big smile and they will always tell you, it’s so fun; I just love this math exercise. And, by the way, in my free time, I want to do this and do that. Do they love math or do they love winning?

In fact, it’s always the same. In a company, it’s exactly like at school. You have companies which love winning and you have some others who are a bit cumbersome. They are cumbersome because everything is hard, because they don’t see the light at the end of the tunnel. They struggle, because they don’t have a culture of winning and they don’t have this will that says, we are going to be the best at what we do. Through our innovation, through our market leverage, through this and through that, we are going to win, over the competition. You have companies which excel at this and they are always the same. It’s not permanent, because some companies lose it, over time. This is what I call formidable competitors.

My definition of a formidable competitor, is a company which, in a given field, does everything better than anybody else, in the same industry. It can be a division or it can be a company. If I ask you to give me an example of a company that does everything better than anybody else and, therefore, reaps the financial rewards of all of this, you’re probably going to say Apple. I would say, sure. Basically, you don’t want to compete with Apple. If you do, it’s because you are Korean and, therefore, a masochist. Or because you are Chinese and you want to mass produce. But it’s Apple that gets the financial rewards, because Apple does not only sell phones, they sell everything around the phone. They sell iTunes, they sell things and they collect fees from this and that. They’re not done when they have sold you the phone.

They also sell status, with the phone. I have an iPhone, not a Samsung.

Exactly. They’ve built the brand and they hook you. If you have an iPad and an iPhone, you’re on drugs. You can’t move to Samsung or to Huawei or whoever else. So they don’t talk to each other anymore. This is the definition of a formidable competitor. They do everything better than anybody else.

I can tell you, in the pharmaceutical industries, in the nineties, Merck was one of those. Then they lost it, at a point in time. Then in the agricultural industry, Monsanto was one of those, in the nineties and 2000s. You did not want to compete with Monsanto. I was competing with Monsanto. When I was the CEO of Dow AgroSciences, we had an industry association and I knew the CEO of Monsanto, very well. He was called Hugh Grant and I said, “Hugh, you really are a formidable competitor and I want to thank you.” He asked what a formidable competitor was. I said, “You, basically, do everything better than all of us.” He smiled, losing his humility. I told him, when we compete with Monsanto, we have two choices. Either we quit and we do something else, or you force us to be better. Thank you, for forcing us to be better.

What did they do so well?

They had really leveraged genetically-modified seeds, so transgenic technology for seeds and things like this. It was, originally, an acquisition of a start-up company. But then they really leveraged this technology, by buying lots of seed companies and, by combining the two, they were really a formidable competitor. They displaced the traditional agricultural chemical companies and the traditional seed companies. They disrupted the industry, significantly, but they forced the industry to be better.

In doing that, lots of competitors have disappeared. I said to him, thank you for making us better.

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