WEBVTT

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My answer to the board is yes,
we have the financial capacity,

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which is obvious,
but we also have the managerial capacity.

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So this is the time to do something
like this.

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Now's the time to strike.

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Hey, Christoph, it's so nice to see you.

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Welcome to S&P Global.

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Thanks for having me to headquarters.

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It's great to be here.

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Come on in.

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So S&P

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Global is almost a household name
for business leaders.

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Tell us a bit more about S&P Global.

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Well, we start with data and analytics
that we provide to our clients

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to make informed decisions.

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So that's everything we think about

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how can be independent,
how can provide information.

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And that cuts across all the divisions;
the ratings division,

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indices, market intelligence,
commodity insights and mobility.

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And that's one of the beauties
of our business.

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It's these embedded data flows
that people need to use to run contracts

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and make decisions.

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And tell us a bit
more about your mix on a global scale.

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We serve as clients in over 150 countries.

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We have offices in 32 countries.

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They're humming and there's
a lot of growth in the emerging markets.

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And we see maybe the biggest thing
that's important to us right now

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is seeing the shift from bank markets
to capital markets.

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And that's happening all over the world.

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So you became

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CEO in
2013, so it's now more than a decade.

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Tell us a bit
more about one of the defining moments

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that truly shaped the company
and also you as a leader.

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After about three years of being CEO,

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the name of the company was McGraw-Hill
Financial.

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And I realized that we needed
to bring the organization

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together under one brand,
which was S&P Global.

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And at the time we had the rating agency,
we had the index business,

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and they all fit together,
but we had some businesses that didn't.

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And this gave me the ability
to have a single brand,

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a single vision for the company.

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And it's also helped mark going forward
from then on what our strategy is

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and how we think about building
the portfolio.

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Strategy has to be driven by what are your
clients need and what are they doing.

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Those biggest themes were

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what was happening with sustainability,
with digital transformation.

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The private markets
were starting to emerge

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and we said we need to understand

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how we can fulfill
the needs of our clients in these areas.

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We could do it organically.

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We could do it with small tuck ins,
or we could find a partner

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that would allow us to move
to scale very quickly.

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And that's what we decided to do
with the merger with IHS Markit.

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That was I think, the biggest M&A
move in the world actually in 2020.

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Yes, it was.

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Industries and certainly the biggest one
that you had ever done at S&P Global,

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what got you so excited about IHS Markit?

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Well, we used to talk about it,
the industrial logic of the two companies,

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and they had data and analytics
that we didn't have.

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And we had the benchmarks and the
technology platforms that they didn't have

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that.

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That was in the middle of COVID
that you made that decision.

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Were you just sitting at home
and not being able to come to the office

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wondering what bold move

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you could make or how did the idea come up
and how did the whole process start?

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Well, it wasn't quite like that.

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We we had a scan of the markets for many,
many years, and IHS Markit

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was always part of that scan.

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But we said, well,
should we do something that's bold?

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And we started thinking about
how are we going to do it?

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It started with a phone call to the CEO
and so of

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IHS Markit, and we had to decide
how we were going to work.

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And there were two ways that I had
to think about it for the board.

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The first was our financial capacity to
undertake a large transaction like this.

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This was quite large.

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It ended up being over $40 billion.

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But probably the more important question
was do we have the leadership capacity

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to do something like this

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requires you to have a strong team
of people who have proven in the field,

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who are change managers,

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who have experience doing mergers
and acquisitions, including divestitures.

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And my answer to the board is, yes,
we have the financial capacity,

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which is obvious,
but we also have the managerial capacity.

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So this is the time to do something
like this.

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Now's the time to strike.

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So it all started with a phone call
that you made to the CEO of IHS Markit.

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How did that happen?

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After getting the approval
from our board of directors

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that I could make the phone call,
which isn't always easy.

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I was at a vacation home
and I had to sneak out on a balcony

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and make a phone call, and I got him
right away and he was intrigued

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but didn't say yes the first time
and said he was going to go back

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and think about it and look at it.

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And a couple of days later he called me
back and said, Let's sign a NDA.

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And so that was good.

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And it meant that we were able to move
pretty fast

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and we had really cordial discussions
throughout.

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So there was an important element
of personal chemistry and trust.

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Absolutely.
I'd known Lance for many years.

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Somebody
that I've worked with over the years,

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been in commissions with him
and things like that.

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So somebody I knew, company
I knew well and we were able

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to have that trust and that very strong
relationship throughout.

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How did you convince your leadership

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team, your board,
that this was the right moment?

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Well, I'll tell you something
that's very practical,

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not very strategic, very practical.

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Trying to do something like this
during COVID was a big challenge.

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We had one of our very first management
meetings with the management

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teams from both side in Connecticut.

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We rented a place
where they normally have weddings.

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We all took COVID tests
and we sat about ten feet apart.

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We had all of the windows open,

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even though it was
the fall was a little bit cold outside.

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So we could have fresh air and we could
we could be in a room together

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to actually get the entire management team
from both sides together,

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to get to know each other,
to start doing the due diligence.

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And it took really long.

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I tried to take a step back and said,
Well,

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let's take advantage of that
to come up with a plan for the strategy.

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The organization design,
who are going to be the leaders

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across every part of the organization?

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Who were going to be
all of their direct reports?

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So as opposed to many mergers
and acquisitions, the day the deal closed,

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we had an executive team,
we had the entire organization below them,

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and even a lot of the organization below
them was already defined.

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So we were able to move really fast
after we closed.

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You are generally known
to be a very people oriented CEO

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and you aware that
before the deal with IHS Markit, now

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the merger happens, people topics
are incredibly important at that moment.

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What were the big opportunities

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and also what were the challenges
that you had to navigate?

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We've always talked about our culture,
it being people first customer centric,

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and we think that combination
of being really fair

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to your people, understanding
how important it is that we have values,

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we have a strategy, or people are involved
in constant communications,

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but then it's all about the customer
and delivering innovation to the customer.

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We found that
IHS Markit had a similar culture.

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They were people oriented,
customer oriented.

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They had innovation in the middle
of what they did.

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So bringing the two cultures together
wasn't too hard.

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But it's not easy.

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And I talked about those meetings
that we were having to pull together,

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the management team.

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We had some really tough conversations,
but valuable conversations

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about what kind of company do
we want to be.

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Obviously, this transaction,
the merger, completely repositioned

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S&P, global strategically, operationally,
people wise,

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I'm sure it has also shaped
you as a leader.

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What are your big takeaways
from this process?

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I've been involved
in many big change management initiatives,

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crisis management, other mergers
and acquisitions throughout my career.

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But what really became apparent
to me, and more obvious

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than ever, was the importance of culture.

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I've talked about it before
and I've always thought about it,

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but when you have two large organizations
that are this big coming together,

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if you don't put that front and center,
it's not going to happen.

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And I know sometimes talking about things
like vision and purpose and values

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sounds like it's an academic exercise,
but it's not.

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It actually is meaningful.

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And when I think about the culture
that we've built and putting those values

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upfront every single day
has been so important for our success.

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I couldn't agree more.

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In the end,

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I mean, culture always sounds fluffy,
but you can measure it,

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you can document it, you can articulate it
and you can change it.

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And I do think the boldest
and most successful leaders know that.

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And actually do it,

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whether it's in the situation of a merger
or in the normal course of business.

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So thank you for talking about
the moment of truth.

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Always wonderful
to hear from you, Doug. Thank you so much.