Thanks to Owen Smiley for providing these notes while I went back to work.
Leadership and Ethics on Wall Street
- The retirement savings crisis is so hairy, such a downer, that we’re not even talking about it anymore. $14T missing dollars, assuming Social Security and Medicare are solvent (they’re not).
- What if you knew there were huge strides that could grow the economy in the US by 9%?
- We need to shift our lens. We need to look at a different lens and recognize that the retirement savings crisis is a woman’s crisis. Women retire with 2/3 the money and live 6-8 years longer.
- There is real power in the intersection of women and money. This could increase our savings gap by a third.
- Let’s tilt the lens a bit more, because the power of diversity also gets activated in the process. Diverse teams outperform smarter and more capable teams, in general. Adding more smarts or superstar power doesn’t add much, but adding a different perspective adds a lot.
- Why talk about this? I worked Wall Street for twenty years and ran parts of Merrill Lynch after the sub-prime crisis.
- First job on wall street was not great sounding. In 1994, she wrote her first report saying sub-prime would crash and she was told not to publish. She published it anyway, because she was brand-new and had been hired to do the best job for her clients, even if it meant telling them something they want to hear.
- Women take jobs primarily for meaning and purpose, research shows.
- 14 years later. They slammed into the 2007 sub-prime downturn. Suffice it to say they sold what they thought were low risk, and those products were lost almost completely. Her determination was that they hadn’t been evil, just dumb. She thought they should share some of the losses with the clients. Brand-new CEO says no. Board voted to partially reimburse clients, and she was fired. She did it again at Merrill Lynch.
- Was she right or wrong? She thought she was right. She thought it was ethical. But what she was really thinking in the moment was the clients and how they were suffering for her company’s mistake. Research tells her that this kind of relationship focus was very female. She’s the only big person on Wall Street who returned money. Her voice was different, and that kind of difference can drive different results.
- Diverse teams are not efficient; they take longer. But they make more effective decisions. So why aren’t we making more progress here? Diversity is hard and we have inherent biases.
3 thoughts to drive diversity:
- Recognize the differences – they are strengths. There is false comfort in agreement.
- To improve diversity we need to start asking not, “Who’s the best person for the job?” because the best person generally looks like us, but, “Do we have the strongest team in place?” Have we balanced the historian with the dreamer, the optimist with the pessimist, etc.?
- Value your people. Women and millennials in particular see through the insincerity.
[missed the rest of this talk]