Tuesday, October 28, 2008

Private Equity, Managing Money, Women’s Leadership, Global Poverty, Hedge Funds, Goldman Sachs, Making a Difference and FAILED

Today was a busy day. I am doing something today that I have never done before on this blog: truly letting it rip. Why today? Because it was one of the most interesting days I have had in my life, and by the way, I have had a few.

There was no one thing, but rather the diversity of topics that I explored today, combined with whom I explored them, that made it exceptional. Warning: this is long, perhaps too long, but that is in part why I am developing a newsletter so subscribe now to the right!!! If you don't have time to read it all, jump to the end where I get fired up about women and leadership.

I begin with my journal entry on the way home on the train tonight:

The morning began at 5am when I woke up with a big kink in my neck.. ouch. By 7 am I was on the train settled in to my hour of reading. The first piece was John Mauldins (must subscribe now), my favorite of all the investment newsletters, which basically said everything I would want to say but better. Almost at Grand Central I hit the last page of the front page of the FT (my fave newspaper) and was delighted to read an oped by Jeffrey Sachs as I was to see him again this afternoon (read the piece!). Dashing from the train I made it early to the Fortress Private Equity Conference, an event I was very much looking forward to as I am an investor in many of their funds.

I was deeply interested in how my investments were doing in this environment. Note, I was not so interested in how they were doing on a marked to market basis, but rather how they likely going to be doing longer term. I was also very interested in finding out whether the private equity model was fundamentally broken. After listening to four hours of investment updates, I was pleased that my investments are likely to be ok over the longer term, but the old private equity model is somewhat broken. The meeting validated what I already knew: credit markets continue to be frozen for most corporate borrowers and will remain that way for some time. Survivors will have smart operating managers (and investors) that either thought ahead, or are able to renegotiate their debt, and heaven helping, are cash flow positive. It is a world of tremendous risk, and tremendous opportunity.

By the way, all the presenters were men and there were mainly men in the audience. I was the only woman who asked a, well, several, questions.

Next it was off to Circle Financial Group for a discussion with a very cool investor about his approach to managing his family’s assets. CFG is a group of women that meet regularly to share investment ideas, networks, and knowledge around a variety of wealth management topics. We have been together for 6 years and it has been an absolute blessing in my life for 100 different reasons. The investor shared with us that he thought the traditional wealth management was broken, and we responded, why do you think we set up CFG?

Although there are great people out there at traditional 'full-service' wealth management offices (GS, MS, ML, Citi, JPM, NT....), with a few exceptions, it is about product and execution fees. It is more about getting you into product, then getting you out. Over the past year as I have pulled assets out of many funds and managers because of my growing concern over the financial condition of our economy and system, no one ever said "Jacki, you are making the right decision for you and your family." At CFG we have spent collectively thousands of hours finding the best of the best, and it is hard. Very hard. A dear friend of mine suggested I read the book Simple but Not Easy about investing. It is not even simple. We are on a mission to share what we have learned with the world and to help women get financially organized and be financially empowered. We cannot fully delegate the management of our money. Money is a precious resource and a tool to change the world.

Next I rushed off to catch up with a friend, Leslie Bennetts, who wrote a very controversial book called “The Feminine Mistake,” and writes regularly for Vanity Fair and Portfolio Magazine. I met Leslie years ago… a whole other long story… and I think she is fabulous! She had the courage to go to a place where a lot of us women are not comfortable going and that is to talk about the economic consequences of choices women make. She got blasted for suggesting that women should perhaps think twice about leaving paid work as if it was some complete slap against motherhood. She was not slapping mothers, she was giving us a wake up call. Again the theme, women and economic empowerment. Read the book!

We moved on to talk about the current crisis and what it meant for women. Not good. Would corporate Amercia still be committed to their diversity programs? That is the question that diversity leaders would be gathering to talk about in the morning at the National Council for Research on Women's Corporate Circle Meeting. I will report back. I could not help but ask her, “Leslie, don’t you think it is time we know what Women's Leadership might look like?” (a question my friend Marie Wilson always asks). Men have ruled the world in general, forever… and although there have been good times, right now it ain’t looking so good and I for one would really like to know, if women ruled the world what would that be like? (again topic for another newsletter and more below... keep reading)

That bridged very nicely into my next gathering which was at the Earth Institute for a discussion with Jeffrey Sachs about the progess and the challenges in the Millennium Villages. For one hour Jeff spoke, without notes, about what it would likely take to create sustainable development for the poorest of the poor in this world. To Jeff, and to many other leaders in this field, it is about empowering women and girls especially, and men and boys also (my words not his). Jeff did say, women do most of the work in these villages. Women, given the resources, make it happen. Even Goldman Sachs said that with their 10,000 Women Initative. The world of economic development recognizes that it is all about women, yet in this country we have somehow missed that point.

Jeff criticized the past two US administrations for failing to care about the world's poor. He said that we give virtually no money to help people, help people, around the world. We put our money where our values are, so take a good look at the US budget and get ready to cry. You must read more about this fabulous man and support his work now more than ever. I am getting ready to write him a big check and I hope you will consider writing him one too. A newsletter on his work is to come.

A subway ride and 5 blocks later I ended up at dinner with three friends in the heart of New York City. My head was exploding and I could not wait for a cosmo. We quickly caught be up with what happened in the financial markets today!!!!!!! Equity markets exploding for various reasons, short covering on Volkswagen (up 425% today) causing substantial damage to hedge funds and investment banks now bank holding companies, dramatic currency moves. To say that what we are experiencing is financial chaos would be an understatement. We launched into a long discussion about personal versus professional money management, the merits of hedge fund compensation structures, the true value of gold and the future of the world economy. Exhausting those topics we moved on to Women's Leadership. At this point I got a little fired up.

I am going to say something bold, something I have never written down for other eyes to read: As women, in this country, at this moment, and especially as women of means, with resources (time, treasure and talent) we have failed.

Failed.

We have failed to use our power to make significant change, and by that I mean to make the world a more just and equitable place. Notice I did not say you have failed. I say we have failed. I want to acknowledge that we have tried, and for many of us tried very, very hard, and often with few resources and little help, to try to figure out how to create systematic change. There are so many women I have met, know well and have heard about who are tireless supporters of other women. I honor you all.

Men, collectively, have failed too. FAILED. They have failed to make the world a more just, equitable and safe place and I truly question whether that was even on the agenda. Their failure however comes from a a place of power. The powerful failed to take care of the powerless. As mentioned above, Jeff Sachs spoke today about the failure of the past two administrations to care anything at all about the poorest of the poor. Power. Resources. They had it all, and they failed to use it wisely. It was such a time of economic prosperity in this country, as fake as it might have been, and that period is now over. What an opportunity for leadership wasted.

Men remain the decision makers and where we are at this moment is the responsibility of collective male leadership. Hey, men in power, do you know what women would do right this moment if we were in your shoes? If our collective decisions resulted in the same outcome? We would ask for forgiveness and then we would ask for your help. Invite us to the table damn it or at least open the damn door. Although I am tempted to say move over, the right solution, the possible solution, is really in at least sharing the power. I love good men as much as I love good women, so come on guys, be part a sustainable solution. Try something different.

In my professional life so far (20 yrs) I have seen basically no progress for women, and arguably at this moment of financial and economic crisis, women are virtually absent in the decision making. That is heartbreaking for me. Sure you can name a couple of women, but that is just it, a couple.

Are more women running in senior management positions in investment banks/banks versus when I started in 1988? Nope – none then, none now.

Are more women running major corporations in general? No.

Are more women running this country politically? Not really.

Are women running the money at hedge funds and private equity funds? Nope. A few is not critical mass and it takes critical mass to know what women's presence and leadership looks and feels like.

So my friends and I talked about that for a while and then I was asked to stop yelling as I was disturbing the other diners. We then moved on to marriage, motherhood, fertility, and adoption to close out the evening.

As I sit here, now at 1:00 am, typing this completely imperfect entry about my life, I am brought back to many such evenings when I used to work at Goldman Sachs so many years ago. I would come home after a long day, unable to sleep, and get up and write about all that happened that day in my journal. Now I have my blog. Usually, back then, it was because I had spent some ‘couch time’ with a woman/women professional(s) at the firm that needed career advice and I was trying to figure out how to help her, or better yet, how to create an environment at the firm where she did not need help. I tried so hard to create change, or even the possibility of change. My heart was broken at Goldman Sachs, and that is why I left.

It took time with my family, time with my sisters at CFG, time serving on non-profits that serve women and girls, time meeting some of the most fabulous women on the planet that has brought healing. My heart is mended, in fact it is bigger then ever (remember how the Grinch Stole Christmas), and I am ready for a revolution. A leadership revolution.

Leslie asked me today, “Jacki, do you miss working at Goldman Sachs?” Honestly, it took me a while to answer. Although I left for all the right reasons for me, I miss more than anything the platform from which I could hope to really make a difference. The world cares about the platform and it has very specific ideas what that platform looks like. We don't as a society value the work that women do (back to Leslie Bennetts book). We value money and the pursuit of money as the endgame. Women generally see money as a means to an ends and not the end itself. Even when women do have a platform and money we, as a society, try to knock them down. Why don't we celebrate women and celebrate their success??? I just don't get it.

As a perfect example (don't) pick up this month's issue of Bloomberg Magazine. The cover story is about Lloyd Blankfein. Inside you will find a fold out containing 41 faces, 40 of them are white males. Granted some of these guys, most of these guys, have done amazing things, but where are the women? Where is Ann Kaplan? Ann, one of the first women partners of Goldman Sachs who created the Women and Financial Education Program at Smith, serves on two corporate boards and teaches at Columbia Business School for FREE. She also serves on the Boards of Columbia University, Columbia School of Business Board of Overseers, Smith College, The American Red Cross, The Museum of Arts & Design, and Women's World Banking. She is a member of the Committee of 200, the International Women's Forum, the Economic Club of New York and the Council on Foreign Relations. Ann, who after leaving Goldman created a community of high-net worth women that controls sigfinicant amounts of investable and charitable assets, is not even listed. In her spare time she teaches women around the world the basics of investing and how to get financial organized. Where is she on the list in Bloomberg Magazine? One by one I could list all of the 14 pre-IPO women partners at Goldman and tell you the incredible things they are doing to create a most just an equitable world. We are not spending our time shopping, we are driven, we are serving, we rock.

Don't get me started. Shame on you Bloomberg. Where is the sidebar that lists so many amazing ex-women of Goldman? If that article is not a testament to our culture and to power, I don't know what is. This country, the media, our world in general does not look for women leaders.

It is such a tragedy that when we are at the peak of our careers in corporate America, when the world needs us to be that tireless advocate and role model for change because we have the platform that the world values, we have the least time to do it. Too often when we do make the time to do it, we are not rewarded for it by our organizations; dare I say we are often punished. I often thought about writing that book about my experience working for Hank Paulson, John Thain and John Thornton in the executive office of Goldman Sachs. I spent two years working on diversity programs and other human capital management initiatives. Someday.... So sometimes we leave because we do want the time to serve others, not just serve our checkbook, and the world pulls away that platform.

So what needs to change? Not only do women have to more fully claim their space as credible leaders at all levels and in all places (thank you Chris Grumm for the language), but we need to change the space to reflect our collective values. We need to be about doing the right thing, not the easy thing. We need to think about long-term solutions, not short-term fixes. We need to care about the common good alongside what is good for me. We have to help and support one another. Bigger. BOLDER. Go where no woman has gone before. We need to grab our power tools - our skills, our passions, our financial resources, our influence, our networks to make change happen. "Do what you can with what you have where you are." We need to get ourselves in to the rooms where decisions are made that determine our children's futures.

Men also need to want it to happen. They need to make it happen. Has the damage done in the worlds economic and financial crisis, $13 trillion of wealth destruction since January of this year, been enough of an event to say, hey, let's do it differently next time? Is the fact that financial institutions are failing and governments are claiming insolvency enough to wake us up? Is spending hundreds of billions in taxpayers' hard-earned money to bail a collection of bad decisions enough?

Let the difference next time around be women's leadership and presence! Let's start a revolution. Enough is enough. You have had your turn, now move over and make space.
So it is time ladies... claim your space. Let's see what women's leadership looks like. And for all the good men in the world that will help make it happen, God bless you.

Good night and thanks for reading.

And to Vikram – my new friend from the train this evening, with who I shared all this, I hope I somehow touched your life too. “Be the difference you want to see in the world” and good luck with your studies.

16 comments:

Sophie Wilson said...

Thank you so so SO much for this post. This is JUST what I needed to read right now - WOW! - I am so glad to feel I am not alone in feeling this way about women, leadership, power and control.

I just spent the last hour having a very very intense discussion with my parents about these issues which I am so deeply passionate (and frustrated) about.

Acknowledging there is something wrong in this society (which so many are failing to do right now) is the first step to something that could be change.

I'm determined to "claim my space" and stop accepting the status quo - which is what too many women AND MEN are doing.


P.S
Found you through the 85 Broads website!

Anonymous said...

Great post (it's a wonder you can get that down in 30 minutes!) - such is the state of the world that we must keep improving - improving ourselves and improving awareness.
Women (and men) out there are doing amazing things to change the world - thanks for providing my inspiration for the day. (thx for the link to the earth institute)

Aiming to claim.my.space.

Julia

Greg said...

It is great. Full of passion, full of truth. Good on you for putting yourself out there. You are right, men have failed. Many of the good men don’t want any part of leadership – they don’t want to play the game because the emotional cost and frustration is too high. Since the door isn’t open to women, that just leaves the less desirable men. I do wonder how women would do . . . . . they couldn’t do worse.

Anonymous said...

thanks for the inspiration and the energy - we are all too complacent and need to step up

fan1 said...

This is a great thoughtful/inspiring piece.I have battled with these issues for years and wished your blog existed 10 years ago.
Bottom line, we need to candidly assess why as women in general, but in particular as professional women, we let others intimidate us and accept not being appropriately recognized for our contributions or talents. You are reminding us that we all lead by example. You are certainly doing it through this blog and by being a leader in your life. I am determined to stop "biting my tongue" and start respecting myself by being my own advocate.
Keep the inspiration coming...

Anonymous said...

Your blog is great jacki....you really are born to be a leader.....maybe you should get citizenship in this country and show palin and hillary how to do it!

Anonymous said...

wow... im glad you made me read that. very passionate. first of all, i love the way you wrote it. even i could understand most of it. what you said here was very inspiring. i've always wanted to be someone who would be remembered, maybe even make a history book (fat chance). but i don't know how to get there. your involvement and your knowledge brings you so close. help me! show me! i want to get involved too!
~ love kristi

patches17 said...

You step up, girl! It's all about speaking your truth. That's when you unleash the awesome gifts you have to offer.

As a lifelong activist who has never worked for a multi-national corporation, I'd like to support what you say, and push the envelope a bit further:

Many of us who have spent our lives in social change wonder:

Can real, lasting change happen EVEN if women are in leadership positions in corporations, hedge funds, investment banks?

From my perspective sectors that prioritize money, earnings, and shareholder rights above mission, talent retention, and community service will not unleash change and equity, no matter who is in charge. Individuals rise to greatness when greatness is the priority. Individuals do not rise to greatness when greatness is not even on the radar, or when greatness is considered a weakness that could be penalized.

An example:

Years ago I was fundraising from an executive at a large financial corporation based in NY. I was inviting her firm to make an investment into a group support women and girls? Her reply, "Even though I want to, I couldn't get support for that. And trust me, I need to choose my battles and this can't be one of them right now."

I pushed her some. I said, "Why isn't this worth fighting for?" She said, "Then I become the 'women's lib' woman and that will not help me in my work or career. I need to wait until I get higher up, I control money, then I will give."

From my perspective, even if she ran the company she would never give to women and girls. She would have shareholders to worry about, fears that men would try to find her 'weaknesses', etc. etc. If you don't stand up for something when you have the most to lose, you won't stand up when you have the least to lose.

After that visit, we became friends. Over coffee one day I asked her if I could dig deep with her. I said, "What's the point of having professional success- as a woman- if you don't use it to lift up other women?" She said, "I thought I would. But when I got there I got pulled into the culture. I played the game."

Those of us not in the corporate culture have been waiting for women leaders in that sector to change it. That has not be a realistic expectation. First, and foremost, our country would need to modify what we want our corporate sector to look like and do. Asking a handful of women to take on a sector that does not prioritize equality is setting up those women for failure.

Having spent my life in the non-profit and consulting sectors, I have met thousands- and I mean thousands- of great women who avoided the corporate sector because they did not see this sector as a venue for change. Maybe we have been wrong. Maybe if there was a critical mass, change could happen. What do you think?

I would love to see corporate culture be driven by mission and not by profit. Can it be done? (This is an actual question to all you smart women in the corporate sector. Do you think it can be done)?

I don't think women- or men- truly thrive in any sector that prioritizes profit over people.

With the fall of Wall Street as we know it, what is the opportunity? Can financial and investment institutions be rebuilt to be sustainable? Can women put aside their need for "first I have to do well then I can help others" and start helping even before feeling set in their lives?

From this activist's vantage point, success is unleashed when human rights serves as the framework for all of our sectors.

Today, I am hopeful. Because of the Wall street collapse and the events of the last few years, I see the potential for our world to shift our values away from money and personal security and toward working for the greater good.

The change we are seeking won't come from presidents of countries, banks, or corporations.

The change we are seeking comes from me and you.

A favorite quote that drives me on the darker days:

"The bad news: there is no key to the Universe. The good news: it was never locked."

Kathy

Anonymous said...

You are saying what we have all been thinking for so long! Enough male/destructive/egotistical energy - onto caring/nurturing/how can we serve energy!

Lori Soderlind said...

Wow, Jackie.
okay...3 thoughts: 1)what does the future of women's leadership look like? Sarah Palin. That sums up the difficulty of undoing what has been done in this arena and is the topic of many a blog, focus group, etc. 2) what is the true value of gold? I just wanted to chime in on that from a completely off-Wall Street point of view. I hate gold. I feel like the whole economy is based on 12th century mythology. and 3) Please give me directions on joining the revolution. I used to think I was in a revolution but it really did fail and I'd like to sign up again but I don't know where to start. You have a true talent for raising esprit des corps. Sign me up. Put me to work. Other than teaching those who don't want to learn or whose public schools have utterly and completely failed them (my work at a community college feels like Peace Corps work and I'm committed to it), I wonder what role I could play to help undo what has been done...
Keep writing!!

Karen Lea Aasand said...

Hi Jacki- Thankyou. I have been on the receiving end of unequal treatment since I started in business in the early 80's. Am still too frequently presented with evidence of this. As President of a startup it surprises me that I still see it! Keep up this good work.

Elaine Maly said...

Jacki: You need to take this message on the road! Thank you.

Ellen Maidman-Tanner said...

Dear Jacki,

I read with great interest your summary of an emotionally charged day, brought about through your years of experience and observation, and one hell of a period in US financial history. Charity/activism born of self-inerest is the best form of that enterprise, so the key, I believe, to a more humane and balanced world, including financing and investing, is to figure out what is in it for the guys. As long as the Golden Rule holds ("them that has the gold makes the rules") we will be hard pressed to see any lasting change.

I personally have no answers to the overwhelming absence of women in either positions of power or even in the posted notice of women who do have power and who have brought great change. Women do tend to live their lives in varied phases and their accumulated wisdom is not sought or valued to the extent yet that a good golf swing, clever networking or a stock tip is. As a senior female executive, I feel your pain.

Thank you for writing this up and for your efforts to rally more awareness and activity to address this issue. It has certainly given me food for thought on my resolutions for 2009.

Ellen Maidman-Tanner

Ellen Maidman-Tanner said...

Dear Jacki,

I read with great interest your summary of an emotionally charged day, brought about through your years of experience and observation, and one hell of a period in US financial history. Charity/activism born of self-inerest is the best form of that enterprise, so the trick to a more humane and balanced world, including financing and investing, is to figure out what is in it for the guys. As long as the Golden Rule holds ("them that has the gold makes the rules") we will be hard pressed to see any changes.

I personally have no answers to the overwhelming absence of women in either positions of power or even in the posted notice of women who do have power and who have brought great change. Women do tend to live their lives in varied phases and their accumulated wisdom is not sought or valued to the extent yet that a good golf swing, clever networkting or a stock tip is. As a senior female executive, I feel your pain.

Thank you for writing this up and for your efforts to rally more awareness and activity to address this issue. Your writing has certainly given me food for thought for my 2009 resolutions.

Ellen Maidman-Tanner

Debbie Porter said...

The biggest failure women have experienced is the failure to empower and celebrate other women.

Women are often times threatened by other powerful women. I think we are our own worst enemies. Women tend to be more critical of other women.

If we could only push aside competition, jealousy, and comparisons with each other - we could gain the momentum to move forward with greater momentum.

Anonymous said...

Jacki,

Well said! In my mind, I depict "Super Women" (i.e. YOU) taking charge and leading a cultural revolution. Your passion and desire for change comes jumping out of the computer. A must read. Indeed, we need change. Not sure I would use the word "failed" but I get your point. Yet, we have actually come a long way vs. our parents' generation. Who would have predicted a women presidential candidate 20 years ago? Who would have predicted a CEO running a Fortune 100 company 50 years ago? However, YES, we have a long way to go.

You are right! We need change! As you have stated previously, "Good Men, Better world." and I think alot of this starts at the home of raising "good boys" that become "good men." Of course, we cannot ignore the strong influence of media too.

Jacki,
I love your passion and vigor. I am also grateful that you make us all think and challenge the status quo and stretch us to the next level.

Yours truly,
yumi