Jacki Zehner On Women, Money, and Changing the World  » The Road Not Taken: What If I Never Left Goldman Sachs?

November 20, 2014

The Road Not Taken: What If I Never Left Goldman Sachs?

Originally published on LinkedIn Influencers, November 20, 2014. 

In this series of posts, Influencers explain how their career paths might have changed. Read all the stories here and write your own (please include the hashtag #RoadNotTaken in the body of your post).

Last month I turned 50, and when you mark a milestone like your 50th birthday, the celebrations are often accompanied by moments of reflection and introspection. I was no exception, and therefore it was a pleasant surprise when I discovered this month’s Influencer topic. LinkedIn asked, “What was the road you didn’t take in your career? What was the path you didn’t choose?”

So I sat down with a big cup of coffee and asked myself, “What if I hadn’t left Goldman Sachs in 2002?” I imagined where I might be now, 12 years later, and perhaps more interestingly, knowing who I am now and what I now know, what if I had become a part in the corporate story of a financial services firm that became the leading financial services firm for women? What would that firm look like?

First, allow me to frame my history at Goldman to outline where I was at the time of my leaving over a decade ago. I loved Goldman Sachs and my career there, and judging by my career trajectory at the firm, they appeared to love me as well. I started as an analyst in 1988, before becoming a trader in 1990, and finally a desk manager some years later. Of course, my primary responsibility was to make money for the firm, but I did so by building great relationships with our clients. In 2012, when Greg Smith’s oped appeared in the New York Times describing how the former was overshadowing the latter, I publicly wrote and spoke about how I believe it’s possible to do both. Doing both was the key to my success at the firm.

In addition to my day job as a trader and manager, I became very involved with many of the firm’s people efforts, including their nascent focus on investing in and accelerating women’s career development and leadership. This was the 1990s, a time when the dam burst open in terms of women coming to Wall Street, but at that point, and still true today, there were not many women in the upper ranks of any major firm. Goldman was no exception.

In 1996, I made partner. I was 32, and I became the youngest woman and first female trader to do so. Both prior and subsequently to that date, my performance reviews always described me as someone who not only did her job well, but was a true carrier and champion for a strong Goldman culture. Though I had never worked anywhere else as an investment professional, I believed with all my head and heart that Goldman was special, and I was proud to be an owner of the firm.

In 1999, I hit my first major career pivot point when I was invited to take on a role in the Executive Office where I would report directly to the two Co-Presidents of the firm, John Thain and John Thornton, and then-CEO Hank Paulson. My new role was to help manage the careers of the firm’s managing directors, and although this was a very exciting opportunity, it was not without risk. Although there was a rich history at the firm of moving senior people out of production roles into completely different positions, the outcomes of these moves could be wildly divergent. Sometimes these new roles were a big step up, while sometimes they turned out to be a step toward the door. I wanted it to be the former. I thought long and hard about whether or not to take this new position, and I had many conversations with John Thain about it. I wanted his commitment that my new role would not derail my career ambitions, and when he assured me that this would be a great career move, I took the job.

As part of this new role, I became a member of the firm’s partnership committee, which was responsible for guiding all of the people processes of the firm. Members of this committee were hand-selected not just because of the business roles they occupied, although they had to be part of the firm’s senior leadership, but for their reputations for being great managers and culture carriers. Our collective job was to focus on the people of Goldman Sachs, and my job in particular was to focus on our efforts to increase the representation of women in leadership roles, succession planning, performance evaluations, promotions, and leadership development. I loved it, and for the next year I threw myself into this role wholeheartedly.

In many ways it was a dream job. At 36, I had the time and support to go deep into not only trying to understand what made Goldman so successful, but how it might be even more so. We benchmarked best practices with companies around the world, brought in experts to guide our thinking, and brought forth ideas to improve our human capital management processes. One of the areas I was particularly passionate about was our diversity practices, because although Goldman already had a fairly sophisticated approach at that point, it was time to go deeper.

In 2000, the firm decided to embark on a very intensive full-year study of our corporate culture that included a firm-wide people survey, focus groups, interviews and more. It was headed by the now CEO Lloyd Blankfein, and a team of other business leaders, and our consulting partner was Towers Perrin, who did a brilliant job. The results were presented at the first ever two-day meeting of the management committee and the partnership committee on this topic, and attendance was mandatory. While the report revealed many findings, the key takeaway was that the world of Goldman Sachs was very different depending on whether you were part of the majority group (white, male, heterosexual, American) or if you were not (non-white, female, non-heterosexual, non-American).

Although Goldman got great reviews as a place to work in general, the feeling that the firm was a meritocracy was much more likely to be held by those in the majority group. Non-majority members were more likely to say that there were hidden rules for success, and that it was harder to get the right opportunities and more difficult to be sponsored. There was a high level of detail in the report, which ultimately lead the consultants to present Goldman as a firm that had “Two Worlds” or “Two Realities” depending on whether you were in or out of the majority group.

I can still remember the goosebumps I felt when the results were being presented. Although I cannot remember the exact words I used, I did at one point stand up and passionately invite the attendees to embrace the reality that Goldman was not a meritocracy, and that by accepting this, we could move to try and improve it and make it so. When we moved into small group discussions, my excitement quickly moved to concern. I could feel that the revelations were not landing on others the same way they were landing on me. Their dominant belief about Goldman being a place where the best deservingly rose up the ranks was being challenged, and it was clear that it would take a lot more than a PowerPoint to work through it.

It was not long after that meeting that I left the firm. It was a voluntary, planned exit that just happened to occur as the results of this work were being presented. I left for many reasons that felt right at the time, but I do often wonder: What if? Not so much what if I had stayed at Goldman, but what if I had stayed in the industry with the continued goal of being a full throttle champion for women’s participation and advancement in the financial services industry? What if I was a part of the story of how a financial services firm made an intentional, deep, authentic, long-term commitment to not only having women in leadership roles internally, but dare I say it, be the financial services company for women?

Jumping forward, little has changed in the 12 years since I have left the financial services industry. No woman has ever been the CEO of one of the major financial institutions in the world, including JP Morgan, UBS, Credit Suisse, Morgan Stanley, or the Royal Bank of Scotland. There are a number of powerful women in finance, but none sit in that coveted seat. The world of money is so male dominated that women comprise little over 18 percent of Senior/Corporate Officer positions, and in hedge funds, women only manage 3 percent of all assets. This makes me crazy, and while I could spend pages pontificating on the reasons why so little has changed, I offer this instead. I invite you to take the big leap with me, on my rainbow-colored unicorn, and see what my fantasy financial services firm would be like.

1) The firm would have a woman CEO who fully embraces her role as a woman for women leader, as well as just a leader. A just a leader is one who does not show a deep and authentic commitment to addressing gender bias, while by my definition, a woman for women leader does. She accepts and embraces the fact that she is a trailblazer, and she takes that role very seriously. It is her business to not just break her own way through the glass ceiling, but to ensure she is doing all that she can, and I mean all that she can, to break it for all talented women, for good.

2) The firm would have a minimum of 30 percent women on the board of directors of the company, and a stated goal of 50 percent. A few years ago, I helped start an organization called The 30% Coalition, which brings together organizations that work on promoting board diversity. There are dozens of these groups, and the coalition’s goal is to leverage their collective resources to accelerate change. The evidence is in: Gender and other forms of diversity are crucial to good governance and the long-term sustainability and profitability of a company, and while this may take a little time because board turnover is slow, the commitment has to be named and claimed. The leading financial services firm for women would undoubtedly be visibly committed to this benchmark.

04a056a3) The firm would be a “gender intelligent” organization, and in doing so, would have become a best place to work for everyone. What is Gender Intelligence? According to Barbara Annis and Dr. Keith Merron, it is “an understanding of and appreciation for the naturally occurring characteristics that distinguish men and women beyond the obvious biological and cultural, to include attitudinal and behavioral differences.” Just two months ago, I attended a two-day deep dive with them both, as well as other business leaders, to learn how Annis and Merron work with companies to help them become truly inclusive organizations. Their work is anchored in research that reveals that while it is true that on average men and women are different, it is by recognizing, understanding, and most importantly, valuing these differences that will allow companies to develop strategies that can unleash everyone’s potential. The outcome of having a gender intelligent organization is a more diverse and productive workforce at all levels of the organization. It is my belief that the main reason why there has been so little progress in terms of the numbers is because the dominant belief at most companies is that they are a meritocracy. In other words, nothing is really broken. There is no deep examination of corporate culture, but rather a long list of programs aimed at
“fixing” less qualified and able people. What a waste of time and money. My dream firm would have done the work to understand their culture early on, because this firm understands that change cannot happen without it.

4) The firm would be the leading wealth advisor for women. A recent global study by The Center For Talent Innovation called “The Power of The Purse” showed that women want different things from their money managers than men, and in general, women are very dissatisfied with the offerings currently available to them in the financial industry. Women now control 27 percent of the world’s wealth, and this number is rising fast, meaning that this is huge opportunity for the firm that gets it right. Right means being more relationship focused rather then product focused, having education as a key component of their offerings, and seeing philanthropy as a gateway to engaging women around their financial resources.

5) The firm would have a fully developed investment thesis around gender equality. Think back to when you may have first heard of the term BRIC, which stands for Brazil, Russia, India, and China. A Goldman Sachs professional, Jim O’Neil, first coined the term when he made the macroeconomic case for investing in these countries, followed by specific strategies and investment products that were designed to help the investor capitalize on the underlying thesis. By following this sound advice, you could have made a great return. Now think women. There are countless studies that have been done on connecting gender equality to the long-term economic growth of countries. When women have basic rights protected and have access to the resources they need to be productive in society, everyone benefits. To date, the abundance of research has yet to be fully embraced or fully framed in such a way that investment has followed. It’s time.

6) The firm would have figured out how to address and overcome one of the biggest issues facing women today — capital punishment. No, not that kind of capital punishment, but the challenges women face in accessing capital. Frustrated by the lack of capital in the hands of women, I embarked on a study in partnership with the National Council for Research on Women called “Women in Fund Management: A Road Map to Critical Mass and Why it Matters.” This report reviewed all the research that was available at the time to try and answer the question of why does so little money flow to or through women? In short, there is no good reason. None. What we landed on is a long list of solutions that could level the playing field. This fantasy firm would have embraced them all. One that was not mentioned on that list, but I now see as critical, is for women to become more active and engaged investors, especially as it relates to funding women entrepreneurs.

7) The firm would be a leader in impact investing. We are at the very tip of the iceberg when it comes to unleashing capital in a more socially responsibly way. While product has been created, it can be counted in the billions compared to the trillions of investment assets. Part of the reason why is that there has not been a big enough investment in upfront education. SSIR recently dedicated a whole issue to impact investing, which included a number of thoughtful reflections on the current state of the movement. Financial services firms need to be willing to make the long-term commitment to supporting the field building work, and my dream firm would be the leader in this arena.

Running a global financial services firm is complicated. Obviously. The goal of this article was not to address every business area that financial firms face, but rather to imagine myself as having taken a different path at a pivotal point in my career. A decade ago, when I was a fully engaged partner at Goldman Sachs, it was not only my dream to make them THE financial services firm for women, but it was actually my job to try and do so. I may have left Goldman Sachs, but my passion for women’s full participation and leadership in the financial sector continues. Right now, there exists a huge opportunity for a large financial institution to make such a commitment, and my hope is that one day, one actually does. Perhaps this roadmap will inspire them to do so.

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