GENERATION FLUX'S SECRET WEAPON (7)
In a world of rapid change and great uncertainty, the greatest competitive advantage of all may be at your very core.
BANKING ON A NEW WALL STREET
If
there is a segment of
the business world that seems hostile to the idea of a purposeful
mission, it is Wall Street. Big Finance has epitomized the outside-in
approach and celebrated the pursuit of maximum dollars. Wall
Streeters are not, of course, a breed without conscience; the Robin
Hood Foundation, to cite one example, raises millions for genuinely
laudatory programs. (And of course, the alleged purpose of banking is
to help fund projects and companies that create value and jobs.) But
in light of the economic meltdown, government bailout, and Occupy
Wall Street's critique of the 1%, even positive measures can feel
like whitewashing. Wall Street as a brand has become defined by
helping the rich get richer.
All
of this makes the tale of Sallie Krawcheck immensely compelling.
Krawcheck has had "the dubious distinction," as she puts
it, of having worked for seven different CEOs in the financial
services industry. She first attracted notoriety at Sanford
Bernstein, where she was hailed as "The Last Honest Analyst"
on the cover of Fortune.
Her reputation for independence was a key reason that she was tapped
by banking icon Sandy Weill to take over brokerage Smith Barney in
the wake of conflict-of-interest investigations by then–New York
State Attorney General Eliot Spitzer. Krawcheck's star continued to
rise, as she became CFO of Citi and then head of wealth management at
the firm. It's an impressive sequence, the tale of a woman in what is
still largely a man's world, a gadfly in clubby Wall Street, who
became an influential insider.
Now,
however, Krawcheck is not sure she was ever fully part of the club.
During the financial crisis, in 2008, she was fired by Citi. She had
lobbied Citi's board of directors to reimburse clients who had put
their money into a particular set of investments that had flopped.
After much discussion, the board agreed with her plan, but other
powerful executives at Citi were unhappy. A few months later, she
lost her job.
"If
you had asked me, when it happened, if I got fired from Citi because
I'm a woman, I would have told you absolutely not," says
Krawcheck, who has always resisted efforts to connect her
professional achievements (and setbacks) to her gender. "But
now, I'd say, not exactly."
Krawcheck
isn't alleging a misogynist conspiracy. She has come to believe there
is a more subtle problem confronting Wall Street. "I was invited
to leave," she says, "because I had a fundamentally
different business perspective than the powers that be." So
she's made it her mission to safeguard that different perspective.
Last year, Krawcheck took over an organization of more than 30,000
professional women called85
Broads and renamed it Ellevate Network.
"We survey our women every week, and we ask about their
priorities in taking a job," she says. "Gentlemen put money
at No. 1; women make it No. 4. Meaning and purpose are No. 1 for
women."
"At
Citi," she continues, "we sold alternative investments that
people thought were low risk, and they weren't. We were dumb. I
advocated for returning some of the clients' money. I felt like it
was the right thing to do and the positive business decision, to
demonstrate to clients that we would do right by them." But
returning that money hurt Citi's earnings, which didn't help its
already-troubled stock price. "I knew I would get fired."
Krawcheck
says her focus has shifted to helping professional women "not
because of hippy-dippy reasons, but because of the impact it can have
on businesses." She now believes that "what could have
averted the financial crisis [was] more diversity of perspective, of
opinion." She doesn't sidestep her own blame. "I was
sitting in those conference rooms, at those tables. I was one of
them." But she thinks that more voices like hers could have made
a significant difference. "All the research tells me that women
are more client-focused than men, more risk-averse," she says.
"The
financial industry, despite its bad reputation, can do a lot of good
in the world. But it has defined itself about money and not about
meaning at all," she says. "I believe it is good for
American business and for the global banking system to have more
diversity in leadership." With Ellevate, Krawcheck is both
following these ideals and capitalizing on a business opportunity.
"Women want mission and purpose in their investments. Companies
run by women--and capital devoted to women--have performed well,"
she notes. So she's launched an investment fund that will focus on
women-friendly, women-led companies and target female investors. "If
you are looking only at middle-aged white guys," says Krawcheck,
recalling the financial meltdown, "how'd that work out for you?"
BY
ROBERT
SAFIAN
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