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B-School Success
(Admitted to Chicago) |
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Interview: Jon Corzine
By David Wallis; Content provided by mbajungle.com
Political novice and
Wall Street wizard Jon Corzine rode to a Senate victory in New Jersey with a
liberal platform and a $60 million war chest. Prior to the election, the future
senator sat down with MBA Jungle in an exclusive interview in which he talked
about making that money, his B-school grades, and the difficulties of being a
capitalist with a conscience.
Like a peacock that has
just enraptured its mate, New Jersey senatorial candidate Jon Corzine struts
into Manhattan's '21' Club after another morning spent "putting the party
back together." If anyone can unify the state's disparate Democrats -- from
radical professors at Princeton to Reagan Democrats in Passaic County -- it's
the former chairman and CEO of Goldman Sachs, a man who can brag about boosting
his old firm's bottom line by billions of dollars, then, in the next breath,
crow about carrying a union card during his days spent hauling cement as a
member of Hod Carriers Local 709.
Corzine, who grew up the
son of an Illinois farmer, put himself through business school at the University
of Chicago. It's tough to imagine this nattily dressed bearded titan pushing a
wheelbarrow -- until you review his platform. If he beats Republican challenger
Bob Franks in November, Corzine pledges to support universal health care, a hike
in the minimum wage, and laws making it easier for organized labor to recruit
members -- all policies more popular in union halls than board rooms.
MBA Jungle recently sat
down with Corzine to learn how he prospered on Wall Street as a pro-business
liberal and shifted careers with relative ease.
MBA JUNGLE: What skills
did you learn on Wall Street, both as a trader and as the guy in the corner
office, that are now helping you in the political arena?
CORZINE: Being a manager
is all about managing people -- how you deal with people; how you interact with
people; how you motivate; how you set missions and objectives and get to
effective bottom lines. It's all about communicating and [building]
relationships. Very similar skills are required in politics. But the trading
room -- where I spent the first 10, 12 years of my life at Goldman Sachs -- is a
much more moment-to-moment experience, very competitive and intense. The
pressure you feel in the trading room, particularly when you're responsible for
larger positions, taught me to deal with high-stakes situations. So in the
political arena I'm not afraid to face the risk-reward relationships.
Early in the campaign,
critics poked fun at your stumping abilities; should corporate executives
undergo media training?
I thought I was perfect
back in the old days. There's a difference between being a business spokesperson
and political speechifying -- a different theme and a different focus. There's a
simplicity required in political speechmaking that doesn't often fit within the
context of what's expected of business spokespersons. It's important that
business people have good speaking skills; I never considered it one of my
greatest strengths, so I worked on that at Goldman Sachs.
Your campaign platform
promotes several sizable government programs. Why do you believe the government
can succeed, when as an investment banker you championed the power of private
enterprise?
I believed as an
investment banker, as I believe today, that there's a reason for partnership
between the federal government and private enterprise. I think we have one of
the most tangible examples of a partnership in the securities markets. The
Securities and Exchange Commission and the Federal Reserve Board are important
participants in making the United States capital markets the most important, the
most efficient, the most successful capital-raising function in the world,
because they have effective regulations. I think we don't have them in health
care, and I don't think we have an effective effort for the environment.
Some people saw you as
something of an odd duck on Wall Street, namely, a Democrat with a social
conscience.
Well, I don't know if
people thought of me as an odd duck; I think people thought I ran a pretty good
company. We went from making half a billion dollars in 1994, when I took over,
to over 3 billion in the year that I left. People thought of me as a committed
capitalist.
As a committed
capitalist with a social conscience, was there ever conflict between your
personal beliefs and your work?
Of course. If you are in a
complicated company in a global environment, you are never going to have
absolute purity of every activity within a company.
Can you elaborate?
Attitudes about tobacco. I
feel strongly that as a society we should try to regulate tobacco, particularly
as it relates to kids. Goldman had long-standing, deep relationships [with
cigarette manufacturers] going back to a different era -- I think it's important
to respect long-term relationships.
How did you reconcile
yourself with the fact that you didn't agree with all of Goldman's business
relationships?
There are frequently
ethical and moral concerns about business decisions. My approach was to try to
build a consensus for these tough decisions among a number of different people
who represented a range of ethical views and experiences. It's also important to
remember that questionable business decisions reflect poorly on and devalue your
franchise.
Which piece of
legislation will Senator Jon Corzine author that will have corporations like
Goldman up in arms?
I hopefully will be able
to explain my policies with such precision that they will not be up in arms.
There are all kinds of tax credits and foreign tax arrangements that are legal
and legitimate [ways] to shelter income but are not generally available to the
public; I don't know whether unfair is the right word, but they're not
necessarily just. As a representative of the public's interest, I think I can
challenge 100-year zero-coupon bonds and things of that ilk. That might be
frustrating to some of my friends at Goldman Sachs.
You've been criticized
by the media for record campaign spending. You've responded that you needed to
build name recognition. Can an unknown without deep pockets be elected today?
Yes, but unfortunately,
under our current campaign financing system, it frequently exacts a high price
in terms of indebtedness to the special interests.
If you hadn't entered
politics, how would you be spending your time?
I'm sure I would still be
pursuing business interests as well as public service through philanthropic work
or appointive office.
Earlier in your life, a
stint in the Marine Corps reserves sidetracked your plan to pursue a Ph.D. in
urban planning from UCLA. Why, when you went back to school, did you decide to
get an MBA instead? If you were to start over, would you still go to B-school?
Yes. An MBA provided me
with an understanding of a balance sheet and how one approaches management. It
also provided me access to a quality institution like Goldman Sachs. But the
reason I didn't go back to work on my Ph.D. at UCLA was that my wife was
carrying our first child, so somebody had to go to work.
Your former professor
the late Fischer Black remembered you from his class Financial Markets and
Institutions. "I gave him a C," Black told The Washington Post in
1994. "He spent more time talking to his friends in class than listening to
me." How important is schmoozing in business school?
[Laughs] I don't exactly
remember it that way, but Fischer did. He was a terrific guy -- absolutely the
most mathematical of instructors, and since I'm not a great mathematician, it
was a very difficult course for me. I don't think it had anything to do with my
social skills in class, it had to do with the degree of difficulty that he
brought to bear on the exercise. It's important to network, but the purpose of
going to business school is to get an education.
Every time a national
election rolls around, the public learns how well or how poorly the presidential
candidates performed in college. Do voters care?
Very little; I don't think
I've been asked what my grades were.
Consider yourself
asked.
I think I got a 3.1 out of
4.0 in business school, and I was a Phi Beta Kappa undergraduate, which means I
had a 4.5 or above out of 5. But I really don't remember what the grades were.
Leaving Wall Street has
meant you've been on the sidelines for much of the Internet revolution. Do you
feel you've missed out?
No. My organization was
involved in the technology world, dating back to the mid-'80s. We were the lead
underwriter of Microsoft in its original incarnation. Time magazine said I was
among the 50 most important technology executives in 1997 -- not because of my
computer skills, but because of Goldman's interaction with the technology
industry. We did the underwriting for the major companies like Yahoo. I was
plugged in, and I participated in the benefits that have accrued. That's
reflected in the valuation of Goldman Sachs today, which is certainly to my
advantage.
What changes do you see
coming around the corner on Wall Street?
I think we'll continue to
see the impact of technology. You will see much of the distribution function in
the securities business accomplished through the Internet, and the distribution
of information will become almost entirely technology-based. Price discovery
will be increasingly accomplished through technology linkages. There's talk of a
breakdown in traditional exchange operations because of the bringing together of
the trading books onto the Net. All of those things will change the face of the
securities business, but there will still be buyers and sellers and
intermediaries who provide capital.
Any career advice for a
newly minted MBA?
Make sure you are well
versed in technology -- and use that PalmPilot.
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