« Exchanges at Goldman Sachs

Why Does Goldman Sachs President and COO John Waldron View Himself as COO First and President Second?


John Waldron is a busy man. He’s almost a year into his role as Goldman Sachs COO and President, and he’s also a father of six. In this episode, Waldron demystifies his day-to-day and explains why he’s even more focused on executing on the title “COO” than “president.” “My role right now really is to first learn the firm and understand the inner workings of the firm, and so that’s a really operationally intensive job, thus the chief operating officer component,” says Waldron. “The president job comes into play more on an external basis where you’re out with clients, with governments, with regulators and other external constituencies where that title has real resonance.” Waldron also discusses how younger employees can identify and invest in mentors, as well as the importance of recharging out of the office. For Waldron, that means getting home for dinner with his family if he has to head out to a client event later in the evening. “I’ll have a little bit of peanut butter and jelly and then I’ll have a steak tartare later on,” he tells podcast host Jake Siewert. 

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
This is exchanges of Goldman Sachs when we discuss developments. Curly shaping markets, industries in the global economy, objects, Ewart globally, of corporate communication shared the firm. Our guest today is John Waldron Goldman Sachs President in chief operating off Sir John Joint Comin back in two thousand and prior to his current Rome, he was covered of our investment begging. Division on this episode will be diving into words, really liked to be presidency, O of Goldman Sachs. Some of the key strategic initiatives Johns August on some advice, young people and much much more John welcomed the programme. Thank you. Thank you. Haven't so talk a little bit about your background fastening career. What was the path to this job, so I started my career bear starts
which, in the early nineties, was very entrepreneurial farm, and I got a lot of experience at a young age Polly well before I deserved it and a firm like that. That was not as deeper or is well established. The firm Goldman Sachs and I read through a bunch of different jobs and investment banking, but a lot of them were in the capital markets, part of the business motion your business and alone, does so I had a background in leverage credit. There was deep there was deep. Their bare had a real expertise there. Why things I learn, particularly in my early years, working in leverage finance is the ability to analyze companies really looking at income statements, balance sheets, cashflow statements, an understanding how the financial statements work and how companies make money with the issues are with the competitive threats are really that analytical background on company performance for me very well work there until two thousand and then I came the Goldman Sachs in two thousand actually David Solomon, who I now we're forces C o the firm came to the firm a year earlier and
May I think you'd like coming out if you like the farm and could be a firm, you really enjoy in and learn a lot professional on executive in coming here, and so I ultimately made the switch and I came over. Then I would say my background. It bear was quite helpful because I was pretty entrepreneurial. I was pretty skilled and understanding markets and had spent a lot of time. Looking at companies now is pretty able to analyze companies, and I had a reasonably good experience dealing with clients at an early age. I was given responsibility to interact with clients to own clear relationships and be in a position where I had to be the interface between the firm and I am at a relatively young aid, and so I had that experience you are just in the back office. Crunching numbers I made a little doing. Tat was, I was more in the front office before probably deserves to be an affront office. But again a barrister earns you. They have more people in that scope, so it was good background when I came to Goldman Sachs. I learned a lot first of all by covering big companies because bears turns really would have focused more on small company. And I learned a lot about working on teams. I would say barrister
and had more of a soul, proprietorship kind of model. Where, if you were the banker you can have brought in the business, you prosecuted the business, you did a lot of it yourself. It wasn't a particularly fulsome team approach and government is all about. Companies on a team basis, and that really was Oki learning for me, and I learned a lot about how to swarm accompany with broad swathes of opportunities and capabilities of affirming common sex demystify for us, the role of president and seal. It's a very lofty signing title wars. It mean on a daily basis, tall slobber. What you're, typical weak might look like. I've been abandon this job about a year. The way I think about it. I actually think those two titles are somewhat different and I think about the job as chief putting officer first and president second, and what I mean by that is My role right now really is too first learn the firm and understand the inner workings of the farm across the different complexities of all the businesses that were in, and the new initiatives that were embarking upon
and to be valuable than trying to lead the firm and making sure that we execute against the existing businesses and the new priorities, and so that's a really operational intensive job. Thus the chief operating officer component, the president job, really comes into play more an external basis where you are out with clients, with governments with regulators and other external constituencies, or that title has real residence in your position on. The firm is employed to that constituency and they, like the title president and that bestows on you, a notion of being at the top of the firm inside the firm people, not really care about the tunnel present they care about the tunnel chief operating officer if you're actually doing the job. That way, and so I tend to try to build lean in
to the divisions and to the new initiatives and see if I can be of value and help to making things happen and otherwise wouldn't happen because of the role that I play and because of my knowledge and what's happening around the firm. So when you talk about the seal of job, you talk about executing making sure things are happening. How do you do that which is not inconsequential on a firmer the size and scope and make sure that were executing on those larger strategic objectives to which involve a fair amount of change and change management? One of the things that we started doing is actually getting together. The key leaders and the different divisions, together on a regular basis by weakly and really parsing the execution priorities between existing businesses and new initiatives and actually being very purposeful about delineating. The two were not taking her eye off the existing businesses. Cassettes franchises are strong their important and they need to be managed and cared for
in a very important way, verses this new initiatives which really are longer range kind of J Curve, investment opportunities where you can have a, return horizon, and you can start to really think about things over a three five, seven, ten european. That meeting is really Rhine in a bifocals fashion, where we think about existing business, new opportunities, whether synergies when the two and I really spend probably half my time on the existing businesses and half my time in the new initiatives and we try to go through a pretty systematic fashion where we are making progress and where we have problems in deficits and where I've got spend more time weekly or by Winkler monthly basis. One thing you ve talked a lot about is breaking down silos inside the firm which doesn't sound like the most glamorous work, but explain why that's important to you and how you going about doing it. While on the first day and our job David, Stephen, I put out a memo, they talked about one Goldman Sachs and really focusing on clients intercity clients at the core
that we do and serving our clients as one firm, which again sounds pretty simple and basic, and you would think we'd be doing that four hundred fifty years. And there is an ethos and the firm to do that. But where we observed was that the organizational structure of the firm was getting in the way of the ethos of. In terms of prosecuting that in the right way, so we think disallowing the farm really is about bringing everybody together to solve clients, problems or our own problems for that matter, whether it's in a technology platform, context or any other context in bringing the best of what we have to offer together across all the different disciplines of the firm to get to the best answer, and that seems again quite simple. But there's a lot of organizational cow suffocation,
if you well, that we ve gotta cut through to do that. You're right, it's unglamorous, but I think what we have is a real strength at the course. We have a cultured and ethos. What people want to be that way? Having Bennett barrister, I've only been one of the firm of my life barristers, would never been able to achieve this. I think a lot of firms in our industry wouldn't be able to achieve this. If we really successful in doing this, we are gonna be differentiated, because I think we have a cultural basis to want to work together to respect each other to work in the notion of getting the best answer for our clients and to be one, for. I think that is our cultural underpinning, but we ve got a throne least that capability and break down the sailors into in lending money I'm with clients knows the Clyde doesn't care how we're organised. They just want a solution to the problem, so you indeed and leadership team of set out certain goals, hurrying measuring progress against those goals. And how do you yourself see progress
One of the things were really trying to do is think long term in the context of the goals that were setting out, because it's very easy in a public company where you got quite a quarter, earnings pressure to be falling into short termism. In terms of thinking about what kind of progress we make how's the stock trading. What were earnings last quarter where they can be this quarter? and of course we have to live with some of those precious, you can avoid them. But I would say, in answer to your question, were really setting a three year running caught a three year path, as we think about our progress or business planning has now done through your basis. It used to be on a one year basis, so all the business units now think about their business opportunity, their investment span, their returns, their margins, their sales, growth, etc. All in a three year basis and every one of those initiatives that I talked about that were focused on has at least a three year plan in some cases is a five year plan or even longer plan or credit card. Joint venture with apple is a much longer than three year plan, because it takes a long time to build a businesslike that from
watch or transaction begging platform that were building and will launch in the first quarter of next year will have a much longer than three or horizon. So you can measure investment, banking on a three year plan and say: ok, we have an existing book of business and existing franchise. How are we making it better over the next three years on a new venture? It may be a five or ten year bell than so. We're setting out metrics were very focused on creating cape eyes and metrics and making sure we ve got real mathematical grounding where we can all people accountable, but are also trying to give people the space to make adjustments be creative, makes mistakes fail, we adjust and go for it and that's an important thing that balances and importantly that were constantly tinkering with the try to make sure we get right talk a little bit about worked with David. You vote together for a long time, both at their Annick omen for last. Nineteen
This has that working relationship evolved over time, a mean inside the firm, ass externally presenting a united front, but behind the scenes I know you have different views from time to time and you're not afraid to express those as a change with these new jobs David's, an extraordinary professional I've worked with him for most of my career. I have learned a lot from him. He's been a mentor to me, and so I really have great respect for what he brings to the table. We are different were pretty complimentary in the way we operate at it. We see things similarly in many respects, but we have different, towns and skills we bring to the table, so we do complement each other and so you're right. We will usually present a united front, but that doesn't mean we always started from a position of unity, but one of the things he and I feel quite strong about as if your leading an organization, whether it's a group of people, a business, a farm in the case now, leaving means. Creating a real path of people want to follow, which means, when you ultimately get to a place where you agree on where the path is, you should be united. There shouldn't be a lot of gray matter. You can disagree, you can kick and scream and fight behind closed doors.
You come out. You set a direction. People want to see and feel that their conviction and unanimity in the leadership behind that direction. The word pretty good at having are our disagreements, but close doors on those that tons of disagreements about which we, gentle We have a similar world view and we generally want to get to the same place and we generally have the same ethos about how we're gonna get there, but we may have different views actors on how to get there who the right people are to get us there in some cases, and so. We generally handles things more behind closed doors. We come out and we agree in a one side or the other was gonna prevail and then we get behind. Whatever side prevails and we go. You spend a lot of time on sea. As ceo running the business data, you also managed to travel. I still see a lot of clients what international markets, most focus on right now. I remember when I used to talk to hang Paulson a lot about how he spent his time all the way back to when he was running banking and before he ran the firm.
What things that he said to me. That still sticks with me that I try to keep my mind as I think about my travel schedule today. Is you have to look at where the big markets are where we can have a real impact, because that still the eighty twenty in the equation of where you can really move a needle- and I still I was United States cross- the whole of the United States is clearly the UK is clearly Germany, France and the group of countries on the continent and the major economies in Europe and increasingly its China and Japan. Fire had categorize were But in the vast Madrid my time it's the G7 and China and in essence most of my time is really spent trying to make sure operations and the key countries are working well and that our clients are feeling our presence in that meeting. The right people and I've got relationships with the key people that matter externally, whether it's in a government or with corporations or private equity firms are large and too
and then, in the case of a country like China, it's really try to figure out. Where are we going to go and how we gonna build a business and how we gonna get ourselves to be more important, more relevant and that market place inside the country and then obviously connected to our clients globally, connecting them back into China seized them Imma try to both as someone running the investment bank, but also as presents yellow. What is it that most business people are? Most Americans have a casual acquaintance of trying to miss when they're not spent enough time there. So I think it's a multi layer country- and you know I feel, like you- walked out of a meeting and that a real meeting happens after you leave. You know when you walk into the meeting and meet with a group of chinese executives, our government leaders, and its translated meeting and then you leave and then they go out another meeting and that's the meeting you're, not an insult me. You want to know now you want to know about inciting the key to figure out how to know about what happened in that meeting, which there is no substitute for.
Going there a lot and getting a sense for the new ones and building relationships where you can actually get some sense for what's happening when you're, not in the room. When I experience when I go to China is its translated, it's very formal, there's not a lot of new wants to the meeting, it's a pretty staged environment and then there's another set of discussions that
really is where the rubber meets the road, and I think if you got there a few times you fuck all. I had a good meeting every meeting as a good meeting. You not can have a bad meeting in China because the Chinese don't like having bad meetings, but there's plenty of things that happen in a meeting that wouldn't be too your benefit. If you didn't know about what is going to happen next, and so I think the key is to get to a sense were a place. We ve got enough of a relationship with somebody with. I can give you the nuance behind the scenes in the room you're, not in what major geopolitical issues a you must focus. I now see. There's a lot going around the world are busy right now, but what do you think will have the biggest impact on government over the longer term? If you think about the next five to ten years, if you call that the longer term, the? U S, China relationship in the trade discussions, but also more broadly, just the broader relationship, yet how it unfolds, particularly given the trumpet
patients policy, which is obviously a departure from prior. U S, policy towards China! I think that foreign away has the most global implications for from my Goldman Sachs. Has implications for our business in China obviously has implications for how multinational companies and governments react to that relationship. If I D pick one that would be it. The second, I think, is bricks which, on the surface, is not as big an issue, but it has ramifications for the whole of the European Union where we have significant operations, we ve got six thousand or so people in the UK at a big presence on the continent. I think breaks. It is the beginning of a reset of the relationship. Broadly in the European Union. Will thirty five percent of our business by most measures resides when so that is very important to Goldman Sachs to our clients. I would say that to be the second big geopolitical event that we're watching carefully, Sir John and Course year banking. Will you became a councillor to some of the most successful ceos really in the world. Do misgivings
and of advisory still get an opportunity to do it, and does that background help you in this current job I look back in my career. The most fund that I've had is really sitting was ceos and boards and chewing through difficult problems, whether to them in a problem or a capital markets. Problem once cases of personnel or other problem. It doesn't relate to a transaction council. Client is really one of the great joys of this business, and so yes, get to do it as often as I used to do it, and I do that aspect of it, but one of the good Benefits of this job is by virtue of my position. I actually get to interact with more scenarios and more president's and more executives and important positions that even identical our job, and so I still get to spend time counselling and now the council is a little bit different. It's not as much on transactions or deals. It's more on macro issues, and I'm things at the CEO worthy
I could have a rustling, with its will actually find. Some of those relations has become even more intimate than they would have been when I was more of an adviser on a transaction, so that's been quite beneficial, and sometimes I turned the tables now, and I ask questions really picking their brains on how they run their businesses. So I've had numerous conversations with executives about how they run our human capital organization, how they run their technology organization, how they think about silo position and their farms are they think of my brain,
how they think about technology, disruption, content, etc. I found that the counselling I was doing is actually serve as a pretty good baseline. For me, too sometimes turn the tables and ask the questions that I know I was being asked in my power life. As a banker, people talk a lot about the culture of Goldman Sachs. It's hard to understand less. He worked here, but you ve been outside the firm rabbit inside the firm for a long time, almost two decades. What do the things you most proud of inside the culture where some places that you think we need to change? What I love about our culture is its fundamentally grounded and respect, lots of communication and a collaborative perspective. People come to work here because they want to be surrounded by very, very talented people that are, desirous of doing important things in the world and they want to collaborate with those people to get a better outcomes. We take that for granted because that's where Goldman Sachs has been for a lotta years, most other firms have a hard time, assimilating and assembling that kind of a culture. So we ve got tremendous.
Vantages. I think back to your question on silos asian and bringing the four together, one of the things that we ve suffered from in the last ten twelve fifteen years. Maybe the crisis will accentuate this in that the notion that we had to play defence coming out of a crisis as we have got more vulcanised, we do operate in more individual units. The firm has gotten bigger. It's more complex were more businesses, it's hard to bring people together, target Hap into the vein of that collaborative ethos, and actually together and go. Do the thing that I think everybody wants to do so we have work to do they are, but we ve got a lotta raw material to work with, and I think gives us great advantage. You are running investment bank for a while. You ve made the transition now what's been the biggest surprise going from the business investment, banking division to the executive office, investment, banking, a great business, and it's done very well for a long time. But the firm is a lot more complex investment, banking and so for me, the hardest part. This transition is indeed
only been getting my arms around the complexity of the firm just to rob breath of businesses that were in of people that I have to get to know that I have to learn to both trust and have them trust me. You know it's just a very, very broad, complex carb and I'm getting my arms around it slowly but surely, but it takes a while, and I think you can't rush it and if you have to just a rights it and you have to go through the basis and so on almost a year ended up, and I think in your two and three I feel even more comfortable than I feel today. That's far and away the the toughest part, the transition. I think the thing that I've really been heartened by is I've. Yet a part of the firm. Why dont see really high quality people and a really high quality organization? We ve got bog innovation. We ve got challenges, we ve talked about in discussion, but we start with a base of extraordinary people. You go all over the world. You see people in every nook and creating the firm. It's a young, energetic, ambitious mobile.
Group of people that want to work together want to collaborate and want to win and want to make almost sex as good as it can be and want to be important in the world than relevant in the world than that again is a great advantage and we take it for granted, but I think it's a great advantage We talked about your career earlier. We started after college, but You got a liberal arts, education or the great liberal arts colleges in America. Talk about how the liberal arts education basically can be applied to a career finances. You have this Joker play the question because I'm a huge proponent of liberal arts education, although I did once I know that if I could come back what about an engineer that was easy to say that we have more spoke to my insecurity, of not understanding on the platform worth that we're doing and not knowing the engineering as walls. I wish I did my view as you can learn the technical stuff when you're in it.
Rob and you need to learn it. If you're, smart, you ve got a good brain, unwilling to read and listening and absorb you can learn lots of technical details, harder things to learn or how to solve problems, how to communicate. Engage how to be well read how to understand. What's going on the world, you know how to have a perspective on a point of that's a a horrifying to learn, and so I think that would liberal arts education does view as it gives you that broad apple you're too want to learn, what's going on the world and have a lot of breath and then try to four- how to assimilate all information and distill it down into something. This communicable to somebody else is a really import gale in this parliament, I find more more I'm in settings where I have to take a briefing memo and then go speak for three minutes on something that was seven pages and still it down into something that can be understood by another party and that calls on my liberal arts background there,
engineering and that that's just kind of learning how to read analyze, assimilate thinking about the problem and then communicated intelligent fashion. And so I think the education of a liberal arts student is a big advantage to lots of things, but particularly final. To communicate effectively. So I went to Middlebury College, where I spent for wonder for years those an english major was just up there recently and had a wonderful day and Middlebury prepared me exceptionally well for a grand Maastricht, What advice would you have other than Studier Liberal in college: would you ever young p? just starting out their career to go manner or elsewhere. Fine good mentors. All. Organisations like Goldman Sachs will have a formal mentoring programme and there is no harm in participating in those programmes but a lot of the mentoring that I think you gain and careers informal it. Somebody who takes an interest in your career, somebody that you work with a run into and form some relationship, take mutual interest and then, when you find a mentor couple mentor us, you have to invest in that relationship and it gets
Is it so I have a mentor, but if you talked, and once a year, you're not really getting much out of that relationship, I always felt like. If I had, somebody was taking an interest in me and I felt like they really could help me. I need to do, invest back and actually help them understand what I'm dealing with what my ambitions are. What man securities are what I'm trying to improve upon and then I get more of the relationship that foreign away to me is the most first thing I would say in the second thing I would say is ask a lot of questions. It's very easy when you come in as a young person from a prestigious college university to think you have a lot of answers in your well educated and you understand things and that you're expected to know right, the expectation of Goldman Sachs from a or any other prestigious farm. As you come from a great school your expected to now and in the early prettier crammed particular, you need to ask those so called them questions to get them out of the way to make sure you really have a grounded, because once you get to be more senior, you are expected to now, but as a
person you're not expected to know so that's important thing and then over time it mean that my job, I asked tons of questions, there's lots of things. People think I know that I dont know and I didn't one of the things that I'm pretty good at is asking I'm unafraid afraid of somebody single he's present or chief operating officer from how does he not know that? I better asked the question the first six months, because in your three, everyone is going to assume got his arms around that relate to figure out a way. I don't think you can ever stop learning the people that I most respect in the world are constantly asking questions and costly learning a costly growing, and, I think, that's a great scale bab. So at a young age you want to do it because you need that grounding in you get more senior you. They keep evolving and keep learning in the world. This dynamic, I mean, there's a lot more technology disruption today than they ever asmund before that wasn't the case. Ten years ago, when I was running a vessel banking, five or six years ago, it seemed a lot easier than it is today, and so you have to constantly evolve and be on top of the trends are able. If you want asked questions you be,
had cast host. So maybe maybe if this job doesn't work, I but most most of our shareholders and employees are hoping it does work out. You don't have a lot of time outside the office. You have to allocate it very effectively. How do you think about work? Life balance? for some of our employees, not just our young employees, but certainly some of our most senior professionals to how do you think about that issue? And how do you handle it yourself, they got the really important issue, not just for the young generation, as you rightly point out, but for any of us that want to have a long term career, and I still consider myself one of those people that wants to have still a longer term career. This is a marathon, it's not a sprint, and I think first of all, you need to take care of yourself and you have a balanced life. Otherwise you are going to make it as long as you think you're going to make it because in the early days it feels like you could go forever, and so I think it's important to have balance.
I that perspective, I also think you're more interesting to people, clients, your own employees and anywhere else you come into contact with if your life is richer and four than just Goldman Sachs, or just whatever your employer is and so on, hard to make sure for small that my life is more enjoyable and more balanced and more fall, and I also think that suits me in my career in terms of being better arrested, more able to kind of come to work charge up feeling really good about? What's going on in my home life and therefore feeling less distracted are stressed out about that when I come to work and I think Philippe more interesting to talk too, when I talk to people inside or outside the firm, because I have six children, I can talk about my kids and the time has been with my kids, I travel a lot. I read a lot in. I have lots of its own interests and it's important to be able to talk about those outside interests, otherwise, you're really just defaulting to macro a policy and Goldman Sachs, which goes as far as it goes, but you know in the third, fourth and fifth interaction, clients, kind of want to go into the next more interesting levels of human and our
The way I do what balance in my life is. I actually scheduled time with my kids, which, on the one hand, sounds depressing they have to actually schedule it. On the other hand, if I don't do it, it doesn't happen. So I have dinner with my kids many nights. I've six gives in total fork is under the age of ten and the wonder tat? I can actually get home at six o clock and have dinner with them from six to seven or seven thirty, and put some of them to bear But I can go on to a client, dinner and other dinner outside later, and so I have two dinners I've a little bit of peanut butter jelly and that I'll have a stake Tatar later on, and I find that that time for what's good for my relationship with my kids, but it's really good for me I actually reset I unwind a little bit. I get a little bit of perspective and then I go back out and I go back into Goldman Sachs Mode and that balance this as a microcosm is important to me
And then on the weekends, I'm really common driver driving, my kids around different sporting events or other cultural work, social events at their involved in and- and I find that really great time with my kids- I can watch him on the sports field. Sometimes I coach them. Sometimes I'm just an observer. One of my daughter's does acting and other things in the arts, and I love watching her. Do that and watching her go through the stresses of learning how to get up on the stage and That's really valuable time and agree sets me for the week. I had only been let you get home to those kids backs up research, and that includes this episode of exchanges. Goldman Sachs thanks for listening and if you join the show, we hope you subscribe and Apple podcast them leave a rating or a comment in for more from Goldman Sachs experts, as was influential policymakers, academics and investors be sure to check out our new podcast top of Minor Goldman Sachs US by Alan.
Nathan a senior strategist in the firms, research division. Thank this spot gas was recorded on September night. Two thousand nineteen, this podcast should not be copied distributed, published or reproduced in whole or in part. The information contained in this podcast is not financial research, nor a product of Goldman Sachs, global investment research. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty. As today
accuracy or completeness of the statements or any information contained in this podcast, and any liability, therefore, including in respect of direct indirect or consequential loss or damage, is expressly disclaimed. The views expressed in this pot cast are not necessarily those of Goldman Sachs and Goldman Sachs is not providing any financial, economic, legal, accounting or tax advice or recommendations in this podcast. In addition, the receipt of this podcast by any listener is not to be taken as constituting the giving of investment advice by Goldman Sachs too. That listener, nor to constitute such person a client of any Goldman Sachs Entity.
Transcript generated on 2021-09-18.