Welcome to How Leaders Lead. Every week you get to listen in while I interview some of the very best leaders in the world. I break down the key learning so that by the end of the episode you'll have something simple you can apply as you develop into a better leader. That's what this podcast is all about. You know, I think every good leader feels that pressure to deliver. People want results and they want them now. But that can make it really easy to get short-sighted. Sometimes we don't really give ourselves permission to look down the road and think about the long term. But if you want success that's actually sustainable, you've got to learn how to take a longer view of things. And that's why I'm excited for you to hear from my guest today, David Solomon. He's the CEO of Goldman Sachs, one of the most renowned companies in the financial industry. Now look, David faces a lot of short-term pressures. But those don't keep him from looking ahead and taking a long-term approach. Of course, that's never easy. It takes a heck of a lot of courage. But in this conversation, you're going to learn how it's done and why it's crucial for any leader who wants to build trust and be a part of something that lasts. Plus, David's got some insights into the economy that you do not want to miss. He explains from his perspective what's really been going on over the last few years and what leaders need to be doing to prepare for what's coming. So let's jump right in. Here's my conversation with my good friend, and soon to be yours, David Solomon . David, I always like to start out at the beginning. Tell us about your upbringing. Sure. I grew up outside of New York City in Westchester County and Heart State, New York. I went to public high school in that area. My father owned and ran with a partner, a financial printing business that was based in Manhattan for most of my childhood. My mother was an audiologist. She had an audiology practice at the Berk Rehabilitation Hospital in White Plains. So I would say it was a very middle-of-the-road, middle-class upbringing. Tell us about a story from your childhood days that probably shaped who you are today. Sure. Well, I'm asked often about people that have had a big influence, and certainly my parents had a very, very big influence. My mom had extraordinary drive and extraordinary capacity to handle a lot. And my dad was just really a great mentor. My dad was someone who really believed that you didn't tell your kids what to do. You tried to give them a lot of rope, give them an opportunity to learn from their mistakes, and provide guidance and support as they navigated the world. And there's a story I've told a handful of times just where I think my dad had a profound impact on how I've managed my life, and in particular my time professionally over the years. This goes back to my being in high school and really having a lot of my plate and complaining to my father that I couldn't get it all done. And he told me to take out a calendar, an old-classed calendar with big square boxes you could write on. And he said, "Take the next month, and I want you to write down in each day everything you have to do each day, including sleeping, eating, going to school, studying, etc. Try to fill every minute of the day up and see where you wind up." And what I discovered through that exercise was I spent a lot of time doing nothing, sitting on the couch, watching television, just hanging out with my friends after school, and that if you actually were thoughtful or purposeful with respect to how you'd spend your time, there actually was a lot of time in the day to get a lot done. And that experience as a 17-year-old had a profound impact on my kind of re thinking how I spend my time. And I've carried it with me up till today. I think you've got to be very purposeful in how you choose to spend your time. And if you are, there's a lot of time to get a lot accomplished. That's great. What did you want to be when you grew up when you were a kid? Did you know what you wanted to be? You know, when I was really little, I wanted to be a garbage man. That's when I was really little, I used to stand on the corner and watch the garbage trucks go by. But I probably along the way, like most young boys growing up in the '60s probably want to be a fireman at some point. But I think from a more reasonable perspective as I entered high school and college, you know, I thought I would go to law school. I always, for some reason, my parents, my mother in particular, really thought at that point in time, you needed to be a professional. And there were two kinds of professionals, doctors and lawyers. And in that context, I just wasn't really that interested in the physical sciences in school. So the law seemed more interesting. But somewhere along the way, it didn't pan out that way. Tell us about the moment you decided that you wanted to take the finance track. Did you have that aha magic moment? The aha moment, they're tying it back to the story about going to law school. I didn't do great on my law boards. And probably I didn't do great on them because I was out the night before having fun with my friends instead of, you know, being in studying or being more focused. But I didn't do great on my law boards. And when it came time to apply to law school, I kind of looked at where I was and I said, you know, I if I really want to really put the effort into this, I got to get more focused on it. But I need a job. I'm getting out of school. And at that point in time, you know, finance was just starting. This was 1983. finance was just starting to expand the amount of hiring it was starting to do the markets. We're starting to open up. And a lot of banks were offering programs to come to New York and get some training. A bunch of my friends were moving in this direction. And I kind of stumbled into it because it was an easy opportunity to stumble into. And so I got a job out of school interviewing on campus at Hamilton College to go work for the Irving Trust Company, which was an, you know, an old line commercial bank that was running a training program. And I really didn't know a lot of what banking was or what finance would be. But it was a good job. And off I went and got some training and that kind of started me on my way. Is it something that you really enjoyed tremendously when you got into it? Well, that's why I think it really, it really changed. And I went to work at the Irving Trust Company and I went through the training and there were things about finance that I discovered. Oh, I have a capacity or an interest in that got interesting. But I went through the training for a year and then I got placed in the bank. And at that point in time is, you know, you'd well remember most people ought to go back to business school. And so I was going through the process of applying a business school. This would have been in 1985, early 1986, when I got a job offer to go work at Drexel Burnham. And so I looked at that job opportunity. I was like, this is pretty interesting job opportunity. Drexel was pretty visible and prominent. We all know the story of where it wound up, but it was pretty visible and prominent on the rise then. And I decided to take that opportunity and that opportunity kind of opened up over the next five years, a great opportunity for me to really understand what it meant to be in the middle of finance. I learned a lot. I grew a lot. I did very well. And that was kind of the moment when I said, you know what, you know, I like this. I think there's something here for me that's more meaningful. Now, of course, in 1990, Drexel Burnham went out of business and I had skipped business school at that point in time. So you know, it was clear that I then had to navigate what was next, but I was pretty hooked at the moment that I was going to pursue a career, finance at that point . I was in my late twenties and I was going to stay on that path. You know, people have to navigate their career in terms of what's next and you had this experience at Drexel. What process did you use or what advice could you give to someone on how to navigate what's next, where you go to, to leverage your skills and what you happen to really like doing? You know, it's interesting because one of the things that I see now is I have a lot of young people coming to me for advice and it feels to me like people are much more in a hurry to figure out what's the next step in their career as opposed to really experience the ride, you know, of their career. But I always try to advise people to think about one, are you learning? Are you learning, growing, gaining skills and experience that are really adding to what you know and are really broadening the lens that you look through professionally? Two, are you working with people that you like and enjoy and are you creating a professional network that you think is also, you know, opening up longer term opportunity for you? And three, are you having some fun? You know, both on a day to day basis and, you know, with those people that are really an important part of your life because you're spending a lot of time with them. And if those three things are in place 60 to 70% of the time, it's probably a pretty good job, you know, ride it a little bit. You know, don't worry so much about what's next, but rather, you know, see what comes your way because you kind of stay put and develop some consistency in what you 're doing. And so I'm a big believer in taking the long road, investing, good things happen when people, you know, take kind of a longer, slower perspective. I'm a little bit of a tortoise as opposed to a hair. What came your way after Drexel that excited you? Well, I found my way to bear stones. And by the way, you know, there's no pattern developing because, you know, two institutions that are no longer around today. But I found my way to bear stones and had a very interesting run for eight or nine years at Bear Stearns through the nineties where because of some of the skills and autonomy and the entrepreneurial nature of the industry at the time, it really was an industry that was driven by what you produced. And you know, I became a relatively big producer in Bear Stearns in my early th irties in the early nineties and rose to the top of that organization. And by my mid thirties, I was on the management committee of that organization and was running the investment banking business there, small investment banking business compared to Goldman Sachs, but I started to have some real success and get some real visibility around the industry. And it was through that that in 1999, Goldman Sachs came to recruit me to Goldman Sachs, you know, given some of the interactions I had with the firm during my experience there. You want to ask yourself that you mentioned you didn't have an MBA. How much anxiety did that create for you when you're coming up in a world where everybody seems to have an MBA? I mean, that's a very insightful question and the honest answer is at the time a lot. It didn't seem like an inappropriate choice when I was working at Drexel and everything was working and I was ahead of and making more money than my peers who were going to business school or just coming out of business school. But when Drexel went out of business and I started interviewing for jobs, I felt it and it made me nervous and I think it affected the choices that were available to me. I think if being in my late 20s and not having an MBA limited at that time some of the choices that were available to me, I obviously landed on my feet and found my way and ultimately and I think this is really true, ultimately experience and credibility became more important than what schools I went to or what degrees I had. But at the time I remember being nervous about it and I do think that's been tempered. I think the world is much more open. I think a place like Goldman Sachs is much more open than it used to be and in fact not only are we more open from a diversity perspective, we want people from a much broader array of schools and experiences in the organization than the organization did 20 years ago. But at the time that felt like a limiting thing. It was a less traditional path. Certainly in my generation it was a less traditional path. But you leverage your experience, you were a producer, you brought forward the great results and you were a very senior position at Bear Stearns. What made you ultimately make the move to Goldman Sachs which is at a senior level I know doesn't happen very often. What was unusual, it happens a little bit more today but at the time I was hired as a partner at Goldman Sachs in 1999 and at the time that was something that the firm did not do that often. But I think the leadership of the firm at the time, Hank Paulson at the time it was John Thornton and John Thane working for Hank. They really thought that the firm was going to become a public company. It was becoming a much broader, more global business and the firm would benefit from a diversity of experience and actually having some people that hadn't grown up starting right out of school inside the firm. And so at the time the firm went out higher to handful of people as partners and I got swept in in the context of that. So it was unusual but it was also, and again this goes to the long term thinking. Goldman just had in my own mind such a place in the industry that it was kind of like an opportunity to play for the Yankees. And I was 37 years old at the time. I really loved the industry and was kind of committed to a career in it. I saw this as an opportunity to really go work with the best and the brightest but it required me to take a step back professionally. I was on the management committee for firm. I had a very, very big job and I went to run a business that I had run, it was bigger than the one at Bear Stearns but it was a business I had run seven years earlier. And I started at a lower position in the partnership but I decided you know what, this is something that I think will be good for me with a long term view. And it turned out to be a wise decision. Absolutely, you know, you had, obviously you had senior sponsorship, you know, when you brought in as a partner but you come in as an outsider in a company that didn't really bring in partners from the outside. How did your peers view you and other people in the company? Was that hard for you? How did you adjust to that? You know, I think that actually turned out to be easier than I expected. You know, the culture here is extremely collaborative and I remember at the time feeling really embraced and really open. I think there was an ethos here in the partnership at the firm that we weren't going to do that often but when we did choose to do it, if we chose to do it, we were really going to embrace those people and make sure it worked because if we didn't embrace them and it didn't work, you know, we'd lose that, you know, that ability to attract people. Now in the context of bringing people along, I think I interviewed with 20 or 25 partners before I was hired. So there's certainly a lot of people that I spent time with and felt some connection or ownership but I, and actually went better than I thought although the one thing I would highlight, whenever the partnership got together, they used to grab us and they 'd say, "Let's get the outsiders. Let's get the lateral hires and let's get them to talk about what's different about this." And you know, I sat on those panels for 10 or 15 years before finally it progressed. I was, you know, I was no longer a lateral hire. It took you a while to be an insulator. Although still today, still today I am the CEO but a lot of people walk around, you're the CEO who was a lateral hire. So, you know, I don't think you ever lose that moniker or a Goldman Sachs. Now, you listen to this podcast so you know how much I love learning about leadership from some of the world's greatest leaders. 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You know, when you left Bear Stearns, did you learn anything from that experience that you think about, you know, when you're dealing with people and managing people and trying to keep your highest performance? Because obviously, Bear Stearns did not want to lose you. You were at the highest ranks of the company. So did you learn anything that allows you to manage or helps you manage the really top performers better? Well, the real contrast to Bear Stearns, the way Bear Stearns operated and Goldman Sachs and the way Goldman Sachs operated and it's actually, I think, one of the reasons. I mean, Bear Stearns was around for a long time, but it's not around today and Goldman Sachs has been around a long time and it is around today. And, you know, Bear Stearns never made the transition from being a very tightly controlled partnership to an institutional firm. And while Goldman Sachs always retained the partnership culture, it really spread out decision making authority and really held people accountable in a very horizontal, collaborative way. And you know, Bear Stearns didn't do that. Bear Stearns was run by a handful of people. It was extremely tight and as a result, you were either in this very, very small group or you weren't. It seemed to work fine when I was there, but I could really see the contrast in a collaborative partnership culture where you're really trying to empower the organization in a horizontal way. And, you know, I think I learned that in these kinds of professional services, businesses, that empowerment is super important. I'd also say one of the things culturally that this firm has excelled at is there's a deeply rooted culture of risk management that really empowers the control side of the firm to have an equal balance with the producing side of the firm. And I think that matters in the sustainability of these organizations. And so that's something else that I'd observed that was different than I think has been a real attribute of this platform. David, you followed some really legendary leaders and CEOs at Goldman. You know, what do you think are the defining qualities of the best leaders who have led the firm? Well, as people, they're all, we're all different. I was going to say they're all different, but now I guess I can include myself in that one-gust group, although I certainly have a lot of work to do to earn their standing. As people were all different, but I do think there are a handful of things that even though the styles can be different, their core to successful leadership in an organization like this, the first is you've got to bring people along with you. And you've got to find a way to communicate your vision and get people to exchange an open debate, an open challenge, but ultimately arrive at a conclusion as to the direction that you're going to go and want to go with you. And whether it's been Hank or it's been Lloyd or even many before that, this organization operates in a collaborative way that encourages open challenge, but also the need for people to come along. And I think that's a very important aspect of leadership. I think in the world we live in today, transparency and communication are increasingly important on the part of leaders. And you've got to be able to get your messages out in a real-time basis much more frequently than you used to. The transparency with respect to everything you do and everything that you say is much, much higher. And so I think you've got to be very, very thoughtful in your whole communication strategy and the way you make sure people understand the direction that you want the organization to go. And last, I think is the world shifting. And you can look at Goldman Sachs as an example of this. 60% of the employees here are 30 years old or less, 74% are millennial or Gen Z . They want to see people as human beings, as authentic in their leadership. And I think you just have to be much more open as a person to successfully get the younger generation that's coming up in these organizations to want to be a part of it. And they want to know what you stand for and who you are, not just what you're doing in the company. You do a lot of innovative things on that front. I want to get to that a little bit later. I remember that the late John Weinberg, he was former partner, he was on our Young Brands Board. I remember him being, and you came in as a partner, but I remember him being very concerned about Goldman moving from a partnership model to a public company. How do you think that's worked out? Well, I understand why John Weinberg had concerns because it's such a core part of what Goldman Sachs was. And Goldman Sachs held off longer than anyone else because all these businesses were partnership structures at one point. Goldman Sachs held off longer than anyone else in terms of making the switch to being a public company. But what I'd have to say is I think it worked out very well because Goldman Sachs wouldn't be Goldman Sachs if it hadn't gone public. The world changed the amount of capital that was necessary in these businesses to compete on a global scale changed. And there was no way that you could operate at a global scale in these businesses without being a public company. Your capital was not going to sustain it. So the choice became being a smaller niche organization or being a true global player. We chose being a true global player. And it was that transition that allowed that. I think the thing that we have done that's unique is unlike any other organization, we've retained the partnership in a public company structure. And I think it's been a huge asset to the firm. You know, Goldman Sachs is probably most famous for its historical client first culture. It's not so much about the individual, but all about bringing a team together to find the right answer for the client. How would you describe that culture today? And what are you really trying to do to evolve the culture to make the firm even more successful? Yeah. So it's still a hugely important part of the culture of the organization. And I'd say that focus on the client and really thinking about the client's interests is the true north of this organization. It's always been important, but I think the big thing that we're focused on now and really I've been trying to emphasize is the idea of delivering the whole firm to our clients in a much more unified way. So when you were young as the CEO of young brands, you generally dealt with our investment banking business. But as the world's got more complicated, we have a lot of clients on a global basis that deal with us across investment banking, across our market making businesses, across our asset management business, and that integration and the way we deliver that for a long time, the firm really ran in divisions. And you dealt even though there was a team approach in that division, you really dealt in silos in the firm. And so we've been really talking about one GS is core to our culture going forward. How do we deliver the entire organization to our clients and really get focused on how our clients experience the firm as opposed to how do we approach our clients? And we've been trying to really wrestle with ways to make that as positive an experience for our clients so they can get what they need out of the firm as possible. And that's really the true north of the organization at this point. You know, as a relatively new CEO, you've already built a reputation for being strategic and in long term focused. And I always know the people I worked with at Goldman talked about Goldman Sachs being long term greedy. And here you are, you're running this public company where you got to deliver the quarterly results. Can you really be long term greedy and run such a transactional business where the stock goes up and down? And how do you deal with that? Well, I mean, I'd start by the fact I know that's a very famous long time Goldman Sachs expression, but I'd say I don't like that expression. And there's a connotation to it that I think I'd use different words in describing how I want as the CEO, our organization to face clients. I want our organization to take a long term approach to solving our clients needs. And I'm convinced that if you take a long term approach and you build trust, good things will happen and we'll do just fine in those relationships. And that to me, I think centers it the right way. In terms of the company and the organization, we're making a bunch of investments. And I do think this is a change. The organization does have to to perform as a public company, make longer term investments and those longer term investments have a drag on our short term performance. And we're trying to be very transparent about that. But I think you've got to invest in the franchise. And when I look back at this company historically, I look at some of the great businesses we've built over the last 30, 40 years, we built an asset management business. But it took us really 15 years to gain traction. We built a merchant bank and investing platforms, but it took 10, 20 years to really build scale. We're building a transaction banking platform. I'm trying to think about it. How can we make these strong businesses over the next decade or two? And look, there's invariably going to be some pressure from investors and the market in the short term. But as long as we're striking the balance right and can show paths to delivering higher returns for our shareholders, I think the market will be accepting of our investments and the overall strengthening of the organization. I may have the number wrong, but I know you have about 40,000 employees around that. You have such a wide net. How do you make sure that you drive home the importance of values and ethics in the industry that you have to have that as job one? Yeah. And so we have about 36, 37,000 employees spread around the world. We're in 45 countries. And that's that is a core constant cultural focus of the firm. How do you make in different cultures and different places in the world the core cultural pillars of the organization? How do you make Goldman Sachs feel like Goldman Sachs as you get around the world? And actually one of the things I take pride in as I travel around the world and see it firsthand is it feels like Goldman Sachs. Those core foundational pillars are there. But I think you have to work hard at it. And I think it's got to be something that you wake up every day and you think about it. You get the organization focused on and look at our business. This is one of the challenges of our business, 37,000 employees bad behavior by one, dense our reputation. And unfortunately that happens from time to time. And so, you know, we spend a lot of time on training, on compliance, on really talking about why integrity is so important in building trust in everything we do. And that doesn't mean that the organization's perfect and it gets it right every time. And of course, whenever you have an organization to this size, there are people that do things that they shouldn't do. But you've got to be very, very firm about how you deal with that and where you stand on what's right and what's not. You know, your industry, David, as you well know better than most, it's so competitive and you compete against big, massive companies like JP Borgachase and then, you know, small investment boutiques. How do you see differentiating your company going forward? Well, in our core business is investment banking, sales and trading, and active asset management. These are businesses where there can be niche players that operate in some way, but to really have big businesses in those areas, you have to be a market leader, you have to be global, you have to be broad, you have to be deep, and we happen to be those things in those businesses. And so interestingly, you have people technology and capital, capital is a commodity, but the people are differentiating both in terms of what they do and the technology they can develop in the organization. And so there's a virtuous ecosystem when you're global and you're at scale in these businesses that actually strengthens your position. And we feel very lucky in those businesses to be in that position. That doesn't mean we take it for granted at all. And that doesn't mean we're constantly investing to strengthen it. But one of our advantages is we're a true global firm and we can bring that to our clients. And we have the resources to do that. I do think that the quality of our people and having an ecosystem with respect to the people in the organization where our clients really do believe that they're differentiated is something that's hugely important. And so we invest an awful lot in perpetuating that and making sure that that continues. And one of the things I take great pride in as I travel around is listening to clients tell me about how they value our people. And I also appreciate when they tell me where they don't think it's up to the standard that they expect from Goldman Sachs. And that's very, very important feedback. Third, I do think that we're good at building platforms and using technology to disrupt or change the way products or services are connected with or delivered to our clients. And I'm excited about some of what we're doing as we start to expand what we can do for consumers. And I think the digital platforms that we're building are quite interesting. I don't think we get a lot of credit for it right now, but that's just fine. But I feel very good about what we're building and how it's differentiated versus some of the offerings that are out there. And so I'm excited about that for sure. Now, when you look at the world, David, what countries and opportunities are you most excited about? I'm still very excited about the United States. And for good or for bad, and there's a lot going on around the world, one of the things that I notice as I get around the world is there are a lot of people around the world that want to get capital into the United States or want to get into the United States. And that's a real advantage for us and something we need to protect. And our model is not perfect here. There are certainly things we can do to improve it. There are certainly things we need to do to continue to improve the opportunity set for everyone across the country. But I'm a big believer in our system and the opportunities that are here. And so Goldman Sachs, while a global firm is a US company and just very committed to the opportunities to serve our clients here in the US, that said, we're very correlated to the big economies in the world. So we're very correlated to the broad European economy next, which is obviously a very, very significant economy. And we're investing in and correlated to China, although obviously the relationship between the US and China is more complicated. And I think they're going to be bumps in that over the next decade. But you know, you know, very well from Yum's experience, you know, the opportunity set to build big businesses in China, especially if the business that you're in is really open, financial services is really not open yet. But I think over time, it will become more open. And so we're trying to position ourselves for that. You're probably wondering when I was going to ask you this question because I know you get it from everybody. But you know, I've learned that you're not only a big time CEO, but you're a world renowned DJ, you know, tell us how you got into that. Well, you knew I had to ask you. Yeah, world world renowned would be a stretch. I am a competent house music DJ who because he happens to be a CEO probably gets more visibility than he deserves. I've always been into music and about 10 years ago, because I happened to be looking at what was going on in Las Vegas and how the business model was changing in these large hotels, because we were doing some banking work around that. You could see how big a business this was becoming this performance music business, you know, in whether it's in hotels or clubs. And I started asking questions of people in the music industry and I started learning about some of the music and I actually found I liked the music. I mean, I've loved all kinds of music and I've been very into music and live music for a long time, but I really liked this music. So I got introduced to some people. I got introduced to a pretty world renowned DJ named Paul Oakenfold, who's been around for a long time. It was very involved in the early days of house music and electronic music and club music. And he suggested to me that he would help me learn to DJ and introduce me to some other people. And I started doing it in my dining room on weekends for fun. And about five years ago, Paul was coming to New York to perform and he said to me, hey, you know, you're getting pretty good. Why don't you come play for an hour in a real live club called Marquis on the Upper West Side of Manhattan? And I said to Paul, I've never DJed in front of anybody other than my family or the dining room chairs. You know, can I really do this? And he said, come on, go do it. It'll be early. There won't be a lot of people there. And I showed up and I did it. And I really enjoyed it. So I started doing it as a little bit of a hobby quietly just for fun. And then, you know, as my job gave me more visibility a few years ago, I got outed and then I had to decide, okay, I'm either going to invest some time and do it at a higher level or I'm going to give it up and I decided try to do it. When I do get paid, the money goes to charity. I started producing some music. There are revenues from the streaming. That all goes to charity. I've created a record label called Payback Records and Payback Records. I'm ultimately going to try to get some other artists on it. But the goal is to produce some music and have the proceeds of that go to addiction charities around the United States. And so if I have the opportunity to do this at a slightly higher level than I deserve because of my business position, I'm going to try to do some good with it. That's great. You know, I mean this is a very high compliment. You're not cut from the same plot as a lot of CEOs that I know. You know, you really are authentic. I can see how in your world it's a 24/7 world that you could be criticized for being a DJ, but you've stuck to it. How do you deal with your authenticity and staying true to who you really are and what you believe? Well, I think you've got to, when you become a public figure in the context of running one of these companies, I think you have to decide, you know, who you are and what you stand for and what you want to be. And I've decided that I'm going to be me. I don't think if you walked around the halls of Goldman Sachs, anyone inside Goldman Sachs would ever criticize my work ethic, my focus, my intensity around helping Goldman Sachs with our great team here and move forward. But I still have a life. I'm still a human being. I put on my pants one leg at a time just like you do. And I mean, maybe you jump into them both, but at my age and your age, you know , one leg at a time. And you know, I have things that I enjoy and, you know, I'm at a different stage of life because my kids are grown. So when I'm not working and I have my own time, I don't have to be so focused on my kids and family. And so I have time to do these things. There are a lot of CEOs that play golf and I do play a little bit of golf, but there are a lot of Sundays when my friends are playing golf and instead of spending, you know, six hours to go play golf, I'll spend six hours in the music studio. And I get as much pleasure out of that, candidly more pleasure out of that than playing golf given the quality of my game. But I still, you know, it's, you know, you've got to find things to clear your head and I find this to be something that relaxes me and clears my head. It makes me more effective. And I've also, your authenticity point, it's something people can relate to. People love music. Everybody loves music. And I love the fact that I walk around Goldman Sachs and people who work here want to talk to me about music. They want to talk to me about Goldman Sachs too. But in some way, shape or form, you know, I hope it just makes everyone in the organization recognize I'm just like them. I just happen to have a different job. We'll be back with the rest of my conversation with David Solomon in just a moment. You know, this tension between long-term results and short-term results is something every leader faces. And I love Dave Cody's take on it. He was a CEO of Honeywell for 16 years and he led an incredible turnaround and he believes you don't have to choose between long-term and short-term results. This conversation might be just the paradigm shift that you need. You don't have to tell your boss or your investor, "Hey, wait for three years and then everything's going to be terrific." Rather, there are things you can be doing that allow you to perform better in the short-term so that your boss and investor are satisfied, but also does all the seed planting that's needed for the long-term. Go back and listen to my entire conversation with Dave Cody, episode 20, here on How Leaders Lead. David, this has been so much fun and I want to have some more with my lightning round of Q&A. What's one word that others would use to describe you? Resilient. What would you say is the one word that best describes you? Persistent. If you could be one person beside yourself for a day, who would it be and why? I mean, I've always had a fantasy to play basketball for the New York Knicks, so put me in the shoes of a great basketball player. I'd love to be a professional basketball player for a day. What's your biggest pet peeve? I like transparency. I like direct engagement. I like honest debate. At times, people don't really want to tell you how they feel. I just wish people would tell you candidly nicely how they feel and that people would be open to discussion and debate, even on difficult topics. Describe your last, "I can't believe this is happening me moment." My last, really, "I can't believe this is happening to me moment" is when my daughter told me recently she was getting married. I really, I just can't believe I can't believe I'm at a point where my kids are getting married. I also can't believe that I turned 61 last week, David. It's all in the root of how did this happen that I got to this point? What would I hear if I turned on the radio in your car? You would hear probably Sirius BPM, Station 51, or you might hear 70s on 7. It would be both ends of the spectrum. What's something about you, David, that few people would know? I'm a kite surfer. That's fantastic. Okay, that's the end of the lightning round. I'll get into a few questions here. David, you've been CEO now for four and a half years. Is there anything about being in that seat that surprised you? Something that you really didn't expect? I think, David, the thing that's really interesting about being a CEO and really sitting in one of these seats, and I know you appreciate this, you did this, as a banker, I always would talk to CEOs and they'd talk about sometimes the loneliness, the isolation, the fact that a whole bunch of the communication in some way gets cut off to you as you sit in those seats. What you're trying to do is you're trying to constantly open up channels to get people talking, to get the information. You've got to work very, very hard at it. I always would listen to other CEOs and imagine how they felt or what that meant in terms of the loneliness or the separation. I was really surprised when I actually got into the seat how real it is and how different it is. You can imagine it, but until you really sit there and feel it, it's just a very, very different experience. I think one of the great challenges for leaders is you've got to figure out how to do everything you can to change or modify that dynamic that generally just occurs as you sit in one of these CEO jobs. Anytime a leader comes into a new role, they always make changes. When you look back on your tenure as CEO, what's the change that you've made that you're most proud of? I think the thing that I'm most proud of in my tenure that relates specifically to Goldman Sachs is the firm has always been a firm with a real strong client orientation. There were parts of our businesses where there were opportunities to really enhance the client experience. Because we were enhancing the client experience, get a better result for ourselves as a business with our clients. The place where this has been most evident over the last few years is in our markets business, our fickin' equities businesses, our trading businesses. We've really enhanced the client experience, not that it wasn't good before, but we've really enhanced it. That's led to over 300 basis point improvement in market share and a very large mature business for the firm. It's really grown the business and strengthened the business. I think it's as a result, strengthened the overall performance for the firm. That was something that I think wasn't obvious more broadly that we made a very , very particular strategic objective. I think we've really executed on it. It's made a difference. I'm quite proud of the team and the way they've delivered on that. What would you say, David, is the biggest change you've tried to make that met with the most resistance? The changes we've made in the organization that have been toughest have been organizational alignments. Our business was organized a certain way four and a half years ago. We decided that we wanted to reorganize the business and the operating divisions of the business. We've actually made two realignments during the four and a half years. We now have the business in a place where I think it's really aligned the way we run about in the business. Those were big changes. Those obviously had an impact on different leadership groups and who was leading and how the business was set up. Those were tough changes to execute on. The biggest one is we had a number of asset management businesses in the firm and a big wealth business. We really thought that as an integrated platform, as one big client franchise, as an asset wealth management franchise, we'd be much more effective in serving our clients and we 'd have a much better ability to deliver for our clients. Pulling those different businesses together into one big broad business platform, now the fifth largest asset manager in the world, was a big change. It wasn't easy and there were bumps along the way. I think people really now see the benefit and I think we have a business that we can grow meaningfully, improve the margins meaningfully over the course of the next few years. I think it's set up very well. Those were some difficult changes because you're taking businesses that people ran, combining them. They're obviously winners and losers and corporate parlance in that. That stuff's never easy, but I think it was certainly worth the effort here because I think it positions the firm in a much better way to serve our clients. It's always gratifying when you make those big changes and you begin to see the fruits of your labor. Another thing that I know as a CEO you're focused on is the culture and enhancing and improving the culture, which is obviously at Goldman Sachs, it was already good . But as you think about a David Solomon behavior that you really wanted to drive into the organization, is there one that you're really trying to put a personal stamp on in terms of the culture? I think David, the culture of Goldman Sachs has been a great asset to the firm. The fact that we retained a partnership culture after going public when most other partnerships that were in the financial services business dissolved that ethos has been a huge asset to us. I really think the most important cultural thing that I've tried to do, and there are a number of cultural things we're very focused on, but it's really strengthening this partnership culture inside a big public company. And so really investing and making sure as the firm has gotten bigger that the partnership is special, that the quality of the people, the excellence of the people in that partnership continues in the same way it has for generations of Goldman Sachs, that the aspiration to be a part of that partnership continues in the same way. And it's not really a personal stamp of me. It's really more a stewardship of this very valuable aspect of Goldman Sachs that I think really differentiates the firm. And I'm trying to do everything I can to be the best steward I possibly can be of that piece of the culture that I think is so very important. I'm curious, David, what do you see ahead in the economy the next few years, and how do you think leaders should be preparing for it with this in mind? David, it's an uncertain environment. And I think you really, to kind of frame the forward from here, I think you've got to think a little bit about the journey we've been on and how did we get here, coming out of the financial crisis, we went through a decade of very, very easy monetary policy, even as economic conditions normalized after the financial crisis, there never really was the move from central banks around the world to kind of normalize monetary policy. And we were just starting to do that when we had a real out of the box, Black Swan event, the pandemic, and not so much that the pandemic, there have been pandemics before, there'll be pandemics again. But the thing that happened with this pandemic that was really different is we shut down the economic engine of the world all over the world. And we kept it shut down for an extended period of time. And that created real imbalances in the world. And the way we compensated for that closure of economic activity was with massive fiscal spending, fiscal stimulus to try to counterbalance some of the impacts of that broad shutdown. And so the result of that was a real imbalance in the economy that we're now trying to rebalance. It's not surprising that that led to inflation to start to creep into the economy. And then in early 2022, we had another out of the box event with a ground war in Europe, which obviously had enormous secondary implications to energy supplies, given policy decisions that have been made across the European continent. And so the combination of all this, along with increased geopolitical sensit ivities around the world, starting obviously with the US-China bilateral relationship, has really shifted the economic climate. And we're now resetting in a meaningful way. And so I think it's still uncertain how we navigate this. I would say the consensus view at the moment is becoming a little bit more dov ish that we can have a softer landing. If you and I were speaking last summer, I probably would have said to you that the chance of recession in the United States is very high, almost certain in Europe. And now, if you look at our economists, our economists do not see a recession in the US, although I tell you, I still think there's a real possibility of one and a much lower chance of one in Europe. And so there's a scenario we can have a softer landing, but we're tightening economic conditions very quickly. We have to rebalance the labor force. And generally, when that happens, you have a slowdown in economic growth. And so I think we have bumpier economic growth ahead. It's obviously deflated asset prices. And I think we're going to have a tougher time with asset appreciation ahead. The finance things is going to have a real cost to it again. We haven't seen that in quite some time. And so I think you've got to expect, even though uncertainty exactly how it plays out in 2023, I think you've got to expect slower growth, less asset appreciation, kind of a tougher economic slog for a period of time here. And even though we might navigate through 2023 in a softer way than people might have expected six months ago, I do think in the next couple of years, it's not going to be back to the races of what we've kind of seen over the last 15 years in terms of markets and asset appreciation. And so all of those are slight headwinds to growth. So I'm cautious. I'm generally a glass half full guy. I think we can navigate through this. We will get through it. I think the geopolitical sensitivities are higher and those are also headwinds to growth. But I think we just have to be a little bit more cautious. So as leaders are running big businesses, you can plan for a more dovish scenario. But I think you've got to be prepared in the way you operate your business for the outcome that we have some tougher economic times ahead of us in the next couple of years. And I think most CEOs are doing just that. They're being a little bit more cautious and a little bit more thoughtful given the way they look at that economic picture. But I will say, the US economy, the European economy, they're proving to be relatively resilient. Even in the light of a very quickly changing economic environment. You know, David, I know you spent a lot of time with small businesses and you hosted a, I think, around 10,000 small businesses in your New York headquarters in December. What specific advice do you have for people running these smaller businesses today? So small businesses are such an important part of the engine of growth in the US economy. So as you know, and you highlighted it, we run a big program called 10,000 small businesses that provides business education for small businesses. And over the last 15 years, I think we've had 13 or 14,000 businesses across the US go through it and keep a really good set of metrics on how they grow, how they hire, how they expand coming out of it. And the best advice for small businesses is to try to take a long-term view toward building your business. Sure, you understand the business and economic model of the business and the business can really drive a margin or an economic model. A lot of people start businesses because they have a good idea, but they haven 't really thought through how the economics of the business work. So make sure you really understand the economics of the business and the economics of the business can support your plan and try to plan, try to get help, try to find mentors, people that have experience that can help you broaden your experience. Most entrepreneurs of small businesses have certain skills, but they don't necessarily have the broad range of skills that are necessary as business as scale, whether it's finance and planning skills, budgeting skills. Think about how you can find ways to get mentors that can help you with those things and really make sure you understand the base economic model and the base economic model works and then pour your heart and soul into it because running a small business is not easy. Absolutely. Among other things, it takes an enormous commitment and an enormous amount of passion. I know you attend the World Economic Forum in Davos. What's a big insight that you've walked away from that experience? I just came back from Weff last week and I'd say the biggest thing that I get out of it each year is it gives me an opportunity and a very condensed period of time to share views with lots of business leaders and government officials. I would say in a two and a half day period of time, I had over 30 bilateral meetings. We hosted two dinners that had over 60 government leaders or CEOs present. In the context of that, it's a great opportunity to listen, learn and compare notes and try to get a sense of how people feel. My biggest takeaway is always kind of a gauge on how people feel at that moment . I would say that sometimes there's a correlation to how people feel and how the economic scenario plays out in the year. Sometimes it turns out not to be correlated, but it's helpful to understand that because if you understand how people feel and you start to think about the inputs that are driving that sentiment, it sometimes can give you better insight into economic activity broadly. I really use it as a way to both connect with people and keep those connections real. I think when you sit down with people in person, that strengthens the connection, the bond you have, but also to walk away with a sentiment view which helps me a little bit because it's in January, think about the year and think about the direction of travel for the year. As we close, I'd love to have you leave us with a story that highlights what's possible. If you enjoy the ride, whether in your career or in your life, you're a grinder , you're a competitor. The ever, what do you do to just enjoy what's happening? Is that something that you even take time to think about? I do think about it, David, and it's a great question and I appreciate you asking it. I first and foremost, I have two beautiful daughters and a wonderful family and lots of great friends in the world and those things have always been important to me through my journey and coming out of school and building my career and they always will be the number one priority. But I love my job. I love the business. I've always loved the business. I never really envisioned that I'd wind up in this seat. I think I wound up in the seat through a convergence of hard work over a long period of time and an awful lot of luck. Being more important because I think timing and serendipity play a lot in the way these things play out. But I've enjoyed the people I've met. I've enjoyed the intellectual stimulation. I try on a day-to-day basis to really relish the parts of the job and the parts of the experience that I love, which is really the interaction with people, the strategic thought process and really debating and thinking about the strategic agenda and then trying to execute on it. I try when it's more difficult and it can be, as you know, difficult from time to time, the tough quarters, some of the visibility that comes with it. I try to segregate those things and put them aside and just realize that the job is to wake up every day, to do the best that you can do, to be true to who you are. If you do those things, you're probably going to do just fine and embrace people, listen to people, bring in different points of view and try to do everything you can to just keep moving forward. What would be the one piece of advice you'd give to anyone who wants to improve as a leader? Leaders grow and evolve. There's not one leadership style and everybody's leadership style has to grow and evolve. I think all of us as leaders have to be very self-reflective and be willing to listen to not just the good stuff that comes in, but the critical stuff too. You've got to be able to not be overly sensitive to criticism and try to constantly figure out how can I evolve as a human being, how can I grow, how can I expand my capacity, and then you also have to be willing to make difficult decisions and understand when you make difficult decisions. They're not always going to be popular. Leadership is about taking people where they don't want to go. If you're taking them to a place where they're going on their own, they don't really need your leadership. When you have to make difficult leadership decisions, there are going to be times when people doubt and people criticize and you have to be willing to listen to that and absorb it and make sure you're doing the right thing, but you also have to stay true to your convictions and not let the noise take you off course. I try every day to listen, but I also try every day to have a lot of conviction about the things that we want to do and try to move forward slowly and steadily. It's not a straight line and it's certainly, it's a marathon, not a sprint, David, as you all know. David, every time I get the opportunity to talk to you, it strikes me from the conversation that we have, how modern your thinking is and how focused you are in taking Goldman Sachs in the future. You've got this great historic company, but I love your focus on being really contemporary and pushing the envelope with new thinking. I really appreciate you taking the time to share your thoughts and insights with us. Thank you very much, David. I appreciate it. Honestly, I mean, how many people have what it takes to be both the top CEO and a great DJ? I mean, that's a pretty extraordinary overlap of skills, but hey, David is a pretty extraordinary guy and he dropped some serious wisdom on us today, including how important it is for leaders to take a longer perspective. I know we all face short term pressures. It takes a lot of courage to bring long term thinking to the table, but it's key to sustainability and success, especially when it comes to earning the trust of your customers and building a strong company culture. So let me ask you, what's one practical way that you can take a longer view? Consider this, in your regular check-ins with your team, what percentage of your time do you spend talking about the immediate day to day stuff and how much of the meeting do you devote to discussing big long term goals and challenges? It's your job as a leader to facilitate long term thinking and that's a simple way you can get your team to look past the short term pressures and see what's in the distance. So do you want to know how leaders lead? What we learned today is that great leaders take the long view. Coming up next on How leaders lead is Oscar Munoz, former CEO of United Airlines. We can get caught up in ourselves, our intellect, our strategic mindset, our education and learning and how to present things logically and attack the mind and trying to solve issues. We also learn over time that the path to true engagement and true release of someone's discretionary effort is not only capturing the mind, but the heart as well. So be sure to come back again next week to hear our entire conversation. Thanks again for tuning in to another episode of How leaders lead where every Thursday you get to listen in while I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be. [BLANK_AUDIO] [BLANK_AUDIO]