BBS Leadership Lectures | Innovation and Change in Global Financial Markets | George Lee
22 March 2023The Leadership Lectures at BBS continue: the latest event at Villa Guastavillani featured George Lee.
Lee is Head of Innovation at Goldman Sachs, which he joined in 1994, and is an undisputed global authority on finance and investment banking. Prior to this position within the same company, he served as Co-chief Information Officer and Co-chairman of the Global Technology, Media and Telecommunications Group and Co-head of Investment Banking. With a BA in History from Middlebury College, whose Board of Trustees he now chairs, and an MBA from Wharton, Lee is among those who most helped create Silicon Valley as we know it today, shaping more than 20 years of technological innovation in the financial sector. The Leadership Lecture with George Lee also featured an exceptional moderator: Alec Ross, author, entrepreneur and technology policy expert, as well as professor of Geoeconomic Analysis and Geopolitics in Bologna Business School.
Lee’s Lecture began with a brief overview of his career path. And in his case too, as is often the case, fate played a key role and finance came into his life almost by chance, exactly like the move to the Goldman Sachs office in the technological heart of the United States: the Silicon Valley. “My girlfriend at the time, who is now my wife,” Lee recounted, “announced to me that she was moving to Silicon Valley and that she thought I would really like it there too.” That very week, Lee discovered that there was a vacancy in Goldman Sachs over there and immediately decided to take this opportunity. But if chance, or luck, is key, a career path like Lee’s could not be built without a good deal of ‘invention.’ “I treated my career as an entrepreneurial journey in which I had five or six different jobs at Goldman Sachs. Of those, I think I invented four or five. And I think it’s been important to be restless, to optimize work for your own growth, to have the right strength and mindset to walk into the boss’s office and say, ‘Hey, I think we really need to do this and this and I’d like to do that’”, recounted Lee during the Lecture.
Kind of like saying that you become a leader, in short, by also building a career as a manager starting with an entrepreneurial mindset. “I think the first principle is that you have to earn the right to get to define a new role for yourself. So, excellence in one’s daily work is a necessary condition to invent the next stage,” Lee said. “By working hard for six months or a year, excelling and putting your head down, you can create a reputation very quickly that will last for years. Similarly, if you start asking too early, if you seem more concerned about your future than the company’s present, you risk damaging your reputation and not having the currency to make a breakthrough.” But while the mindset of those aiming for increasingly tailored management roles must change and evolve, so too do leadership styles, which over time have shifted from a very vertical model to one that is more authentic and empathetic. “As far as I’m concerned,” Lee said, “I try to move toward a basic, more foundational philosophy, and let the various styles of the moment come and go.” A philosophy that is based on three basic principles: the ability to enhance people, in a very individual way; the ability to cultivate a certain rhetorical approach, a set of statements or principles to stick to, that are cultivated and reinforced over time; and generosity, in all its nuances, ranging from being able to give people a second and third chance, to being open to other ways of thinking, as well as the needs of others.
A challenge that, as Alec Ross pointed out, becomes even more difficult in the current global business environment. Goldman Sachs employs more than 17,000 people around the world, operating in culturally and geographically diverse contexts, but sharing the same corporate values. “I’ve learned a lot. Before these assignments I managed groups of 500 to 1,000 people. Moving up to 17,000 people was a real quantum leap,” said Lee, who has learned many valuable lessons along the way, such as the importance of developing personal relationships with the leaders who work for you, passing on values to them that they will then have to pass on in turn, and being able to recognize the contributions of individuals and rewarding them publicly. A path that begins with selection, increasingly technical, increasingly competitive, which for Lee today has the flavor of an all too mechanical and crowded process, to be circumvented by networking and showing one’s uniqueness: “I think it’s kind of like Hollywood, where you have to keep putting yourself out there and not get upset when things don’t work out. Casting the line a lot and hoping a fish will bite, at some point. And have the resilience, confidence and fortitude to try everything you can to get through the undergrowth,” Lee said.
One of the most engaging moments of the Leadership Lectures is when speakers start telling anecdotes from their past. Then, if the speaker is George Lee, it is easy to imagine what the protagonists of his stories might be: the holy giants of Silicon Valley, from Steve Jobs to Bill Gates, materialized in the Villa Guastavillani lecture hall, bringing with them 20 years of tech innovation history.
And returning to tech, it was inevitable to address the hottest topic of the moment: artificial intelligence and the possible developments it will have in the near future. A topic that is central to Lee’s work, whose job at Goldman Sachs is precisely to drive the thought leadership in this area. Keeping up, however, is not always easy because these are technologies that evolve very rapidly, in an unpredictable direction from what Lee calls “a linear march toward generality”. “The first computers,” he recalled, “were designed to crack codes in wartime. They were built with a very specific, task-oriented purpose in mind. Over time, with the advent of the PC, the Internet and so on, computing has become more generic, more flexible, more adaptable to human needs. Artificial intelligence is a real deviation, because these machines have general capabilities that rival those of humans, and I think I can say that they will soon surpass them. So, I think this is an absolutely momentous development.” A development that owes everything to mathematics, as the response of these machines is based on probability and it is numbers that define the answer, not logical connections between different topics. “So, it’s an interesting concept, as if the world is reduced to math and probability, which, if you will, is a bit humbling for a human being,” George Lee noted. Yet understanding how they work is the key to staying abreast and not being overwhelmed by phenomena like ChatGPT. “For us, in the short term, I think these things are a very helpful support and will be an opportunity in the future to elevate human creativity and efficiency.”
George Lee’s lecture ended with insider observations on two equally timely topics: cryptocurrencies and geopolitics, with a brief analysis of the situation in Europe.
“I often talk about the many faces of Distributed Ledgers,” Lee said. “There is a tendency to focus on the idea that cryptocurrencies are the only or most powerful expression of these kinds of technologies. But there are so many more interesting expressions and uses. Suffice to say that I have a team of about 80 people working on distributed ledger technologies, and only very few of them are involved in enabling our clients to trade cryptocurrencies. Most of them are dealing with a new computing paradigm, a new form of database that overcomes some of the historical challenges that have prevented us from sharing databases among a distributed, dispersed, distinct group of different people.” And here is the irony highlighted by Lee: “This technology mysteriously came about as a libertarian reaction to the global financial crisis, to governments and large financial institutions, but I believe that in the next ten years the biggest beneficiaries of this technology will be precisely the large financial institutions and governments, because it will enable them to solve some really important data problems and give them the ability to have a single platform that coordinates the activities of many parties in a secure way.”
Part of Lee’s job is precisely to develop, amplify, and project Goldman Sachs’ view on geopolitics and geo-trade issues, and that is why his theories on Europe were particularly interesting. “One of the theses that we’ve developed is that the last 30 years have been really extraordinary,” he said. “In general there’s been one motive, one force, one central trend in the world, which is the push toward globalization. Similarly, the world was defined, if not by unipolar leadership by the United States, by well-coordinated multipolar leadership in which, again, people were generally rowing in the same direction. Now that paradigm is being seriously threatened. There’s a hot war in Europe, something we never thought we’d see, and we’re going to see it again on a large scale. China is expressing itself more intrusively and aggressively around the world, and in particular, it is getting ready for Taiwan. And then the United States, in a sense, is retreating from leadership on the global stage at a time when the driving force of globalization is eroding. It’s a much more complicated world, where we have a fragmented, multipolar, confused world order, where the various blocs are going to split and reconfigure in a much more tactical, short-term way. This will cause a lot of strange bedfellows, and I think the question for the EU is, can it maintain its unified coherence in this complicated world? So far it has shown that it knows how to create a bloc around Ukraine, and it is a large and powerful bloc with enormous economic clout. The litmus test will be the ability to maintain that consistency in the face of a world where the temptation to break the bloc to tactically ally with someone on a single issue will be at an all-time high,” Lee concluded.
Read the other articles on the BBS Leadership Lectures:
Lihi Zelnik-Manor, Mauricio Macri, Stefano Venier
