Leading a Global Company... and France

April 21, 2007

Yesterday was one of the most exciting days during my time here at Yale. As part of Professor Jeffrey Garten's "Leading a Global Company" class, we took a field trip to New York City to meet with Lloyd Blankfein, Chairman & CEO of Goldman Sachs, and John Thain, CEO of the New York Stock Exchange. Leading a Global Company is one of the best classes I've taken at Yale and is (to my knowledge) the only class of its kind at a major business school. In addition to Mr. Blankfein and Mr. Thain, we've been treated to visits from an all-star list of CEOs and Chairmen including Sir Ian Davis of McKinsey, Tim Flynn from KPMG, Hank Greenberg (formerly of AIG), Hank McKinnell of Pfizer, Doug Conant of Campbell's Soup, and Dick Evans from Alcan. Now, back to yesterday's trip. The Goldman Sachs visit was impeccably orchestrated - Mr. Blankfein arrived exactly on time (I noticed that he sets his watch five minutes fast), and after our meeting we walked over to One New York Plaza for lunch and a tour of Goldman's trading floor. Mr. Blankfein certainly lives up to his typical characterization as an intense, witty man with a razor-sharp mind. I've been around a lot of great traders in my career, but his intensity level and mental agility were really quite remarkable. One of the most interesting vignettes from our meeting with Mr. Blankfein came when he mentioned that one of his major tasks as a CEO is to "sculpt, cajole and influence" the firm's decision-makers. Words like "sculpting" and "influencing" are not in the vocabulary of most traders (who tend to be extremely autocratic), so I was struck by the degree in which Mr. Blankfein has already grown into his role after less than a year as the firm's CEO. Our visit with John Thain was also a very interesting experience. In his three years at the helm of the NYSE, Mr. Thain has taken the exchange public and engaged in two strategic mergers that have allowed the NYSE to expand its electronic trading capabilities and significantly broaden its global footprint. Pulling off any of these changes at a venerable institution such as the NYSE would have been quite an accomplishment, but pulling off an IPO and two major mergers within three years is an astounding feat by any measure. The NYSE recently merged with Euronext in a $14 billion transaction that has created the world's first truly global exchange. This was a real coup for Mr. Thain, particularly given the entrenched protectionist sentiment within European political circles that has killed many other proposed mergers and acquisitions of "national assets" such as exchanges, power producers and defense contractors. I wish I had remembered to ask him for his thoughts on the upcoming presidential election in France...Euronext is based in Paris, and I think Mr. Thain must have known that a merger would have to be completed prior to the election in order to avoid becoming a major issue in the presidential campaign. The French presidential election hasn't received much press in the United States, but I think tomorrow's election is one of the most important global political events within the last decade. Most French citizens agree that La Belle France is facing an identity crisis, and this election will have a profound impact on the future of the European Union, global trade and defense policies, and immigration patterns in Western Europe. France also maintains a strong influence over West Africa and parts of Asia, Canada and the Carribean, so there are tremendous global ramifications associated with tomorrow's outcome (and the resulting run-off in May). If the center-right, pro-business candidate (Nicolas Sarkozy) wins, I expect France to beef up its efforts to attract foreign investment and water down many of the semi-socialist provisions that have contributed to the country's long economic decline. In an encouraging sign, the Socialist party's candidate (Ségolène Royal) is also supporting a number of changes that will make it easier for the French to begin attracting the outside capital that it badly needs in order to remain competitive in the 21st century. According to French dailies Le Monde and Le Figaro, more than half of French voters are still undecided on the eve of the election, so it will be interesting to see who prevails.

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Stefan Lewellen