Wealth of experience
Saturday, 16 June 2007
Chrystia Freeland
This week, Barack Obama urged chief executives to consider the moral implications of the fact that many earn more in a day than the average worker in their companies makes in a year. His left-of-centre audience applauded enthusiastically - and predictably. More surprising is that the very plutocrats Obama targeted are pretty sweet on the Illinois senator too.
Hedge fund managers and private equity dealmakers - the Street's new royalty- seem especially smitten, helping the rookie to pull in a walloping $25m in the first quarter of this year, just $1m shy of the Clinton machine's haul.
Figuring out Obama's improbable appeal to the money men has become a favourite Manhattan parlour game. Is it shared entrepreneurial spirit? Could it be rich white liberal guilt? Recently, I came across a new explanation, and it is one that says a lot about how American business sees the world in this age of globalisation. My source is Byron Wien, chief investment strategist at Pequot Capital, who met Obama at a New York fundraiser and recounted their conversation to me. (Obama's spokesman did not get back to me when I asked him to confirm the exchange.)
Wien admitted to Obama that he had supported the war in Iraq. How, he asked, had Obama known it would be a mistake? According to Wien, Obama smiled and then "he said the difference between me and you is that you grew up in Chicago and I partly grew up in Indonesia. I understood that Saddam was a bad guy but I had some feeling for what an invasion would do to the attitude of the Muslim world to the United States."
In this era of Lou Dobbs, I'm not sure how much support an invocation of a childhood spent in Muslim Indonesia is likely to win among the crucial primary voters of Concord or Des Moines - particularly if the person uttering it happens to be America's first plausible black contender for the White House.
But Wien thought Obama's answer was "terrific" - "it showed that in spite of Obama's relative political inexperience, he may actually have more international experience than many of the other candidates." Indeed, Wien was so struck by the exchange that he has recounted it to many of his colleagues and friends, and "they think it was terrific too."
I suspect part of the reason this Wall Street crowd was so seized by the story is that it echoes its own professional experience of a world in which international know-how is increasingly important. For some time, a tolerance for jet lag has been a prerequisite for America's frequently-flying executives. But of late, many companies have been going further, moving big jobs overseas and promoting people who have worked abroad.
One of them is Paul Calello, the new boss of Credit Suisse's New York-headquartered global investment bank, who has also worked in Hong Kong, Tokyo and London. "It is not about just logging business trips to various countries," Calello told me. "You can go from the plane, to the hotel, to the meeting place and back to the plane, but it is a very unique and different experience to live and work in a different environment."
Jim Chanos, founder of hedge fund Kynikos, is even more blunt, warning: "I would worry a little bit that the person sitting in a skyscraper in Manhattan who thinks they've got China all figured out probably is going to be on the short end of the stick."
The bad news for America is that it may have some catching up to do when it comes to making sure that the person in the Manhattan skyscraper - or in the DC federal government cubicle - making decisions about other parts of the world has actually lived and worked abroad.
Dr Elisabeth Marx, of headhunters Heidrick & Struggles, recently studied the backgrounds of the chief executives of Britain's FTSE 100 companies. She found that in 2005, 79 per cent had international experience, defined as having had an overseas assignment. That marked a striking change over the past decade - in 1996 the figure was just 42 per cent. Marx is now comparing the FTSE 100 chief executives with the bosses of the US's Fortune 100 companies. Her research isn't complete but "initial signs" are that the Americans are less internationally experienced than the Brits.
Think of it as the weakness of power. "America is such a vast place that you can get very engrossed in the domestic issues," Calello admits. The rest of the world doesn't have that luxury. As Rashid Wasti, a Pakistan-born, British-educated headhunter now working for Egon Zehnder International in Toronto, explains: "The US for the past 20 or 30 years has been such a huge market that people could build their careers at home. The non-US companies had to learn to be international sooner."
American capitalists have figured out that the world has changed - expect USA Inc to globalise at least as rapidly over the next decade as UK plc did over the previous one. Surely the hedge fund guys are right to believe that if lived international experience has become a requirement for running an American company, it might come in handy in the White House too.
This week, Barack Obama urged chief executives to consider the moral implications of the fact that many earn more in a day than the average worker in their companies makes in a year. His left-of-centre audience applauded enthusiastically - and predictably. More surprising is that the very plutocrats Obama targeted are pretty sweet on the Illinois senator too.
Hedge fund managers and private equity dealmakers - the Street's new royalty- seem especially smitten, helping the rookie to pull in a walloping $25m in the first quarter of this year, just $1m shy of the Clinton machine's haul.
Figuring out Obama's improbable appeal to the money men has become a favourite Manhattan parlour game. Is it shared entrepreneurial spirit? Could it be rich white liberal guilt? Recently, I came across a new explanation, and it is one that says a lot about how American business sees the world in this age of globalisation. My source is Byron Wien, chief investment strategist at Pequot Capital, who met Obama at a New York fundraiser and recounted their conversation to me. (Obama's spokesman did not get back to me when I asked him to confirm the exchange.)
Wien admitted to Obama that he had supported the war in Iraq. How, he asked, had Obama known it would be a mistake? According to Wien, Obama smiled and then "he said the difference between me and you is that you grew up in Chicago and I partly grew up in Indonesia. I understood that Saddam was a bad guy but I had some feeling for what an invasion would do to the attitude of the Muslim world to the United States."
In this era of Lou Dobbs, I'm not sure how much support an invocation of a childhood spent in Muslim Indonesia is likely to win among the crucial primary voters of Concord or Des Moines - particularly if the person uttering it happens to be America's first plausible black contender for the White House.
But Wien thought Obama's answer was "terrific" - "it showed that in spite of Obama's relative political inexperience, he may actually have more international experience than many of the other candidates." Indeed, Wien was so struck by the exchange that he has recounted it to many of his colleagues and friends, and "they think it was terrific too."
I suspect part of the reason this Wall Street crowd was so seized by the story is that it echoes its own professional experience of a world in which international know-how is increasingly important. For some time, a tolerance for jet lag has been a prerequisite for America's frequently-flying executives. But of late, many companies have been going further, moving big jobs overseas and promoting people who have worked abroad.
One of them is Paul Calello, the new boss of Credit Suisse's New York-headquartered global investment bank, who has also worked in Hong Kong, Tokyo and London. "It is not about just logging business trips to various countries," Calello told me. "You can go from the plane, to the hotel, to the meeting place and back to the plane, but it is a very unique and different experience to live and work in a different environment."
Jim Chanos, founder of hedge fund Kynikos, is even more blunt, warning: "I would worry a little bit that the person sitting in a skyscraper in Manhattan who thinks they've got China all figured out probably is going to be on the short end of the stick."
The bad news for America is that it may have some catching up to do when it comes to making sure that the person in the Manhattan skyscraper - or in the DC federal government cubicle - making decisions about other parts of the world has actually lived and worked abroad.
Dr Elisabeth Marx, of headhunters Heidrick & Struggles, recently studied the backgrounds of the chief executives of Britain's FTSE 100 companies. She found that in 2005, 79 per cent had international experience, defined as having had an overseas assignment. That marked a striking change over the past decade - in 1996 the figure was just 42 per cent. Marx is now comparing the FTSE 100 chief executives with the bosses of the US's Fortune 100 companies. Her research isn't complete but "initial signs" are that the Americans are less internationally experienced than the Brits.
Think of it as the weakness of power. "America is such a vast place that you can get very engrossed in the domestic issues," Calello admits. The rest of the world doesn't have that luxury. As Rashid Wasti, a Pakistan-born, British-educated headhunter now working for Egon Zehnder International in Toronto, explains: "The US for the past 20 or 30 years has been such a huge market that people could build their careers at home. The non-US companies had to learn to be international sooner."
American capitalists have figured out that the world has changed - expect USA Inc to globalise at least as rapidly over the next decade as UK plc did over the previous one. Surely the hedge fund guys are right to believe that if lived international experience has become a requirement for running an American company, it might come in handy in the White House too.