Super U Podcast | 7 Super Tips with Larry Fink
Larry Fink, billionaire, businessman, and CEO of BlackRock gives us insight into how he creates company culture, what makes a company successful, and how he defines a good leader.
5x #1 Bestselling Author and Motivational Speaker Erik Qualman has performed in over 55 countries and reached over 50 million people this past decade. He was voted the 2nd Most Likable Author in the World behind Harry Potter’s J.K. Rowling.
Need a sneak peek? Below are the main takeaways from the episode.
Super U Podcast | 7 Super Tips with Larry Fink:
[3:10] Tip #1
“One thing I try to tell BlackRock citizens worldwide, and I gave a speech to our new incoming class of 230 young hires yesterday, and I said to them, “Here, I am running this company now, not quite 25 years. And I still spend an hour a day studying the world in the markets, if not an hour to an hour and a half a day. And I’m still a student, I am still learning today as much as I was learning 20-36 years ago when I started in the business.” So our job globally is about investing. And it’s about the transfer of information to our clients. Our job is to provide risk management services to clients. So that means you have to be current, you have to be up to speed, you have to be responsive. You know, so whether you’re an HR, legal operations, technology, if you don’t understand the world in the markets, what you’re doing is probably not in connecting with the firm me as a leader. That is one of the most important messages to everyone. That is my message to politicians. If you think you’re not a student today, in Atlanta you’re not going to know how to govern this country, right, and my message to employees is similar.”
[5:02] Tip #2
“As much as we may change our behaviors, the United States as a very wealthy country, as we may see Canada and Europe change their behaviors. There are many parts of the world that are just beginning their growth curve and their wealth creation. And you know, they’re not going to stop it, but it’s very hard for us to be judging them and their economic path and their lives the problem so we could do all the all that we are potentially able to do. And that will not be enough because so many other parts of the world are just added more and more carbons to our air into our earth. And that’s not going to change anytime soon. So we need to be fair and just, we need to be open-minded about how to do it.”
[6:48] Tip #3
“The core of any organization and certainly a core at BlackRock, which we commonly discuss is, is the foundation of culture. So, this is an organizational chart of how I think about the governance of BlackRock, you have to have a common culture that bonds everybody together. If you don’t have that common culture, you have this pod. And to be successful today, in the global capital markets, if you don’t have a common bond, a common culture, you’re going to have a very fractionalized organization, and you’ll probably struggle financially. And I’ll go into some of the firms that I think have been very strong in terms of building a common culture. Probably the most successful form on a global basis is Goldman Sachs. And they have this common culture that binds it together. And then I could talk on the negative side a little bit like Citigroup, Citigroup has done so many mergers, that there is not a common culture today. And I think this is one of the reasons why it’s struggling. So the foundation of BiPAP, the foundation of any firm is having this culture of excellence that binds all the individuals together.”
[8:44] Tip #4
“It is very clear to me and watching companies, and watching companies in this COVID environment in 2020, the companies that I most respect, some of those companies have had the best performance in their stock performance this year. And so more than ever before a long term purpose with companies that are focusing on all their stakeholders, Enriching their culture and builds this long-termism and it builds this culture of togetherness in an organization more than anything you can imagine. And I believe, more than ever before that those companies are the leading companies in every industry, and they and you see that in their stock performance because those leading companies are generally rewarded with higher multiples than their peers. And so it really, we’re really seeing more and more evidence of these companies that are focused on all their stakeholders and focusing on building long term ism. They’re really big winners. And you’re seeing the companies that are that that are navigating for the during the short term and pivoting all the time. They don’t have a Northstar and a mission to really build long term durable profitability, what I would say, and I think while we’ve been rewarded, just like I admitted, we were not doing enough related to diversity, and I was too optimistic in our movement, and I had to be much more introspective, and make the changes. I have built a leadership team, around my weaknesses, not my strengths. And it and more than ever before, I you know, I admitted my years and years ago that I’m not a scale operator. So if I’m not a scale operator, we have a pretty big scale firm, and we have to manage really efficiently. I needed to hire leaders and have people you know, my co-partners to be really good scale operators, I’m really good at strategy. I’m really good at building culture. And I’m, I think I’m really good at markets. But running the trades on time building the processes that I always believed in, and I was lived in it, but I was not the execute or those processes, I may have been the visionaries of what we need. And I. So what I would just say, Tony, it wasn’t me who made BlackRock really successful during COVID. It’s been some of my other leaders, who are truly excellent in terms of making the scale work, seeing the resiliency of our technology, and making sure that in this COVID environment. When we developed our technology, we never developed the technology that we’re going to have 16,500 remote offices worked. And so I don’t want to personally say, you know, I came up with some aha moment of my strategy that made us a better firm. I would also say when I see the asset management is changing so dramatically right now, and I’m seeing so many changes, you know, we have been really good predict, staying in front of our clients’ needs. And I think that’s probably the most important thing our client needs in this COVID world is more information. In this remote world, the need for information is even more important. And so we are more connected with our clients. We’re doing more zoom calls, more connections, we’re having more seminars. And so with a mantra stay in front of our clients. I think we have we’re actually in this COVID world even more connected with our clients and we were pre COVID. On an operational side, as I said, it’s my team that is really doing a great job and making sure our efficiencies are great, where we’re at as operationally as efficient as ever before. And then you know, having a Great Investor team in this environment is even more important than having information connectivity.”
[13:31] Tip #6
“I would just urge every student, as I urge my children, as they advance their careers was go into a career where you’re passionate about because it’s a passion that’s going to differentiate you don’t go to the best firm if you don’t believe you could be that passionate human being. Go to a firm that or an industry where you believe you’re you can be passionate about where you could just really identify and show yourself and differentiate yourself. I have in my 40 odd years I’ve seen so many young people go into careers where they thought they could make the most money. And if that’s your motivation, you’re probably gonna lose. It’s not about making the most money-making the most money should be an outcome. Not a, it should not be a priority. I mean, and I think that’s one of the lessons that I can tell everybody about BlackRock, we never had that passion, for making money. I would say all eight founders believed in building an organization. And all its founders were not that materialistic. Now, we all are fabulously wealthy, but that is an outcome. That was not a passion. And I see in finance, so many businesses, so many organizations. And I do believe there are parts of the financial ecosystem like hedge funds in some areas of private equity. People do that. With a motivation of making money, and, you know, I think what would differentiate a BlackRock from day one, it was all about client-centric client focus. And if we could meet the needs of our clients, if we get to help them achieve their financial future. All right, the outcome will be fine. And we live that mantra now for 32 years since we’ve been. Since we’ve been an organization, we’ve been public now 21 years, our stock, I think is up close to 5,000% and 21 years. Maybe more than that, now, I don’t even keep track, we hit an all-time high today as a stock. These are outcomes. These are not objectives. And Gosh, I would just tell everybody, as I told my children, go, where you’re passionate, where you’re inspired, where you can make a difference, the outcome will be better than then focus on where you can make the most money because that’s, and if you don’t like it, it’s not going to work, and you’re not going to be happy.”
[16:10] Tip #7
“I would say probably the most important thing that we did from the first day we started the organization was we framed every question, we framed everything that we were doing on behalf of what the client needs. And that sounds kind of hokey and phony, but everything in terms of our acquisitions or mergers, the way we’ve framed the company where we designed your technology, it was all done in a framework of what does the client need. And in addition, I must say now, in 30 years, I mean, this is probably the most amazing feat that I could talk about, in my career that in these last 30 years, I’d never looked backward. The trust that we have with our partners, the organization, the spirit of the firm, and the culture of the organization to try to constantly prove grow, stay in front of the needs of the clients. Focus on the totality of the firm, not any silos. After 30 years, I could proudly say we’ve been focused forward every day for 30 years.”
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The Super U Podcast is hosted by #1 bestselling author and Motivational Speaker Erik Qualman.