Former US Treasury Secretary Henry M. Paulson Jr. told Booth students not to focus single-mindedly on making it to the top. Find work you enjoy and seek the roles that will teach you the most, he suggested. Leadership opportunities naturally will follow.
“I never had an ambition early on to be CEO of a major company,” said Paulson, who led Goldman Sachs & Co. from 1999 to 2006. “Maybe if I had had that ambition, I never would have achieved it, because I would have done all kinds of things to position myself.”
Paulson outlined his career trajectory—from growing up on a small Illinois farm to steering the world’s largest economy through a financial crisis. And he answered questions from a group of about 300 Booth students at the Gleacher Center on February 1 before spending the
rest of the day leading one-hour coaching sessions for small groups of students in Career Services’ Executive-in-Residence program.
Since 2011, Paulson has been chairman of The Paulson Institute, an independent center located at the University of Chicago. The Institute is a non-profit “think and do” tank that promotes constructive collaboration between public and private sector leaders in the United States and China to address pressing economic and environmental challenges. He has been writing a book about US-China relations, expected to be published later this year. Paulson also is Distinguished Senior Fellow at the Harris School of Public Policy Studies.
Second-year student Scott Meyerson asked Paulson, who ran the Treasury from July 2006 to January 2009 under President George W. Bush, how he weighed decisions at times when other executives or public opinion opposed his choices.
“When you’re making a decision in a real crisis, you don’t worry about public criticism,” Paulson said. “The one thing you’re focused on is how you prevent disaster. You always need to trade off an imperfect decision with what happens if you do nothing.”
In 2008, as the largest US banks teetered on the brink of insolvency, Paulson worked with Congress to create the Troubled Asset Relief Program, or TARP. Originally set up to buy toxic subprime mortgage securities from banks, TARP eventually was used to inject capital directly into banks, automakers, and insurance giant American International Group.
During the crisis, Paulson sometimes was criticized for shifting his tactics, but more recent assessments have credited the former Treasury Secretary with heading off catastrophic damage to the economy. An October 2012 report from the Congressional Budget Office estimated that the federal government will recoup all but $24 billion of the $417 billion disbursed through TARP. The capital invested in large US banks has been repaid with interest.
Paulson's path to the top of his field was indirect and idiosyncratic. At Dartmouth College, a school he chose for its rural setting and where he played on the Varsity football team, he disliked his economics classes and majored in English. In 1968, after drawing a low draft number, he applied to the Naval Reserve Officers Training Corps. That move led him to Harvard Business School, where he met his future wife, Wendy, then a senior at Wellesley College. He talked his way into a summer assignment at the Pentagon to be near her in Washington, DC, before his second year of business school.
Next came a stint at the White House, and then Paulson jumped to the private sector, choosing Goldman Sachs over other investment banks because the higher-ups promised the Barrington, Illinois native that he would never have to move to New York. From his post in Chicago, he built up Goldman's Midwest portfolio, eventually working his way up to CEO.
Paulson turned down the Treasury Secretary job three times. "There were two-and-a-half years left with a president with a 28 percent approval rating," he recalled. But Goldman board member and former Sara Lee CEO John Bryan convinced Paulson that his country needed him.
“When they came back the last time, I remember thinking, there are no dress rehearsals in life," Paulson said. "One of the things holding me back from taking the job was fear. As soon as I recognized that's what it was, I said, ‘I'm going to plunge.’” —Amy Merrick