As the new Executive Director of the Aspen Institute’s Finance Leaders Fellowship, Kara Gustafson is mobilizing a global community of finance industry leaders for a journey that ignites their passion and directs their skills and talents toward solving some of society’s most complex challenges. Fellows include people like the CEO of S&P Dow Jones Indices, CFO of General Mills, a Managing Director at Morgan Stanley, the recently nominated Director of the CyberSecurity & Infrastructure Security Agency for the White House, and the Head of Enforcement at the New York Stock Exchange – just to name a few.
So, what does the finance industry – a sector often knocked for causing harm and distrust – and the leaders of it, have to do with catalyzing positive social change? Kara says: a lot. And she knows first hand what the potential is as a member of the founding team of Goldman Sachs’ corporate philanthropy work: A role she held for fifteen years that transformed the way the big banks made philanthropic investments. On this episode of the Value of Leadership, Kara shares what it was like to lead in this new movement that prioritized social return alongside financial return, and what continues to call her to this work.
You can learn more about the Finance Leaders Fellowship at agln.aspeninstitute.org/fellowships/financeleaders.
About The Value of Leadership
At the Aspen Institute, we believe leadership comes from those whose motivations are grounded in values and whose actions are rooted in purpose. That all sounds nice, but what does a values-driven leader actually look like? How does ‘leading with values’ change their day-to-day decision making? How do they react when they’re tested with a challenge? And how does it make them a better leader than the next person?
We ask our Aspen Global Leadership Network Fellows to look inward, to understand themselves, to challenge their thinking. In the new podcast, “The Value of Leadership,” they’re ready to get vulnerable with you, and share mistakes made, lessons learned, and how the values they’ve honed in on are expressed in their actions when faced with challenges. So, if you’ve ever questioned why you’ve done something that way you did or are trying to dig a little deeper and tap into your own values – tune in and learn from leaders who are doing just that.
The Value of Leadership is a podcast from the Aspen Institute’s Aspen Global Leadership Network (AGLN). AGLN’s mission is to develop authentic, high-integrity leaders. People who are committed to proactively confronting societal challenges, individually and collectively, in order to create a more just, free, and equitable society. And Fellows are putting their values to work all across the globe. To learn more about the network and the work of our Fellows, visit agln.aspeninstitute.org. And explore more episodes of the Value of Leadership here.
Episode Transcript
Samantha Cherry:
Thanks for tuning in to the Value of Leadership, a podcast where we connect with fellows in the Aspen Global Leadership Network, leaders from around the world, as they get vulnerable, share lessons learned, mistakes made, and how the values they’ve honed in on are expressed in their actions.
Today, we’re diving into the leadership journey of the woman at the helm of the Aspen Institute’s Finance Leaders Fellowship, Kara Gustafson. As the new executive director, Kara is mobilizing a global community of finance industry leaders for a journey that ignites their passion and directs their skills and talents towards solving some of society’s most complex challenges.
Fellows include people like the CEO of S&P Dow Jones Indices, CFO of General Mills, a managing director of Morgan Stanley, the recently nominated director of the cybersecurity and infrastructure security agency for the White House, and the head of enforcement at the New York Stock Exchange.
Samantha Cherry:
And that’s just to name a few. So what does the finance industry, a sector often knocked for causing harm and distress, and the leaders of it, have to do with catalyzing positive social change. Kara says a lot, and she knows firsthand what the potential is as a member of the founding team of Goldman Sachs’s corporate philanthropy work, a role she held for 15 years, that transformed the way big banks made philanthropic investments.
On this episode, Kara shares what it’s like to lead in this new movement that prioritize social return alongside financial return, and what continues to call her to this work.
Kara Gustafson:
When I first met the co-founders of the Finance Leaders Fellowship, Ranji Nagaswami and Chris Varelas, I immediately felt that this was an opportunity that was really the culmination of everything that I’ve done in my career to date both in the broad impact sector, but also the finance industry. I’ve spent the past 20 years sitting at the intersection of these two industries. And just prior to taking this role, I had founded my own impact advising firm, working with Fortune 500 and pre-IPO companies across a range of industries and sectors to help them understand how to connect their business mission and purpose and leadership to a broader impact and societal good. And before that, I had started my career at Goldman Sachs, I spent 15 years at the firm. And so from my experience there, I understand deeply the role that business plays, particularly the role that a financial institution plays in investing, and in growing societies and communities and thinking about the greater good.
Kara Gustafson:
At Goldman, I had a front row seat as an early architect in what is today a really growing impact space. I spent 10 years as part of the founding team who took the very early work of the Goldman Sachs Foundation back in 2007, 2008, and really pivoted it into a strategic high-impact multi-billion dollar philanthropic investing platform. And the work that we did there, we anchored our initial investments and programs in research and data and set out to find a white space where we could use our people, our capital, our ideas to invest in economic growth and create positive change in the communities where we were working and where we were living. This was a real pioneering move at the time, making this pivotal shift and how we were approaching this space in a very non-traditional way. One of the most pivotal moments for me personally was the day that we announced our first $100 million commitment to a new initiative that we were going to build from scratch, and invest in the economic empowerment of women, a program called 10,000 Women.
Kara Gustafson:
And I remember this day vividly, sitting in the Columbia library in New York City and listening to our chairman and CEO at the time, stand up and say that investing in women is smart economics. So that declaration fundamentally changed this issue from being a moral case, which of course it was one, to an economic case. That is what started to change the dialogue. If women around the world, particularly in developing and emerging markets were not participating in the labor force, were not receiving access to education opportunities, networks, capital, economies were not going to grow equally. And that has really framed how I think about the work that I’ve done in this space and continue to do, and how do I think about the impact that either I want to make as a leader or how organizations and leaders that I’m advising can have an impact, that their leadership plays a major role in stewarding these decisions.
Kara Gustafson:
And over the past 20 years, the space has really turned to data and research and understanding economic implications. And when you’re going to deploy these resources in a significant way, well, you have to have a solid business case to really back that up. Data presents a very clear picture, and this has been a huge shift. And philanthropy has had a major evolution, moving away from traditional forms of charity and writing checks and putting names on buildings and being compelled just by the moral obligation, today, it is viewed as an investment. And when you’re investing millions or billions of dollars, when you’re carving out a part of your team’s time or employee’s time, you’re going to apply the same investment lens as you would on any other investment decision that you’re going to make at that caliber. The difference here is how you measure your return, it’s not about financial return, it’s about social return.
Kara Gustafson:
So, what is the impact that you’re having on an issue, how is that supported by the data or the research that led you here? And so this mindset has really changed, and companies have started to, over the past several years, anchor in research and data to drive their strategic philanthropic investments and other investments when it comes to diversity, equity and inclusion, environmental responsibility, data and research are being used to understand, not just the impact that they can make, but the unique impact that they can make in a white space. This has been coupled with an accelerated shift generationally, the transparency that technology has brought along with it, and just the growing sentiment that with technology and generational shift coming together, that there is a larger role for corporations to play. That generational change was really one of the driving factors that challenged me when I was at my own inflection point after 15 years at Goldman Sachs, and I was thinking about where I wanted to go and what I wanted to do next, and where I saw new white spaces emerging.
Kara Gustafson:
And at the time we were going through a leadership transition at the CEO level. So I could have waited it out for the new CEO to come in and see what the next wave of innovation would be over the course of the next few years, maybe be a lifer and spend another 15 years at the firm, or I could have gone to do something entirely new and different and jumped into different size companies or working with entrepreneurial leaders. And so after building a platform where we invested 2 billion philanthropically, and 5 billion of the firm’s capital, I chose to go work with other size companies and to bring all of that to new organizations and new leaders and it’s been incredibly gratifying.
Samantha Cherry:
When making any big decision, a leader might have to deal with trade-offs, efficiency versus community, liberty versus equality. We asked Kara what trade-offs were necessary when it came to injecting social impact into business objectives.
Kara Gustafson:
Fortunately for me, I never really felt a trade off in terms of the work that I was doing at Goldman Sachs. We were early architects of this work. We had a lot of wind at our back. We had enormous amounts of capital, enormous amounts of resources, very smart and talented people, we had a global reach. We may not have been experts in entrepreneurship or women’s economic empowerment, but we had the ability to convene the best and brightest partners in this space. We had all of the tools at our disposal, and it’s what we did with that which was so exciting. Those 10 years really went by in a flash. When you think about trade-offs, what is it trade-off? I got out of bed every day, and was so motivated by the work that I was doing, that’s what fulfilled me.
Kara Gustafson:
What I was doing was new and innovative and groundbreaking. And to be part of an opportunity like that, it really feels like it can be a once in a career kind of moment. And so, I always, maybe it’s the optimist in me, but I’m always trying to think about what are those trade-offs and how do you make the most of them. I think it goes back to, my upbringing was pretty simple, growing up in a small town. And my parents really taught us the importance of an education, of hard work, and being kind and empathetic to people. And that’s what I bring with me anywhere that I go. And for me, that has led me down this path. I think about how can you lead through a lens of impact, how can you help others see that it’s not just about financial return, but societal return is equally as important.
Kara Gustafson:
And so, I think that those are the leadership traits that I really think about. I always think back to, Warren Buffett was on the advisory council of one of our initiatives, and he would speak a lot at the graduations. And I had the privilege to ride with him to one of the graduations. And he was telling me that he had never spoken at a graduation before, aside from Sing Sing the prison, which I thought was ironic. And the entrepreneurs loved sitting there listening to his story and trying to understand which business he was talking about when he talked about meeting someone when they had started their business with $2,000 in their pocket and sold it to him for 60 million.
Kara Gustafson:
But he always sort of talked about the idea of entrepreneurship, and the combination of entrepreneurship and the determination to succeed. And that sometimes you don’t have to be the smartest person in the room, you may not even know how to read or write or ever run a business before, but the determination to succeed can create some of the most success that you can have, the way that hard work and perseverance and the determination to find the solution and to create success, and to do it in a way that has a positive impact in the world is what has always motivated me. And now all of that has come full circle to the Aspen Institute and the extraordinary opportunity to work with our fellows on these issues.
Samantha Cherry:
Born out of the 2008 financial crisis, the Finance Leaders Fellowship was founded as a solution to build back the broken trust between the financial industry and society. Now with 87 fellows in 19 countries around the world, and about to select its fifth class, Kara sees the potential for the fellowship, a program that awakens values-driven leadership across the industry, to tackle the unique and compounding challenges facing all of us in 2021.
Kara Gustafson:
It’s interesting because when the finance leaders fellowship program was founded, when Ranji was coming out of her experience in the Henry Crown Fellowship, she was thinking deeply about the financial crisis and post-crisis, the trust that needed to be built and continued to be built between the industry and society. So much of that was focused on the aftermath of the crisis, the new regulatory changes, the industry at large, the huge lack of understanding between the complexity of what the industry is and does, and what society understands. The world is changing, we’re at a tipping point. And 2020 and 2021 has shown us that, whether it’s economic recovery from COVID-19, racial justice and equality, environmental responsibility and climate resilience, or an acceleration around ESG, we need the leaders who are part of one of the largest and most important industries, who understand and move the levers of capital, to be invested in and thinking about how they can lead with values and purpose, how they can use their seats and positions of influence to contribute more positively to society broadly.
Kara Gustafson:
And I fundamentally believe that if we don’t invest in and involve the financial leaders of the world, we won’t achieve the kind of societal impact that is critical right now. And so we are at this unique and pivotal moment, and in many ways, much more challenging than the one I was at Goldman. We have a whole new set of challenges today, typically it’s one crisis to focus the decade on. We have multiple moments that we really need to think about what the next decade looks like and beyond. And so again, the responsibility and potential is enormous. And this fellowship is really fertile ground to bring together leaders in the industry to wrestle with these questions and take action towards greater change.
Kara Gustafson:
I think what is most inspiring to see in terms of the work that’s coming out is the work that’s being done around racial equity and ESG. I think that what’s so unique and interesting about the Finance Leaders Fellowship is we have an entire industry going through the program, and so there’s great overlap in the venture projects that fellows are choosing. And we’re starting to see these clusters form around different ventures. And it’s exciting to think about the fellowships impact, of course on the individual level for the individual ventures, but that’s now starting to translate into a more macro narrative around efforts that are taking place around ESG, efforts taking place around racial justice and equality and other categories, but those are two that I think that there are really great things coming together
Kara Gustafson:
I think with any of the fellowships at the Aspen Institute, being a place where the institute at large is committed to creating a free and just and equitable society, that really translates into all of the fellowship programs, certainly the Finance Leaders Fellowship program. And we are really committed to thinking about how the leadership journey that our fellows are going on, can meet the challenges of the times that we’re living in, to play a role in thinking about what are the challenges that are being faced right now globally, whether it’s societal or industry, and how can we come together to use the industry as a force for greater good, and to cultivate a new kind of action through the work that they’re doing with their leadership impact ventures and in their day-to-day jobs as well. There’s a quote that always sticks with me and has, I think really in every twist and turn of my career, in the work that I’ve done, “It’s your road and yours alone, others may it with you, but no one can walk it for you.”
Kara Gustafson:
And those are Rumi’s words, those are not mine, but they really resonate with me because you have to take leaps forward in your career no matter what point you’re at in it. I think that can be an obvious statement, but for me, it’s really been important to always keep in mind. I was working in the finance industry and saw an opportunity inside of a large institution to have a positive impact. I had never really spent time in social impact before, but had taken that leap because I was so motivated by the work that we could do. No one had really recommended that role to me as I was thinking about what was next in my career. They were supportive, they were walking it with me, but I had to take that leap and do it for myself.
Kara Gustafson:
For me, I think that was a really great moment, in having an interest and realizing that I could participate in something that was going to build women’s education programs or small business programs, and this idea that providing new tools and ideas and epiphanies to the entrepreneurs that I was working with so that they could generate new roads that they wanted to walk on, and really creating this fertile ground for new ideas. That was exciting to me. And a fast forward all these years later, the idea of taking on this role in the Finance Leaders Fellowship, and taking these ideas and giving fellows space to reflect on their own road and their own path. We’re all walking together, but ultimately no one can walk this road for you. And so it comes down to individual reflection, and you have to be the author of your own story, and you have to do things on your own. And so the opportunity to give other leaders the space to think, the tools to write, and this place to spark new and entrepreneurial ideas and new ways is a huge privilege.
Samantha Cherry:
That’s it for this episode of The Value of Leadership. You can learn more about the Finance Leaders Fellowship at agln.aspeninstitute.org/fellowships/financeleaders. If you enjoyed this conversation and want to hear more about how the finance industry is making social change, check out our last episode, where we talked to four Fellows who collaborated to launch the National Black Bank Foundation and Fund, tandem initiatives nurturing black owned banks in order to close the racial wealth gap. And don’t forget to subscribe to The Value of Leadership wherever you get your podcasts.
The Value of Leadership is a podcast from the Aspen Institute’s Aspen Global Leadership Network, AGLN. AGLN his mission is to develop authentic high-integrity leaders, people who are to proactively confronting societal challenges individually and collectively in order to create a more just, free and equitable society. And fellows are putting their values to work all across the globe. To learn more about the network and the work of our fellows, visit agln.aspeninstitute.org. Special thanks to everyone who made this episode possible, Kara Gustafson, Joey Blumenfeld, Ashley Sillaro, Phil Javellana, and Colby Hartburg. I’m your host, Samantha Cherry. Thank you for listening.
