"I left Goldman Sachs after 13 years. These are my learnings from Silicon Valley"
I left Goldman Sachs in 2017 after a thirteen year career. Since leaving Wall Street, I've been working in Silicon Valley at a company called Databricks, the lakehouse company (a large software company). I've learned a lot in my five years away from Wall Street and can offer three pieces of advice that the finance industry can learn from the tech industry:
1. Reward failure: Largely speaking, Silicon Valley is culturally designed to fail fast, while Wall Street is designed to never fail. Trying new things and testing new ideas is ‘modus operandi’ in tech. While conservatism is important on Wall Street given risk and regulations, there are ample opportunities for 'newness' and innovation in finance. For example, many parts of Wall Street still operate in the same way they did ten years ago with little changes. That's especially true in areas like investment banking. Innovation is only bred out of an ability to try and test new things, and sometimes, fail.
2. Fine-tune incentives: Unlike Wall Street, compensation for revenue roles in Silicon Valley has few surprises. Largely speaking, target earning-levels are communicated in advance at the start of the year and are formulaic, with specific KPIs that drive behavior. I see three benefits of this for Wall Street: 1) less politics, 2) tailor individual incentives to solve targeted problems, and 3) separates alpha from beta - you know who is capable of hitting core KPIs instead of benefiting from rising tides of a particular asset class.
3. Encourage candor: In tech, employees are empowered to speak up. No matter how junior they are, I’ve seen people freely question decisions, publically challenge executives and candidly provide feedback up and down the chain. I believe Wall Street leaders need to better foster an environment where candor is encouraged and rewarded. There are 17,000+ innovative fintechs out there competing fiercely with incumbents right now. Candor can no longer be curated by politics nor silenced by hierarchy.
I firmly believe that starting my professional life at Goldman Sachs was the best thing that happened to my career. To this day, Wall Street provides tremendous growth and opportunities for the motivated and ambitious. Bringing in some new ideas from tech could make it an even more rewarding place to work.
Junta Nakai is the global head of financial services and sustainablity at Databricks
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