In her new book international financial expert Sandra Navidi describes and analyses the world of superhubs, the most powerful people in the world of finance, and their networks. Speaking to finews.com, the New York-based German expat, explains how superhubs operate, why they are virtually invincible, and the risks they present with regard to the system.
Mrs. Navidi, it's the week of the WEF in Davos. One of the most important meetings of the superhubs, the global financial elite you describe in your new book. Do these meetings affect the economy and society?
Yes, they do. The WEF has the status of an international institution for public-private cooperation, similar to that of the Red Cross. It is an efficient meeting platform for leaders and decision-makers from all over the world, who set the agenda, catalyze trends and influence the zeitgeist. Thus, although its participants don’t make internationally binding and implementable decisions, the Forum does have far-reaching nuanced and subtle influence.
The concentration of business people in one place – no wonder that conspiracy theory mushrooms. With no reason at all?
Conspiracy theories are uncalled for, though I do understand concerns. The aggregation of power in one place has justifiably become suspect to the 99 percent, who have not participated in the globalization gains. But the WEF’s impact on global policy and developments is often overestimated.
«The WEF can render an important contribution to the overdue realignment of our system»
Networks can be a force for good and for bad, and it is generally constructive for people to congregate, communicate and cooperate. In that sense, the WEF can render an important contribution to the overdue realignment of our system, particularly in view of dramatically increased geopolitical risks.
Still: You describe an extreme concentration of power – very few people in the same network can make decisions about everything. How dangerous is that?
Pretty dangerous, and the social stratification and resulting fragilty we are currently seeing are manifestations of that. Generally, systems that become too homogeneous become prone to malfunction, and when they don’t correct themselves, fail. Here, we have a microcosm of the same type of people, who all have the same education, the same information, think similarly, and operate interact with each other in echo chamber.
«It’s imperative to decrease the 'opportunity gap' and increase diversity»
That can lead to what I call «executive contagion», sort of like human intellectual, factual and actual contagion that leads to all of them acting in the same way, causing the system to become more lopsided, while disabling corrective mechanisms. The financial crisis and the increasing wealth disparity are good examples of these self-perpetuating dynamics, and the failure of the necessary checks and balances.
Based on your research and personal experience, who would you say is currently the super-superhub, most important and most powerful person in the financial community?
There is no one single person, who is the most powerful. On a relative basis, central bank governors are immensely powerful. The chair of the Federal Reserve is probably the most powerful person in the US besides the president. But politically connected superhubs like the CEO of J.P. Morgan, Jamie Dimon, BlackRock’s CEO Larry Fink, and Blackstone’s Steve Schwarzman, also have great power. They are powerful individually, but their ultimate power results from their ubiquitous networks. Like I say in the book, in some respects the networks are almost akin to a global supragovernment.
Do you count Swiss bankers to this network of superhubs?
Yes, of course. Although Switzerland is small, it is a powerful financial hub. The head of the Swiss National Bank, Thomas Jordan, and the chief executives of UBS and Credit Suisse, Sergio Ermotti and Tidjane Thiam are superhubs.
You personally know a large number of the people described in you book. How is it to be a woman in this testosterone-driven world?
It’s challenging, which probably is the reason for the small number of women in the top echelons of finance.
«I wouldn’t say that I have unreserved admiration for any superhub, but more for individual qualities»
In this homogeneous environment, women stick out, and many qualities which are considered assets for men, are viewed negatively when exhibited by women, such as aggression, and volubility. One of the main disadvantages for women is that they are not as plugged into the networks, power and information channels to the same extent that their male colleagues are.
Who impressed you the most?
Personalities are complex, and I wouldn’t say that I have unreserved admiration for anyone, but more for individual qualities superhubs possess, such as their discipline, eagerness to learn and groundedness. But generally, Christine Lagarde (the director of the International Monetary Fund, ed.) is a very strong, resilient and politically savvy person. She is always and under all circumstances «on» and courteous, no matter how big the stress or jet lag. George Soros (the hedge-fund manager) is enormously versatile. Jamie Dimon impresses with authenticity. Steve Schwarzman has great social and contextual intelligence.
Wealth and contacts evidently seem to be outstanding characteristics of superhubs. What else?
Superhubs tend to have a big ego and are often driven by the desire for power. Most of them have a high degree of emotional intelligence and are equipped with a resilience that enables them to overcome failures. There are almost always aspects of the personalities which differ from the norm, for instance their obsessive, monomaniacal focus on their goals.
Big success comes at a price. How high is the price paid by superhubs?
The price is high, and most people probably wouldn’t be willing to make the trade-off. But for superhubs, it is their way of being. There is no delineation between their personal and professional lives, they are available at all times and live a life under a microscope.
«Superhubs’ ultimate competitive advantage is their ability to forge deep and resilient relationships»
And since the job is always the priority, family life often takes a back seat.
A lot of the people you described emerged from simple backgrounds and worked their way up. Can you tell us how to become a super-hub?
All superhubs have a first-rate education and are workaholics. Almost everyone at the top of finance, or any field for that matter, is very smart, well-educated and industrious. But superhubs’ ultimate competitive advantage is their ability to forge deep and resilient relationships. They tend to have a holistic networking mentality, a positive view of humanity and its sincere interest in other people. They invest much time and effort in social capital, which is sort of a network currency. If and when they need help, they have a loyal network to fall back on. Superhubs also distinguish themselves through their intellectual pursuits, which give them a prestige that money alone cannot provide.
Sandra Navidi is founder and CEO of Beyond Global consultancy. The attorney previously worked as research director for Nouriel Roubini. She is the bestselling author of «Superhubs – How the Financial Elite and their Networks Rule Our World»How the Financial Elite and their Networks Rule Our World». Sandra Navidi lives in New York.
